Retirement Planning: 2 Safe Stocks for Long-Term Growth

Discover two time-tested TSX dividend stocks ideal for retirement planning. Learn why Enbridge and Brookfield Infrastructure offer the perfect blend of stability, income, and growth potential for long-term investors.

Planning for retirement can be overwhelming as it’s essential to consider several factors, including your magic retirement number, age, risk profile, household income, and more.

Now, most retirees often seek to invest in asset classes that offer the perfect blend of stability, income, and growth potential. So, investing in quality dividend stocks and holding them over time should enable most Canadian retirees to generate a steady stream of passive income and benefit from long-term capital gains.

While daily market fluctuations can test the resolve of even the most seasoned investors, certain companies have showcased an ability to weather economic storms while consistently rewarding shareholders.

In this article, I have identified two blue-chip TSX stocks that have already delivered market-beating returns to shareholders over the past decade. These two TSX stocks are Enbridge (TSX: ENB), an energy infrastructure giant, and Brookfield Infrastructure (TSX: BIP.UN), an essential infrastructure powerhouse.

Let’s dive deeper.

Image source: Getty Images

Enbridge stock

Among the largest companies in Canada, Enbridge stock has returned 6,400% to shareholders in dividend-adjusted gains over the past 30 years, easily outpacing the broader markets. However, the company’s growth story is far from over, given Enbridge added $7 billion to its secured growth program in 2023 and is on track to place $5 billion of secured capital into service in 2024.

In 2024, it completed the acquisition of three U.S. gas utilities, making Enbridge the largest natural gas utility in North America, with a customer base of seven million.

Most of Enbridge’s cash flows are tied to inflation-linked long-term contracts, allowing the TSX stock to generate steady earnings across market cycles. This earnings visibility enables the energy giant to pay shareholders an annual dividend of $3.77 per share, indicating a forward yield of over 6%.

Moreover, Enbridge has raised its dividend payouts at a compounded annual growth rate of 10% over the past 29 years, maintaining its status as a Dividend Aristocrat.

Wall Street expects Enbridge to invest more than $15 billion in capital expenditures in the next two years which should drive future cash flows and dividends higher.

Brookfield Infrastructure stock

Brookfield Infrastructure Partners owns and operates several cash-generating assets across sectors such as utilities, data centers, energy midstream, and transportation. The TSX dividend stock went public in September 2009 and has since returned 1,500% to shareholders after adjusting for dividend reinvestments. Comparatively, the TSX index has returned just 247% in this period.

Despite its outsized returns, BIP stock is down 17% from all-time highs, allowing you to buy the dip and enjoy a forward dividend yield of almost 5%.

In the third quarter (Q3) of 2024, it reported funds from operations of US$599 million, an increase of 7% year over year. In the first nine months of 2024, it secured US$2 billion in proceeds by offloading legacy assets, thereby achieving its capital recycling target for the year. The company emphasized it aims to generate at least US$5 billion from capital-recycling initiatives over the next two years.

Brookfield Infrastructure recently closed the acquisition of 76,000 telecom towers in India, making it the largest tower operator in the country. It ended Q3 with a backlog of US$8 billion in organic growth projects while its liquidity position stood at US$4.6 billion.

Brookfield remains well-positioned to benefit from global digitalization and decarbonization trends, with significant tailwinds in sectors such as data centres and energy infrastructure.

Fool contributor Aditya Raghunath has positions in Enbridge. The Motley Fool recommends Brookfield Infrastructure Partners and Enbridge. The Motley Fool has a disclosure policy.

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