It’s easy to get caught up in the trading frenzy that started in earnest during the pandemic. Meme stocks, Special-purpose acquisition companies — whatever you name, chances are good it was getting individual investors very excited. And the FOMO movement ultimately hit significant socially distanced heights. This caused many to overlook solid retirement stocks in 2020.
But now we’re back in a more “normal” market as the pandemic loosens its grip. And it’s time to start refocusing on long-term goals, like retirement. The fun stocks that have dominated the financial news aren’t the only stocks that are putting in solid performances.
There are some quality companies that are delivering solid growth and decent dividends. That means your returns are compounding over time. And that’s exactly what you want for your retirement investments — solid, steady, undramatic growth.
The retirement stocks that I feature here are quality companies with the kind of businesses that may not make headlines but certainly build comfy nest eggs.
- American Financial Group (NYSE:AFG)
- Ally Financial (NYSE:ALLY)
- Dick’s Sporting Goods (NYSE:DKS)
- Huntington Bancshares (NASDAQ:HBAN)
- Jefferies Financial Group (NYSE:JEF)
- Target (NYSE:TGT)
- Williams-Sonoma (NYSE:WSM)
Retirement Stocks to Buy: American Financial Group (AFG)
Property & Casualty (P&C) insurance companies are mandated to hold significant amounts of cash or cash-like investments to have on hand if it’s needed to settle claims. It’s similar to a bank needing reserves for withdrawals.
Most of those cash-like investments are U.S. Treasuries, since they underpin the value of the U.S. dollar. That means when Treasuries yields rise, insurance companies are big beneficiaries.
AFG is a P&C insurer that focuses on the commercial side of the market. It also sells annuities to individuals, which are retirement-focused investment funds. It has been in this business since 1959, so it has managed to grow in good times and bad. AFG only has a $10 billion market cap, which means it’s more interested in running a solid business than trying to aggressively grow it. That’s a good thing and why we like it as a retirement stock.
What’s more, it trades at a current price-to-earnings ratio of just 7x after a 47% run year to date. It also has a respectable 1.6% dividend that can be reinvested or redeployed. It has a Portfolio Grader ‘A’ rating.
Ally Financial (ALLY)
In 2010, the General Motors Acceptance Corporation, the financing arm for General Motors, became ALLY. The spinoff allowed ALLY to finance beyond the corporations’ brands and expand into the broader auto financing market.
Today, it’s one of the largest auto financing companies in the U.S. But it’s also a leading bank with digital banking and financial services like mortgages and insurance.
With a nearly $20 billion market cap, it has also received new interest from investors for its efforts to become a leading digital bank. The financial technology (fintech) sector is one of the most dynamic sectors in the market today. And ALLY has found itself as a key strategic player.
In early June it announced that it was dropping overdraft fees on its checking accounts. That’s a wake-up call to legacy banks and it’s one example of why ALLY’s big future makes it a compelling retirement stock.
Trading a P/E of 9x after a 44% run year to date, it has a nearly 2% dividend.
Retirement Stocks to Buy: Dick’s Sporting Goods (DKS)
Many sporting goods companies stayed afloat during the pandemic by leaning on their e-commerce arm. People could still get out and hike, ride, fish and other things but they couldn’t shop in physical locations.
Now that’s over and team sports are back as well as group activities, including beach vacations, etc. Certainly the heat waves across the U.S. may slow down outdoor activities — unless you’re heading to the beach or lakes — but demand will certainly grow.
DKS has been around since 1948, so it has seen plenty of tough markets. But it remains the top sporting goods company in the U.S. with more than 750 stores across the U.S. It’s a sturdy company that’s a worthy addition to your retirement stocks.
DKS has a current P/E of 9x after logging a 76% return year to date, with a 1.5% dividend. It has a Portfolio Grader ‘A’ rating.
Huntington Bancshares (HBAN)
If you don’t live in the Midwest, you likely haven’t heard of HBAN. It’s one the 25 largest banks by assets in the country ($175 billion in June 2021). It operates in Ohio, Illinois, Michigan, Pennsylvania, West Virginia, Kentucky and Indiana.
HBAN is also 155 years old. That’s testament not only to its durability but its ability to find opportunities when times are tough. Regional banks are in a decent position right now because they have the size and name recognition to fight off big national banks elbowing in on their turf. They also have the IT teams to build out digital banking platforms.
Regional banks like this are solid retirement stocks because they know their market and their customers well. HBAN has a $21 billion market cap and has a generous 4.2% dividend. The stock is up 13% year to date and has a current P/E of 12x. It has a Portfolio Grader ‘A’ rating.
Retirement Stocks to Buy: Jefferies Financial Group (JEF)
There are a few dozen financial services companies that have been around Wall Street for decades. They usually have niche markets and long-term clients who have personal relationships with the customers they serve. JEF is one of them.
With an $8 billion market cap, it’s not a small player, so it has investment banking, asset management and merchant banking divisions. And it also has a couple joint ventures in the commercial and residential real estate sectors with some major players. Its diversification makes it an attractive retirement stock.
The markets will continue to keep corporations busy trading, and low interest rates will keep financing and real estate deals rolling. That’s why JEF is up 37% year to date, yet it only trades at a current P/E of 6x. It also has a nearly 3% dividend. It has a Portfolio Grader ‘A’ rating.
This mega-retailer is not only the most recognized retirement stock on this list, but it’s also the largest by an order of magnitude.
There were some dicey times five or so years ago, as it made a massive shift to e-commerce. But it’s now a powerhouse in the retail market with its physical stores as well as its e-commerce business. Plus, its physical stores allow a hybrid approach as well. You can order online and then go pick it up the same day. That’s especially important now that consumers are out and about again.
And now that TGT has survived its transition to the computer age, this nearly 120-year-old chain is well positioned for its next century. The stock is up 42% year to date with a reliable 1.4% dividend. It has a current P/E of 20x, which is pretty good given its stability and durability. It has a Portfolio Grader ‘A’ rating.
Retirement Stocks to Buy: Williams-Sonoma (WSM)
From a hardware store to one of the top kitchenware stores in the U.S., WSM has come a long way. Chuck Williams opened a hardware store in 1948, but a trip to Europe opened his eyes to the possibility of selling high-quality kitchenware. And by 1956, he launched his first store.
Today, the company sports a $12 billion market cap and also owns powerful upscale U.S. consumer houseware brands Pottery Barn and West Elm as well as international franchises Rejuvenation, and Mark and Graham.
With lockdowns, houseware and kitchenware were very popular sectors, and it’s likely that spending will continue as the economy gets back to normal. WSM doesn’t make a lot of retirement stocks lists but it certainly should.
WSM is up 53% year to date, has a 1.5% dividend and trades at a bargain P/E of 14x. It has a Portfolio Grader ‘A’ rating.
On the date of publication, Louis Navellier has positions in ALLY, DKS, TGT and WSM. 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. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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