Investors looking for top-rated dividend stocks to buy today to generate passive income in retirement have plenty of options to choose from. Whether we’re talking lower-yielding growth stocks or higher-yielding, more mature blue chip names, there’s something for everyone.
In this piece, I’m going to discuss two dividend stocks with the highest 5% yield that I think investors can easily own in this current environment. These are companies with rock-solid balance sheets, sustainable cash flows that support their current distributions, and plenty of long-term capital growth, as long as we see continued economic growth.
Without further ado, let’s dive in!
SmartCentres REIT
One of my top real estate investment trust (REIT) picks lately: SmartCentres REIT (TSX:SRU.UN) is among the leading retail-focused REITs investing primarily in or around urban centers in Canada.
This REIT has enjoyed remarkable net operating income stability over the years, with the vast majority of its income passed on to investors in the form of distributions. With a solid payout ratio well supported by its industry-leading tenant base and a current dividend yield of 7.2%, this company offers a return on capital of over 5% and a dividend that, in my opinion, could continue to grow over time.
That’s hard to find in this market, especially when investors consider the quality of the company’s underlying assets and low occupancy rates. With little expected to change in the coming years and decades, SmartCentres REIT is one of the most boring options on the market. But when it comes to dividend stocks, I’d say this is generally a positive trait.
Enbridge
With a dividend yield of 6% Enrbidge (TSX:ENB) is another stock yielding over 5% that I think long-term investors can hold on to for decades, patiently shaving off the returns from this investment.
The company’s core pipeline network is an integral part of North America’s energy independence story, which has become politically important across borders. This is a company that takes energy from where it is produced to where it is refined, and if you are among the majority of investors who believe we will continue to see economic growth in the coming decades, then we simply need more energy distribution infrastructure.
Furthermore, given the propensity for new projects to expand existing offerings, I think Enbridge could actually become a growth story again. That is one of the main reasons behind the recent increase. Over the long term, however, I expect Enbridge to be a boring, stable proxy for bonds that investors can own for the yield and relaxation.
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