A major investment goal for a retiree is earning dependable income while preserving (and hopefully growing) one’s capital. Luckily, the TSX is home to a wide array of dividend stocks across sector and industry. You can find a great mix of dividend stocks that can reliably pay income and provide reasonable capital returns over time.
If you are looking for some dividend champions for your portfolio, these three dividend stocks can provide a retiree solid income, inflation protection, and peace of mind.
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Fortis: A champion for retirees
Fortis (TSX:FTS) must be at the top of the list for a retiree’s portfolio. You don’t get much steadier than 52 years of consecutive dividend increases. This stock is the closest thing to a bond. However, its even better than a bond.
From a total return perspective, Fortis has delivered a 10.7% compounded annual total return. That actually beats the market. The best part is that has come at considerably less volatility and risk than the market.
Fortis’ regulated utilities form the backbone of the energy grid in North America. Its services are essential. Consequently, it gets rewarded with a predictable regulated rate. It also gets opportunities to grow and earn an adequate risk-adjusted return on those projects.
Fortis yields 3.1% today. It is certainly not the cheapest utility you will find. However, it has great assets and it is managed very prudently. If you want peace of mind (and predictable returns), this is the ideal dividend stock to hold.
Pembina Pipeline
Pembina Pipeline (TSX:PPL) is another ideal stock for a retiree’s portfolio. With Pembina, you get a slightly higher dividend yield, but you still get a resilient business model.
Pembina provides essential energy infrastructure across Western Canada. It offers everything from collection and egress pipelines to fractionation plants to storage to export terminals. Over 85% of its income is contracted. That income widely supports its dividend. It is aiming to grow its contracted core income by a 5–7% compounded rate to 2030.
Pembina is one of only a few companies that has an LNG terminal actually in construction. It should be operational by late 2028.
The pipeline operator recently announced plans to power a data centre complex in Alberta. It also announced intentions to participate in the construction of a new pipeline from Alberta to the West Coast.
Pembina stock yields 4% right now. It has raised its dividend every year since 2022. It is a great stock for a retiree seeking to earn income and decent capital upside in the coming years.
Granite REIT: Real estate for retirees
Granite Real Estate Investment Trust (TSX:GRT.UN) is a compelling stock if a retiree wants exposure to real estate. It is the largest industrial REIT in Canada. If you want exposure to the backbone of commerce, these are the assets you want to hold. They are institutional quality manufacturing, logistics, and e-commerce properties.
It has over 98% occupancy, high credit quality tenants, and an average lease term over five years. This REIT has maintained a very prudent balance sheet. This has afforded it opportunistic growth and unit buybacks when necessary.
Granite has grown its distribution for 15 consecutive years. It yields 3.6% right now. For great assets, a high-quality management team, and a solid, growing distribution, this is one of the best stocks a retiree can own.
