If you are looking for the best investments to create a substantial amount of wealth for your retirement, consider buying the highest dividend paying stocks. With their strong earnings potential and strong fundamentals, dividend paying stocks consistently generate healthy returns and provide stability to your portfolio.

I focused on Algonquin Power & Utilities (TSX: AQN) (NYSE: AQN), Scotiabank (TSX: BNS) (NYSE: BNS), and Pembina pipeline (TSX: PPL) (NYSE: PBA) as primary investments to create a substantial retirement body.

Besides their low risk business model, these stocks have generated higher dividends in recent years and have strong potential for earnings growth. In addition, these stocks offer attractive returns and have a sustainable payout ratio.


Scotiabank is known for its long history of dividend payments, reflecting its ability to consistently generate exceptional earnings growth. Except in 2020, Scotiabank EPS has grown at a compound annual growth rate (CAGR) of 8% since 2009. In the most recent quarter, the Canadian banking giant reported adjusted net income growth of 81% thanks to lower provisions for credit losses, growth in deposits and a rebound in commission income.

I expect Scotiabank’s financial data to continue improving over the next few quarters, which could boost its dividends and support the uptrend in its stock. In addition, growing digital businesses, exposure to high growth banking markets and improving efficiency are expected to drive strong earnings growth. It offers a return of 4.4% at current levels.

Meanwhile, it looks attractive on a valuation side as it trades at a price / book multiple (P / B) of 1.5, which is well below its peer group average.

Scotiabank stocks have gained about 24% in six months, and I believe the economic recovery and improving demand will continue to drive growth in the volume of its loans and deposits, as well as the price of its loans. actions.

Pembina pipeline

Pembina Pipeline is among the most trusted dividend paying stocks and should be part of your retirement portfolio. He has a long experience in paying regular dividends since 1997. He has notably increased his dividend by around 5% per annum over the last decade and offers a high yield of 6.6%.

In addition, the company’s payments are secure and sustainable thanks to its highly contractual activities which generate stable fee-based cash flow.

I believe the recovery in energy demand, Pembina’s exposure to multiple commodities, improved volumes and higher prices will continue to drive its profitability and cash flow over the long term. Additionally, improved operating leverage and newly secured growth plans will likely support future dividends.

Its recent acquisition of Inter-pipeline is likely to generate significant synergies and accelerate its growth rate. Pembina Pipeline’s stock is also trading at a lower EV / EBITDA multiple of 10 compared to its peers, making it an attractive buy.

Algonquin Power & Utilities

Utility giant Algonquin Power & Utilities is another excellent stock for your retirement portfolio because she owns and operates a low risk, high growth business that generates strong cash flow to support higher dividend payouts. The company has steadily increased its dividend by 10% per year for the past 11 years thanks to its growing rate base and high quality earnings base.

I expect Algonquin Power & Utilities to continue to generate exceptional earnings and cash flow, reflecting its resilient business model, growth in rate base and long-term power purchase agreements. .

In addition, the expansion of its renewable energy business and strategic acquisitions bode well for future growth. Right now, Algonquin Power & Utilities is offering a 4.4% dividend yield which is very safe.

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This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We are straight! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we post sometimes articles that may not conform to recommendations, rankings or other content. .

Foolish contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA and PEMBINA PIPELINE CORPORATION.

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