3 TSX Stocks Perfect for Reliable Retirement Income

These Canadian companies are growing their dividend at a healthy pace and have well-protected yields.

| More on:

High-quality TSX dividend stocks offer regular and reliable income for your retirement. These companies have successfully operated through the recession and financial crisis and continuously paid dividends for over two decades. Further, these companies have been growing their dividend at a healthy pace, thus acting as a hedge against inflation. 

Let’s delve into three high-quality stocks that could be reliable bets for retirees. 

Fortis

Fortis (TSX:FTS)(NYSE:FTS) offers worry-free dividend income. It operates a low-risk, regulated business that generates predictable and growing cash flows, implying that its payouts are safe. Further, its growing rate base indicates that its dividend will likely increase in the future. 

This utility company has a solid track record of consistent dividend payments. For context, Fortis has paid and raised its dividend for 48 years. Further, it projects a 6% annual growth in its dividend through 2025. 

With its diversified and regulated businesses, Fortis is positioned well to deliver solid free cash flows that support its projections. Further, its rate base is expected to increase at a CAGR of 6% through 2026, which will drive its high-quality earnings base and indicate higher payouts in the future. Also, its continued investments in infrastructure, focus on expanding its renewables portfolio, and strategic acquisitions bode well for growth. 

Fortis offers a well-protected dividend yield of 3.3% at current levels with clear visibility over future payouts. This makes Fortis a must-have stock for generating reliable and regular income. 

Toronto-Dominion Bank

Large Canadian banks have been regularly paying dividends for decades, and Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is one of them. This banking giant has been continuously paying dividend for 164 years. Further, its dividend increased at a CAGR of 11% (the highest growth rate among peers) in the past 27 years. 

Notably, its dividend is supported by its solid earnings base. Toronto-Dominion Bank’s adjusted earnings have grown at a CAGR of 9.5% in the last five years. Further, its diversified revenue base and operating leverage indicate that the bank’s earnings could continue to increase in future years. 

The recovery in economic activities is expected to drive its loans and deposits volumes. Moreover, a higher interest rate will likely support its margins. Further, its improving efficiency, strong balance sheet, and high-quality asset base would support its earnings and payouts. 

Overall, Toronto-Dominion Bank’s stellar dividend payment record, sustainable payout ratio, and ability to grow earnings make it a solid investment for retirees to generate regular income. 

TC Energy

TC Energy (TSX:TRP)(NYSE:TRP) is a solid stock to generate regular income. It’s worth noting that this energy infrastructure company has been growing its dividend at a CAGR of 7% for about 22 years. Meanwhile, it projects a 3-5% annual increase in its dividend for the future. 

TC Energy’s contracted and regulated asset base and high utilization rate supports its cash flows and, in turn, its payouts. Looking ahead, its growing asset base, $24 billion secured capital projects, revenue escalators, and productivity savings position it well to deliver strong earnings growth and enhance its shareholders’ returns. It offers a quarterly payout and is yielding 5% at current levels.

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.

More on Dividend Stocks

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »

young people stare at smartphones
Dividend Stocks

GST/HST “Vacation”: Everything Canadians Need to Know

The GST/HST "vacation" is a little treat for the holidays, along with a $250 payment. What should you do with…

Read more »

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »