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Retiring Soon? Add These Dividend-paying Stocks to Your Portfolio

retirees and finances
Image source: Getty Images

Written by Karen Thomas, MSc, CFA at The Motley Fool Canada

Retirement brings new possibilities and opportunities. However, to ensure that your retirement is not lacking the funds necessary for your new life, finding the right dividend paying stocks is essential.

Therefore, here are three dividend stocks to consider buying.

Altagas: A dividend stock for safety and growth

Altagas Ltd. (TSX:ALA) is an energy infrastructure giant with more than $20 billion in assets and a strong position in two distinct areas. The first is the utilities business, which is comprised of regulated natural gas utilities. The second is Altagas’ midstream segment. This business includes natural gas gathering and processing assets, as well as natural gas export terminals. These terminals support Altagas’ global export platform.

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Adding Altagas to your portfolio will provide you with a relatively safe 4.8% dividend yield, which will pay out a nice income supplement for your retirement. Additionally, it will provide you with exposure to growth from its midstream business. This is the beauty of Altagas’ diversified business.

In its latest quarter, Q1 2023, Altagas reported results that were ahead of expectations. In fact, its EPS of $0.98 came in a full $0.10 above expectations. Looking ahead, management expects a 5% to 7% compound annual growth rate (CAGR) in its dividend through to 2026.

BCE: A smooth retirement with BCE stock

BCE Inc. (TSX:BCE) is Canada’s largest telecom services company. It’s also one of Canada’s top dividend stocks, supplementing the income of retirees for decades. Today, BCE stock is yielding a very generous 6.1%.

This yield is backed by the telecom giant’s unmatched network – the fastest and farthest-reaching broadband internet connection. It’s also backed by its rapidly expanding fibre optic network, which continues to strengthen BCE’s competitive advantage.

So, this is the backdrop upon which to trust your retirement savings to BCE. Shifting gear to the financials for a second, BCE continues to generate strong cash flows. For example, in 2022, BCE reported cash flow from operations of $8.4 billion, 4.5% higher than 2021. Although in the first quarter of 2023, the telco generated operating cash flow of $1.2 billion, down 27%, due to the softer economic environment and cost pressures.

Despite this, I remain focused on the long term. BCE has the financial and competitive strength necessary to carry on successfully. Management continues to expect growth in 2023, with the expectation that the dividend will be raised another 5.2%.

Fortis: The ultimate safe and predictable dividend stock to buy when retiring

As one of Canada’s most reliable stocks, Fortis Inc. (TSX:FTS) is definitely one to add if you’re retiring soon. Its business lends itself especially well to those characteristics that one would look for in their retirement income – safety and predictability.

Fortis is a $29-billion utility giant with a diverse geographic footprint and asset mix. Utilities are regulated. They’re predictable. And they’re an essential service. This is why Fortis stock has been so invaluable for investors. For example, Fortis has a 49-year history of dividend growth. Also, in the last 28 years, Fortis’ dividend has grown at a compound annual growth rate of 6.2%, from $0.42 per share to the current $2.26 per share.

So, if you’re retiring soon, be sure to check out this, and the other dividend-paying stocks I’ve listed in this article. Over time, the predictable and reliable income stream will add up to freedom, wealth, and peace of mind.

The post Retiring Soon? Add These Dividend-paying Stocks to Your Portfolio appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Altagas?

Before you consider Altagas, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and Altagas wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 21 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 4/18/23

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Fool contributor Karen Thomas has a position in BCE and Fortis. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

2023