Retirees: Sleep Soundly With These 3 Ultra-Safe Stocks

The stock market keeps plunging. Protect your capital (and get great yields!) with stocks like BCE Inc. (TSX:BCE)(NYSE:BCE) and Smart REIT (TSX:SRU.UN).

It’s official. 2018 will go down as a year many investors would like to forget.

Markets across the world ended the year in the red, something an investor can view in a negative or positive way. The good news is depressed markets create a good long-term buying opportunity. Retirees don’t really care about that bad news; they care more about what their portfolios are doing today.

The latest carnage should serve to remind older investors that protecting capital is paramount. Sure, it’s nice to have a little growth in your portfolio, but at what cost? A millennial can easily bounce back from a 20% loss. A retiree? Not so much.

The time to protect your portfolio is now, before the market dips even further. Here are three ultra-safe stocks that should do the trick.

Fortis

Fortis Inc. (TSX:FTS)(NYSE:FTS) is Canada’s largest utility stock, a sector that’s as boring as it gets. This bodes well for short-term capital protection.

At the same time, investors aren’t sacrificing long-term growth. Fortis has spent the last decade making shrewd acquisitions to expand its empire deep into the United States. Although it’s Canada’s largest utility and it has operations in the Caribbean, Fortis still gets 60% of its income from the United States.

These days Fortis is more interested in organic growth opportunities. It plans to spend $17 billion over the next five years expanding to its current network, with the majority of that spending on small, safe projects. These will add nicely to the bottom line, which in turn should support annual dividend increases in the 6% range.

Remember, Fortis has a demonstrated history of raising its dividend through thick and thin. It has increased the payout annually since 1973, which officially makes it the king of dividend growth stocks in Canada. Combine that with the current 3.8% yield and investors have an attractive income stream they can count on.

BCE

I don’t care how bad the underlying economy gets — people will still pay their phone bills. Most people just can’t live without their smartphones in 2019.

That alone bodes well for BCE Inc. (TSX:BCE)(NYSE:BCE), especially during turbulent times. BCE shares eked out a small 1% gain over the last three months versus an 11.4% decline for the TSX Composite as a whole. That’s exactly what a retiree interested in protecting capital should be looking for.

BCE’s days of being a growth stock are behind it, but the company should still be able to increase the bottom line enough to continue delivering dividend increases. It has the power to gradually raise prices to wireless, television, and internet subscribers over time. Additionally, the company is an active acquirer of various ancillary businesses.

Investors are also getting one of Canada’s best current yields. BCE shares currently yield 5.6%, or approximately double what a typical five-year GIC offers.

Smart REIT

I like to say there’s a reason why Smart Real Estate Investment Trust (TSX:SRU.UN) took that name. The folks in charge are sharp and they know it.

It all starts with the company’s Walmart exposure. Not only is the world’s largest retailer protected against upstart e-commerce competitors, but Walmart-anchored locations generate foot traffic that appeals to other retailers. Approximately 65% of Smart’s properties are anchored by a Walmart store.

Like many of its peers, Smart also has a robust pipeline of redevelopment opportunities. It has identified some 20 million square feet worth of space that can be put to a higher use. The company is also diversifying from retail space; it owns an office tower, storage facilities, and has plans to expand into the condo and retirement living markets.

If anyone can pull it off, it’s Smart. Management have proven they’re good operators.

Smart has held up quite well as the rest of the TSX has plummeted. This stability combined with Smart’s 5.7% dividend make it a great choice to hold during times of uncertainty.

The bottom line

Retirees, the time to protect your portfolio is today. Secure your capital and lock in great dividend yields today with Fortis, BCE, and Smart REIT. Even if the market reverses and starts marching higher, these are still great companies to hold over the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nelson Smith owns shares of BCE INC and WALMART INC.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »