3 Profitable Passive Income Stocks to Buy for Your Retirement Years

  • AbbVie (NYSE:ABBV): The pharma giant has been expanding its portfolio to compensate for the upcoming loss of Humira exclusivity
  • Chevron Corporation (NYSE:CVX): CVX stock recently hit a record high and the bullish sentiment will likely continue
  • Cincinnati Financial Corporation (NASDAQ:CINF): CINF is a well-respected Dividend King with a profitable insurance business
Jars of money with green growth sprouts.

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Wall Street has been nervous since the start of the year. Amidst the soaring inflation and geopolitical turmoil, investors are scrambling to find alternative investment strategies that may offer decent returns with minimum risk. One possibility is to purchase passive income stocks, as regular dividend returns effectively decrease overall portfolio risk.

Research by S&P Global (NYSE:SPGI) indicates that since 1926, dividends have accounted for roughly 32% of total return for the S&P 500 index, “while capital appreciations have contributed 68%.” Moreover, dividend-paying stocks have seen returns that have consistently outpaced the broader market.

Analysts also highlight the strength of Dividend Aristocrat stocks, which have had at least 25 consecutive years of payout increases. Similarly, Dividend Kings, which have increased payouts for at least 50 consecutive years, deserve readers’ attention, as well.

With that information, here are 3 passive income stocks to buy that could see consistent low-risk returns in the long-term:

ABBV AbbVie $161.94
CVX Chevron Corporation $166.60
CINF Cincinnati Financial Corporation $136.48

Passive Income Stocks: AbbVie (ABBV)

abbvie (ABBV) website and logo on mobile phone

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  • 52 week range: $103.84 – $161.98
  • Dividend yield: 3.56%

AbbVie is among the largest pharmaceutical companies worldwide, focusing mainly on immunology and oncology. ABBV stock is a Dividend King with an appealing yield

Management issued fourth-quarter (Q4) 2021 results on Feb. 2. Revenue increased 7.4% year-over-year (YOY) to $14.88 billion. Adjusted earnings stood at $5.92 billion, or $3.31 per diluted share, compared to $2.92 per diluted share in the prior-year quarter.

Its main product, Humira, currently accounts for nearly half of its profits. While the expected loss of its U.S. patent exclusivity looms large, the company seems well prepared for it. Rinvoq sales doubled to $1.65 billion, while revenue from Skyrizi surged 85% YOY to $2.9 billion. Management reiterated guidance for combined revenue of $15 billion from these two drugs in 2025.

ABBV stock has risen 57% over the past 12 months. Shares are trading at 10.6 times forward earnings and 4.7 times trailing sales. The 12-month median price forecast for ABBV stock stands at $153.

Chevron Corporation (CVX)

chevron stock

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  • 52-week range: $92.86 – $174.76
  • Dividend Yield: 3.42%

Major oil company Chevron is the second-largest oil and gas company stateside. It offers exposure to the entire oil and gas value chain, including exploration, production, transportation, storage, refining, and marketing.

Chevron released Q4 2021 results on Jan. 28. Revenue soared 91% YOY to $48 billion. Adjusted earnings came in at $4.9 billion, or $2.56 per diluted share, up from $298 million a year ago. Cash and equivalents ended the period at $5.64 billion.

Like other energy names, Chevron has benefited from rising oil prices. Thanks to its low cost of production, the company reported a record free cash flow of $21.1 billion in 2021. In addition, CVX stock has a track record of 35 consecutive years of annual dividend hikes and generates an attractive 3.42% dividend yield.

CVX stock has risen 56.4% over the past 12 months. Shares are trading at 17.1 times forward earnings and 2.1 times trailing sales. Meanwhile, the 12-month median price forecast for Chevron stock is $169.50.

Passive Income Stocks: Cincinnati Financial Corporation (CINF)

The logo for Cincinnati Financial is shown on a cellphone screen.

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  • 52-week range: $102.18 – $136.51
  • Dividend Yield: 2.05%

Cincinnati Financial is a property and casualty insurance company that also offers leasing and financing services. It is an attractive stock to hold during periods of high inflation, as insurance companies often have the pricing power to adjust premiums charged against the soaring cost of claims. In addition, over the past decade, the company has written consistently profitable policies.

Management announced Q4 2021 results on Feb. 15. Revenue increased 23% YOY to $3.3 billion. Net income came in at $1.47 billion, or $9.04 per share, up from $1.05 billion in the prior-year quarter.

The insurer is a Dividend King, having increased its dividend payout for 62 consecutive years. The current stock price generates a yield of 2.05%.

CINF stock has risen 31.1% over the past year. Shares are trading at 22.7 times forward earnings and 2.1 times trailing sales. Finally, the 12-month median price forecast for Cincinnati Financial stock stands at $135.

On the date of publication, Tezcan Gecgil did not have (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.

Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.


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