Investing $5,000 in dividend-paying stocks can be a reliable way to generate steady passive income. But for retired Canadians, companies with strong fundamentals, a consistent history of generating profits and increasing their dividends over time, and sustainable payouts are the smartest income stocks.
While no stock is without risk, dividend-paying companies with solid balance sheets, stable cash flow, and a focus on uninterrupted distributions tend to be more resilient. They often handle market turbulence more effectively, enabling retirees to generate a steady income in all market conditions.
Thus, for retired Canadians, here are the smartest income stocks to buy with $5,000.
Enbridge
Enbridge (TSX:ENB) is one of the smartest income stocks for retired Canadians. Since 1995, Enbridge has raised its annual payout every single year. This reflects the resilience of its business model, the growing earnings base, and its commitment to rewarding shareholders in all economic conditions.
Enbridge’s vast energy infrastructure network connects major supply and demand zones, thus witnessing high utilization of its system. Further, its pipelines and utility assets operate under long-term contracts and benefit from low-risk commercial arrangements. This setup allows Enbridge to generate steady cash flow regardless of fluctuations in commodity prices, positioning it well to reward shareholders with higher dividends.
The outlook for Enbridge’s payouts remains solid. Its diversified revenue sources, expanding utility base, a growing portfolio of renewables, and higher energy demand from data centers position it well to deliver solid earnings. At the same time, management is focused on operational efficiencies and cost-effective expansion projects, all of which support ongoing growth in distributable cash flow. Enbridge expects mid-single-digit dividend growth in the years ahead and offers a sustainable yield of about 5.5%.
Telus
Telus (TSX:T) is another solid income stock to add to your retirement portfolio. Since 2004, the company has delivered more than $24 billion back to shareholders, supported by a dividend program that has steadily expanded since its formal growth plan began in 2011. With a current yield hovering around 8.9%, the stock looks compelling.
Its ability to consistently generate profitable growth gives Telus the financial power to pay and increase its dividend. The company targets a payout ratio of 60–75% of free cash flow, a range that supports both income distributions and reinvestment into its network and services. Looking ahead, Telus projects dividend growth of 3–8% annually through 2028.
Telus’s network expansion and a diversified revenue model augur well for growth. Strong bundled offerings, supported by improved infrastructure, are helping the company win new subscribers while retaining existing customers. At the same time, Telus is focusing on attracting higher-margin clients and reducing operating costs, thereby strengthening earnings potential. These factors, along with an expected moderation in capital expenditure, will drive its payouts and share price in the coming years.
SmartCentres REIT
SmartCentres REIT (TSX:SRU.UN) is a reliable dividend stock for Canadian retirees to generate steady income. This real estate investment trust (REIT) owns 197 properties located in prime locations across Canada. Thanks to these high-quality properties, the REIT has consistently experienced high occupancy and strong leasing demand, which, in turn, drives its payouts.
SmartCentres’s high-quality tenants, including large retailers, further enhance stability and drive higher rent collection and retention. Thanks to its high-quality assets and tenants, SmartCentres generates solid net operating income (NOI), supporting its monthly payouts. It also offers a high yield of over 7%.
Beyond its core retail properties, SmartCentres is steadily evolving. The REIT is investing in mixed-use developments that broaden its revenue base and unlock future growth. Moreover, its extensive land holdings in major Canadian cities position it well for long-term growth. Overall, the REIT is poised to generate stable operating income and funds from operations, which will drive its future payouts.
