When you retire, you will likely rely on pension programs like the Canada Pension Plan (CPP) and Old Age Security (OAS) to cover your daily expenses. While helpful, these pensions are designed to cover only a portion of the income you might require for a comfortable retired life. To ensure you can enjoy your golden years in style, you should supplement your pensions with a passive-income stream of your own.
Building a portfolio of dividend stocks is one way to generate a reliable passive income to supplement your pension. These publicly traded companies distribute a portion of earnings to investors every quarter or month to people who own shares in the businesses. Today, I will discuss three TSX dividend stocks you can use to create an income stream to boost your pension.
Fortis (TSX:FTS) will always be my top pick for a dividend income portfolio. The $27.30 billion market capitalization utility holdings company is a Canadian Dividend Aristocrat with a 50-year dividend-growth streak. Not only has it paid its shareholders their dividends for over five decades, but it has grown its payouts at least once in all 50 years.
Fortis owns and operates several utility businesses across Canada, the U.S., Central America, and the Caribbean. With almost its entire revenue coming through highly rate-regulated and long-term contracted assets, Fortis generates predictable cash flows.
It can use those returns to fund its capital programs and grow its payouts comfortably. As of this writing, it trades for $55.66 per share and boasts a 4.24% dividend yield.
Bank of Nova Scotia (TSX:BNS) is another mainstay in my books for dividend stocks. The $71.97 billion market capitalization Canadian bank stock is one of the Big Six financial institutions in the country. Multinational banking and financial services companies are reliable dividend stocks.
While Scotiabank has not grown its payouts for 50 consecutive years, it has paid investors dividends for almost two centuries without fail.
Scotiabank stock has solid domestic operations and stands out among its Big Six peers through its strong presence in the Latin American trade bloc between Mexico, Peru, Chile, and Colombia.
The market has immense growth potential, as the middle class in the region expands. It means Scotiabank stock looks set to continue its impressive streak. As of this writing, it trades for $59.71 per share and boasts a juicy 7.10% dividend yield.
Brookfield Infrastructure Partners (TSX:BIP.UN) is another stock that can be an excellent pick for long-term dividend income. Brookfield Infrastructure owns and operates a diversified portfolio of high-quality infrastructure assets worldwide across several sectors, including midstream, utilities, data, and transport.
The well-capitalized giant keeps making acquisitions to further boost its cash flow and revenues. Investing in BIP stock means gaining exposure to the performance of assets in various industries diversified globally in one stock, making it a safer investment than many others. As of this writing, BIP stock trades for $37.27 per share and boasts a 5.69% dividend yield.
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A retirement plan with a disciplined approach to investing and building a portfolio of dividend stocks can be an excellent way to create a passive-income stream to fund a more comfortable retirement. To this end, these three reliable dividend stocks can be perfect for building your passive-income portfolio’s foundation.