Retirees: 2 High-Yield Dividend Stocks to Own for Passive Income

These top dividend-growth stocks now offer high yields for pensioners seeking passive income.

| More on:
Two seniors walk in the forest

Source: Getty Images

Pensioners who are looking for ways to get better returns on their savings can take advantage of the pullback in the share prices of some of Canada’s best dividend stocks to generate high yields inside a self-directed Tax-Free Savings Account (TFSA) focused on generating growing passive income.

TC Energy

TC Energy (TSX:TRP) increased its dividend in each of the past 24 years. The company’s share price fell from $74 in 2022 to as low as $44. TRP stock currently trades near $53 and more gains should be on the way.

TC Energy just announced a $7.15 billion bond sale to refinance loans it took to get its $14.5 billion Coastal GasLink project finished last year. The budget for the 670 km pipeline more than doubled from the initial estimates due to soaring material and labour costs and numerous delays, but the project finally reached mechanical completion last year and is expected to start generating revenue in 2025 when it begins moving natural gas from Canadian producers to a new liquified natural gas (LNG) export facility being built on the coast of British Columbia.

TC Energy raised $5.3 billion in cash through asset sales last year and is on track to bring in another $3 billion in 2024 to shore up the balance sheet. The company is also planning to spin off its oil pipelines business this year.

TC Energy’s ongoing capital investments will be about $8 billion in 2024 and $6 billion to $7 billion per year over the medium term. As new assets go into service, the resulting revenue boost should support ongoing dividend hikes.

Investors who buy TRP stock at the current level can get a dividend yield of 7.25%.

BCE

BCE (TSX:BCE) fell out of favour with investors in the past two years as high interest rates drove up borrowing costs that cut into profits and reduced cash available for distributions. At the same time, the media group faced a decline in advertising revenue while price wars emerged in the mobile segment.

Despite the headwinds, BCE continues to generate solid profits and management is taking aggressive steps to adjust expenses to ensure the business meets its financial targets. BCE announced staff cuts in the range of 6,000 positions over the past year. The company closed or sold dozens of radio stations and trimmed content across its television portfolio.

Guidance for 2024 indicates stable to slightly higher revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) compared to last year. Digital revenue is rising in the media group, and the division appears to be stabilizing.

Ongoing volatility should be expected, and regulatory uncertainty is always a concern, especially heading into the 2025 election. That being said, the stock is likely oversold at this point and offers a dividend yield of 8.9%.

BCE increased the dividend by 3.1% for 2024. Barring any major negative revenue event, the distribution should be safe. Falling interest rates and the impact of lower salary expenses should help provide a cash buffer in 2025.

The bottom line on top stocks for passive income

TC Energy and BCE pay attractive dividends that now offer high yields. If you have some cash to put to work in a TFSA targeting passive income, these stocks look cheap today and 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of BCE.

More on Retirement

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Retirement

TFSA: 2 Canadian Dividend Stocks to Buy for a Self-Directed Retirement Portfolio

Top TSX dividend stocks look oversold and offer attractive yields.

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Retirement

Pensioners: 2 High-Yield Stocks With Great Dividend Growth

These top TSX dividend stocks look oversold.

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Retirement

RRSP Wealth: 2 Great Canadian Dividend Stocks to Buy in July 2024

Choosing the right dividend stocks for your RRSP may require a different approach and vetting methods than choosing dividend stocks…

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Retirement

Investors: Here’s How to Make $1,000 Each Month in Retirement

Real estate investing is a great way to make income in retirement. Investing in Canadian REITs is a passive way…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Retirement

Create a Pension Passive-Income Stream With This TSX Stock

Here's why Choice Properties REIT (TSX:CHP.UN) could be your top choice for monthly passive income in during retirement

Read more »

Path to retirement
Retirement

Discover the Best TFSA Stocks for a Worry-Free Retirement

Canadian dividend stocks like Canadian National Railway (TSX:CNR) can make good TFSA holdings.

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Retirement

New Retirees: How to Average $435 Per Month in Extra Tax-Free Passive Income

This strategy can help people meet their retirement goals.

Read more »

Two seniors walk in the forest
Retirement

Pensioners: 2 High-Yield Dividend Stocks With Growing Distributions

These top TSX dividend stocks now offer high yields for investors seeking passive income.

Read more »