Retirees: 2 Dividend Stocks With High Yields to Buy for 2024

Given their stable cash flows and high yields, these two dividend stocks are ideal for retirees.

| More on:
Senior Couple Walking With Pet Bulldog In Countryside

Image source: Getty Images.

Due to no regular income, retirees will have less appetite for risk-taking. So, retirees should invest in quality dividend stocks to generate a stable passive income and shield their portfolios against volatility. Meanwhile, here are two top dividend stocks that I am bullish on due to their predictable cash flows, excellent record of paying dividends, and over 7% of dividend yield.

Enbridge

Enbridge (TSX:ENB) owns and operates a pipeline network that transports oil and natural gas across North America. With a substantial percentage of its revenue generated from long-term take-or-pay contracts, the company generates stable and predictable financials and cash flows irrespective of the broader market environment. The midstream energy company has paid dividends for 69 years amid stable cash flows. Also, it has raised its dividend at an annualized rate above 10% for 29 consecutive years. With a quarterly dividend of $0.915/share, its forward yield currently stands at 7.75%.

Further, Enbridge acquired the East Ohio Gas Company, which serves around 1.2 million customers across 400 communities in Ohio. The company is working on acquiring two other utility assets in the United States, which would make it the largest natural gas utility company in North America. Enbridge also continues its $24 billion secured capital program and expects to put $4 billion of projects into service annually in 2024 and 2025. These growth initiatives and increased contributions from low-risk utility assets will boost its cash flows in the coming quarters, thus making its future dividend payouts safer.

Also, Enbridge’s financial position looks healthy, with its net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) 4.1 at the end of last year. The company further strengthened its financial position by selling its stake in the Alliance Pipeline for $3.1 billion. Despite its healthy growth prospects and high yield, the company trades an NTM (next-12-month) price-to-earnings multiple of 16.8, making it an attractive buy.

BCE

Despite the near-term weakness, I have selected BCE (TSX:BCE) as my second pick. The telecom sector is a capital-intensive business. So, rising interest rates have put pressure on the industry. The CTRC (Canadian Radio-television and Telecommunications Commission) has mandated large telcos to share their fibre-to-the-home (FTTH) networks with smaller service providers to increase competition. However, the decision would disincentivize companies, such as BCE and Telus, that have invested aggressively in expanding their broadband infrastructure.

Meanwhile, given the rising demand for telecommunication services amid digitization, the sector’s long-term growth prospects look healthy. Further, the requirement for regulatory approvals and high initial capital investments deter new players from entering the industry, allowing existing players to enjoy their market share.

Further, BCE recently acquired 939 licenses, which could allow it to expand its 5G infrastructure across the country. Its growing customer base and ARPU (average revenue per user) could boost its financials in the coming quarters. Also, the company has slashed its capital expenditure on fibre network expansion amid the CTRC’s decision. So, the company could utilize its free cash flows to reward its shareholders and lower its debt levels.

BCE raised its quarterly dividend by 3.1% in February to $0.9975/share, marking the 16th consecutive year of dividend hikes. Also, amid the recent selloff, its forward dividend yield has increased to 8.9%, while its NTM price-to-earnings multiple stands at 14.7. Considering all these factors, I believe BCE would be an excellent buy for retirees.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

edit Balloon shaped as a heart
Dividend Stocks

Love Value Stocks? 2 That Are Screaming Buys in May 2024

Patience can pay off by investing in these two value stocks with nice dividends and the potential to turn around.

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

2 Everlasting Canadian Stocks for Your RRSP

The Canadian National Railway (TSX:CNR) stock is worth owning for the long haul.

Read more »

Business success with growing, rising charts and businessman in background
Dividend Stocks

3 Stocks Set for Dividend Increases This Year

Here are three TSX stocks that are set to increase their dividends later this year.

Read more »

Dice engraved with the words buy and sell
Dividend Stocks

EQB Inc Stock: Buy, Sell, or Hold

EQB Inc (TSX:EQB) is Canada's fastest-growing bank.

Read more »

pipe metal texture inside
Dividend Stocks

Enbridge Stock: Buy, Sell, or Hold Today?

Enbridge is up 7% in the past six months. Are more gains on the way?

Read more »

money cash dividends
Dividend Stocks

The 2 Stocks Every Dividend Investor Should Own for Reliable Cash

Dividend stocks offering consistent and reliable returns can be a crucial asset in any portfolio, especially for income-producing dividend portfolios.

Read more »

grow dividends
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

These top TSX dividend-growth stocks now offer yields above 7%.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold for Tax-Free Gains

Building a large, tax-free nest egg in your TFSA with growth stocks can give you more control over your tax…

Read more »