7 of the Best Retirement Stocks to Buy Now for 2022

retirement stocks - 7 of the Best Retirement Stocks to Buy Now for 2022

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As any financial advisor will tell you, you should always plan for the future. Typically, slow and steady wins the race over making long-odds wagers. However, the novel coronavirus pandemic certainly threw a monkey wrench into this age-old narrative. In turn, seemingly all equities qualified for the label best retirement stocks.

Since the pandemic began, many people have turned to investing for a variety of reasons, and the popularity caught on quickly. Suddenly, everybody became a day trader — using the Wall Street Journal’s language.

Sure enough, the surge of interest in the investment markets contributed to a once-in-a-blue-moon opportunity to make up for the lost time. Even companies that appeared destined for the bankruptcy line — I’m not going to name any names — enjoyed unprecedented support. Truly, bad news was good news in the new normal. So it was only natural for many blue chips to become some of the best retirement stocks.

Of course, a major contributing source for this interest was the never-before-seen cooperation between private enterprises and big government. The latter wanted everybody to go home to combat the spread of Covid-19 while the former allowed their employees to telecommute — a concept that prior to the crisis found resistance from several managers. Just as importantly, stimulus checks put extra money into Americans’ pockets, boosting the best retirement stocks and other categories.

Now, though, the good times might be coming to an end — or at least the drinks might not be on the house anymore. According to the New York Times, consumer prices rose at the fastest pace since 1982, a dynamic that Washington cannot afford to ignore. Indeed, Federal Reserve chair Jerome Powell signaled that it will more aggressively reduce monetary support of the economy. If so, you need to think about the best retirement stocks.

I’m not proclaiming that we’re going to enter a downturn, although to be blunt, that wouldn’t be the most surprising outcome. Historically, rampant speculation — especially stock trading on margin — never ended well. Therefore, people should consider adding these best retirement stocks to their portfolios.

  • American Express (NYSE:AXP)
  • Essential Utilities (NYSE:WTRG)
  • Archer Daniels Midland (NYSE:ADM)
  • Coca-Cola (NYSE:KO)
  • Walgreens Boots Alliance (NASDAQ:WBA)
  • Realty Income (NYSE:O)
  • Altria Group (NYSE:MO)

It’s important to remember that acquiring so-called best retirement stocks is no guarantee of upside, nor of mitigation during a downturn. Nevertheless, this investment category typically weathers storms well due to their resilience and relevance. And should a correction occur, don’t forget to load up on longer-term ideas rather than just keying in on popular growth plays.

Best Retirement Stocks: American Express (AXP)

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Admittedly, retirees place greater emphasis on income compared to those who are not yet ready to hang up their boots. Honestly, as a strict play on dividends, American Express is unimpressive with a yield of only 1.1%. That said, as a combination of a relevant business with generally stable market returns, it’s one of the best retirement stocks.

First, the financial institution has performed very well — relatively speaking — during the new normal. For instance, total revenue for the first three quarters of this year amounts to $30.2 billion, which barring an outrageously negative event, will easily exceed 2020’s sales tally.

More importantly, on a net income basis, American Express has so far posted $6.34 billion, with one more quarter left. That’s almost within 6% of 2019’s net income tally, representing a sizable comeback from the Covid-19 malaise.

Second, as is common knowledge, American Express tends to focus its marketing efforts on higher-income individuals. As a Bloomberg report from earlier this year indicated, this strategy is paying off, with surging revenue the result. Entering an unknown in 2022, you should consider AXP as one of the best retirement stocks to buy.

Essential Utilities (WTRG)

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I’m going to break the fourth wall and let you in on a secret. Whenever the opportunity to talk about the best retirement stocks comes up, I usually like to raise my hand. One of the reasons is that when discussing other investment ideas — say best companies for growth, technology, healthcare, whatever — you don’t really know what’s going to happen.

Maybe some of my colleagues have a crystal ball. I clearly don’t. But that’s the beauty of writing about the best retirement stocks. You don’t need to have a special model that predicts the future. You just need to recognize basic realities.

As far as I’m concerned, the underlying commodity of Essential Utilities is about as basic — meaning ultra-critical — as you can get. A utility firm that provides drinking water and wastewater treatment infrastructure and services, Essential Utilities is one of the rare corporate brands that truly lives up to its billing. According to the World Wildlife Fund, by 2025, “two-thirds of the world’s population may face water shortages.”

It might be cynical, but water resources are something that people must pony up for, even in the worst of times.

Best Retirement Stocks: Archer Daniels Midland (ADM)

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Going along with the theme of leveraging best retirement stocks against the basic realities of life, Archer Daniels Midland is a powerful name. Heck, you don’t even need to be on the verge of calling it a career to justify ADM stock. Whether you anticipate inflation or deflation in the coming years ahead, this company will likely perform well.

