3 TSX Stocks That Can Turn Retirement Dreams Into Reality

Senior couple at the lake having a picnic

People have retirement dreams or envision comfortable living in the sunset years. While every retiree is free to choose what to do, many dreams remain a vision. The common stumbling block is affordability or insufficient financial resources.

Financial planners insist that having enough money is essential in retirement. Their advice is to save early and invest to have at least 70-80% of pre-retirement income to be safe.

If you’ve been saving and have funds to invest, three dividend-paying TSX stocks can help fill the income gap. The evergreen income from the companies will help make your retirement dreams come true.

Dividend grower

Canadian Natural Resources (TSX:CNQ) remains a safer exposure to the volatile energy sector. Canada’s largest oil and gas producer has top-tier reserves. Moreover, its long-life, low-decline asset base generates sustainable cash flow throughout the commodity price cycle.

At $77.04 per share (+5.08% year to date), current investors feast on the 4.72% dividend. This Dividend Aristocrat pays quarterly cash dividends and has increased the payout for 23 consecutive years. Its chief financial officer Mark Stainthorpe said, “Our commitment to increasing shareholder returns is evident in our sustainable and growing quarterly dividend.”

Management commits to return 100% of free cash flow (FCF) to shareholders when net debt reaches $10 billion. As of March 31, 2023, net debt is approximately $11.9 billion.

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Valuable brand

Brand trust can sometimes influence investment decisions. Based on Brand Finance’s Canada 100 2023 ranking, Canadian Tire (TSX:CTC.A) is Canada’s 18th most valuable brand and the 60th most valuable retail brand globally.

The $10.8 billion general merchandise retailer has been around for 100 years. Besides brand familiarity, Canadian Tire is an ideal retirement income stock for sustainable and growing dividends. The payout increased yearly in the last 12 years and has grown by 18.44% in the last 10 years. At $185.04 per share (+33.45% year to date), the dividend yield is 3.75%.

Canadian Tire plans to reshape and drive innovation in Canada’s retail industry through a seven-year strategic retail partnership with Microsoft. CTC will adopt new technology and leverage Microsoft Azure to modernize its systems and infrastructure.

Dividend machine

Transcontinental (TSX:TCL.A) is attractive to yield-hungry investors for three reasons: industry-leading position, high dividends, and an unblemished dividend track record for two decades. At $13.50 per share (-7.38% year to date), the dividend offer is a lucrative 6.69%.

Given the stock price and yield, 3,700 shares today ($49,950) will compound to $188,284.89 in 20 years, including dividend reinvestment. Your capital is intact and will produce $3,149.05 every quarter starting in 2044.

The $1.17 billion company is Canada’s largest printer and the leading flexible packaging firm in Canada, the U.S., and Latin America. A third business segment, TC Media Books, is Canada’s leading distributor of French-language specialized books.

Transcontinental’s packaging and printing sectors have combined to produce profits yearly since 2019. The company recently announced a fresh $15 million investment in its book printing platform. Management aims to double the hardcover printing and production capacities of its plant to meet the growing demand in North America.

Lifetime income

Canadian Natural Resources can deliver lifetime income for retirees owing to its size, scale, and dividend track record. Canadian Tire and Transcontinental can be your supporting stocks for good measure.      

The post 3 TSX Stocks That Can Turn Retirement Dreams Into Reality appeared first on The Motley Fool Canada.

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See the 5 Stocks
* Returns as of 7/24/23

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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources, Microsoft, and Transcontinental. The Motley Fool has a disclosure policy.