Dividend investing is the way to go if you want to receive additional income in retirement, besides the pension. The choices on the TSX are plenty, including Premium Brands Holdings (TSX: PBH), Open Text Corporation (TSX: OTEX), and EQB Inc. (TSX: EQB).
All three companies are dividend aristocrats; you can buy the stocks to secure your retirement. Their dividend growth streaks are at least 10 years. You can expect to receive regular, consistent income in the sunset years on top of your pension.
Top performer
Premium Brands Holdings, or PBH, is among the top-performing stocks thus far in 2023. At $107.47 per share, current investors enjoy a 32.7% year-to-date gain on top of a decent 2.82% dividend yield. The $4.8 billion company is into specialty food manufacturing and premium food distribution in Canada and the United States.
Revenue (22.4% CAGR) and long-term organic growth (6% to 8%) have been trending upwards from 2010 to 2022. Notably, the payout ratio has improved significantly from 106.4% in 2006 to 43.8% in 2022. The quarterly dividends should be safe and sustainable.
Despite a record Q1 2023 revenue of $1.4 billion, earnings dropped to $5.9 million from $22.4 million in Q1 2022. Its President and CEO, George Paleologou, said the first quarter is always the slowest seasonally. He adds that PBH is well-positioned to generate another year of record earnings in 2023.
Rare gem
Open Text is a rare gem because it’s a dividend aristocrat in the technology sector. Most growth-oriented companies are non-dividend payers. If you invest today, the share price is $54.98, while the dividend yield is 2.30%. Interestingly, OTEX outpaces the broader market year to date, +38.83% versus +5.16%.
The $14.9 billion company is a developer and seller of enterprise information management software. OTEX is also an option if you’re looking for a promising artificial intelligence (AI) stock. Its Cloud Editions 23.3 is a cutting-edge AI technology. It also offers intelligent cybersecurity solutions for protection against cyberattacks.
Open Text is gaining significant share in the growing Information Management market through its five clouds and cloud-based solutions. In Q3 fiscal 2023, total revenue and annual recurring revenues (ARR) increased 41.1% and 37.7% year over year to US$1.2 billion and US$1 billion, respectively.
Its CEO and CTO, Mark J. Barrenechea, said, “Our Q3 results demonstrate the potential for our expanded business.” Early this year, Open Text acquired Micro Focus, a mission-critical software technology and services provider.
Leading digital bank
Like PBH and Open Text, EQB is outperforming in 2023 amid elevated market volatility. At $77.08 per share, the financial stock is up 37.5% year to date and pays a modest but super-safe 1.94% dividend. The $2.9 billion digital bank offers personal and commercial banking services. EQB is also Canada’s seventh largest bank by asset size.
In Q1 2023, net income rose 10% to $101.7 million versus Q1 2022, notwithstanding the turbulence in the sector due to rising interest rates and bank failures in the US. This regional bank has raised dividends for 12 consecutive years.
A proven strategy
Dividend investing is a proven strategy if you want to secure your retirement. Future retirees should have confidence investing in dividend aristocrats, especially a consumer-defensive stock like Premium Brand Holdings.
