Canadian retirees can generate a passive income stream by investing in blue-chip dividend stocks with increasing payouts. In addition to consistent dividend payments, investors can also benefit from long-term capital gains, both of which can allow them to generate inflation-beating returns over time.
In this article, I have identified two Canadian dividend stocks every retirement portfolio should hold right now.
Is this TSX dividend stock a good buy?
Valued at a market cap of $150 billion, Enbridge (TSX:ENB) is among the largest energy infrastructure companies in the world. Despite a challenging macro environment, Enbridge delivered a strong quarter in Q2, with record earnings before interest, taxes, depreciation, and amortization.
Enbridge is a diversified energy infrastructure leader that continues to demonstrate the resilience of its low-risk business model, generating 98% of its EBITDA from regulated returns or long-term contracts.
As power demand accelerates due to the artificial intelligence megatrend, Enbridge has secured more than $1 billion in power-related projects. This includes the $900 million Clear Fork Solar facility contracted with Meta and the Line 31 expansion serving industrial customers under 20-year agreements. These wins validate management’s “all-of-the-above” energy approach across gas transmission, renewable power, and utility operations.
Gas transmission benefits from surging data center and liquified natural gas demand, with the business positioned within 50 miles of 29 new data centers and connected to 100% of Gulf Coast LNG export capacity. Recent utility acquisitions continue performing well despite regulatory challenges in Ohio.
Enbridge has increased its annual dividend from $2.12 per share in 2016 to $3.66 per share in 2024. Analysts forecast these payouts to grow to $4.17 per share in 2029, enhancing the effective yield to more than 6%.
At 4.7 times debt-to-EBITDA, the balance sheet remains healthy with $9–10 billion annual investment capacity. The company’s incumbent North American footprint, diversified business model, and $32 billion secured capital program make ENB stock an attractive defensive play with growth optionality in the evolving energy landscape.
Is this banking stock a buy, sell, or hold?
Another blue-chip stock retirees should own is Toronto-Dominion Bank (TSX:TD), which offers a yield of 4.1%. Toronto-Dominion Bank delivered results in fiscal Q3 (ended in July) with earnings of $3.9 billion or $2.20 per share. The bank increased revenue by 10% driven by strong performance in Canadian Personal and Commercial Banking, deposits, and loan volumes.
TD’s primary focus remains on the U.S. AML remediation program, where management reports being on track to complete the majority of management actions by the end of 2025.
The bank has invested $500 million in remediation this year, with similar spending expected next year. Concurrently, TD has successfully executed its U.S. balance sheet restructuring, achieving the targeted 10% asset reduction and completing a $25 billion investment portfolio that is expected to generate $500 million in annual net interest income benefits.
Credit quality remains strong, with impaired provision for credit losses (PCLs) declining quarter-over-quarter. However, TD added $600 million in performing reserves across three quarters to address policy and trade uncertainty. Management expects PCL ratios to remain within the 45–55 basis point range for fiscal 2025.
Wholesale Banking continues to demonstrate the benefits of the TD Cowen acquisition, delivering over $2 billion in quarterly revenue for the third consecutive quarter as capital markets activity normalizes.
The bank maintains strong capital metrics with a 14.8% CET1 (common equity Tier 1) ratio while progressing on its $8 billion share buyback program.
Despite current challenges, the bank’s diversified platform, strong domestic franchise, and disciplined approach to risk management position it well for future growth as regulatory issues are resolved.
TD Bank has raised its annual dividend from $2.16 per share in fiscal 2016 (ended in October) to $4.08 per share in fiscal 2024. Analysts forecast these payouts to increase to $4.55 per share in fiscal 2029.
