Living life after retirement without any financial worries is everyone’s dream. In order to achieve that goal, you should ideally start saving money at an early age. Besides that, investing your hard-earned savings in some quality dividend stocks can also be extremely helpful. It will help you not only expect handsome capital gains on your invested money over the long term but also give you a chance to create a reliable source of passive income.
In this article, I’ll talk about two of the best Canadian dividend stocks you can buy you can add to your retirement portfolio now and hold forever.
My first Canadian dividend stock pick for retirement planning
Before buying any dividend stock with a high dividend yield, you should closely analyze its ongoing financial growth trends and long-term business growth outlook. This is because businesses with a weak growth outlook, when faced with persistent financial challenges, could be forced to cut or even discontinue their dividend payouts in the future, no matter how great their dividend yield looks right now. That’s why sticking to large-cap dividend stocks could be a great idea, especially when you’re investing in stocks to build wealth for retirement.
With that in mind, BCE (TSX:BCE) could be a trustworthy dividend stock in Canada to consider for a retirement portfolio. This Canadian communications giant currently has a market cap of $53.9 billion, as its stock trades at $59.09 per share without any notable year-to-date change. BCE stock offers an impressive 6.5% annualized dividend yield at this market price and distributes its dividend payouts every quarter.
Besides its strong portfolio of some popular brands, including Bell, Bell Aliant, Bell Media, Bell MTS, NorthwesTel, and Virgin Plus, BCE’s robust capital structure, resilient cash flows, and sustainable dividend growth track record make it a great stock to own for long-term investors.
And another reliable, long-term dividend stock to buy now
Toronto-Dominion Bank (TSX:TD) could be another reliable Canadian dividend stock to buy now to hold for the long term. Despite its strong 7% recovery in June, TD stock currently trades at $83.25 per share with nearly 5% year-to-date losses and a market cap of $151.7 billion. At the current market price, this banking giant has a decent annual dividend yield of 4.6%.
The banking sector has seen a difficult operational environment in the last few years due to COVID-19-driven restrictions and other macroeconomic concerns. Nonetheless, TD Bank’s commitment to return value directly to our shareholders could be understood by the fact that in five years between its fiscal year 2017 and 2022 (ended in October 2022), its dividend per share grew positively by about 51%.
Although market uncertainties have affected its earnings growth in recent quarters, TD Bank’s continued focus on delivering innovative personalized solutions to its customers and modernizing its offerings with new technology makes its long-term growth outlook look bright. Given that, any short-term dip in its stock could be seen as an opportunity to buy a reliable Canadian dividend stock at a bargain to hold for the long term.
