Inflation can nibble nearly half the value from a retirement dollar without making a sound. At an average rate of 2%, one dollar would lose approximately 45% of its purchasing power over 30 years. Apparently, retirement bills don’t receive the memo that income has stopped.
The Bank of Canada targets inflation near 2%, making some continued portfolio growth essential throughout retirement. Dividend stocks can help by producing cash without forcing investors to sell shares whenever groceries, utilities, or an aggressively priced dental visit arrive.
The yield deserves only the first glance. Retirees should also examine free-cash-flow coverage, debt, dividend growth, and the company’s ability to keep earning through recessions. Quarterly payments aren’t inferior to monthly ones, particularly when dividends are reinvested before retirement. In fact, there is one company with strong quarterly payments that only looks like it’s getting stronger.
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Down, but not out
Rogers Communications (TSX:RCI.B) recently closed at about $49, approximately 16% below its 52-week high of $56.27. Its $2 annual dividend provides a yield near 4.1%, giving retirement investors a respectable starting paycheque without wandering into double-digit-yield danger territory.
Rogers stock provides wireless, internet, television, and business communications services across Canada. It also owns substantial media and sports assets, including the Toronto Blue Jays and a controlling interest in Maple Leaf Sports & Entertainment.
The telecommunications network creates an important competitive advantage. Building nationwide wireless infrastructure requires billions of dollars, government spectrum licences, and rather more effort than launching an online store from the spare bedroom.
Cash flow set to jump
Management now expects 2026 free cash flow between $4.1 billion and $4.3 billion, approximately $800 million more than in 2025. Rogers stock reduced its capital-spending forecast by roughly 30% as major network investments following the Shaw acquisition moved further into the rear-view mirror.
The annual dividend currently costs approximately $1.1 billion across both share classes. That consumes only about one-quarter of forecast free cash flow, leaving substantial cash available for debt reduction, investment, and eventually returning more money to shareholders.
Debt remains elevated, although the leverage ratio improved to 3.8 times adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) during the first quarter. Continued free-cash-flow growth could accelerate that reduction while Rogers stock develops its sports and media holdings into another earnings engine.
For now, Rogers stock trades around 10 times forecast earnings, which looks reasonable beside their 4.1% yield and improving cash generation. Investors comparing Canadian dividend stocks could build the position gradually rather than attempt one magnificent bottom call.
Foolish takeaway
Canadian telecom pricing remains fiercely competitive, while slower population growth could reduce subscriber additions. Rogers stock must ensure today’s capital-spending cuts don’t weaken tomorrow’s network. Debt, regulatory intervention, and volatile sports results add further risk.
The dividend hasn’t increased since 2019, meaning inflation continues eroding its purchasing power. Still, strong coverage and rising free cash flow could eventually create room for growth. Investors willing to hold through the current 16% discount may collect a useful retirement income while debt reduction and business growth build the larger reward.
