Investing in retirement requires careful thought and preparation. Investors looking for retirement stocks not only need to continue to grow their nest egg, but also protect their portfolio from inflation, market downturns and unexpected events.
As such, investors need to seek out stocks of established companies that have a track record of delivering consistent, reliable returns to shareholders. Retirees also need to consider whether a stock pays a dividend and if the company buys back its own shares on a regular basis, as these can each add value.
Investors in retirement should also seek out stocks that will continue to perform strongly during an economic downturn or recession. There’s a lot to think about and many factors to weigh. In this article, we help retirees figure it out.
Here are three of the best retirement stocks to buy for long-term wealth.
Consumer electronics giant Apple (NASDAQ:AAPL) is a great business and equally great long-term investment. There are many ways that Apple provides value to its shareholders.
Driven by consistently strong quarterly earnings and profits, Apple’s share price has gained 283% over the past five years; the company has split its stock on two separate occasions in the past 10 years; the stock pays a quarterly dividend that currently yields 0.6%, or 92 cents per share annually; and Apple buys back more of its own stock than any other publicly traded U.S. company.
At the end of April this year, Apple announced that it will buyback $90 billion of its own stock in 2022 and raised its quarterly dividend by 5%. Last year, Apple spent $85.5 billion repurchasing its own shares, and spent another $14.5 billion on dividends for shareholders.
All of these benefits make AAPL stock a must own for any portfolio. Until this year’s market downturn, Apple also was the only company in the world to have a $3 trillion market capitalization, making it the most valuable publicly traded company on Earth.
Given its incredibly strong financial position and the myriad of ways in which it rewards shareholders, Apple stock should be a top choice of retirees.
JPMorgan Chase (JPM)
For another reliable, long-term investment look no further than JPMorgan Chase (NYSE:JPM), which is the largest bank in the world by market capitalization. With nearly $4 trillion of total client assets, JPMorgan Chase is involved in all aspects of banking, from consumer retail branches, to corporate lending, investment banking and trading.
The company is a global leader in the world of finance and an earnings machine, having posted a record $48.3 billion in profit last year. JPM stock has also been a consistent winner, having gained over 400% since the 2008 financial crisis, including a 69% gain since its March 2020 low.
JPMorgan Chase also pays a strong quarterly dividend yield of 3%, which is good for a payout of $1 a share every three months. And, like the other names on this list, the bank has been aggressive about buying back its own stock, authorizing share repurchases of $30 billion for this year.
While the bank performs strongly in good economic times and bad, as the largest lender in America, JPMorgan Chase does particularly well when interest rates are rising as they are now, as it enables the bank to charge more interest on products ranging from credit cards to home mortgages. If you’re looking for dependable retirement stocks, look no further than JPMorgan Chase.
Berkshire Hathaway (BRK-B)
Former hedge fund manager turned analyst Whitney Tilson calls Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) “the No. 1 retirement stock in America.” And he might be right. Helmed by legendary investor Warren Buffett, Omaha-based Berkshire Hathaway has a lot to recommend it.
The holding company is incredibly diversified, owning railroads, insurance companies, the Dairy Queen restaurant chain and the Fruit of the Loom underwear maker. Additionally, Berkshire Hathaway has a monster stock portfolio that currently totals more than $350 billion.
Top stock holdings in the portfolio include stalwart companies such as American Express (NYSE:AXP) and Coca-Cola (NYSE:KO).
Impressively, BRK-B stock has consistently outperformed the benchmark S&P 500 index for the past 40 years. Since the beginning of 2020, the stock has gained 38% compared to a 27% return for the S&P 500. The company’s stock tends to perform its best when markets are at their worst. Case in point, Berkshire Hathaway’s share price is up 4% this year, compared to a 13% decline in the S&P 500.
While Berkshire Hathaway doesn’t pay a dividend, Warren Buffett does buy back the company’s stock when he feels it is undervalued. In 2021, Berkshire Hathaway repurchased a record $27 billion of its own stock, which helped to bolster the share price. This is a rock solid investment that will help retirees sleep soundly at night knowing that it’s in their portfolio.
On the date of publication, Joel Baglole held long positions in AAPL, BRK-B and AXP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.