When you are a retiree you want a nice mix of steady growth, moderate volatility, and predictable dividend income. Luckily, Canada has plenty of these stocks to choose from. If you are a retiree looking for some stocks that meet the above criteria, here are three top TSX dividend stocks to have on your radar.
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AltaGas: A perfect utility for a retiree to hold
AltaGas (TSX: ALA) has a little bit of everything for a retiree: growth, income, and stability. Over 55% of its revenue is generated by its regulated northeastern U.S. gas utilities. The remainder is coming from a booming midstream business in Western Canada.
It just delivered a record quarter. Normalized earnings before interest, tax, depreciation, and amortization (EBITDA) rose 19% to $818 million. Earnings per share increased 16% to $1.33. AltaGas expects to hit the high end of its guidance range for the year.
AltaGas has attractive opportunities to grow its utility business through low-risk growth opportunities (including behind-the-grid data centre gas supply). Likewise, its export business is seeing significant demand supporting several smart expansion opportunities.
AltaGas yields 2.6%, but has the ability to grow its dividend by a 5–7% annualized rate over the coming five years.
Granite REIT: A retiree’s inflation hedge
Granite Real Estate Investment Trust (TSX: GRT.UN) is a strong bet if you want a bit higher yield. It has a market capitalization of $5.6 billion. Granite owns 139 large-scale logistics, manufacturing, and warehousing properties across Canada, the U.S., and Europe.
These assets are perfectly positioned for today’s modern commerce. These buildings are leased to high-grade tenants like of Magna, Amazon, and Wayfair. The REIT has 98% occupancy and an average lease term over five years. Its income stream is quite predictable, and most leases have annual inflation-linked rate increases, so there is embedded organic growth.
Granite has one of the best balance sheets amongst REITs in Canada. Its low leverage and investment grade debt provide considerable resilience for when the economy turns rocky. This REIT has a best-in-class management who have been very smart about accretive share buybacks.
Granite stock yields just under 4% today. This REIT has grown its distribution for 15 consecutive years. If you want an income hedge against inflation, Granite is a great dividend stock for a retiree.
Chartwell: Winning from a major long-term trend
Chartwell Retirement Residences (TSX: CSH.UN) is another perfect dividend stock for a retiree. With a market cap of $6.8 billion, this is the largest retirement community provider in Canada.
It operates attractive communities for aging seniors that help meet their health, social, and recreational needs. The company has a national brand and scale across the entire country.
With the baby-boomer generation aging, there is set to be a steady rise in demand for these communities. Already, Chartwell operates close to 95% occupancy. Yet, new supply is hardly keeping up. This just means that will put increased pressure on rental rate growth over the coming years.
Chartwell just delivered an exceptional quarter where revenues increased 24% and funds from operation per unit increased 35%. Clearly, the business is hitting its stride.
Chartwell stock yields 3% today. This year, Chartwell raised its dividend 2%. This is the first increase since 2020. However, given strong fundamentals, more increases are likely in the coming years. Chartwell is a perfect place for a retiree to invest for steady growth and safe dividend income over the years ahead.
