3 Canadian passive income stocks to buy for retirement life

Highlights

• A bank stock mentioned here has been among the most active stocks on the TSX.
• A Canadian iron and steel stock surged by almost 44 per cent in a year
• A company listed below posted a dividend yield of 23.166 per cent.

Investors can power their retirement portfolio by investing in quality stocks with solid financials and management that provide stable passive income and cover the downside risk.

While all stocks come  with a certain level of risks, some of them are fundamentally robust with broad market share and can offer inflation-hedged growth in the long term.

Also read: Algonquin & 2 other TSX clean energy stocks to buy before November

Here are some TSX-listed stocks that can be a healthy option if you are looking to plan your after-job life. Let us dive in.

1.    Royal Bank of Canada (TSX: RY)

With a market cap of C$ 186 billion, Royal Bank of Canada (widely known as RBC) is one of the top Canadian banks. It offers diverse financial services from personal and commercial banking solutions to wealth management, insurance, and capital markets.

The Toronto-headquartered bank saw its scrip slip down by 1.289 per cent to C$ 130.99 apiece at market close on Wednesday, October 27.

However, RBC scrip scaled to a day high of C$ 132.62 during this trading session and was among the top three actively traded stocks, according to the TMX site.

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RY stock also jumped up by nearly 41 per cent over the previous year and surged by more than 25 per cent year-to-date (YTD). Its six-month return was more than 11 per cent. In addition, it gained almost four per cent on a month-to-date (MTD) basis.

As of Thursday, October 28, RBC held a return on equity (ROE) of 18.61 per cent and a price-to-earnings (P/E) ratio of 12.30, with a dividend yield of 3.298 per cent against its dividend of C$ 1.08 per share.

2.    Canadian National Railway Company (TSX: CNR)

The Canadian transporter and trade facilitator has a railway network spanning 19,500 miles, connecting the east coast and the west coast to the US South.

The railroad stock fell by 0.629 per cent and closed at C$ 164.21 per share on October 27. It had declined by roughly three per cent from the 52-week high of C$ 168.66 achieved on October 25.

But its stock has noted a year-over-year (YoY) growth of about 22 per cent and has increased by more than 17 per cent YTD. It climbed up by over 26 per cent in the nine months.

On October 28, CN held an ROE of 23.53 per cent and a dividend yield of 1.498 per cent for its dividend of C$ 0.615 per share. In addition, its average dividend growth rate for the last five years stood at 10.57 per cent.

On the financial front, its revenue marked a YoY surge of five per cent to C$ 3.59 billion in the third quarter of fiscal 2021.

3.    Labrador Iron Ore Royalty Corporation (TSX: LIF)

Labrador Iron Ore Royalty Corporation, a Canadian iron and steel firm, saw its stock wrap up trade at C$ 36.26 apiece, down by 2.29 per cent, on October 27. At this price, it had slumped by more than 28 per cent from the 52-week high of C$ 50.45 (June 23, 2021).

Though LIF stock dipped by about 10 per cent in the last month, it held a one-year return of almost 44 per cent and a nine-month gain of nearly 16 per cent.

As of October 28, LIF posted an ROE of 56.08 per cent and a dividend yield of 23.166 per cent for a dividend of C$ 2.10 per share). Moreover, its five-year average dividend growth rate was 27.26 per cent.

Also read: 3 Canadian growth stocks to buy in November 

Bottom line

Investors should always consider two crucial factors while planning the retirement - diversification and risk. Some experts advise that a retirement portfolio should include distinct types of equities to cover the overall financial risk.