Retirees: 2 Top TSX Dividend Stocks to Buy Now for Passive Income in 2024

Dividend stocks are an attractive investment option for retirees seeking passive income and stability. Notably, the payouts of well-established dividend-paying companies are relatively stable and predictable, which is crucial for retirees as it offers financial security and helps them manage their living expenses. Further, top dividend stocks with high yields have historically served as an effective hedge against inflation.

While fundamentally strong dividend stocks provide regular income, they also have the potential for capital appreciation in the long term. This dual benefit makes them an ideal addition to retirement portfolios, ensuring income stability and potential growth.

Fortunately, the TSX has several such top stocks that are reliable investments for retirees to generate passive income. Against this background, let’s look at two Canadian stocks with solid dividend payments and growth history. 

Canadian Natural Resources

Speaking of reliable dividend stocks, retirees could consider investing in the shares of Canadian Natural Resources (TSX:CNQ). This crude oil and natural gas production company is popular for its commitment toward returning higher cash to its shareholders. Further, the energy company is renowned for growing its dividend at a stellar pace. 

It’s worth highlighting that Canadian Natural Resources has increased its dividend by 24% through three separate increases over the past year. Moreover, it has uninterruptedly increased its dividend for 24 years. During this period, its dividend grew at an impressive compound annual growth rate (CAGR) of 21%. 

The company’s efficient operations, ability to increase production, and disciplined capital-allocation strategy enable it to generate significant free cash flows. Consequently, this allows the CNQ to return cash to its shareholders through share repurchases and dividend payments. 

Looking ahead, Canadian Natural Resources’s long-life, low-decline asset base, high-value reserves, and low maintenance capital requirement position it well to generate robust free cash flows. Also, its focus on cost control and solid balance sheet provides a solid platform for future growth. It currently offers a quarterly dividend of $1.05 per share, which translates into a yield of 3.9%.

Toronto-Dominion Bank

Retirees may find top Canadian banks a reliable source of passive income, given their stellar history of dividend payments spanning over a century. Besides their solid track record of dividend payouts, these financial giants are poised to increase their dividend distributions in the foreseeable future. Among the leading banks, Toronto-Dominion Bank (TSX: TD) emerges as a compelling investment. With a market cap exceeding $142 billion, it boasts a commendable track record of dividend disbursements and growth.

Notably, Toronto-Dominion Bank has been paying regular dividends for 167 years. Further, it has increased its quarterly dividends at a CAGR of around 10% since 1998. This dividend-growth rate is much higher than that of its peers. 

The bank’s strong portfolio of high-quality assets and a well-diversified deposit base position it well to generate durable earnings, supporting its payouts. Additionally, steady credit quality, operational efficiency, and a solid balance sheet augur well for future earnings and dividend growth. The bank offers a quarterly dividend of $1.02 a share, reflecting a yield of over 5%.

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