Dividend Fortunes: 2 Canadian Stocks Leading the Way to Retirement

Looking ahead to our retirement years can bring many feelings to the surface — like excitement, eagerness, and anticipation. But sometimes, it can also bring sheer panic and fear. Will we have enough money to actually retire? Canadian stocks that pay dividends can help. In time, the right dividend stocks can allow you to accumulate significant income. Look for reliable and growing dividends.

Everything is more expensive these days, from housing to food to energy. The cost of living has simply skyrocketed over the last few years. This has many of us worried about our financial futures.

So, what can we do to set ourselves up financially for a successful retirement?

Regular automatic withdrawals

The first thing to do is to invest in your future. This means setting up automatic withdrawals from your paycheque, and investing these regular withdrawals into your Tax-Free Savings Account (TFSA) or your Registered Retirement Savings Plan (RRSP).

It can be weekly, bi-weekly, or monthly transfers that are automatically deducted from your paycheque. This ensures that you don’t spend this money on useless purchases. This strategy is one that enables investors to accumulate savings without even thinking about it.

So, now the question is, where should you invest this money? Well, picking up where I left off in the introduction, I think one good place to start is Canadian stocks in the energy sector, which is benefiting from higher rates and prices.

Enbridge

Electricity rates are rising as demand growth accelerates and new investments are being made to meet it. Natural gas is likely to see long-term price increases as demand for liquefied natural gas (LNG) and power for emerging data centres rises.

Enbridge (TSX:ENB) is one of North America’s leading energy infrastructure companies. As such, Enbridge and its stock are set to benefit tremendously from this industry outlook. This makes it a solid choice for your retirement planning. Enbridge stock is currently yielding a very generous 6%, and it’s trading at just over 20 times next year’s expected earnings.

It’s a stock that’s been a reliable dividend payer, funding investors’ retirements for decades. With 31 consecutive years of dividend growth and a low-risk business model, Enbridge has the history and the future that are well-suited for your retirement portfolio.

Peyto Exploration and Development

Peyto Exploration and Development (TSX:PEY) is one of Canada’s lowest-cost natural gas producers. The company’s track record of dividend payments is both long and impressive. For example, Peyto has been paying a dividend for more than 20 years. Even in difficult times in the natural gas cycle, Peyto’s dividend kept coming. And although it has been adjusted depending on the environment, Peyto has kept it as a priority.

The factors driving Peyto’s strong long-term outlook are strong demand for LNG from around the globe, strong demand from utilities, and strong demand from emerging data centres. This dynamic is already boosting natural gas producers like Peyto, whose stock price has rallied more than 80% in the last two years.

This dividend gem is currently yielding just over 6%. This makes it a solid choice for retirement income.

The bottom line

Both Enbridge and Peyto have very generous dividend yields. And both Enbridge and Peyto are looking forward to strong industry and company outlooks. This means that these Canadian dividend stocks can contribute to a financially safe and secure retirement.

The post Dividend Fortunes: 2 Canadian Stocks Leading the Way to Retirement appeared first on The Motley Fool Canada.

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More reading

• Outlook for Enbridge Stock in 2026
• 5 of the Best TSX Dividend Stocks to Buy Under $100
• Transform Your TFSA Into a Cash-Crushing Machine With Just $30,000
• Dividend Investors: Top Canadian Energy Stocks for December
• High-Yield Stocks for Canada’s Current Low-Rate Environment

Fool contributor Karen Thomas has positions in Enbridge and Peyto Exploration and Development. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.