Investors heading into the twilight of their working careers and thinking about retirement have plenty of factors to consider.
From surging inflation to concerns around interest rates, valuations and overall economic strength, there are reasons why some investors may look at the stock market and think there may be better opportunities elsewhere.
While that’s a fair view for some (and some exposure to asset classes outside equities makes sense), I still think holding a portfolio of high-quality stocks makes sense for those thinking long-term. For those looking to generate passive income in retirement, here are a couple of companies I think are worth considering, even after the recent rally, which has taken so many stocks on a nice ride higher.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is among the top dividend stocks Canada has to offer. With an impressive track record of paying growing dividends (Canadian Natural has raised its distributions for more than a quarter century), there’s a lot to like about this company’s future dividend profile.
Indeed, finding a 5% dividend yield that also happens to coincide with a management team intent on raising its distributions further from here is difficult in this market. Yields have come down considerably, with the overall yield on most index funds hovering near dot-com bubble lows.
So, for those who think interest rates are more likely than not to decline from here and want exposure to a company that’s historically managed through periods of cyclicality in the energy sector, this is a top stock to consider right now.
Personally, I think the company’s cash flow generation profile and ability to continue to raise its production stand as key underlying pillars of strength. Those thinking long-term may want to give this stock a look not only due to its robust dividend profile, but also its balance sheet strength. Those are factors I’d argue will matter more in the years to come.
Maple Leaf Foods
Maple Leaf Foods (TSX:MFI) is a company I haven’t covered much in the past, but I’d argue I probably should have.
The company’s chart above is an interesting one, with investors clearly able to see a notable spike around a month ago tied to the company’s strong earnings.
A leading provider of meats, cheeses and other foodstuffs, Maple Leaf Foods is a blue-chip player in a sector I’d argue is overlooked. The company’s ability to grow into a behemoth in its sector has awarded scale and strong market share-related barriers to entry in this space. I’m of the view that this market positioning should bode well for investors banking on continued cash flow growth down the line.
With a current dividend yield of 3.6% and a strong dividend growth track record of its own, this is a defensive stock I think passive income seekers can own and sleep well at night. Given the current dynamics at play, I’d argue that’s a valuable trait.
