2 Safer High-Yield Dividend Stocks for Canadian Retirees

Two high-yield dividend stocks to consider for Canadian retirees seeking reliable passive income are Enbridge (TSX:ENB) and Brookfield Infrastructure Partners L.P. (TSX:BIP.UN). Both companies operate defensive infrastructure businesses that generate resilient cash flows, support growing payouts, and offer attractive yields well above the broader Canadian market.

At recent prices, Enbridge stock offers a dividend yield of approximately 5.1%, while Brookfield Infrastructure Partners provides a distribution yield of roughly 4.7%. By comparison, the Canadian stock market yields only about 2.2%, using the iShares S&P/TSX 60 Index ETF as a benchmark. For retirees who depend on investment income, that difference can significantly improve cash flow without taking on excessive risk.

Enbridge: A reliable dividend giant

Enbridge stock is one of the most dependable dividend stocks on the Toronto Stock Exchange (TSX). The company owns a massive network of energy infrastructure assets that include crude oil pipelines, natural gas transmission systems, gas utilities, and renewable energy facilities. These assets are critical to North America’s energy system and generate highly stable cash flows.

Importantly, Enbridge’s earnings are largely protected from commodity price swings because most of its revenues come from long-term contracts and regulated operations. The company transports roughly one-third of North American crude oil production and about 20% of the natural gas consumed in the United States, giving it a dominant market position.

For retirees, Enbridge’s dividend track record is especially attractive. The company has paid dividends for more than 70 years and has increased its payout for approximately three decades in a row. That consistency demonstrates the strength and resilience of its business model, even during recessions and volatile energy markets.

Although the stock has performed well, analysts still view Enbridge as reasonably valued. As a result, investors could potentially earn long-term annual returns of around 8% through a combination of dividend income and moderate cash-flow growth.

Brookfield Infrastructure Partners offers global exposure

Brookfield Infrastructure Partners is another solid option for retirees looking for dependable income with long-term growth potential. The company owns a diversified portfolio of essential infrastructure assets around the world, including utilities, rail networks, toll roads, energy infrastructure, and data centres.

These businesses generate predictable cash flows because they benefit from regulated frameworks, inflation-linked pricing, and long-term contracts. In many cases, demand for these services remains steady regardless of economic conditions, making Brookfield Infrastructure Partners a relatively defensive investment.

The partnership also has a strong history of growing its distributions. Over the last decade, its payout averaged an increase of roughly 7% annually, reflecting management’s disciplined capital recycling strategy and focus on high-quality infrastructure assets.

Unlike many income investments that appear expensive today, Brookfield Infrastructure Partners still trades at an acceptable valuation. The analyst consensus price target suggests the units trade at a discount of roughly 10%. Even assuming no valuation expansion, investors could still achieve annualized returns near 10% through distributions and business growth over time.

Canadian retiree takeaway

For Canadian retirees with long-term capital to invest, Enbridge and Brookfield Infrastructure Partners offer a good mix of above-average income, defensive business models, and long-term dividend growth potential. Their yields comfortably exceed the broader market average, while their essential infrastructure assets help support reliable cash flow in both strong and weak economic environments. For investors seeking safer high-yield dividend stocks to strengthen retirement income, these two TSX investments deserve serious consideration, especially on market corrections. 

The post 2 Safer High-Yield Dividend Stocks for Canadian Retirees appeared first on The Motley Fool Canada.

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More reading

• 3 TSX Stocks to Buy for Magnificent Long-Term Growth
• 3 Strong Canadian Income Stocks That Raised Their Dividends Again
• 2 Dividend Stocks to Hold Comfortably for the Next 5 Years
• 5 TSX Dividend Stocks Yielding 3% to 5% for Steady Cash Flow
• The One Canadian Stock I’d Keep in My TFSA Indefinitely

Fool contributor Kay Ng has positions in Brookfield Infrastructure Partners. The Motley Fool recommends Brookfield Infrastructure Partners and Enbridge. The Motley Fool has a disclosure policy.