As a retiree, you may be relying on a pension to help you with your day-to-day expenses. Depending on what jobs you’ve worked and the kinds of pensions they offer, you may be looking for ways to supplement that income. One way to do that is by investing in dividend stocks. These are stocks that pay shareholders a portion of their earnings simply for holding shares in the company. In this article, I’ll discuss three Canadian dividend stocks that could be a pensioner’s best friend.
This is one of my favourite dividend stocks
In terms of dividend stocks, I believe Bank of Nova Scotia (TSX: BNS) is one of the best companies around. A company that needs no introduction, Canadians should be very familiar with Bank of Nova Scotia for its inclusion in the Big Five. For the uninitiated, that’s a term given to the five large Canadian banks. What makes Bank of Nova Scotia stand out among that group is its focus on international growth. It’s estimated that Bank of Nova Scotia’s international business could drive its growth in the future.
With respect to its dividend, Bank of Nova Scotia has a long track record of successfully paying its shareholders. First instituting a dividend in 1833, the company has never missed a dividend payment since. For those keeping track, that represents 190 years of continuous dividend distributions. In addition, Bank of Nova Scotia offers investors a very attractive dividend yield. With a forward yield of 6.95%, you’ll certainly get the most bang for your buck.
A dividend stock that can generate a bit of growth
One thing that often holds investors back from going all-out on dividend stocks is the perceived lack of capital appreciation. However, some dividend stocks are able to provide a bit of growth in addition to a solid dividend payment. Take Brookfield Renewable (TSX: BEP.UN), for example. This is one of the largest renewable utility companies in the world. Due to the industry it operates in, Brookfield Renewable is poised for tons of growth over the next decade.
With respect to its dividend, Brookfield Renewable has managed to increase its distribution each year for over a decade. Since 2013, the company’s dividend has risen at a compound annual growth rate of 6%, easily allowing shareholders to stay ahead of inflation. Brookfield Renewable aims to grow its distributions at a rate of 5-9% per year. Its recent performance suggests that the company’s management team has done an excellent job of allocating capital in order to meet those goals each year.
An old reliable
Finally, if you’re looking for a well-known dividend stock to rely on in retirement, then consider buying shares of Fortis (TSX: FTS). This is a multi-national company that provides regulated gas and electric utilities to more than three million customers across North America.
Fortis is followed by many dividend investors because of its outstanding track record in increasing its distribution each year. In fact, Fortis’s 50-year dividend-growth streak stands as the second longest in the country. The company has already announced its plans to continue raising its dividend through to 2028 at a rate of 4-6%.
