The search for the top dividend stocks in Canada for retirees starts well before retirement. Retirees of tomorrow need investments that provide consistent income today and continue to grow over longer periods.
That is part of the reason retirees turn to established businesses with reliable payouts and a strong history of growth.
While there’s no shortage of great dividend payers on the market, three in particular are worth considering right now.
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Consider this stock for dividend growth
Fortis (TSX: FTS) is one of Canada’s best-known regulated utility stocks. The company offers electric and natural gas utility services to parts of Canada, the United States, and the Caribbean.
Fortis’s operations provide essential services to those markets and generate a predictable, recurring cash flow, even when the broader economy slows. This allows Fortis to reliably invest in growth initiatives and pay one of the most stable dividends on the market.
As of the time of writing, Fortis offers investors a yield of 3.37%. Fortis also boasts the second-longest dividend growth streak in Canada. The company has provided annual upticks to its dividend for over five decades.
This handily makes Fortis one of the top dividend stocks in Canada for retirees who want a growing stream of income.
Generate a higher-yield income from essential infrastructure
Another option for investors to consider is Enbridge (TSX: ENB). Enbridge is one of the largest energy infrastructure companies on the planet. The company operates a portfolio of pipelines, renewable energy assets, and natural gas utilities.
The bulk of Enbridge’s cash flow is derived from long-term contracts and regulated utility operations. This helps Enbridge generate more predictable cash flow, allowing the company to pay its quarterly dividend and invest in growth.
That growth comes primarily from Enbridge’s multi-billion-dollar backlog of projects.
As of the time of writing, Enbridge’s quarterly dividend carries a yield of 5.56%. This makes it one of the better-paying options on the market. And like Fortis, Enbridge has an established precedent of annual increases that stretches back over three decades.
Add some financial strength and long-term growth
Rounding out the top dividend stocks in Canada for retirees is one of Canada’s big bank stocks. Royal Bank (TSX: RY) operates a diversified business that includes personal and commercial banking, wealth management, and insurance.
The big banks are renowned for their long-term stability, providing both dividend and capital growth over long periods. In fact, the bank has seen its stock price surge 41% over the trailing 12-month period. Over a longer five-year period, Royal Bank has surged over 110%.
As of the time of writing, Royal Bank’s yield comes in at 2.48%. That’s lower than both Enbridge and Fortis, but it comes with over a century of paying dividends and that long-term growth potential.
The top dividend stocks in Canada for retirees
Fortis, Enbridge, and Royal Bank are some of the top dividend stocks in Canada for retirees because each stock offers growth, income, and some defensive appeal. Additionally, each stock fills a different role in a well-diversified portfolio.
Fortis provides defensive dividend growth and consistency that utility stocks provide. Enbridge offers higher current income and a diversified energy infrastructure backbone. Finally, Royal Bank adds financial-sector exposure with long-term growth potential.
In my opinion, one or all of the above should be core holdings in a well-diversified portfolio.
