Canadian Retirees: 2 High-Yield Dividend Stocks to Buy and Hold Forever

Add these two TSX dividend stocks to your self-directed Tax-Free Savings Account portfolio to generate tax-free income in your retirement.

Key Points
  • Build a TFSA of monthly‑paying dividend stocks to create tax‑free, reliable retirement income rather than relying solely on CPP/OAS or a nest egg.
  • Top picks: Chemtrade Logistics (TSX:CHE.UN) — industrial chemicals, monthly payouts, ~4.64% yield — and Slate Grocery REIT (TSX:SGR.UN) — grocery‑anchored U.S. properties, monthly distributions, ~8.12% yield.
  • 5 stocks our experts like better than [Chemtrade Logistics] >

No retiree wants to have to worry about being able to handle their monthly expenses during their golden years. Unfortunately, relying on a nest egg that you’ve built up over the years alone might not be enough to fund a comfortable retirement. Pensions like the Canada Pension Plan (CPP) and Old Age Security (OAS) are there only to cover a portion of your retirement income needs, and not all of them.

It is on you to make sure you have more retirement income streams to cover the rest. To this end, building a portfolio of income-generating assets in a Tax-Free Savings Account (TFSA) can be an excellent strategy. Any income earned from interest, capital gains, or dividends can grow without incurring taxes. You can withdraw funds from the account with the kind of flexibility you cannot get with a retirement account like the Registered Retirement Savings Plan (RRSP).

While it will take time, building a sizeable portfolio of monthly dividend stocks can turn your TFSA into a self-directed pension that cannot be counted as taxable income. Here are two high-yield dividend stocks that you can consider when building such a portfolio.

senior couple looks at investing statements

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Chemtrade Logistics

Chemtrade Logistics (TSX: CHE.UN) is a $1.72 billion market-cap fund that provides industrial chemicals and services to clients in North America and worldwide. It is a monthly dividend stock that many Canadian investors own and feel confident about. Why? Well, it’s because the company provides essential industrial chemicals across a broad range of applications, including oil refining, water treatment, food processing, and manufacturing.

All these sectors require reliable supplies of essential chemicals. The recession-resistant demand means Chemtrade has stable cash flows that can comfortably fund its high-yielding dividends. With improvements in its balance sheet, lower debt, improved margins, and a focus on long-term contracts, it looks well-positioned to be a dividend stock its investors can count on.

Slate Grocery REIT

Slate Grocery REIT (TSX: SGR.UN) is another monthly dividend-paying stock, but from a completely different sector. Slate is a $903.38 billion market-cap real estate investment trust (REIT) that lets you generate monthly returns based on the number of units you hold, much like a stock. This is why REITs trade on the TSX. The REIT focuses on acquiring, owning, and leasing a portfolio of revenue-generating real estate properties across the U.S., emphasizing grocery-anchored properties.

Slate Grocery’s tenant base features some big names located at properties like Oak Hill Village, Salerno Village Square, Errol Plaza, Bloomingdale Plaza, and many more. Big chains like Walmart, Kroger, and Publix are some of the tenants in its properties. Long-term tenants mean SGR generates reliable income from its properties, translating to virtually guaranteed monthly distributions to investors. It can be an excellent way to leverage the real estate market without having to buy investment property yourself.

Foolish takeaway

Chemtrade stock and Slate Grocery REIT are two top dividend stocks that retirees can count on to generate high-yielding monthly returns. As of this writing, Chemtrade Logistics pays investors $0.0575 per month, and Slate Grocery REIT pays US$0.072 per month, translating to 4.64% and 8.12% annualized dividend yields, respectively.

If you’re a retiree looking for safety through tax-free passive income, building a portfolio of dividend stocks in a TFSA can be an excellent strategy. CHE.UN stock and SGR.UN stock can be excellent core holdings in such a portfolio.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. The Motley Fool has a disclosure policy.

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