Retirees should consider investing in high-quality dividend stocks that are less susceptible to market volatility and can provide stable passive income. In this context, let’s take a look at two Canadian safe stocks that offer attractive dividend yields.
Energy infrastructure company Enbridge (TSX: ENB) is an ideal choice for retirees due to its resilient and predictable business model, consistent dividend growth, and high yield. The company transports oil and natural gas and also sells electricity generated from renewable energy assets through long-term power purchase agreements (PPAs), ensuring stable financial performance. Supported by this financial stability, the company has paid dividends for the past 69 years and has increased them over the last 30 years. As of last Friday’s closing price, the stock offers a forward dividend yield of 6.2%.
Additionally, Enbridge has further strengthened its cash flow by acquiring three natural gas utility assets in the U.S. for $19 billion. The company is expanding its asset base through secured capital projects and plans to invest $23 billion in projects by 2027. Management expects to raise dividends by up to 3% annually through 2026. With an attractive NTM (next twelve months) price-to-earnings (P/E) ratio of 19.7x, the stock is a compelling buy.
Another safe dividend stock is the Bank of Nova Scotia (TSX: BNS), which has paid dividends since 1833. The company provides a wide range of financial services across 20 countries, benefiting from reliable and predictable cash flows. These steady cash flows enable it to reward shareholders with consistent dividend payments. Over the past 10 years, the Bank of Nova Scotia’s dividend has grown at a compound annual growth rate (CAGR) of 5.2%, and as of March 7, the stock offers a forward dividend yield of 6.1%.
In its first fiscal quarter, the company reported adjusted earnings per share of $1.76, up 4.1% year-over-year. Its recent acquisition of a 14.9% stake in KeyCorp will allow it to deploy more capital in the North American market. Declining interest rates could stimulate economic activity, boosting credit demand and benefiting the company. Moreover, with an attractive NTM P/E ratio of 9.7x, the stock is a safer choice.
With their robust underlying businesses, healthy cash flows, and strong growth prospects, these two dividend stocks are appealing options for retirees.
