Retirement planning can be a tedious task, especially if you don’t have enough of a financial background. While there are several ways to grow your savings to plan an early retirement, dividend stock investing could arguably be one of the most effective ways to do that. This is primarily because a dividend-yielding company usually has a more robust business model and a stronger financial position to support its future growth plans compared to a high-growth company. In addition, dividend stocks also tend to be less volatile than growth stocks, which can help you keep your risks low.
In this article, I’ll highlight two of the best TSX dividend stocks you can buy today to help you achieve your early retirement goal sooner than you think.
Enbridge stock
Enbridge (TSX:ENB) is one of the most reliable dividend stocks on the Toronto Stock Exchange, with a solid annualized dividend yield of about 7.7% at the current market price. The Calgary-headquartered energy infrastructure and transportation company currently has a market cap of $98.4 billion, as its stock trades at $46.37 per share with nearly 12% year-to-date losses.
Despite the ongoing economic uncertainties and a double-digit decline in its total revenue, Enbridge reported a 1.3% YoY (year-over-year) positive adjusted earnings growth in the first half of 2023 to $1.53 per share. Similarly, its adjusted net profit margin in the June 2023 quarter expanded significantly to 13.2% from 10.2% a year ago, reflecting the company’s ability to continue posting strong profitability even in tough times.
Although the broader market selloff has driven this top TSX dividend stock downward in 2023, Enbridge’s predictable cash flows, diverse and low-risk business model, and expanding presence in renewable energy and crude oil export segments can help it recover fast.
BCE stock
BCE (TSX:BCE) could be another attractive TSX dividend stock that long-term investors can add to their retirement portfolio in 2023. This Verdun-based communications giant has a market cap of $48.3 billion as its stock trades at $53.10 per share with roughly 11% year-to-date losses. At this market price, the company offers an attractive 7.3% annualized dividend yield, and just like Enbridge, it also distributes its dividend payouts every quarter.
In the first half of 2023, BCE’s total revenue improved by 3.5% YoY to $12.1 billion. Even as its advertising sales in the second quarter fell 9% from a year ago due mainly to the ongoing advertising industry-wide downturn in North America, the Canadian telecom company posted a strong 20% YoY increase in its Bell Media digital quarterly sales. While inflationary pressures and other macroeconomic challenges drove its adjusted earnings down in the first half of the year, BCE’s consistent focus on revenue diversification by expanding its fibre network and benefitting from 5G and multi-product bundling momentum brightens its long-term growth outlook.
Notably, BCE has been increasing its annual common share dividends by at least 5% for 15 consecutive years. Given that, besides the positive fundamental factors I mentioned above, BCE’s strong dividend-growth track record makes it a really attractive TSX dividend stock to have in the retirement portfolio.
