Investors have different needs in retirement, and having some strong retirement stocks in your portfolio is huge.
Volatile growth stocks often give way to more stable blue-chip names that have high dividend payments, which people use as a source of monthly and quarterly income while retired. But selecting the right stocks can be tricky, especially during a choppy market or in the midst of a market correction. The important thing is for retirees to choose long-term investments that will help the value of their portfolio grow steadily over time and help them live comfortably in retirement.
With all of that in mind, I took a look at seven steady retirement stocks that can be counted on to provide consistent returns and dividend payments. They are:
- Coca-Cola (NYSE:KO)
- Crown Castle International (NYSE:CCI)
- Kimberly-Clark (NYSE:KMB)
- Amazon (NASDAQ:AMZN)
- Costco (NASDAQ:COST)
- JPMorgan Chase (NYSE:JPM)
- Vodafone (NASDAQ:VOD)
Now, let’s dive in and take a closer look at each one.
Steady Retirement Stocks to Buy: Coca-Cola (KO)
Steady and reliable, Coca-Cola stock is often compared to a bond in terms of its performance and the returns it provides to investors. While not a growth or momentum play, KO stock nevertheless has a steady share price and provides consistent dividend payouts to shareholders, which can be a reliable source of income in retirement. The company has increased its dividend payment annually for nearly 60 years and the yield now stands at a healthy 3.1%. This performance makes Coca-Cola a true “dividend aristocrat.”
In terms of its share price, KO stock is today trading at $54.40, about flat year-to-date. Again, not overly exciting, but a safe play that avoids big swings to both the upside and downside. The even keeled performance reflects the fact that Coca-Cola remains essentially the same as it was 100 years ago, a beverage company.
Today, nearly three-quarters (70%) of Coca-Cola’s sales still come from its popular brands of soda. And while the company is diversifying into energy drinks, juices, coffee and spring water, it remains a beverages company through and through.
Crown Castle International (CCI)
While not as much of a household name as Coca-Cola, Crown Castle International is still a great investment opportunity for people to consider in retirement. The Houston, Texas-based company is a Real Estate Investment Trust (REIT) that operates 40,000 cell towers and has more than 80,000 miles of fiber optic cable running across the U.S. The company and its stock have been getting a lot of positive attention this year as its cell towers and related infrastructure make the switch to fifth generation (5G) wireless. CCI stock has risen nearly 16% since the beginning of March and now trades at $180 a share.
Crown Castle International is the largest provider of communications infrastructure in America and is considered by many analysts to be an essential service given the increasing reliance on wireless technologies. The company also has a strong dividend yield of 2.9% and has increased its dividend in each of the past seven years. Management expects to further grow its dividend by 7% to 8% per year moving forward, making it attractive for investors looking for an income stream in retirement.
Steady Retirement Stocks to Buy: Kimberly-Clark (KMB)
When famed investor Warren Buffett is asked about his investment in Fruit of the Loom, he likes to say that people will always need underwear. The same can certainly be said of toilet paper, which makes Irving, Texas-based company Kimberly-Clark a great long-term investment.
The company makes well-known household brands that include products such as Cottonelle, Scott and Andrex toilet paper, as well as Kleenex facial tissue and Huggies baby wipes, among many other products.
Kimberly-Clark’s manufactures durable products that people need and use in their everyday lives. So much so that the company’s brands hold market leading positions in more than 80 countries worldwide. Like other companies on this list, KMB stock pays a hefty dividend to its shareholders that’s currently at 3.3%. Kimberly-Clark’s management has approved a 6.5% dividend increase, so the yield over the next year will move up closer to 3.5%. And the company remains in great financial shape with sales up 4% and earnings per share (EPS) up 10% in the last year.
Online retail giant Amazon’s most recent quarterly results say it all. The Seattle, Washington-based company’s first-quarter revenue rose 44% to $108.52 billion. It was the second-consecutive quarter that Amazon earned more than $100 billion of revenue. EPS obliterated analysts expectations, coming in at $15.79 per share versus $9.54 per share that had been forecast. And the company raised its forward guidance, forecasting that its sales will be between $110 billion and $116 billion in the second quarter that ends June 30.
The financial results reinforce that Amazon is the dominant retailer of our time. It continues to produce record breaking results even as the economy reopens and people return to shopping malls and brick-and-mortar stores. And, the company’s business is increasingly diverse. Amazon’s cloud-computing and advertising businesses are booming. Amazon Web Services saw net sales of $13.5 billion during the first quarter, up 32% from a year earlier. The company does not currently pay a dividend, but it remains one of the best growth stocks money can buy.
AMZN stock is currently trading at $3,282.7 per share, up less than 1% YTD and up almost 42% over the past year.
Steady Retirement Stocks to Buy: Costco (COST)
Costco is another company that dominates its market, this one the wholesale grocery sector. And the company can be counted on to produce strong results in good times and bad. In its most recent quarter, Costco reported that same-store sales across its network rose by 12.9%. And in the past five years, Costco’s EPS increased from $5.33 to above $9 for an average annual growth rate of 11%. Long-term, Costco remains a fantastic investment.
Additionally, Costco pays generous dividends to reward its shareholders. While the dividend yield is currently only 0.85%, the company has raised its dividend every year since 2004. And, Costco is known for paying large, one-time special dividends to shareholders. Last December, Costco paid a one-time special dividend of $10 per share to shareholders after the company outperformed during the pandemic. In 2017, Costco paid a a special dividend of $7 a share. COST stock has risen 22.4% since bottoming at $310.92 on March 8. The share price is now at $381.25.
JPMorgan Chase (JPM)
Retirees should hold some bank stocks in their portfolio and few are as good as JPMorgan Chase, the largest lender in the U.S. with more than $3 trillion in assets. The company is one of the most diversified, stable and profitable banks in the world’s biggest economy. The bank consistently produces strong earnings, including a recent first-quarter profit of $4.50 per share that was much higher than the $3.10 per share expected by analysts on revenue of $33.12 billion that surpassed the $30.52 billion estimate of analysts.
JPMorgan Chase typically pays a dividend, although it was suspended during the pandemic by the U.S. Federal Reserve, along with all other banks. JPM stock is also a perennial strong performer, having risen 26% so far in 2021 to $160.40 a share. However, at its current level, many analysts claim the stock remains undervalued.
Given its track record, many analysts feel that JPMorgan Chase is cheap at its current share price, noting that the stock trades at a forward price-earnings (P/E) ratio of 13.5, which is about average for financial institutions but low considering this bank’s market leading position and growth potential.
Steady Retirement Stocks to Buy: Vodafone (VOD)
Retirees who are in it purely for the dividend income should consider taking a position in British telecommunications company Vodafone, which has a dividend yield of 5.5%, among the highest of any stock in the world. The company provides telecommunications and wireless services in 22 countries, primarily throughout Europe and Asia. Vodafone is aggressively pushing into cloud computing and content streaming.
The company has inked a long-term agreement with Discovery (NASDAQ:DISCA) that enables Vodafone customers across 12 European markets to access content from Discovery’s portfolio of shows. Discovery will access around 100 million customers subscribed to Vodafone’s mobile, broadband and television services. And, Vodafone is in the process of spinning off its cell phone tower business, Vantage Towers, in a hotly anticipated initial public offering (IPO) that is expected to raise more than $1 billion from investors.
Overall, VOD stock is up 21% YTD and has a stable share price. And there’s no beating the company’s dividend yield.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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.