Retirees: 2 Top Dividend Stocks to Buy for Stable Income

These two top dividend stocks could be perfect additions to your retirement portfolio to supplement your pension income during retirement.

| More on:

Canadian retirees have been worried about the performance of their investments ever since the pandemic struck. The volatility created by the pandemic-induced challenges has had a significant impact on stock markets worldwide. If you are a Canadian retiree or are nearing retirement, high-growth investments are too much of an unnecessary risk for you to consider.

If you want to reevaluate your portfolio and gear it more towards supporting your retired life, dividend investing might be the right way to go.

Today, I will discuss two top dividend stocks that you can add to your investment portfolio to generate a reliable and stable passive income that can supplement your retirement pensions through the Old Age Security (OAS) program and Canada Pension Plan (CPP).

Fortis

Fortis (TSX:FTS)(NYSE:FTS) is a no-brainer for many stock market investors seeking income-generating assets that can offer them a reliable and stable income stream. Fortis is a $27.95 billion market capitalization utility holdings business that owns and operates several utility businesses across Canada, the U.S., Central America, and the Caribbean.

The company earns most of its revenue through highly rate-regulated and long-term contracted assets. It means that Fortis generates predictable cash flows that the company’s management can use to comfortably fund its growing shareholder dividends. Fortis is a Canadian Dividend Aristocrat with a 48-year dividend-growth streak. At writing, the stock trades for $59.10 per share, and it boasts a 3.62% dividend yield.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a $110.24 billion market capitalization giant in Canada’s banking industry. When it comes to investing in reliable dividend stocks, you cannot go wrong with any of Canada’s Big Six banks. Scotiabank is the third-largest Canadian bank in market capitalization. It might make for a more attractive pick among its peers due to its extensive presence in the Pacific Alliance trade bloc countries of Colombia, Mexico, Peru, and Chile.

These Latin American countries have been suffering due to the pandemic. However, as the economic reopening continues, these markets continue to boost Scotiabank’s international operations. The bank’s domestic operations performed well during 2021 and could be set for better performance with the impending announcement of rate hikes. Combined with its presence in Latin America, Scotiabank stock could see a significant boost in the coming years.

At writing, Scotiabank stock trades for $90.68 per share, and it boasts a juicy 4.41% dividend yield.

Foolish takeaway

One of the best ways to supplement your retirement nest egg is to invest in reliable income-generating assets that boast a strong track record of providing investors with stable and increasing shareholder dividends.

If you buy and hold a portfolio of income-generating assets in your Tax-Free Savings Account, your investment returns will be tax free, and you won’t have to worry about moving to a higher tax bracket with the additional income.

Fortis stock and Scotiabank stock could be excellent assets to begin building a dividend income portfolio.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA and FORTIS 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 »