Retirement Planning: How to Generate $3,000 Monthly Income

Discover how dividend stocks like Enbridge can help you build a $3,000 monthly retirement income stream. Learn proven strategies for generating reliable passive income through dividend growth stocks.

| More on:
Start line on the highway

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As the retirement age approaches, investors must answer one key question: “How will I replace my paycheque?” While retirement plans such as the Canada Pension Plan offer a reliable monthly income stream, it’s not enough to lead a comfortable life.

Instead, quality dividend growth stocks offer a compelling solution for generating recurring monthly income. Over the years, blue-chip Canadian companies like Enbridge (TSX:ENB) and Fortis (TSX:FTS) have demonstrated a commitment to shareholders through decades of consistent dividend payments.

Moreover, a widening payout has meant these TSX dividend stocks can form the core of your income portfolio in retirement. So, let’s see how Canadian retirees can earn $36,000 annually or $3,000 each month via dividends.

Created with Highcharts 11.4.3Enbridge + Fortis PriceZoom1M3M6MYTD1Y5Y10YALL19 Jan 201516 Jan 2025Zoom ▾20162017201820192020202120222023202420250www.fool.ca

Is Enbridge a good stock to own right now?

Valued at a market cap of $138 billion, Enbridge is a Canada-based energy infrastructure giant. Its core business includes operating vast pipeline networks transporting crude oil and natural gas in Canada and the United States. Moreover, Enbridge operates natural gas utilities and is gaining traction in the clean energy segment with investments in wind, solar, and geothermal power generation.

While Enbridge is part of the highly cyclical energy sector, the company has consistently increased dividend payments over the last three decades. Since 1995, Enbridge’s dividends have risen at an annual rate of 10%, showcasing the resilience of its cash flows, which are tied to inflation-linked, long-term contracts.

Enbridge has increased its annual dividend from $0.26 per share in 1997 to $3.77 per share in 2024. These dividend hikes have meant that ENB stock has returned more than 6,000% to shareholders since January 1995 after adjusting for dividend reinvestments.

Despite its market-beating returns, ENB stock currently offers shareholders a yield of 6% right now.

Is the TSX dividend stock a good buy?

Valued at $30 billion by market cap, Fortis is a North American utility company that focuses on the distribution of electricity and natural gas. With operations in Canada, the U.S., and the Caribbean, its regulated utility operations serve more than 2.5 million customers.

Armed with an extensive infrastructure portfolio that includes power generation facilities, distribution lines, and natural gas pipelines, Fortis is a utility heavyweight. From providing electricity in Arizona to distributing natural gas in British Columbia and operating utilities in places like Newfoundland and the Cayman Islands, Fortis has established itself as a reliable utility provider since its founding in 1885.

Fortis has increased its annual dividend payment from $0.43 per share in 1997 to $2.46 per share in 2025. Its consistent dividend hikes have enabled the TSX stock to return over 3,000% to shareholders in dividend-adjusted gains since 1995.

The Foolish takeaway

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
Enbridge$63.315765$0.9425$5433Quarterly
Fortis$60.136070$0.615$3733Quarterly

The average dividend yield of the two TSX stocks is around 4.9%. So, to earn $36,000 a year in dividends, retirees would need to invest close to $730,000 equally distributed in the two stocks.

Fortis has increased its dividends by 6.4% annually in the last decade, while Enbridge’s growth is higher at 10.3%. If the two companies raise dividends by 7% each year, your payout will double over the next decade.

Identifying other fundamentally strong stocks with a tasty yield, strong balance sheets, and a growing payout is essential to diversify your income portfolio and lower overall risk.

Should you invest $1,000 in Bmo Canadian Dividend Etf right now?

Before you buy stock in Bmo Canadian Dividend Etf, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Bmo Canadian Dividend Etf wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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.

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

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »