With no regular income, retirees will have less appetite for risk-taking. So, they should look to invest in quality dividend stocks that are less prone to market volatility and deliver a stable passive income. Against this backdrop, let’s look at two safe Canadian stocks that offer higher dividend yields.
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Enbridge
Enbridge (TSX: ENB) would be ideal for retirees due to its resilient and predictable business model, consistent dividend growth, and high yield. The energy infrastructure company transports oil and natural gas through a toll framework and take-or-pay contracts. It also sells the power produced from its renewable assets through long-term PPAs (power purchase contracts), thus stabilizing its financials. Supported by these stable financials, the company has been paying dividends for the previous 69 years and has also raised its dividends for the last 30 years. Its forward dividend yield is at 6.2% as of Friday’s closing price.
Moreover, Enbridge has further strengthened its cash flows by acquiring three natural gas utility assets in the United States for $19 billion. These acquisitions have lowered its business risks due to their lower-risk utility businesses. Further, the company is expanding its asset base through its secured capital program and hopes to put $23 billion of projects into service through 2027. Amid these growth initiatives, the Calgary-based energy company expects its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS (earnings per share) to grow at 7–9% and 4–6% over the next two years. Also, the management expects to raise its dividends by up to 3% annually through 2026.
Meanwhile, Enbridge’s net debt-to-adjusted EBITDA has increased to 5 amid the recent acquisitions. However, the energy infrastructure giant expects increased adjusted EBITDA from these acquisitions could bring the ratio down in the coming quarters. Besides, the company trades at an attractive NTM (next 12 months) price-to-earnings multiple of 19.7, making it an attractive buy.
Bank of Nova Scotia
Another safe dividend stock I am bullish on is the Bank of Nova Scotia (TSX: BNS), which has been paying dividends since 1833. The Toronto-based financial services company offers various financial services across 20 countries, enjoying reliable and predictable cash flows. These reliable cash flows have allowed it to reward its shareholders with consistent dividend payouts. BNS stock has raised its dividends at a 5.2% compounded annual growth rate for the last 10 years and currently offers a juicy forward dividend yield of 6.1% as of the March 7 closing price.
Meanwhile, BNS posted its first-quarter earnings for fiscal 2025, which ended on January 31, last month. Its net income stood at $993 million, a substantial decline compared to its previous year’s quarter of $2.2 billion. The decline was primarily due to the impairment loss of $1.4 billion from the sale of its banking operations in Colombia, Costa Rica, and Panama to Davivienda. Removing these one-time items, the company’s adjusted EPS stood at $1.76, a 4.1% increase from the previous year’s quarter.
Moreover, the recent acquisition of a 14.9% stake in KeyCorp will allow BNS to deploy more capital in its priority North American markets. Further, falling interest rates could boost economic activities, thus driving credit demand and benefiting the company. Despite its healthy growth prospects, the company trades at an attractive NTM (next 12 months) price-to-earnings multiple of 9.7, making it a safer bet.
