SPECIAL REPORT The Top 7 Stocks for 2024

The 7 Best Retirement Stocks to Buy in July

Advertisement

  • Albemarle (ALB): Albemarle provides lithium to feed the burgeoning EV market.
  • McDonald’s (MCD): McDonald’s may benefit from a return to pre-pandemic norms.
  • Bunge (BG): Bunge’s relevant business is currently undervalued.
  • Read more about the best retirement stocks to own now!
Best Retirement Stocks in July - The 7 Best Retirement Stocks to Buy in July

Source: Shutterstock

While the post-pandemic market cycle inspired much speculation into the mix, forward-thinking investors may want to use this time to strategize the best retirement stocks in July. Fundamentally, the future arrives sooner than you expect. Therefore, it pays to plan ahead.

And believe me, time flies, mostly as a derivation of mathematics. For example, from age 10 to age 20, a child transitioning to adulthood has lived a “lifetime” to get there. However, from age 20 to age 30, we’re talking half a lifetime (relative to the 10-year-old child’s perspective). As you jump from decade to decade, time from a perceptional view “accelerates” if you will.

The point of the above paragraph is to emphasize that you shouldn’t waste time. Therefore, you want to stock up on retirement stocks to buy as early as possible. Below are several compelling ideas to consider.

Albemarle (ALB)

retirement stocks an older couple sitting on a dock and looking at a pamphlet
Source: Shutterstock

While electric vehicles may represent the future of personal mobility and transportation, as an idea for the best retirement stocks in July, the narrative becomes quite tricky. At the end of the day, it’s anyone’s guess which EV brand will dominate over the next several decades. A much safer idea (relatively speaking) is Albemarle (NYSE:ALB). As a specialty chemicals manufacturing firm, its focus on lithium for the EV sector should be relevant indefinitely.

To be fair, ALB isn’t the most exciting idea for retirement stocks to buy. Then again, this space isn’t built for excitement but rather for predictable and steady gains over time. I genuinely believe that’s the situation with Albemarle. By pretty much all accounts, both industry leaders and policymakers will push for broader EV integration. That’s only going to make ALB rise in pertinence.

Currently, the company only features a forward yield of 0.7%, which is really nothing. However, the underlying EV market and its overall stout financials make ALB one of the top retirement stocks for July.

McDonald’s (MCD)

a financial planner showing a couple a piece of paper
Source: Shutterstock

A fixture in the American fast-food industry, McDonald’s (NYSE:MCD) at first glance might seem a risky proposition for best retirement stocks in July. While the Golden Arches may be iconic, the “problem” is that younger consumers tend to focus on healthier eating. Now, one would have to stretch credulity to characterize anything associated with McDonald’s as healthy. Still, MCD has a key element working in its favor.

Specifically, social normalization trends should augur well for the fast-food giant. Based on an Axios report, companies have aggressively pushed for at least hybrid schedules for their employees. That means you’re going to see increased demand for breakfast products as worker bees attempt to make their commute more tolerable. Also, McDonald’s offers an excellent alternative for fancy (read overpriced) coffeeshop beverages.

Presently, MCD carries a forward yield of 2.06%. Though it’s not particularly generous, it’s higher than the consumer discretionary sector’s average yield of 1.89%. Thus, it’s a solid idea for investing in retirement stocks.

Bunge (BG)

retirement stocks: miniature figurines climb a staircase made of coins
Source: Shutterstock

An American agribusiness and food company, Bunge (NYSE:BG) makes an excellent case for the best retirement stocks in July. Mostly, that’s because Bunge aligns with the traditional approach to planning for the future: acquiring income-providing enterprises that feature relevant, predictable businesses. Aside from rare geopolitical flashpoints, the agricultural industry is generally predictable because of its critical nature.

Obviously, humans need sustenance to survive and thrive. Further, BG makes a particularly strong case for high-potential retirement stocks because of its value proposition. Due in part to disruptions to global agricultural and food-related commodities, the underlying sector has underperformed. However, this circumstance also sees BG being undervalued relative to forward earnings.

Featuring solid revenue growth and consistent profitability, BG seems a worthwhile candidate for (relatively) mild speculation. Better yet, the company carries a forward yield of 2.7%, above the consumer staple sector’s average yield of 1.89%. Also, its payout ratio sits at 23.14%, indicating high confidence in yield sustainability.

