With no regular employment income, retirees often seek a reliable source of income to cover expenses and maintain their lifestyle. In a low-interest-rate environment, investing in high-quality dividend-paying stocks with a strong and consistent track record of payouts can be an effective way to generate dependable passive income. Against this backdrop, let’s look at my three top picks.
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Enbridge
Enbridge (TSX:ENB) is a Calgary-based diversified energy company that generates approximately 98% of its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) from regulated assets and long-term, take-or-pay contracts. As a result, it has minimal exposure to commodity price volatility, with roughly 80% of its adjusted EBITDA indexed to inflation. These characteristics support stable and predictable cash flows, enabling Enbridge to pay and grow its dividend consistently.
The company has paid dividends for more than 70 years and has increased its dividend for 31 consecutive years. Its current quarterly payout of $0.97 per share yields 5.8%, making it particularly attractive to income-focused investors.
Looking ahead, Enbridge has identified $50 billion in growth opportunities and plans to invest approximately $10 billion annually to advance these initiatives. Management expects to place about $5 billion of projects into service in 2025 and $8 billion this year. Supported by this visible growth pipeline, Enbridge aims to return $40–$45 billion to shareholders over the next five years, reinforcing the sustainability of its dividend and making the stock an ideal choice for retirees seeking reliable income.
Fortis
Fortis (TSX:FTS) serves approximately 3.5 million customers by meeting their electric and natural gas needs through a highly regulated asset base. The company operates nine utility businesses, with the majority of its assets concentrated in low-risk transmission and distribution operations. Approximately 99% of its assets are regulated, which largely shields its financial performance from economic cycles and market volatility. This stability, combined with steady asset base expansion, has supported consistent financial growth and enabled Fortis to raise its dividend for 52 consecutive years. The utility currently pays a quarterly dividend of $0.64 per share, yielding 3.5% on a forward basis.
Looking ahead, Fortis is continuing to expand its asset base through a $28.8 billion five-year capital investment program. These investments could grow its rate base at an annualized rate of 7% to $57.9 billion by 2030. In addition, operational efficiency initiatives, preventive maintenance programs, and investments tied to the energy transition should support margin expansion and drive earnings growth.
Supported by these initiatives, Fortis’s management is hopeful of raising its dividend at an annualized rate of 4–6% through 2030, making the stock an ideal choice for retirees seeking stable and growing income.
Bank of Nova Scotia
My final pick is the Bank of Nova Scotia (TSX:BNS), which has paid dividends uninterruptedly since 1833. The bank offers a comprehensive suite of financial services across more than 55 countries. Its diversified revenue streams generate stable and reliable cash flows, enabling it to maintain consistent dividend payments. Over the past decade, BNS has increased its dividend at a compound annual rate of 4.3%, while its forward dividend yield currently stands at 4.3%.
In addition, the bank’s financial performance has been improving, with its fourth-quarter revenue and adjusted earnings per share rising by 15% and 22.9%, respectively. BNS has also strengthened its balance sheet and improved its loan-to-deposit ratio, positioning the bank for sustainable long-term growth.
Furthermore, management is strategically shifting its focus toward higher-margin, lower-risk North American markets while reducing exposure to lower-return, higher-risk Latin American operations. This realignment could streamline operations, enhance profitability, and reinforce dividend sustainability, making it ideal for retirees.
