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5 Best Dividend Stocks for Retirement Income

You don't just want yield. You want sustainability and dependability.

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Retirement Dividend Stocks: Huntsman (HUN)

  • retirement-dividend-stocks-huntsman-hun-stockMarket cap: $5.5 billion
  • Current dividend yield: 2.2%
  • Payout ratio: 22% of projected 2014 earnings
  • Dividend growth: 150% in seven years, from 20 cents per share in 2007 to 50 cents last year.

Huntsman (HUN) is also a bit smaller than some of the blue-chip dividend picks out there. Compared with its big brothers in the chemicals space, it is more attractive.

HUN has a price-to-earnings ratio of about 10 based on 2014 forecasts, while Dow Chemical (DOW), 3M (MMM) and DuPont (DD) are all right around 15.

Secondly, it has a heck of a lot more dividend growth potential over time after a 150% increase in payouts since 2007. That blows away the track record of the bigger chemicals stocks. And its very comfortable payout ratio means that those distributions should continue to market steadily higher.

There are risks in being small. After basically flat revenue in 2013, forecast for 2014 indicate 6% revenue growth — which isn’t killer, but is at least higher than Dow or DuPont. There’s a risk that a downturn could create short-term volatility, but Huntsman stock made some significant cost-cutting during the Great Recession that should serve it well no matter where the market goes in 2014 and beyond.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at or follow him on Twitter via @JeffReevesIP

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