There is nothing better than collecting dividends from stocks that you don’t have to worry about. Earning passive income is all about minimizing stress. That is especially true if you require that income for retirement. You want stocks that you can tuck away, collect dividends, and then go on enjoying your life.
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Sleep-weSleep well at nightese top dividend stocks
You will have to be more choosy when picking dividend stocks for retirement. Dividend yield is important. However, you also want to ensure that the dividends are sustainable (and hopefully growing). You don’t want to sacrifice business quality just to get a few extra percentage points of yield.
If you are looking for some sleep-well-at-night stocks for dividends, these are three of my favourites.
Canadian Natural Resources
Canadian Natural Resources (TSX: CNQ) has established an incredibly resilient and essential energy business in Canada. It is Canada’s largest energy producer with over 1.68 million barrels of oil equivalent (BOE) per day in production.
It has increased its dividend for 26 years consecutive years. That dividend has increased by a 20% compounded annual growth rate (CAGR) over that time. The dividend is just a reflection of the increasing quality of its business.
Not only has it gotten larger, but Canadian Natural has become more efficient and profitable. It is generating a massive amount of cash. It sits with an incredibly strong balance sheet that will support continued shareholder returns (share buybacks and dividend increases).
This dividend stock is up 51% this year. Its yield is 3.5% today. If you just want a great stock that you can put away for a decade (or more), Canadian Natural is an excellent pick.
Fortis: A top dividend-growth stock
Fortis (TSX: FTS) is another dividend stock hard to ignore if you want to invest and rest easy at night. It is a very boring business that is perfect for a retiree’s portfolio.
It operates nine regulated utility businesses across North America. These are energy transmission and distribution infrastructure assets. These assets form the backbone of the power grid in North America.
Power consumption is starting to increase across the continent. That bodes favourably in the long term for Fortis. It certainly supports its plans to keep growing by about 7% a year for the coming five years.
Fortis has a strong balance sheet to support its growth plans and sustain consistent dividend growth. It has raised its dividend for 52 consecutive years. It offers a 3.4% dividend yield today.
Granite REIT
Granite Real Estate Investment Trust (TSX: GRT.UN) is one of the most defensive stocks you can buy if you like real estate. Its warehouses, manufacturing facilities, and logistics centres form the backbone of modern commerce.
It offers modern, high-quality properties that meet the demands of e-commerce and distribution companies. With over 98% occupancy and long-term leases, its income is very secure.
Granite has one of the best balance sheets in the Canadian real estate sector. This has afforded flexibility to raise its distribution for 15 consecutive years. Likewise, it has been opportunistic to buy back stock whenever the stock gets cheap.
Granite stock yields 4% right now. It looks like an attractive addition at today’s price.
