With no regular employment income to cover their day-to-day expenses, retirees typically prioritize preserving their capital while generating a stable and reliable stream of passive income. Their shorter investment horizons also leave less time to recover from market downturns, making capital preservation and dependable income especially important.
Against this backdrop, retirees should focus on high-quality dividend stocks with well-established businesses, resilient cash flows, and a proven history of consistent dividend payments. These companies can deliver dependable income while protecting investors during periods of market volatility. With that in mind, here are two high-quality dividend stocks that are ideal for retirees.
Fortis
Fortis (TSX:FTS) is an ideal dividend stock for retirees, thanks to its highly regulated, low-risk utility business. With the vast majority of its assets dedicated to the regulated transmission and distribution of electricity and natural gas, the company’s earnings are largely insulated from economic cycles, commodity price swings, and market volatility. This resilient business model has enabled Fortis to deliver a total return of approximately 670% over the past 20 years, representing an annualized return of 10.7%. The utility has also rewarded its shareholders through 52 years of consistent dividend growth, while its forward dividend yield currently stands at 3.12%.
Meanwhile, rising electricity and natural gas demand, driven by population growth, economic expansion, and increasing electrification, continues to support Fortis’s long-term growth outlook. To capitalize on these favourable trends, the company expects to invest $28.8 billion over the next five years, expanding its regulated rate base at an annualized rate of approximately 7% through 2030. Fortis is also improving operational efficiency through preventive maintenance programs and other cost-saving initiatives, which should support earnings growth. Backed by these growth initiatives, management expects to increase its dividend by 4% to 6% annually through the end of the decade, making Fortis an excellent choice for retirees seeking dependable and growing income.
TC Energy
Another dividend stock that is ideal for retirees is TC Energy (TSX:TRP). The company operates an extensive natural gas pipeline network and power generation facilities with approximately 4.7 gigawatts of capacity. Importantly, about 98% of its comparable EBITDA (earnings before interest, taxes, depreciation, and amortization) is generated from regulated cost-of-service frameworks and long-term take-or-pay contracts, making its earnings resilient to commodity price fluctuations, economic cycles, and market volatility.
Supported by this dependable business model, TC Energy has consistently delivered solid financial performance and attractive shareholder returns. Over the past 20 years, the stock has generated a total shareholder return of approximately 710%, representing an annualized return of around 11%. The company has also increased its dividend for 26 consecutive years and currently offers an attractive forward dividend yield of approximately 3.6%.
Looking ahead, rising natural gas production and growing demand for reliable energy infrastructure across North America should continue to support TC Energy’s long-term growth. To capitalize on these trends, the company plans to invest $6-$7 billion annually to expand its asset base while improving operating efficiency through commercial initiatives and technological innovation. Supported by these growth initiatives, management expects adjusted EBITDA to reach $12.6-$13.1 billion in 2028, with the midpoint implying annualized growth of approximately 5.3% through 2028. These healthy growth prospects have also given management the confidence to target annual dividend growth of 3% to 5% over the coming years, making TC Energy an attractive choice for retirees seeking dependable, growing income.
