Retirement 101: The Best Canadian Dividend Stocks for Passive Income

Home » Investing » Retirement 101: The Best Canadian Dividend Stocks for Passive Income
Canadian pensioners and people saving for retirement are looking out for one of the best Canadian dividend shares so as to add to their self-directed portfolios.
Fortis (TSX:FTS)(NYSE:FTS) has raised its dividend in every of the previous 47 years and intends to spice up the payout by a median of 6% per 12 months by not less than 2025. This is nice steering in an unsure financial state of affairs the place the extent of the post-pandemic progress continues to be unknown.
Fortis owns $56 billion in utility belongings unfold out throughout Canada, the United States, and the Caribbean. Businesses embody energy technology, electrical transmission, and pure gasoline distribution. Revenue from the subsidiaries is essentially regulated, and the character of those important providers means money stream tends to be predictable and dependable. That’s why the board is so comfy giving long-term projections for dividend hikes.
Fortis is engaged on $19.6 billion in capital tasks that may considerably increase the speed base between 2020 and 2025. Additional developments are into account that might be added to the present plan or come into play past 2025.
Fortis additionally grows by acquisitions. It hasn’t made a serious buy up to now 5 years, so it wouldn’t be a shock to see Fortis do one other deal quickly. The firm can make the most of low rates of interest and the robust Canadian greenback to make one other transfer within the United States. Fortis just lately introduced the hiring of a brand new senior vice chairman of capital markets and enterprise growth. The particular person becoming a member of the corporate has a background in funding banking and has supplied Fortis with steering by earlier mergers and acquisitions.
The inventory trades close to $58 per share on the time of writing and presents a 3.5% dividend yield.
Bank of Nova Scotia
Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) has underperformed most of its giant Canadian banking friends this 12 months, however the inventory ought to catch up in 2022 and past, because the post-pandemic international restoration drives a rebound within the firm’s worldwide operations.
Bank of Nova Scotia has giant investments in Mexico, Peru, Colombia, and Chile. Political uncertainty is at all times a problem in these international locations, and the pandemic hit them arduous. However, Bank of Nova Scotia’s operations within the 4 members of the Pacific Alliance commerce bloc are worthwhile and have good potential for long-term progress.
Bank of Nova Scotia is sitting on a big money hoard it constructed up final 12 months to make sure it may cowl potential mortgage losses. Extensive authorities assist and mortgage deferrals have helped companies and householders keep away from defaulting on their loans. Some ache is predicted when help ends, however the financial institution is positioned effectively to soak up the hit.
Investors ought to see a beneficiant enhance to the dividend when the Canadian banks get the inexperienced mild from the federal government to restart distribution hikes. In addition, Bank of Nova Scotia may use the money pile to make strategic acquisitions. In truth, the CEO just lately stated they’re evaluating wealth administration alternatives within the United States.
The inventory seems enticing on the present share worth close to $78 and supplies a strong 4.6% dividend yield. Bank of Nova Scotia has paid out dependable dividends for greater than 100 years.
The backside line on high dividend shares
Fortis and Bank of Nova Scotia are two of one of the best dividend shares within the TSX Index. If you will have some money to place to work in diversified portfolio targeted on passive earnings, these shares should be in your radar.

This article represents the opinion of the author, who might disagree with the “official” advice place of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one in every of our personal — helps us all suppose critically about investing and make choices that assist us develop into smarter, happier, and richer, so we generally publish articles that is probably not in step with suggestions, rankings or different content material.

The Motley Fool recommends BANK OF NOVA SCOTIA and FORTIS INC. Fool contributor Andrew Walker owns shares of Fortis.

Recommended For You