Retirement investments can be tricky. On one hand, investors still need some growth in their portfolio to ensure that they don’t outlive their savings. On the other hand, investors don’t want the stress of roller coaster ups and downs that come with more volatile securities.
Most retirees will also want to earn some income from the stocks they own in the form of dividend payments. And, at the end of the day, investors will want to know that their investments are safe and secure.
Here we look at seven stocks that can help people live comfortably in retirement.
- American Tower (NYSE:AMT)
- Apple (NASDAQ:AAPL)
- Waste Management (NYSE:WM)
- CVS Health (NYSE:CVS)
- Coca-Cola (NYSE:KO)
- Walmart (NYSE:WMT)
- Procter & Gamble (NYSE:PG)
Retirement Investments: American Tower (AMT)
American Tower is a real estate and infrastructure company for modern times. The Boston-based company is a real estate investment trust that owns and operates cell towers throughout the U.S. and around the world — everywhere from South America to Africa and Europe.
Its towers are critical to the wireless and broadcast communications that we all use everyday. Our internet-connected computers and cell phones wouldn’t work without American Tower.
The company operates more than 40,000 cell towers in the U.S. and nearly 175,000 worldwide. Retirees on the hunt for an investment with future upside and growing demand should look no further than AMT stock. By all indications, we will be using more wireless and broadcast communications in the future, not less.
AMT stock rose 50% from its March 2020 low to hit $272.20 a share in late July. Since then, the share price has slumped 20% and now trades below $220. But long-term investors should buy the weakness in American Tower stock. The company is a solid long-term investment.
And while waiting for the stock to rebound, investors can comfort themselves with the fact that American Tower stock provides a quarterly dividend to its shareholders. At just over 2%, the dividend isn’t the best around. But the company has raised its dividend nearly every quarter since mid-2012, which is encouraging.
Apple is a technology stock for people who don’t like or even understand technology. The world’s first $2 trillion company is the kind of stock that allows investors to “set it and forget it.” Investors young and old can buy AAPL stock and relax knowing they’ll get reliable returns and shareholder value.
And while the iconic company is more diversified today than ever before with new ventures in streaming, online payments, wearable technology and cloud storage, Apple’s suite of iPhones remain the primary driver of its business worldwide.
Most investors need only know that AAPL stock is a safe and reliable business that consistently delivers profits to investors. The company’s stock has appreciated more than 50,000% since its IPO in 1980 when shares debuted at $22 a piece. Apple has also split is stock five times in the past 40 years, most recently a four-for-one split on Aug. 28, 2020. And, Apple pays a quarter (25%) of its earnings out as a dividend each year. Investors can rest easy with Apple stock in their portfolio.
Waste Management (WM)
There’s a lot to be said for garbage. Especially where Waste Management is concerned. The Houston, Texas-based company and WM stock are immune to economic cycles and disasters such as the Covid-19 pandemic. In good times and bad, trash and recycling still need to be collected.
And garbage is a growth business. According to Allied Market Research, global garbage collection and disposal is forecast to expand at a compound annual growth rate of 5.5% through 2027 and reach $2.7 trillion. And in the U.S., Waste Management is the undisputed trash king with an impressive 32.69% share of the market.
WM stock has recovered nicely from its pandemic bottom last spring. The company’s share price has risen more than 35% over the past 10 months and now hovers just below $115. However, it remains below its 52-week high of $126.79 a share, suggesting there remains upside potential.
While the company did see its garbage collection work from commercial and industrial clients decline since the pandemic hit, its residential garbage and recycling business (which typically comes from municipal contracts) remains robust as people sheltering at home produce more waste than ever. A 1.9% dividend yield isn’t too shabby either.
CVS Health (CVS)
As most retirees know, pharmacies are essential. And CVS Health stands above the competition in the retail pharmacy space.
The Rhode Island-based company is currently the market leader among pharmacies with a 25% market share. The next biggest U.S. pharmacy, Walgreens Boots Alliance (NASDAQ:WBA) controls 19% of the market. But CVS Health isn’t just a chain of retail pharmacies. The company also owns health insurance provider Aetna, beauty and personal care products and a host of other health and wellness brands. CVS is fast becoming a lifestyle brand.
And CVS stock has been red hot since vaccines against Covid-19 were approved and began being distributed across the U.S. The company is helping to distribute the vaccine at assisted living facilities throughout the country and is also giving shots to people in its retail stores.
The company’s role in distributing the vaccine has helped lift its share price 13% since Dec. 1, 2020. The stock has been outpacing the broader market in recent weeks and now trades above $76. And many analysts see this stock as a good long-term investment, especially given America’s ageing population.
Buying shares of KO stock is like buying a secure bond. Coca-Cola isn’t flashy, its share price is stable, and the returns are modest but steady and reliable. Plus, Coca-Cola has the advantage of being a company that is understandable and familiar to everyone.
Most investors don’t buy this stock for growth, but rather for its hefty dividend which is among the best around and has been steadily growing for more than 25 years. After all, the Atlanta-based company has been basically making the exact same sugary beverage for nearly 130 years now.
KO stock had been trading in a range between $55 and $60 prior to the pandemic. Over the past six months, the stock’s trading range has been largely confined to between $45 and $50 a share. The ups and downs are not overly dramatic, which is probably what most retirees want in their holdings. But the company has paid a quarterly dividend like clockwork ever since 1920 and many investors rely on that dividend for income in retirement, including famed investor Warren Buffett (age 90) who owns 400 million shares of Coca-Cola.
Walmart is a dominant retailer with a discount approach that does well regardless of how the economy is performing. This approach makes WMT stock a good choice for buy-and-hold investors who value substance over flash.
This is not to say that the Bentonville, Arkansas-based company is complacent. Walmart didn’t grow to more than 11,500 stores worldwide by standing still. Today, the company has expanded into groceries and pharmacies, grown its online sales and even announced that it is launching a fintech company. Diversification is the name of the game for the company started by Sam Walton in 1962.
WMT stock has risen nearly 30% since the start of 2020 and is up 42% since the global pandemic sent stock markets crashing down in March of last year. The stock is well insulated against market gyrations and economic cycles. It should continue performing well in good times and bad. And the company continues on a rabid international expansion and diversification trajectory.
Procter & Gamble (PG)
Cincinnati-based Procter & Gamble is one of the very best consumer goods companies in the world. It makes many of the essential products that people use in their everyday lives, including Tide detergent, Bounty paper towels, Crest toothpaste, Gillette razor blades, Head and Shoulders shampoo. The list goes on.
The items made by P&G, as the company is known, are so diverse and widely used that it provides a sizable competitive moat around the business and PG stock. Consumers need to buy Procter & Gamble products no matter what is happening in the wider world. Its products truly are ubiquitous in our lives.
Procter & Gamble is also ruthless when it comes to jettisoning its under-performing brands. Any products that aren’t cutting it are discontinued or re-branded. The company prides itself on focusing on its bestselling core products and marketing them to consumers. It’s an approach that has rewarded shareholders of PG stock. The company’s share price is currently up 46% since last March and now stands at near $135 a share.
The stock also yields a competitive 2.9% dividend. Procter & Gamble has been in business nearly 200 years (since 1837) and shows no signs of fading into the sunset anytime soon.
On the date of publication, Joel Baglole held a long position in AAPL.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.