Don’t get me wrong — I don’t think you can get cryptocurrency rich from wagering on Archer Daniels Midland. Still, as a food-processing company, it’s a critical part of our food infrastructure and security. Indeed, food security plays a vital role in geopolitics: the more a country imports its food, the more likely these sources of nourishment can be weaponized.

Having learned a harsh lesson with N95 respirators, U.S. government officials (presumably) are in no mood to exacerbate any other national weaknesses.

But another reason I like ADM stock as one of the best retirement stocks to buy is its exposure to plant-based proteins. Scientific literature is beginning to confirm what I’ve personally long suspected: eating excessive red meat may be bad for your health.

What’s more alarming is that a study revealed that “people who consumed large amounts of processed meat had an elevated risk of dementia, including Alzheimer’s disease.” If true, we might see a broader transition to plant-based alternatives.

Coca-Cola (KO)

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With the media focusing so much on millennial healthy living habits, you might think that Coca-Cola is hopelessly irrelevant. If we were to apply the trend to its logical conclusion, you might also assume that future generations will eschew Coke-branded products for healthier alternatives. Then again, a glaring fact contradicts this narrative.

According to one study, a third of American youth are ineligible for military service due to unhealthy lifestyles and rising obesity rates. Indeed, it’s enough to raise alarm for the top brass, who view expanding waistlines among the young as basically a national security risk.

With all due respect, if the U.S. Army thinks a wide swath of youth are unworthy of being thrown into war, that’s a problem. But it’s a “good” problem for KO stock being one of the best retirement stocks.

Also, Coca-Cola has done very well during the Covid-19 pandemic. With people forced indoors, it limited its revenue-based opportunity costs in 2020. And for the first three quarters of 2021, it’s generated $29.2 billion. It just needs a decent fourth quarter to beat out 2019’s total revenue tally.

So no, KO stock isn’t quite as irrelevant as you might have suspected.

Best Retirement Stocks: Walgreens Boots Alliance (WBA)

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With Walgreens Boots Alliance, we’re going to explore some of the higher-risk, higher-reward opportunities among the best retirement stocks. If you do decide to go with this idea, you don’t necessarily need to allocate as much of your funds toward WBA stock since the underlying company is working on a recovery narrative.

Now, I don’t want to understate the risk involved in this storyline. Over the trailing five-year period, WBA stock has dropped over 42%. As people are quick to say, when a stock loses that much value, there’s a reason for it.

But on the optimistic front, the bulls have justification for their belief in Walgreens’ turnaround efforts. For one thing, the coronavirus pandemic has been a boon for the company. While we all want this crisis to finally go away for good, it’s also possible that Covid-19 could become endemic. If so, living with Covid could translate to higher returns for WBA stock.

Also, the performance this year has been spectacular, with the company generating $132.5 billion in it’s fiscal year 2021. And while this is slightly under last year’s tally during the same period, the outlook is still very strong for WBA stock.

Realty Income (O)

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On the surface, Realty Income features counterbalancing factors regarding inclusion into a list of best retirement stocks. On the positive end of the spectrum, Realty Income provides monthly dividend payouts, which makes it more ideal for those seeking income. As you know, the bills associated with life tend to come due on a monthly basis. Therefore, receiving dividends on such a schedule makes for predictable cash flows.

However, the physical real estate segment took a hit during the early months of the pandemic. With people forced to shelter in place, e-commerce transactions took a greater share out of all retail transactions during the peak of the crisis. Thus, investors will be taking on higher risk with O stock, especially if the pandemic worsens.

At the same time, retail revenge has really pushed people outside, seeing as how so many developed cabin fever. Also, e-commerce gains during the crisis last year have decelerated conspicuously, boosting brick-and-mortar retailers.

Finally, several of Realty’s top 20 clients — if not the majority of them — feature e-commerce resistant businesses. Therefore, even if the pandemic took a turn for the worst, Reality potentially has enough relevance to keep moving forward.

Best Retirement Stocks: Altria Group (MO)

a sign with the Altria (MO) logo

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Easily the most controversial name on this list of best retirement stocks, Altria Group offers a very attractive yield of right around 8%. However, you know what they say about high yields — it might be a trap to lure you into an unstable business. And this is also a good time to mention that I own shares of MO stock, largely on its underlying cynicism.

Of course, one of the biggest challenges to Altria is that smoking is losing popularity. According to the Centers for Disease Control and Prevention, “Cigarette smoking among U.S. adults has reached an all-time low of 13.7% in 2018 — a decline of approximately two-thirds in the more than 50 years since the first Surgeon General’s report warned of the health consequences of smoking.”

I’m not going to pretend that this is an easy company to wager on. However, it’s also fair to point out that demand for cigarettes and tobacco products, in general, is still strong. Naturally, Altria has depended on this demand profile to raise prices. With the government also applying pressure on the vaping industry, the traditional smoking base could be bigger than many folks realize.

This has cynicism written all over it, but it can also be quite lucrative in exchange for the added risk.

On the date of publication, Josh Enomoto held a LONG position in MO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.


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