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Retirees: Protect Your Portfolio With These Defensive Dividend Stocks

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protect, safe, trust
protect, safe, trust

Written by Ambrose O'Callaghan at The Motley Fool Canada

The S&P/TSX Composite Index was down 116 points in mid-morning trading on May 12. Canadian retirees are facing a challenging environment in the form of high inflation, rising interest rates, and an assortment of geopolitical fires. Today, I want to discuss how retirees can seek to protect their portfolio in this dangerous climate. We will look at three defensive dividend stocks that are worth snagging. Let’s dive in.

Hydro One is a dividend stock you can trust for the long haul

Hydro One (TSX:H) is a Toronto-based electricity transmission and distribution company. It boasts a monopoly in the province of Ontario. This is one of the reasons I’d suggested that I was holding onto the dividend stock for the long term back in the summer of 2020.

Shares of Hydro One have climbed 6.2% in 2022. It released its first-quarter 2022 earnings on May 5. The company reported total revenues of $2.04 billion — up from $1.81 billion in the previous year. Hydro One delivered net income of $310 million, or $0.52 per share, compared to $268 million, or $0.45 per share, in the first quarter of 2021.

This dividend stock currently possesses a very solid price-to-earnings (P/E) ratio of 20. Retirees can count on its quarterly dividend of $0.2796 per share. That represents a 3.2% yield.

Retirees should seek exposure to the grocery retail space in the spring

Back in March, I’d suggested that Canadian investors target grocery retail stocks as food prices were on the rise. Indeed, these equities proved to be highly resilient during the 2020 market pullback. That is why I’d recommend grocery retailers for retirees. Metro (TSX:MRU) is a dominant grocery and pharmaceutical retailer in the province of Quebec. Shares of this dividend stock have increased 1.7% so far in 2022. The stock is up 17% in the year-over-year period.

The company released its second-quarter 2022 earnings on April 21. Sales increased 1.9% from the previous year to $4.27 billion. Meanwhile, adjusted net earnings climbed 5.1% to $204 million, or 7.7% on a per-share basis to $0.84. In the year-to-date period, Metro delivered adjusted net earnings growth of 6.8%, or 9.6% to $418 million, or $1.72 per diluted share.

Metro last had a favourable P/E ratio of 19. It offers a quarterly dividend of $0.275 per share, which represents a modest 1.6% yield.

One more dividend stock for retirees to target today

Telus (TSX:T)(NYSE:TU) is the third and final dividend stock I’d recommend for retirees as we approach the middle of May. This Vancouver-based company provides a range of telecommunications and information technology products and services to domestic consumers. Its shares have jumped 3.8% in the year-to-date period. The stock is up 17% year over year.

Investors got to see Telus’s first-quarter 2022 earnings on May 6. Operating revenues increased 5.8% from the prior year to $4.25 billion. It delivered adjusted net income of $414 million or $0.30 per share — up 15% and 11%, respectively. Telus hiked its quarterly dividend to $0.3386 per share, representing a 4.3% yield. Retirees should also be attracted to its favourable P/E ratio of 24.

The post Retirees: Protect Your Portfolio With These Defensive Dividend Stocks appeared first on The Motley Fool Canada.

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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends TELUS CORPORATION.

2022

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