This week represents one of the most volatile weeks on the market in recent years. With that volatility set to continue, investors are now seeking investments that can offer some defensive appeal — specifically, stocks that can cater to growth and income for retirement needs.
Here are two safer, high-yield dividend stocks I’m looking at for my retirement needs.
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Choose Canadian Utilities for stable income
The first option for investors looking at retirement needs in this volatile market is Canadian Utilities (TSX: CU). Utility stocks provide investors with a reliable and recurring revenue stream as well as a healthy dividend income.
Part of the reason for that stability can be traced back to the lucrative business model that utility stocks adhere to. In short, utilities offer a necessary service that provides a recurring and stable revenue stream.
That stability, coupled with the sheer necessity of the service that a utility provides, makes Canadian Utilities one of the most defensive options on the market for investors. By extension, it also means that a Canadian Utilities investment can meet, if not exceed, most retirement needs over a longer period of time.
Canadian Utilities’s stable revenue stream is backed by long-term, regulated contracts that leave room for growth and dividends. In the case of Canadian Utilities, that dividend works out to an impressive 5.00% yield.
To put it another way, a $20,000 investment in Canadian Utilities will generate an income of just over $1,000. And that’s not even the best part.
Canadian Utilities has provided investors with annual upticks to that dividend without fail for over 50 consecutive years. Not only does this make the stock one of just two Dividend Kings on the market, but Canadian Utilities plans to continue that tradition.
This means that the dividend income earned from investing in Canadian Utilities will continue to grow.
Have you considered Bank of Nova Scotia?
Another great option for investors looking to meet their retirement needs this month is Bank of Nova Scotia (TSX: BNS). Scotiabank is one of Canada’s big bank stocks and is often referred to as Canada’s most international bank.
Over the years, Scotiabank’s focus on international markets, specifically Latin America, has provided the bank with stellar growth, albeit with higher risk. To mitigate that risk, the bank is now focusing its growth on the U.S. market.
Apart from its internationally focused growth plans, it’s worth noting that Scotiabank has a mature and well-established domestic segment at home in Canada. That segment provides a stable revenue stream that leaves room for growth, as well as paying out a handsome quarterly dividend.
Turning to income, Scotiabank’s quarterly dividend currently works out to a 6.37% yield, making it one of the better-paying options on the market.
Using that same $20,000 example from above, investing in Scotiabank can provide an income of $1,325. And like Canadian Utilities, Scotiabank has an established cadence of providing investors with handsome annual upticks to that dividend.
Note that prospective investors who aren’t ready to draw on that income yet can reinvest those dividends, allowing them to grow further.
Final thoughts
As we’ve seen in the market this week, no investment, even the most defensive, is not without some risk. Fortunately, both Scotiabank and Canadian Utilities can provide some defensive appeal to meet retirement needs while also paying a juicy dividend.
In my opinion, one or both should be core holdings as part of any well-diversified portfolio.
