Dividend-paying stocks are attractive investments for retirees to earn additional income. However, as the payouts of the companies depend on their financial performance, retirees must take caution before investing. They should focus on stocks that are fundamentally strong, have a solid track record of dividend payments, and a growing earnings base. Focusing on these attributes can reduce risk and help you earn a steady income, regardless of market conditions.
With that backdrop, let’s look at three Canadian stocks that are Dividend Aristocrats and offer well-protected yields.
Fortis
Fortis (TSX:FTS) stock is a no-brainer for Canadian retirees to earn regular passive income. The company’s stellar dividend payments and growth history (raised dividend for 49 consecutive years), a low-risk business (regulated electric utility business), and predictable cash flows make it one of the best dividend stocks.
While Fortis has a solid track record of dividend payments, the company is poised to increase its dividend further by 4-6% annually through 2027.
Fortis’s 10 regulated utility businesses and $22.3 billion capital projects are likely to drive its rate base, which will support higher dividend payouts. The company expects to increase its dividend at an average annualized growth rate of 6.2% through 2027, implying it can cover its payouts well. Fortis stock offers a yield of about 4% near the current price levels.
Enbridge
Like Fortis, Enbridge (TSX:ENB) is another top-quality stock to earn worry-free income. The energy infrastructure company’s diversified income streams, high asset utilization rate, and contractual arrangements position it well to deliver distributable cash flows, which support higher dividend payments.
Impressively, Enbridge has increased its dividend for 28 years, reflecting an average annual growth rate of 10%. Further, it has been paying dividends for 68 years.
Looking ahead, Enbridge, with its solid conventional and renewable assets, is well positioned to capitalize on the energy demand. Meanwhile, its diversified cash flows, inflation-protected earnings, power-purchase agreements, and low capital-intensity growth projects will likely drive its future cash flows and dividend payouts. Enbridge stock offers a high yield of over 7%, while its payouts are sustainable in the long term.
Bank of Montreal
Large Canadian bank stocks have been popular for paying dividends for decades. One of them is Bank of Montreal (TSX:BMO). The banking giant sports the longest dividend payment history by any Canadian company. For instance, it has been paying a regular dividend for 194 years. Further, its ability to grow its earnings has allowed the company to increase its dividend in the past several years.
Notably, Bank of Montreal has raised its dividend at an average annualized growth rate of about 55 in the last 15 years. Meanwhile, it offers a dividend yield of close to 5%.
The financial services giant’s diversified revenue base, ability to grow its loan book, stable credit performance, and operating efficiency bodes well for earnings growth and will likely support its future dividend payments.
Bottom line
These Canadian stocks have solid dividend payout and growth history. Further, their resilient businesses, growing earnings base, and attractive yields make them compelling investments for retirees to earn stable cash.
