High-quality dividend stocks are a compelling option for retirees to generate steady income. Notably, several Canadian stocks with fundamentally strong businesses have been consistently paying and regularly increasing their dividends over time, making them perfect stocks for retirement income.
Against this backdrop, here are three Canadian stocks that are dependable bets for retirees to generate worry-free income.
Source: Getty Images
Telus
Canadian communication giant Telus (TSX:T) is a reliable Canadian dividend stock perfect for retirees to generate steady income. This telecom company has consistently paid and increased its dividends for years. Notably, the telecom giant has returned approximately $23 billion in dividends since 2004 and increased them 27 times since 2011 under its multi-year dividend-growth program.
Telus’s payout ratio of 60–75% of free cash flow appears sustainable over the long term. Besides its resilient payouts, Telus offers an attractive yield of 7.5%, making it a compelling stock for investors seeking income.
Looking ahead, Telus’s diverse revenue streams and low customer churn rates bode well for growth. Furthermore, its focus on acquiring margin-accretive customers and reducing costs will enhance its profitability, allowing it to pay higher dividends. Its investment in network infrastructure and focus on expanding its broadband and wireless services bode well for growing its subscriber base and driving retention.
Overall, Telus is poised to deliver steady earnings growth, and a moderation in its capital expenditures will support higher payouts. Telus is targeting annual dividend increases of 3% to 8% through 2028, implying it will continue to return significant cash to its shareholders.
Enbridge
Retirees can easily rely on Enbridge (TSX:ENB) stock for generating stress-free income. This energy infrastructure company has been increasing its annual dividend payments since 1995, driven by its resilient business model and low-risk cash flows.
Retirees should note that Enbridge is well-positioned to continue raising its dividend in the years ahead, as the majority of its earnings are generated through regulated returns and long-term contracts. This contractual agreement adds stability to its payouts. Moreover, Enbridge follows a disciplined capital allocation strategy, targeting a payout ratio of 60%–70% of distributable cash flow (DCF).
Further, the company will benefit from high asset utilization and $28 billion in secured growth projects, which will help the company deliver consistent earnings and drive payouts. Looking forward, Enbridge aims to grow its dividend at a steady mid-single-digit pace over the medium term and return $40 to $45 billion to shareholders within the next five years. Moreover, ENB stock currently offers a high dividend yield of 5.6%.
Brookfield Renewable Partners
Brookfield Renewable Partners (TSX:BEP.UN) is another stock worth holding to generate steady retirement income. With its diverse renewable energy assets, a large installed base, and significant operating capacity, Brookfield is well-positioned to deliver steady returns. Its revenue is largely shielded from economic cycles through long-term contracts, while its customer base is highly diversified, minimizing risk.
The company is poised to benefit from rising global demand for clean energy, driven by data centres, industrial expansion, and mining. Further, its long-term, inflation-linked contracts and robust development pipeline add stability and offer strong visibility for future growth and reliable dividend payments.
Over the past 14 years, Brookfield has consistently increased its dividend distribution by at least 5% annually. Further, it offers a solid yield of 5.9%. The company’s low-cost operations, stable cash flows from contracted assets, and efficient asset recycling strategy show its ability to sustain and grow dividends. Management targets an attractive long-term total return of 12% to 15% annually. This suggests strong dividend growth potential and steady capital appreciation, making it a compelling investment.