Sempra Energy (SRE)

an elderly couple jumping up in a white household. Cheap retirement stocks
Source: Shutterstock

In real estate, it’s all about location, location, location. And one could make the same argument for public utilities, which is why I peg Sempra Energy (NYSE:SRE) as one of the best retirement stocks in July. While it’s not exactly a favorite enterprise among its users, here’s the reality: Sempra covers much of the lucrative Southern California market. Since the Golden State is the U.S. economic engine, folks here can pay their bills.

Now, I don’t want to get bogged down with the discussion that clearly, not everybody lives the good life in Cali. However, people here generally tend to be educated, work high-paying jobs, or are otherwise go-getters. Naturally, such a framework serves the utility provider well. Like other companies in its ecosystem, Sempra doesn’t have sterling financial metrics. But it’s consistently profitable as you might expect.

Also, what makes it a great candidate for retirement stocks to buy is its passive income. Carrying a forward yield of 3.3%, the payout ratio sits at a decent 49.71%. Also, Sempra enjoys 19 years of consecutive dividend increases.

Phillips 66 (PSX)

Coins stacked next to a calculator that says "retirement plan." Retirement stocks.
Source: kenary820 / Shutterstock

At first glance, the inclusion of Phillips 66 (NYSE:PSX) among the best retirement stocks in July appears to clash with Albemarle. After all, Phillips 66 represents a downstream hydrocarbon energy giant. In contrast, the political and ideological winds favor EV integration, not building combustion-powered cars. So, what gives?

Well, I’ve got to be real with you all – I don’t see combustion cars fading out altogether. Sure, EVs may become a much more prominent fixture on our roadways. However, sparking a majority transition to EVs will almost surely require a power infrastructure overhaul. We already have enough problems with air conditioners running during a heat wave, let alone charging full-sized vehicles. Therefore, Phillips 66 should be surprisingly relevant for years to come.

Notably, because of the aggressively hawkish monetary policy, the underlying sector has underperformed. Subsequently, the market prices PSX at a forward multiple of 7.2, which is undervalued. For passive income, the company features a forward yield of 4.4%. As well, its payout ratio sits at 35.74%, providing confidence regarding yield sustainability.

IBM (IBM)

A pink piggy bank sits on top of piles of cash to represent cash-rich stocks
Source: Shutterstock

Perhaps a more classic idea for best retirement stocks in July, legacy technology giant IBM (NYSE:IBM) offers myriad relevancies. Sure, that wasn’t always the case. Years ago, “Big Blue” held on too strongly to its legacy business units. However, that was then and this is now. Today’s IBM focuses on contemporary and pertinent innovations such as the hybrid cloud network.

Moving forward, what I appreciate about IBM as one of the top retirement stocks for July is that it provides core competencies without ego and fanfare. DO you want artificial intelligence? IBM has more than proven itself with IBM Watson and other enterprise-level digital intelligence solutions. How about cybersecurity for corporate clients? Or the blockchain? Whatever tech you can think of, Big Blue has you covered.

What investors of high-potential retirement stocks will really appreciate is the passive income. Currently, the tech juggernaut carries a forward yield of 5.02%. While its payout ratio stands a bit on the high side at 66.53%, the company also features 30 years of consecutive dividend increases. That’s a status management that won’t give up cheaply.

International Paper (IP)

a man sitting behind a pile of cash
Source: Shutterstock

Another classic idea for the best retirement stocks in July, International Paper (NYSE:IP) is boring. Maybe a little bit too boring, which may then raise some alarm bells for investors. Should they pile into an “analog” enterprise when the world is rapidly moving toward advanced digitalization? On paper (no pun intended), IP seems to contradict the bullish thesis for IBM.

However, much like the situation with EVs and the mobility paradigm, I don’t see digitization efforts completely eliminating paper from the personal and business ecosystem. At the most cynical level, paper can’t be hacked into, offering a viable backup. Moreover, the rise and dominance of e-commerce will ironically boost the paper and packaging market. Thus, IP should be surprisingly relevant.

Also, it’s difficult to overlook passive income if you’re investing in retirement stocks. At the time of writing, International Paper commands a forward yield of 5.91%. In fairness, the payout ratio of 81.34% is elevated. However, if you’re seeking a little spice and contrarianism in your long-term portfolio, IP may be enticing.

On the date of publication, Josh Enomoto 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.


Article printed from InvestorPlace Media, https://investorplace.com/2023/07/the-7-best-retirement-stocks-to-buy-in-july/.

©2024 InvestorPlace Media, LLC