Building wealth for retirement is one of the most important goals for many investors, especially those who are planning to retire in the near future or have already retired. One of the best ways to achieve this goal is to invest in top Canadian dividend stocks that could offer consistent and growing income as well as capital appreciation in the long term. Besides these benefits, many strong dividend stocks on the Toronto Stock Exchange could also help investors reduce the volatility and risk of their portfolios, as they tend to be less affected by short-term market fluctuations and economic downturns.
In this article, I’ll talk about two such Canadian dividend stocks that have a solid track record of providing robust dividend income and are ideal for creating a reliable income stream for retirement. Let’s quickly take a look at the details of these two dividend giants and why they are great choices for your retirement portfolio.
Great-West Lifeco stock
Great-West Lifeco (TSX: GWO) is the first Canadian stock to consider adding to your retirement portfolio. As one of the top international financial services firms with operations in life insurance, health insurance, asset management, and reinsurance, it stands out for its diversified business model and strong presence in major markets like Canada and Europe.
GWO stock currently has a market cap of around $3.5 billion as it trades at $41.25 per share after witnessing about 6% decline so far in 2024. At this market price, the stock offers a 5.4% annualized dividend yield and distributes these dividend payouts every quarter. Interestingly, the company raised its dividends by around 72% over the 10 years between 2013 and 2023.
Despite the ongoing global macroeconomic challenges, Great-West’s earnings soared by 19.8% YoY (year over year) in the last four quarters combined to $4.14 per share, reflecting its ability to achieve operational efficiency and generate stable cash flows irrespective of economic conditions. Moreover, its financial stability, combined with strategic acquisitions and a focus on high-margin businesses, make it a perfect fit for investors seeking to build retirement wealth through steady dividend income.
Pembina Pipeline stock
Pembina Pipeline (TSX: PPL) could be another great option for your retirement portfolio. This Calgary-based energy transportation and midstream service provider has a strong history of rewarding investors with consistent and growing dividends, which are backed by its diversified portfolio of energy infrastructure assets.
This energy sector-focused firm currently has a market cap of $30.7 billion as its stock trades at $52.86 per share with around 16% year-to-date gains. PPL stock has a decent 5.2% annualized dividend yield at the current market price. Just like Great-West Lifeco, Pembina also increased its dividend per share by nearly 61% in the last 10 years.
In the first quarter of 2024, higher revenues and volumes on the Peace Pipeline system, the reactivation of the Nipisi Pipeline, and increased contributions from the Alliance Pipeline helped Pembina post strong double-digit YoY growth in its adjusted earnings. As it continues to focus on more strategic acquisitions and project developments, I expect the company’s financial growth trends to improve in the years to come, making it an ideal stock for retirement portfolios.
