Retired passive-income investors may wish to hang onto some of the market’s less-volatile (or “safe”) dividend stocks as we look to close out the year with some wobbliness. Undoubtedly, the coming U.S. election, economic data releases, quarterly fumbles, and geopolitical pressures could continue to make for a rocky finish to the year. Either way, retirees should keep on playing the long game by sticking with the shares of well-run firms that can make it through tougher terrain without having to put the dividend (or distribution) on the chopping block.
In this piece, we’ll take a brief glimpse at two retiree-friendly Canadian passive-income plays that one can feel comfortable holding during almost every type of market environment.
Such all-weather plays pay generous dividends and are worth hanging onto, even when fear grips the hearts of most other market participants. Indeed, given their solid (and in many cases, growing) dividend payouts, the following names seem more like mainstay investments to hang onto for decades at a time rather than stocks to be traded into or out of for a shot at quick gains.
Though the following two “safe” dividend stocks could enjoy considerable appreciation over the coming years and decades, it’s the payout that I believe is the main draw for retirees who need the passive income to finance a sustained and perhaps even comfortable retirement lifestyle. Without further ado, let’s get into the relatively low-beta, high-yield names that may just be able to help you keep your cool when should the market continue wobbling into 2025 and beyond.
CT REIT
First up, we have CT REIT (TSX: CRT.UN), one of the most reliable retail-focused REITs (real estate investment trusts) in the country. The REIT, which houses many Canadian Tire locations, is a slightly higher-yielding (shares yield 6.42% at writing vs. 4.68% for shares of CTC.A) way to ride on the back of one of Canada’s most iconic retailers.
As interest rates begin to fall, I see CRT.UN shares making a run for all-time highs, perhaps as soon as the fourth quarter. Undoubtedly, REITs stand out as one of the bigger winners once the Bank of Canada really gets going on the rate cuts. Though the retail REITs aren’t the most exciting in the world, I find names like CRT.UN represents a less-rocky trade than the retailers themselves as we move into a mixed economy that could bring forth the need for rapid-fire rate cuts.
Fortis
Fortis (TSX: FTS) is a steady utility that’s been picking up momentum for the summer after spending around a year fluctuating violently and failing to sustain any sort of breakout. At writing, FTS stock boasts a nice 4% dividend yield, which is poised to grow at a mid-single-digit rate every single year, even if there’s a recession or bear market in the cards.
With the company clocking in a relatively solid second-quarter result, retired income investors may wish to initiate a position before lower rates and increased demand for its services help power the stock’s latest rally. Finally, the 0.22 beta entails less market risk and a smoother ride for investors who aren’t fans of the turbulence endured more than a week ago.
