Thinking about your retirement, especially when you’re still young and in the workforce, might not have made a lot of sense a couple of decades ago. Inflation was a concern back then, but it seemed possible to save enough for a comfortable retirement without considering other revenue streams.
However, the situation is quite different now. Any standard pension program cannot cover all the expenses you might have in retirement. A good retirement plan considers standard pensions, but also takes steps to supplement that retirement income.
Stock market investing can be an excellent method to make your retirement a lot easier. Instead of worrying about creating more income streams then, you can set yourself up with a self-directed pension that you start today. Dividend investing offers the best possible avenue to explore to this end.
Today, I will discuss two high-quality dividend stocks that can be part of a solid income-focused dividend stock portfolio.
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Hydro One
Hydro One (TSX: H) is a $31.25 billion market-cap Canadian utility company. It owns and operates a portfolio of regulated transmission and distribution assets throughout Ontario. With the provincial government owning around half of it, Hydro One is a utility business backed by the government and has a monopoly in the province.
Hydro One stock pays investors $0.3331 per share each quarter, translating to a 2.56% dividend yield. While it doesn’t offer high-yielding dividends, it offers plenty of capital gains potential. As of this writing, Hydro One stock trades for $52.11 per share. It is up by 75.75% in the last five years. If you’re on the hunt for a dividend-paying stock that also offers growth through capital gains, Hydro One stock can be a good investment to consider.
Emera
Emera (TSX: EMA) is another regulated utility business to consider. The $20.21 billion market-cap energy and services company invests in electricity generation, transmission, and distribution. It also boasts assets that provide gas transmission and utility energy services. Instead of being region-specific and enjoying a monopoly, it has operations throughout North America and the Caribbean.
Emera stock pays its investors $0.7325 per share each quarter, translating to a 4.34% dividend yield. Where it might not boast the kind of track record that Hydro One has for capital gains, Emera stock more than makes up for it in high-yielding but reliable dividends. As of this writing, Emera stock trades for $67.52 per share. If you want to balance growth with reliable dividend income, Emera stock can be a good investment to consider.
Foolish takeaway
Creating passive-income streams while you are actively making money might seem like a hassle right now. However, it can be a gift that keeps on giving, especially during the best years of your life. Building a portfolio of income-generating assets in retirement accounts can help you achieve the financial freedom everyone craves for their golden years.
Against this backdrop, Hydro One stock and Emera stock can be good holdings to consider as part of a solid retirement plan.
