With no regular income to cover their expenses, retirees tend to become risk-averse investors. Their primary focus will be on capital preservation, while earning a stable passive income. Against this backdrop, let’s explore three top Canadian dividend stocks that can provide reliable income to support them during their retirement.
Source: Getty Images
Enbridge
Enbridge (TSX: ENB) stands out as an attractive dividend stock for retirees, supported by its strong business model, stable cash flows, consistent dividend track record, and healthy yield. The company’s tolling framework, long-term take-or-pay contracts, regulated utility assets, and power-purchase agreement-backed renewable energy assets provide stability to its financials and cash flows. Amid these stable and predictable cash flows, the diversified energy infrastructure company has paid dividends for 70 years. It has also raised its dividend uninterruptedly since 1995 at an annualized rate of 9%, while currently offering an attractive dividend yield of 5.58%.
Amid growing energy demand, Enbridge has identified $50 billion of growth opportunities and has planned to invest $9-$10 billion annually to strengthen its asset base. These expansions could boost your financials, with the company’s management predicting that its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) and EPS (earnings per share) will grow at a 5% CAGR (compound annual growth rate) in the medium term. Further, the company has also strengthened its financial position by lowering its debt-to-EBITDA ratio from five at the end of last year to 4.7. Considering all these factors, Enbridge appears well-equipped to sustain healthy dividend payouts, reinforcing its appeal as a retirement-friendly investment.
Bank of Nova Scotia
Another dividend stock that I believe would be ideal for retirees is Bank of Nova Scotia (TSX: BNS), which has been paying dividends uninterruptedly since 1833. The company offers various financial services across Canada, the United States, Latin America, Europe, and Asia-Pacific. Given its multiple revenue sources across different countries, the company’s cash flows have been stable and reliable, allowing it to pay dividends consistently. The company has also raised its dividend at an annualized rate of 4.9% for the last 10 years, while its forward dividend yield currently stands at 4.94%.
Moreover, BNS is advancing its long-term strategy by expanding its business in the lower-risk, more stable North American market while reducing its presence in Latin America. The company’s financial metrics are improving with its CET1 (common equity tier-one) capital ratio rising 10 basis points to 13.3% in the recently reported third-quarter earnings amid healthy internal capital generation. Additionally, investors could benefit from its ongoing share-repurchase program, which would repurchase 20 million shares between May 30, 2025, and May 29, 206. These repurchases could lower its outstanding shares by 1.6%. Additionally, the company trades at a reasonable NTM (next-12-month) price-to-earnings multiple of 11.6, making it an excellent buy.
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) is my final choice, backed by a 25-year track record of raising dividends at an annualized rate of 21%. The oil and natural gas producer operates a diversified and balanced asset base. With its large, low-risk, high-value reserves, lower capital reinvestment requirements, and efficient operations, the company has lowered its breakeven point while generating healthy cash flows. These solid cash flows have allowed the company to raise its dividend consistently, while its forward yield currently stands at 5.2%.
Moreover, CNQ has planned to invest $6 billion this year, including drilling 182 heavy crude oil multilateral wells, boosting its production capabilities. Meanwhile, the midpoint of the company’s 2025 production guidance represents a 12.4% increase from the previous year. Along with organic growth, the company also focuses on strategic acquisitions to expand its footprint. Considering these growth initiatives, I expect CNQ to continue with its dividend growth, thereby making it an ideal buy for retirees.
