The stock market is a great way to ensure you have a comfortable retirement. However, it’s not a time for taking risks. You want a portfolio that includes companies with a proven business model and a solid foundation, but also a bright future.
That means avoiding stocks that used to be an easy choice but now face an uncertain future, like oil and airline companies. Retirement isn’t the time to buy at historic lows in the hope that entire industries will regain their footing. Instead, look to stocks like these. Maybe not exciting, maybe not thrilling, but also in little danger of becoming a stock market cautionary tale.
Each of these stocks is a conservative pick, with an “A” rating in Portfolio Grader. If you’re looking for picks that will be safe for your retirement, any of these would be a good choice:
- Chewy (NYSE:CHWY)
- Cloudflare (NYSE:NET)
- DocuSign (NASDAQ:DOCU)
- Logitech International SA (NASDAQ:LOGI)
- PayPal Holdings (NASDAQ:PYPL)
- Sony (NYSE:SNE)
- Zscaler (NASDAQ:ZS)
Retirement Stocks: Chewy (CHWY)
Americans think of pets as an integral part of their family these days. That means they are spending more on them than ever — and even recessions and pandemics can’t put a dent on that spending. According to data published by the American Pet Products Association, pet owners in the U.S. spent $95.7 billion on their pets in 2019. In 2020, that is estimated to have increased to $99 billion.
Online pet supply retailer Chewy was in the perfect position to benefit from the convergence of increased pet spending and the pandemic-boosted online shopping. Last November, that payoff was obvious when the company reported revenue up 45% year-over-year for its third quarter.
Going forward, pet spending is going to continue. Online shopping will continue to be popular. Even with stores reopened, the convenience of having pet food (which can be bulky) delivered to their doors is not something many pet owners are likely to walk away from.
CHWY stock is up 210% since the company’s 2019 initial public offering (IPO). As a retirement stock, it’s a great pick because it’s not only on a growth trajectory, but the company has a solid business model in a market that’s projected to continue growing.
Cloudflare offers two services that have been of increasing importance, but became even more so during the pandemic. The company is a CDN (content delivery network) and also provides online security. Its services make apps and websites more responsive, while providing protection against online attacks. With so many people working, learning, shopping and gaming from home during the pandemic, you can understand why Cloudflare’s services have been in the spotlight.
The need for the company’s services isn’t going to end in a post-pandemic world. Life, entertainment and work is increasingly online, and companies will constantly be pressed to optimize that experience.
Like Chewy, Cloudflare went public in 2019. At this point, NET stock has gained in value 348% since then. It’s a nice pick for a retirement portfolio: a company still in growth mode in a market that is more important than ever.
DocuSign is a company that was in the right place at the right time with the pandemic. When many companies sent staff to work from home and business travel crashed, documents and contracts still had to be signed. That’s where DocuSign was perfectly positioned to save the day.
The San Fransisco-based company has been offering electronic signature solutions (or eSignatures) since 2003. It was an uphill battle at first, but eSignatures became increasingly popular thanks to the amount of time they saved. The pandemic drove eSignature adoption into overdrive and the use is expected to continue.
DocuSign’s pioneering presence in the eSignature industry has led to a dominant position, with over 72% of the market. The company has also expanded into enterprise workflow solutions. DOCU stock is up 236% since the March 2020 stock market crash. That pace of growth is unlikely to last, but with its products dominating the increasingly important eSignature market, this is a great stock to have in your retirement portfolio.
Logitech is one of those companies that seems as though it’s been around forever. It’s certainly been selling PC accessories for a long time. In 2008, Logitech announced it had sold its billionth computer mouse. It’s not just mice. Logitech sells a wide range of PC must-haves, including keyboards, headsets and one of the pandemic’s hottest commodities, webcams.
If you’re worried about Logitech tying its fortunes to an industry that’s been in decline for a decade, don’t. Over the years, the company has been canny about snapping up brands to expand its range into high-growth areas, including audio and video games. So in addition to its core PC accessories business, Logitech owns brands like Ultimate Ears (one of the top names in portable Bluetooth speakers), Jaybird (premium earbuds aimed at fitness enthusiasts), Blue microphones (prized by podcasters) and ASTRO Gaming (competitive video-game headsets).
LOGI stock has been on a consistent growth trajectory since 2013 and has increased in value more than sixfold over the past five years. It shows investing conservatively doesn’t have to mean giving up on gains.
PayPal has a history going back more than 20 years and a pedigree that involves some of the biggest names in tech, including Elon Musk and Peter Thiel.
Over the past two decades, as online shopping has grown in popularity, PayPal has leveraged its position to become the leader in online payments. The company now counts 300 million consumer and merchant customers in more than 200 markets. PayPal has also expanded its offerings, notably with its Venmo cash app. In addition, it’s making big moves into the cryptocurrency market.
The pandemic — which saw online shopping grow even more popular, while cash was frowned upon — benefited both PayPal and Venmo. Over the year, the company added nearly 73 million new users. 2020 was the strongest year in PayPal’s history, with transaction volume up 25% and revenue up 21%. Over the past 12 months, PYPL stock has increased in value by 130%.
As the pandemic’s effects recede, PayPal remains in a strong position. Its subscriber base isn’t just growing, those subscribers are using it for more. As additional services like cryptocurrency support are folded in, that engagement is only going to increase. So far as retirement stocks go, PYPL is one that’s been performing and is built for continued growth in the post-pandemic world.
Sony is one of those stocks that many people overlook. It was the consumer electronics powerhouse until the arrival of the iPod in 2001 signaled a changing of the guard. The decline of the Sony Walkman was followed by the systematic decline of many of the company’s flagship products. Bravia TVs, Sony point-and-shoot cameras and Sony smartphones were all category leaders. They were all either eclipsed by cheaper rival brands or left behind by technological advances.
By 2012, SNE stock had dropped over 90% compared to 2000 levels. So why is a company like that on a list of safe retirement stocks?
Because Sony learned from those tough mistakes and implemented a turnaround plan that worked. The company still makes TVs, cameras and a smartphone or two, but it has focused on leveraging its key strengths and high-revenue opportunities. Sony image sensors are now in half the world’s smartphones. It’s making the most of its movie and music businesses for streaming opportunities.
And video games are now the company’s primary revenue generator, led by the PlayStation game console. The latest version — the PlayStation 5 (PS5) — sold 4.5 million units in 2020, despite only being on sale since November and being constrained by shortages. Those few months of PS5 sales helped boost Sony’s revenue for the quarter to all-time record levels.
Since successfully turning around its business, Sony has been back in the groove. SNE stock has been firmly in growth mode, and over the past five years it’s posted growth of 419%.
Zscaler focuses on enterprise internet security solutions. Its products ensure remote workers who connect to a corporate network are secure, and it prevents a company’s connection to the public internet from being a security risk.
Companies were already connecting their networks to the internet, but with the pandemic, that accelerated and remote workforces exploded in size. In its Q1 2021 earnings, Zscaler reported revenue up 52% year-over-year. Earnings per share were 14 cents, compared to 4 cents a year ago. This marked the fourth straight quarter where Zscaler earnings beat Wall Street estimates. It’s no surprise that ZS stock is up 297% over the past 12 months.
With signs that many of these remote workers are here to stay, even if it’s a hybrid model of splitting time between the office and working from home, companies like Zscaler are going to continue to find their solutions in high demand. And ZS stock will continue to be a safe bet.
On the date of publication, Louis Navellier had a long position in CHWY, NET, DOCU, LOGI, and PYPL. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.