Diversify for Retirement: The Best Canadian Dividend Stocks in August 2023

Looking to diversify your investment portfolio for retirement? Check out these three quality Canadian dividend stocks this August.

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The closer you get to retirement the more important it is to own a diversified portfolio of dividend stocks. Owning a mix of stocks in a variety of businesses, sectors, and geographies can help spread out and offset risk. Preserving capital and streams of passive income is crucial in retirement.

For this reason, don’t just look for high dividends. More importantly, look for quality businesses with sustainable and, hopefully, growing dividends. These businesses tend to have much less risk and much better long-term returns. If you are looking for the best dividend stocks for retirement, here are some great ideas to consider in August.

A diversified infrastructure stock for dividend growth

Brookfield Infrastructure Partners (TSX:BIP.UN) owns and operates a portfolio of economically essential infrastructure assets. Given its exposure to energy infrastructure, utilities, transportation, data centres, and cellular infrastructure, Brookfield is a diversified entity in and of itself.

While the stock has struggled over the past year (down around 16.7%), its business has continued to deliver very strong results. Last quarter, its funds from operations (FFO) per unit grew by 7.4% to $0.72. The company has benefitted from inflation-indexed contracts that are supporting high-single digit organic growth.

Furthermore, the company has been deploying capital into an array of high-quality acquisitions. This year, it has focused on data infrastructure and key assets in the global logistics and supply chain.

This stock earns a 4.5% dividend yield today. BIP.UN has grown its dividend by around 6–9% per year for more than a decade. Right now, this dividend stock trades for 10.3 times FFO, which is near its lowest multiple (other than in March 2020) in five years.

An energy stock with huge special dividend payouts

At a glance, Tourmaline Oil (TSX:TOU) stock may not appear like a big dividend payer given its 1.5% dividend yield. Yet, the company has commenced a streak of special dividend payments that equals a 12% annualized dividend yield at today’s price.

Tourmaline is Canada’s largest natural gas producer and the fourth largest midstream operator. Given that the company owns most of its infrastructure assets, it can generate and bring gas to market at a very low total cost. It has access to some of the highest paying markets in the world.

Even though natural gas prices have declined in 2023, Tourmaline has continued to generate ample spare cash. The company is almost completely debt free, so it is paying 100% of its excess cash back to shareholders.

This stock announced a $1 special dividend last quarter. There are likely more special dividends to come, especially if natural gas prices recover in the winter.

A top REIT stock for monthly income

Granite Real Estate Investment Trust (TSX:GRT.UN) is a solid bet for safe, reliable monthly dividends. Granite owns a portfolio of institutional grade logistics, manufacturing, and specialized industrial properties across Canada, the U.S., and Europe. Industrial real estate has been a very strong segment.

In its recent quarter, Granite renewed 1.9 million square feet of leases at an average 15% uptick to prior rates. FFO per unit increased by 11% in the quarter. The REIT has a large development pipeline that should support further growth for the remainder of the year and into 2024.

Granite stock earns a 4.3% dividend yield that is paid out monthly. It has grown its dividend annually by a low-single digit rate for 12 consecutive years. The company has a great balance sheet and strong assets, which make it a solid long-term bet for retirees seeking dividend income.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown has positions in Brookfield Infrastructure Partners, Granite Real Estate Investment Trust, and Tourmaline Oil. The Motley Fool recommends Brookfield Infrastructure Partners, Granite Real Estate Investment Trust, and Tourmaline Oil. The Motley Fool has a disclosure policy.

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