When building a retirement portfolio, investors should look beyond current income and focus on companies that can support dependable payouts for many years. That means looking beyond the current yield and asking whether the business has durable demand, financial strength, and room to keep investing.
Some of the best answers can come from companies that operate in areas people use every day. While groceries, pharmacies, utilities, and infrastructure may not sound very exciting, they could give a retirement portfolio consistency.
In this article, I’ll highlight two Canadian dividend stocks that could help retirees build income they can rely on for decades.
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Metro stock
The first dependable dividend stock worth a closer look is METRO (TSX: MRU), a retailer built around two everyday necessities, food and pharmacy products.
Headquartered in Montréal, METRO operates or services more than 1,000 food stores and about 640 pharmacies across Quebec and Ontario. After slipping 4% over the last year, MRU stock now trades at $90.53 per share with a market cap of roughly $18.9 billion. At that price, it offers a 1.8% annualized dividend yield.
MRU’s mixed performance has come during a challenging operating stretch, as a labour conflict at METRO’s Laval produce distribution centre continued to weigh heavily on its latest results.
Even so, the retailer’s third-quarter sales rose 1.4% year-over-year (YoY) to nearly $7 billion, helped in part by new store openings. At the same time, its pharmacy same-store sales climbed 4.8%, including 6.4% growth in prescription drugs. But the company estimated that the labour conflict reduced its after-tax earnings by about $66 million.
As the company overcomes this short-term challenge, METRO intends to convert 10 Metro stores to the Food Basics banner, close one store and a satellite warehouse, and shift its e-commerce fulfilment model. These moves are expected to generate about $15 million in recurring annual net earnings improvement by the end of fiscal 2028.
For retirees, METRO’s essential retail operations and focus on improving efficiency could make the stock attractive despite the current short-term pressure.
ATCO stock
Another dividend stock that could fit a retirement portfolio very well is ATCO (TSX: ACO.X), especially for retirees who want income backed by essential services and large infrastructure investments.
The Calgary-based company operates across energy, utilities, modular structures, housing, transportation, and defence-related services. After jumping 47% over the last year, ATCO stock currently trades at $73.19 per share with a market cap of about $7.4 billion. It also offers a 2.8% dividend yield at that price.
ATCO posted adjusted earnings of $114 million in the second quarter, up 12.9% YoY. In addition, the company has several projects that could support long-term growth. ATCO Structures has secured contracts across Canada, the United States, and Australia, including workforce housing and modular projects.
Moreover, the company is moving ahead with the roughly $2.9 billion Yellowhead Pipeline after receiving key regulatory approvals. With growing adjusted earnings, regulated utility exposure, and major infrastructure opportunities, ATCO looks like another attractive dividend stock for retirees that could deliver dependable income for decades.
