Retirees who do not have a steady income stream to cover their daily expenses tend to prioritize saving capital while they generate a stable and reliable stream of passive income. Setting up good passive income streams is part of a solid retirement plan. Considering the shorter investment horizons retirees have, they don’t have the luxury of waiting for the long run to recover from market downturns.
Retirees investing in the stock market should consider a more conservative and lower-risk approach to it. Against this backdrop, high-yielding dividend stocks with solid fundamentals make the most sense. Fortunately, the TSX has no shortage of high-quality dividend stocks that boast greater-than-average yields.
Today, I will discuss two dividend stocks that can be excellent investments for retirees.
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Enbridge
Enbridge Inc. (TSX: ENB) is a $161.5 billion market-cap TSX energy stock that is heavily involved in the North American energy infrastructure space. Its extensive network is responsible for transporting around a fifth of the crude consumed in the region, and it boasts one of the biggest utility businesses in North America. The company has also expanded to the renewable energy sector to prepare for a greener future in the energy industry.
Its contracted business model, steady dividend growth, and high-yielding dividends backed by a solid business make it an attractive investment for retirees. As of this writing, Enbridge stock trades for $74.01 per share and pays investors $0.97 per share each quarter, translating to a 5.2% dividend yield that you can lock into your self-directed portfolio today.
SmartCentres REIT
SmartCentres REIT (TSX: SRU.UN) is another reliable dividend stock that can be a good investment for retirees. The $5.1 billion market-cap Real Estate Investment Trust (REIT) is one of Canada’s largest fully integrated REITs, with a growing portfolio of mixed-use properties located across communities nationwide.
An interesting fact about SmartCentres is that approximately 90% of Canada’s population lives within 10 kilometres of one of its properties. The trust also has a diversified tenant base, especially across its retail properties, as 95% of them operate at a regional or national level, and almost two-thirds of its tenant base provides essential services.
The trust continues to expand its footprint, with around 0.8 million square feet of properties currently under development and a significant pipeline of projects that can expand its tenant base and overall revenue.
As of this writing, SmartCentres REIT trades for $28.68 per share, and it pays investors $0.15417 per share each month, translating to roughly a 6.5% annualized dividend yield.
Foolish takeaway
A portfolio of high-quality dividend stocks held in a retirement account like a Tax-Free Savings Account (TFSA) can be an excellent strategy for retirees. All the returns that qualifying investments held in the account generate can grow without incurring taxes. It means retirees can count on such a portfolio for extra income to supplement their pensions and enjoy a more comfortable retirement. To this end, Enbridge stock and SmartCentres REIT can be excellent investments to consider.
