For Canadian retirees seeking regular income, dividend-paying stocks offer a compelling alternative. Their frequent payouts and attractive yields can provide a reliable income stream, helping retirees manage their financial needs in a sustainable way.
That said, not all dividend stocks are worth investing in. While dividend payments are appealing, they are never guaranteed. Companies can reduce or even suspend payouts during challenging times. To mitigate this risk, retirees should focus on companies with solid fundamentals, robust earnings growth, and a proven track record of consistently paying and increasing dividends, even during tough market conditions. Further, it is essential to diversify your portfolio to spread the risk.
Against this background, TSX stocks such as Enbridge (TSX:ENB), Fortis (TSX:FTS), and Toronto-Dominion Bank (TSX:TD) are top picks for Canadian retirees in 2025. Let’s explore why.
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Enbridge stock
Canadian retirees can rely on Enbridge stock for regular income. This energy infrastructure company is known for its resilient dividend payments and ability to increase quarterly payouts. For instance, it has paid dividends for about 70 years. Moreover, it has increased the dividend for the past 30 consecutive years, which shows the durability of its payouts.
Enbridge’s diversified income stream supports its payouts. Moreover, higher utilization of its system, power-purchase agreements (PPAs), long-term contracts, and regulated cost-of-service tolling frameworks add stability to its operations and drive its distributable cash flow (DCF).
Looking ahead, strength in its liquid pipelines business, multi-year growth projects, highly contracted gas transmission and midstream operations, and utility-like cash flows will support its dividend payments. Moreover, energy transition opportunities and strategic acquisitions will accelerate growth and drive higher dividend distributions. Along with its solid dividends, Enbridge stock offers a high yield of 5.9%.
Fortis stock
Fortis is another reliable stock for Canadian retirees. This utility company has a stellar track record of dividend growth (51 consecutive years, to be specific). Further, its payouts are well-protected by a defensive business model and rate-regulated asset base that generates predictable cash flows.
Approximately 99% of Fortis’ operations are tied to regulated utilities, enabling it to generate steady earnings and cash flows. Furthermore, 93% of Fortis’ assets are engaged in transmission and distribution, which remains immune to commodity price volatility and delivers low-risk cash flow.
Fortis’ $26 billion five-year capital plan will likely expand its rate base and support higher earnings. The utility company forecasts its rate base to expand at a compound annual growth rate (CAGR) of 6.5% through 2029. Moreover, its dividend per share is projected to increase by 4–6% annually during this period. Besides its well-covered payouts, Fortis stock offers an attractive dividend yield of over 4%.
Toronto-Dominion Bank stock
Large Canadian bank stocks are a reliable investment for retirees to generate steady passive income. The leading Canadian banks are known for regularly paying dividends for more than a century. Among them, Toronto-Dominion Bank stock stands out for its high dividend growth rate.
Notably, this financial services company has been paying dividends for 167 years. Further, its dividend increased at a CAGR of 10%, the highest growth rate among its peers.
The bank’s dividend growth history shows its ability to generate steady earnings and maintain its sustainable payout ratio. The financial services giant will likely benefit from its diversified revenue stream, expansion of loans and deposit base, and operating efficiency. Further, its focus on accretive acquisitions will accelerate its growth, driving higher payouts.
Toronto-Dominion Bank offers a dividend yield of about 5% and a sustainable payout ratio of 40–50%.
