4 Top Canadian Stocks for Retirement Income

These top TSX stocks have great track records of dividend growth.

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The market pullback is giving investors seeking passive income a chance to buy top TSX dividend stocks at discounted prices for their self-directed Tax-Free Savings Account (TFSA) portfolios.

Fortis

Fortis (TSX:FTS) is one of those stocks dividend investors can buy and forget for decades. The company has $64 billion in utility assets across Canada, the United States, and the Caribbean. Nearly all of the revenue comes from rate-regulated operations that provide essential electricity and natural gas services.

Fortis is working on a $22.3 billion capital program that will boost the rate base by about a third over five years. The resulting increase in cash flow is expected to support planned annual dividend increases of 4-6% through 2027.

Fortis raised the dividend in each of the past 49 years. The current distribution provides a 4.2% yield.

Telus

Telus (TSX:T) has increased its dividend annually for more than two decades. The company typically raises the payout by 7-10% per year, although the board might be less generous over the near term, as the company adjusts to high interest rates and challenges at its Telus International subsidiary.

Despite the headwinds, the pullback in the stock price looks overdone. Telus still expects its core mobile and internet businesses to support consolidated revenue growth of nearly 10% this year. Investors who buy the dip can now get a 6.1% dividend yield.

Enbridge

Enbridge (TSX:ENB) raised its dividend annually for the past 28 years. The last two hikes were in the 3% range, and investors should see steady payout growth at that level or higher over the medium term.

Enbridge is working on a $17 billion capital program and has the financial clout to make strategic acquisitions to drive additional growth. ENB stock has been down considerably in the past year, largely due to the sharp rise in interest rates.

Higher rates make borrowing more expensive for financing projects, but the drop in the share price appears exaggerated. Investors who buy Enbridge at the current price can get a 7.5% dividend yield.

Canadian Natural Resources

Canadian Natural Resources (TSX:CNQ) is the largest oil and natural gas producer on the TSX, with a current market capitalization of close to $92 billion.

The company raised the dividend annually over the past 23 years, and investors have enjoyed a compound annual dividend growth rate of better than 20% over that timeframe. CNRL started giving out bonus dividends last year with a special $1.50 payout in August. That was on top of the regular quarterly distribution, which is currently $0.90 per share.

Oil and natural gas demand is expected to remain robust for years. Investors who buy CNQ stock at the current price can get a 4.25% dividend yield.

The bottom line on top stocks for dividend income

Fortis, Telus, Enbridge, and Canadian Natural Resources all pay attractive dividends that should continue to grow. If you have some cash to put to work in a portfolio focused on generating retirement income, these stocks deserve to be on your radar.

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.

The Motley Fool recommends Canadian Natural Resources, Enbridge, Fortis, TELUS, and Telus International. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge and Telus.

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