Retirees: 2 High-Yield Dividend Stocks to Buy in July

Dividend income and long-term growth? You get that and more from investing in these top-notch dividend stocks on the TSX today.

Amy Legate-Wolfe ❯

@amylegatewolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest.

Published June 26, 2024 4:20 pm EDT

Retirees, it’s time to let your money work as hard as you did all those years! High-yield dividend stocks are the VIP ticket to a comfortable and carefree retirement. Imagine sipping a piña colada on a sunny beach while your investments churn out regular cash flows. Sounds enticing, right?

These stocks can act as a sturdy anchor in the sometimes stormy seas of the stock market. High-yield dividends often come from well-established companies with solid track records. This means they’re less likely to be swayed by market turbulence, giving you peace of mind and stability. With the power of compound interest, reinvesting those dividends can supercharge your portfolio. It’s like a snowball rolling down a hill, gathering more and more snow as it goes. Before you know it, your nest egg can grow into a full-blown financial fortress.

Sienna stock

Imagine a retirement where your investments not only grow but also support a business you believe in. Intrigued? Let’s dive into the facts and figures that make Sienna Senior Living (TSX:SIA) a must-have for your golden years.

This company specializes in providing top-notch senior living facilities, ensuring that residents enjoy comfort, care, and a sense of community. But it gets better. Sienna Senior Living reported robust revenue growth of 12% year-over-year, reaching an impressive $250 million. This steady climb isn’t just a fluke; it’s a testament to their strategic expansions and high occupancy rates. With more seniors seeking quality living spaces, Sienna is perfectly positioned to capture this growing market.

Now, let’s talk dividends, because who doesn’t love a steady stream of income? Sienna Senior Living offers an attractive dividend yield of 6.6%. This means for every $1,000 you invest, you’re pocketing $66 annually. Not too shabby, especially when you consider the stability of the senior housing market. Plus, Sienna’s payout ratio is a healthy 70%, indicating that they’re not overextending themselves to pay dividends. They have a strong balance sheet with a debt-to-equity ratio of 0.8, showcasing their prudent financial management. This means they’re balancing growth with sustainability, ensuring that they can continue to reward shareholders without compromising their financial health.

Freehold Royalties

Now let’s talk about a golden opportunity on the TSX that could make your retirement not just comfortable, but downright luxurious: Freehold Royalties (TSX:FRU). Freehold Royalties is a cash flow king.

This company owns oil and gas royalties, meaning they earn money from the production of energy resources without the hefty costs of extraction and production. It’s like owning a slice of a very profitable pie! In their latest earnings report, Freehold Royalties posted impressive revenue of $400 million, marking a 15% increase from the previous year.

Furthermore, Freehold Royalties boasts a mouth-watering dividend yield of 7.9%. For every $1,000 you invest, you’re raking in $78.90 annually. That’s a pretty sweet deal, especially when you consider the reliability of the oil and gas sector. With energy prices often riding high, those dividends are likely to keep flowing your way.

But the fun doesn’t stop there. Freehold’s payout ratio is a conservative 60%, indicating they’re distributing earnings responsibly while retaining enough to fuel future growth. Their balance sheet is rock solid, with a debt-to-equity ratio of just 0.4, showcasing their financial prudence and stability. This means they’re not only paying you well now but are also positioned to keep those payments coming for the long haul.

Bottom line

So, retirees, why settle for ordinary investments when you can have the excitement and rewards of Sienna Senior Living and Freehold Royalties? These stocks offer high yields, solid financial health, and the peace of mind that comes with supporting essential services and diversified energy resources. It’s time to let your investments work as hard as you did all those years and make your retirement truly golden!