Canadians who meet the required number of contributions are eligible to receive the Canada Pension Plan (CPP) pension. Individuals 65 years or older who meet specific residency requirements are eligible to receive the Old Age Security (OAS) benefit.
While the CPP and OAS are lifetime benefits, are they enough to live comfortably in the later years of life? Retirement planners and financial experts recommend supplementing these pensions with additional income sources. But how?
If you scout for investments on the TSX, a pair of dividend stocks are built to last and can provide pension-like income. Canadian Utilities (TSX: CU) has raised its dividend for 52 consecutive years, while Imperial Oil (TSX: IMO) has been a dividend payer for more than 100 years.
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First dividend king
Canadian Utilities is Canada’s first dividend king. The $10.3 billion Alberta-based diversified global energy infrastructure corporation boasts a stable business model. Its economic moat stems from its regulated utilities. At $37.67 per share (+10.9% year-to-date), prospective investors can partake in the 4.9% dividend yield and expect higher payouts in succeeding years.
In Q1 2025, adjusted net earnings increased 3.1% to $232 million versus Q1 2024. The ATCO Company invested 91% of its $401 million capital budget in regulated utilities. Notably, cash from operations rose 27% year-over-year to $637 million.
Bob Miles, President and Chief Operating Officer of Canadian Utilities, said, “We see positive momentum in Alberta with significant opportunities for growth.” Its Chief Financial Officer, Katie Patrick, added, “We remain focused on strong cash generation to finance our enhanced capital program.”
Because of increased industrial investment across the company’s service areas and a supportive regulatory environment, Miles believes that Canadian Utilities is in a favourable position.
Management expects to invest $5.8 billion in regulated utilities in Canada over the next three years. The $1.5 billion investment in the natural gas transmission business, tied to the Yellowhead pipeline project within ATCO Energy Systems, is a potential driver of earnings growth.
Regarding dividend growth and sustainability, Canadian Utilities is a time-tested utility stock. The company has raised dividends yearly for 52 years, notwithstanding uncertain environments and several recessions. Utilities are generally slow-growth businesses, although the annual earnings growth forecast over the next five years is 4%. The business should withstand a recession in 2025.
Reliable, safe dividends
People invest in Imperial Oil not for yield but more for financial stability and reliable dividend income. At $105.81 per share, current investors are ahead by 21.2%-plus year-to-date, in addition to the modest but safe 2.8% dividend (27.4% payout ratio). The $52.4 billion integrated energy company is Canada’s largest refiner of petroleum products.
American oil giant Exxon Mobil has a 69.6% ownership stake in Imperial Oil. Also, the construction of the country’s largest renewable diesel facility at the Strathcona refinery is on track to commence operations this year.
In Q1 2025, net income increased 7.8% year-over-year to $1.3 billion, while cash flows from operating activities climbed 41.9% to $1.5 billion. Its Chairman and CEO, Brad Corson, before his retirement in May 2025, said, “Our integrated business model, low break-even and focus on low-cost volume growth continue to support Imperial’s strategy of paying a reliable and growing dividend.”
Buy and hold
Canadian Utilities and Imperial Oil can fill the shortfall of the CPP and OAS benefits. Both buy-and-hold stocks can deliver pension-like income.
