Many retirement investors seek solid dividend stocks to buy for long-term income. But sometimes picking the best income stocks can be challenging, especially when the market makes scary moves like the near-2,000-point-drop in the Dow Jones Industrial Average this week.
Events like this might have some investors worried about the future of their investments. When picking ideal dividend stocks for retirement, however, the long-term case should always be in the back of your mind. As such, some of the biggest — and arguably most boring — companies are still the best bets for your Golden Years, despite recent volatility.
The important thing to consider is that while these companies may have been beaten up recently they’re all high-quality, fundamentally strong names. What’s more, they all boast reliable dividends with cash flows to back it up.
Keeping that in mind, here are three dividend stocks at discount prices that you can trust in the years ahead.
Dividend Stocks to Buy for Retirement: IBM
Dividend Yield: 4.1%
Tech stocks like International Business Machines Corp. (NYSE:IBM) have had a rough start in 2018, but the struggle IBM stock has endured has been for much longer than other notable names in the space. In fact, the stock is down 16% in the past year.
However, much of its problems have to do with its shifting strategy. As mentioned earlier, when picking solid dividend stocks to buy for retirement, it’s important to not only focus on the reliability of the company’s name and its dividend payments but to look at its future prospects as well.
Although IBM has lagged behind other names in the space, it still has a few tricks up its sleeves and its new strategy — an emphasis on its Strategic Imperatives, which include tech hot topics like “artificial intelligence, cloud computing, data security, and mobile applications” is finally starting to show promise. In fact, compared to two years ago, where Strategic Imperatives only accounted for 35% of its revenues, they now account for 49%.
Still, with its latest earnings report, where the company demonstrated its “first year-over-year revenue growth in five years,” the success was not mainly due to the “Strategic Imperatives,” which were essentially flat in the report. Ultimately, IBM is a reliable dividend stock that’s showing initiative to alter its structure to keep up with developments in technology. Although it’s still in this process — and whether it succeeds is yet to be determined — retirement investors can still rely on it for steady income as it makes this transition.
You shouldn’t expect IBM to see astronomical growth in 2018, but high risk/reward is not the point of investing in retirement. Reliability is king, and for now, IBM should remain solid and it’s an ideal buy at its latest discount price.
Dividend Stocks to Buy for Retirement: General Electric (GE)
Dividend Yield: 3.3%
Thanks to recent market volatility and an earnings-report related beating, General Electric Company (NYSE:GE) is down 16% YTD. But as terrifying as all of this may sound, the appearance of destruction does not address important nuances that actually make GE a standout pick among other dividend stocks to buy.
Most of the turmoil GE is suffering at the moment is short term. The long-term case — the part that makes it one of the more appealing dividend stocks out there — is fairly strong. As InvestorPlace contributor Luke Lango notes, “while the power business is tumbling … [its] aviation and healthcare businesses have tremendous long-term value.”
Despite facing a newly disclosed Securities and Exchange Commission investigation and a weakened power division, which declined 88% in Q4, the growth prospects of the aforementioned aviation and healthcare divisions is what makes GE an appealing dividend stock at current “discount” prices.
These segments are expected to see continued growth in the years ahead, with 7%-10% growth expected for aviation in 2018 alone and increased growth for its healthcare segment in emerging markets expected to continue in the years ahead.
Although GE was down significantly in 2017 and isn’t fairing too well in 2018, you’re not investing for a year or two. You’re investing for the long haul. The “stronger-than-expected outlook for 2018” and beyond is what makes the case for General Electric stock as one of the roughened-up dividend stocks to buy for retirement. If you believe in the GE comeback, it certainly won’t be sitting around its current prices for long.
Dividend Stocks to Buy for Retirement: Chevron (CVX)
Dividend Yield: 3.9%
Like all the other dividend stocks on this list, Chevron Corporation (NYSE:CVX) is down on its luck at the start of 2018 — off 10% YTD. Much of the pain comes from its Q4 earnings miss, which sent CVX stock lower as a result.
Although the early 2018 situation looks rocky, CVX actually has a lot of long-term promise, which makes it one of the ideal dividend stocks to buy for retirement.
With oil prices on the rise and positive cash flow projections in the books for CVX, the stock has the chance to run much higher in 2018 alone. When you combine that with the fact that its EPS and revenue is projected to grow significantly between now and 2020, the long-term case for Chevron is even stronger, despite its recent struggles.
As InvestorPlace Contributor Will Healy notes in his analysis of Chevron’s long-term prospects, its general dividend reliability is yet another reason to trust this stock in the long run. After all, CVX is a “dividend aristocrat,” which means it has consistently increased its dividend payments for over 25 years. That means you can trust the company will deliver income in good times and bad.
All of these factors make CVX one of the more promising dividend stocks to buy for retirement, especially at its currently discounted price.
Robert Waldo is an Assistant Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.