As investors approach retirement, the focus often shifts towards securing stable and diversified income sources. Retirees want stocks that help secure financial stability and peace of mind during retirement, ensuring that your portfolio is well-positioned to navigate various market conditions.
Today, that’s exactly what we’re after. We’ll look at three TSX stocks that should help Canadian investors nearing retirement lock up income, while seeing growth continue.
VXC ETF
Among TSX stocks, one compelling option is the Vanguard FTSE Global All Cap ex Canada Index ETF (TSX:VXC) on the TSX. VXC offers exposure to a broad spectrum of global equities, excluding Canada. This exchange-traded fund (ETF) tracks the FTSE Global All Cap ex Canada China A Inclusion Index, which includes large-, mid-, and small-cap stocks from both developed and emerging markets. This wide diversification helps mitigate risk by spreading investments across various regions and sectors, reducing reliance on any single economy.
Historically, VXC has demonstrated solid performance. As of July 2024, the ETF has shown impressive returns, with a one-year return of 21%. Such performance indicates robust growth potential, which can be crucial for building a substantial retirement nest egg.
For retirees, generating a steady income stream is essential. VXC provides quarterly dividends, contributing to regular income. As of the latest distribution, the dividend yield stands at approximately 1.6%, offering a reliable source of income in addition to capital appreciation.
Royal Bank
Another one of the solid choices for such investors is Royal Bank of Canada (TSX:RY) on the TSX. Despite market fluctuations, RBC has shown resilience, with its stock price rebounding by over 18% in the last year. This growth trajectory, coupled with a price-to-earnings (P/E) ratio of 14.1, indicates that the stock is reasonably valued with potential for capital appreciation.
One of the primary attractions of RY stock is its dividend yield. As of the latest announcement, RBC increased its annual dividend by three percent to $5.68 per share, resulting in a forward dividend yield of approximately 3.7% as of writing. This steady dividend payout can provide retirees with a reliable income stream, crucial for managing daily expenses without dipping into capital investments.
RBC’s recent acquisition of HSBC Canada has reinforced its position as Canada’s largest bank, expanding its market share and operational capabilities. This acquisition should enhance RBC’s revenue streams and solidify its competitive edge in the financial sector. Additionally, RBC’s strategic leadership reshuffle aims to streamline operations and drive further growth, which can positively impact long-term investor returns.
Granite REIT
Finally, real estate investment trusts (REITs) are a great way for investors to bring in passive income. But if you want growth as well, you want Granite REIT (TSX:GRT.UN). Granite REIT is known for its consistent and attractive dividend payouts. The trust recently declared an annual distribution of $3.30 per unit, translating to an annual yield of approximately 4.5%. This steady income stream is crucial for retirees who need regular cash flow to cover living expenses.
Granite REIT’s portfolio is diversified across geographies and industries, reducing risk and enhancing stability. The trust owns and manages a range of industrial properties in North America and Europe, which are leased to high-quality tenants. This diversification helps mitigate the impact of economic downturns in any single market.
Granite REIT has been actively pursuing growth through strategic acquisitions. In the past year, the trust acquired several high-quality industrial properties, further strengthening its portfolio. These acquisitions should enhance Granite’s revenue streams and provide long-term growth potential for investors.
