Not every Canadian has access to a workplace pension. This means that for many Canadians, retirement income needs to increasingly come from savings and investments built from Canadian dividend stocks.
Given the right mix of those Canadian dividend stocks, investors can build a recurring stream of income that doesn’t require selling any shares.
While this won’t replace a pension, regular contributions and reinvested dividends can make a huge difference when retirement finally comes around.
All that’s needed is the right Canadian dividend stocks to invest in. Here are three options for investors to start building that income stream.
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Fortis offers dependable dividend growth
Fortis (TSX: FTS) is one of the largest utility stocks in North America. The utility operates regulated electric and gas businesses across Canada, the United States, and the Caribbean.
Those businesses provide essential services, which translate into a predictable revenue stream that lets Fortis invest in growth and pay a handsome dividend.
That growth comes in the form of expanding and modernizing Fortis’s regulated utility network. Fortis has earmarked $28.8 billion for its capital plan through 2030 for that purpose.
Turning to income, as of the time of writing, Fortis offers a yield of 3.39%. While that’s not the highest yield on the market, it is stable and continues to grow. In fact, thanks to the stability of its business, Fortis has been able to raise its dividend for over 50 consecutive years without fail.
For an investor looking at Canadian dividend stocks to build retirement income, Fortis is an option that’s hard to ignore.
Canadian Natural Resources adds income and growth potential
A second option among the best Canadian dividend stocks on the market right now is Canadian Natural Resources (TSX: CNQ).
Canadian Natural is an energy giant with a diversified portfolio of oil and natural gas assets, including long-life operations that can continue to generate cash flow. Apart from its operations in Canada, Canadian Natural also has operations in the U.K. and in Offshore Africa.
Canadian Natural’s long-life asset base generates cash flow and provides it with the flexibility to fund operations and return capital to shareholders.
Like Fortis, Canadian Natural has built a reputation for rewarding shareholders. That includes both dividend growth through annual dividend increases and share repurchases.
As of the time of writing, Canadian Natural offers a yield of 3.53%. The company has also amassed over two consecutive decades of increases, earning its spot on the list of Canadian dividend stocks to own.
BMO adds a bank dividend for long-term retirement income
I’d be remiss if I didn’t mention at least one of the big bank stocks on the list of Canadian dividend stocks to buy. Today, Bank of Montreal (TSX: BMO) earns that spot.
BMO is Canada’s oldest bank, offering a mix of personal and commercial banking and wealth management.
One of the major advantages that the big banks have is stability. BMO, in particular, operates a large domestic network that’s backed by the well-regulated Canadian financial sector. Complementing that is the bank’s increasing exposure to its primary growth market, the U.S.
As one of the Canadian dividend stocks to own, BMO offers a yield of 2.85%. Investors should note that the lower yield comes with long-term growth potential and a history of dividend increases spanning well over a decade.
Canadian dividend stocks can help build retirement income
Is it possible to build a portfolio that produces retirement income from the trio of investments outlined above?
Absolutely. And even better, each of the three Canadian dividend stocks mentioned above offers something different.
Fortis provides stability. Canadian Natural Resources adds energy-driven cash flow and growth potential. BMO brings a proven bank dividend and exposure to the financial sector.
Together, they offer a diversified starting point for investors building retirement income over time. The key is to start contributing early, stay diversified, and give that income stream enough time to grow.
Buy them, hold them, and watch your future retirement income grow.
