Building your retirement portfolio on a foundation of sturdy, income-generating stocks is perhaps the single best path to securing financial freedom in your golden years. With that in mind, we asked three Motley Fool investors to spotlight a dividend stock with characteristics that make it an ideal vehicle for reaching your retirement goals.

Here's why they think Enbridge (NYSE:ENB), Pfizer (NYSE:PFE), and PepsiCo (NASDAQ:PEP) are top stocks for building a next-level nest egg. 

A golden egg in a nest that's on top of a dark wooden plank

Image source: Getty Images.

Big pharma, big dividend, and a big opportunity

Keith Speights (Pfizer): Retirees have liked Pfizer stock for a long time. And for good reason. The big pharma company has traditionally paid an attractive dividend and has generated pretty good growth through the years.

That tradition continues. Pfizer's dividend yield now stands at 3.78%. Some companies boasting a yield that high have troubles that could worry investors. Not Pfizer. The drugmaker currently uses only 57% of free cash flow to fund its dividend program. 

While Pfizer's dividend serves as a key reason for retirees to consider the stock, I think the company's long-term growth prospects look good as well. Pfizer hasn't generated impressive growth in recent years, primarily due to declining sales for older drugs that have lost patent exclusivity and for the sterile injectables business gained with the Hospira acquisition in 2015.

However, the negative impact to Pfizer from slipping sales for older drugs should diminish over the next few years, and weakness for the sterile injectables business stemmed mainly from product shortages. Pfizer thinks it will make significant progress resolving the issues causing those shortages this year.

Meanwhile, sales for Pfizer's anticoagulant Eliquis and cancer drug Ibrance are soaring. The company expects to launch 15 potential blockbusters over the next five years, three times as many as it did over the last five years. In my view, Pfizer is a big pharma with a big dividend and a big opportunity over the next few years.

A model of consistency

Matt DiLallo (Enbridge): Canadian energy infrastructure giant Enbridge has an excellent dividend history, having sent cash to investors for the last 64 years. Even better, the company has increased that payout for 23 consecutive years, boosting it by an 11.7% compound annual growth rate over the past two decades. With its most recent increase, its dividend yields an attractive 6.3%.

More importantly, Enbridge built that payout on a firm foundation. Three factors support that view:

  1. 96% of Enbridge's cash flow comes from long-term contracts or other predictable revenue streams.
  2. The company only pays out about 65% of its cash flow to support the current dividend.
  3. Enbridge has an investment-grade balance sheet, with improving credit metrics. In fact, it's in the process of selling some noncore assets to speed up the process. 

But as good as that current income stream might be, it will be even better in the future. That's because the company is in the process of investing 22 billion Canadian dollars ($17.5 billion) to expand its energy infrastructure portfolio over the next three years. The cash flow from these growth projects means Enbridge can increase its dividend at a 10% annual rate through 2020. Furthermore, it can achieve that fast-paced growth while maintaining its current conservative payout ratio and improving its balance sheet. Meanwhile, with North America needing to invest an estimated $26 billion per year on new energy infrastructure through 2035, Enbridge should continue adding projects to its backlog, providing it with the fuel to keep growing its payout at a high rate for years to come.

With an ultra-safe payout that's on pace to increase in safety over the coming years, Enbridge is an ideal stock for income-seeking retirees to hold for the long-term.

A dividend profile that's hard to beat 

Keith Noonan (PepsiCo): Few companies have a better history of returning value to shareholders and delivering market-beating returns on an annual basis than PepsiCo, and that's a track record I think that it's poised to continue building on. The company's strong brand portfolio and infrastructure advantages give it a moat that should keep cash flowing back to shareholders, and investors have an opportunity to build a position at an appealing price amid a recent uptick in uncertainty. 

Pepsi's North American geographic segment has been stagnating due to weak sales for its soda and Quaker brands. However, demand looks more promising internationally, and the company is still delivering solid earnings growth. Its January-ended fiscal year saw it post a non-GAAP earnings increase of 9%, and the company is guiding for earnings-per-share growth to come at 9% again in the current fiscal year. Pepsi also recently announced plans for a $15 billion share repurchasing initiative, a move that will add to earnings momentum and put it in better position to grow its dividend.

Its share price has fallen roughly 10% over the last month and now trades at just 19 times forward earnings estimates. Sell-offs have brought Pepsi's dividend yield back up to 2.9%, and retirees can look forward to ongoing payout increases. The snack and beverage giant has raised its payout annually for 45 years running, and the cost of distributing its dividend represents just just 57% of trailing earnings and 65% of trailing free cash flow. 

The business also looks to have a long-term tailwind in the form of increasing automation. Pepsi recently implemented robotic truck loaders at shipping centers and automated the process for packing small-bag variety packs, and it's likely that the company will continue to find opportunities to use robotics to improve operational efficiency. With a fantastic dividend profile and some underappreciated long-term growth catalysts, PepsiCo continues to be an ideal stock for retirement portfolios. 

Keith Noonan has no position in any of the stocks mentioned. Keith Speights owns shares of PepsiCo and Pfizer. Matthew DiLallo owns shares of Enbridge. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool has a disclosure policy.