A solid retirement plan for Canadian seniors nearing retirement should involve creating multiple revenue streams. While setting money aside from their active income might seem like a good idea, leaving it idle is a waste of an opportunity.
Granted, high-interest savings accounts can deliver returns to grow the value of their savings. However, the Canadian stock market offers opportunities to generate better returns on that money.
Dividend investing can allow Canadian retirees to use their capital to create passive-income streams in their self-directed investment portfolios. Canadian dividend stocks are TSX stocks that pay a portion of earnings to investors through quarterly or monthly distributions.
To create a passive-income stream in your self-directed portfolio, you must identify high-quality dividend stocks with reliable track records for paying investors their dividends regularly.
Today, I will discuss two top-notch TSX dividend stocks you can consider adding to your portfolio to begin building the foundations of a solid passive-income portfolio to supplement your retirement income.
Enbridge
Enbridge (TSX:ENB) is a $97.37 billion market capitalization giant in the North American energy industry. The Calgary-headquartered firm operates a multinational pipeline network that transports crude oil, natural gas, and natural gas liquids throughout North America. Its infrastructure is responsible for transporting a fifth of the crude consumed in the region, making it vital to the economy.
Due to several interest rate hikes over the last year and a half, companies across the board have seen deteriorating financial performances, particularly due to higher borrowing costs. Enbridge stock recently reported its financial results for 2023.
Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) still managed to rise by 6%, but its adjusted earnings were the same as in fiscal 2022. Despite the challenges, ENB stock has managed to continue its 29-year streak of growing shareholder dividends.
As of this writing, it trades for $45.81 per share. Down by 15.24% from its 52-week high, its lower share prices have led to an inflated 7.99% dividend yield that investors can lock in today.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS) is the fourth-largest bank among Canada’s Big Six banks. The Toronto-headquartered $77.24 billion market capitalization financial institute belongs to one of the most reliable banking sectors. The Big Six are reputable for delivering reliable long-term returns through capital gains and dividend payouts. Scotiabank stock has lagged behind its peers in recent years.
Before the pandemic, it focused on spending billions in acquisitions within the up-and-coming economies in Chile, Columbia, and Peru. With a new chief executive officer in charge, Scotiabank is shifting tact to focus on growth opportunities in Canada, the U.S., and Mexico.
While there is long-term growth potential in the Latin American market, the company’s renewed focus on North American markets might spur more near- to medium-term growth for the bank.
As of this writing, Scotiabank stock trades for $63.62 per share. At current levels, it pays its investors their shareholder dividends at a juicy 6.66% dividend yield.
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Foolish takeaway
Stock market volatility can cause problems in the short term for even the most reliable TSX stocks. However, declining share prices in the near term due to market uncertainty do not impact the ability to continue paying shareholders their quarterly distributions if the underlying business is sound.
To this end, Enbridge stock and Scotiabank stock are prime examples of reliable dividend stocks you can consider.
By allocating a portion of your capital to dividend stocks like ENB stock and BNS stock, you can begin building a portfolio of income-generating assets to supplement your retirement income for decades.
