Identifying the “best” retirement stock that fits seamlessly into every investor’s portfolio is a challenging task due to myriad factors, such as the tax structure of your retirement account, your age, risk tolerance, and individual investment preferences. However, a well-rounded retirement plan typically diversifies across various industries, providing exposure to a range of investments. While you may think you are too young to think about retirement investing, you want to jump on it before its too late.
When fine-tuning their retirement stock selections, investors should prioritize companies that boast a strong track record of performance, promise future growth, and display investor-friendly financial metrics. Dividends play a crucial role for those nearing retirement by generating income within their accounts, while younger investors benefit from using dividends to increase their holdings “for free” through reinvestment.
Although many investors will adjust their retirement portfolios over time to lower risk as they approach retirement, these three stocks stand out as prime candidates for a buy-and-hold strategy effective immediately. Adding these stocks to your retirement portfolio today could potentially eliminate the need for further adjustments until you reach your golden years.
Intuitive Surgical (ISRG)
Intuitive Surgical (NASDAQ:ISRG) stands out as a distinguished choice among retirement stocks, seamlessly integrating innovative hard tech, robotics, and healthcare’s worldwide growth trajectory. A key player in both the S&P 500 and NASDAQ-100 indices, Intuitive Surgical is celebrated for being a stable and ubiquitous provider of high-end, specialized medical equipment. Setting itself apart from competitors that typically concentrate on conventional medical hardware, Intuitive Surgical revolutionizes surgery to improve provider output and patient outcomes.
With the healthcare industry rebounding from the pandemic, Intuitive Surgical is aggressively expanding on a global scale. The company’s latest quarterly report showcased a notable 21% year-over-year increase in the global use of its premier robotic surgery system, the da Vinci platform, and a 14% growth in new da Vinci system installations. This progress, coupled with a 17% sales increase and a jump in net income to $606 million from $325 million, solidifies Intuitive Surgical’s position as a top retirement MedTech stock investment.
Keep a close eye on Intuitive Surgical this year, as the company is gearing up to unveil its next-generation da Vinci platform. According to CEO Gary Guthart, this new model will boast “10,000 times the processing power” compared to current versions, significantly improving data analysis, sensing technology, and overall digital and analytical functions. This advancement represents a major step in robotic surgery innovation, offering substantial growth prospects alongside its inherent stability for retirement-minded investors. Consider this stock for your retirement investing plan.
The Home Depot (HD)
Home Depot (NYSE:HD) may have had a tough few years as inflation and housing supply slowdowns brought new construction to a crawl, but that macro environment is rapidly changing – which bodes well for this long-term retirement stock.
With an untouchable competitive advantage, Home Depot faces minimal threats from new market entrants and existing rivals. Although it is the preferred choice for home improvement enthusiasts and weekend DIYers, Home Depot has also started catering to a broader audience to capture the growing housing supply expansion. By increasing sales to professional renovation teams, contractors, and builders, Home Depot enhances its prospects within the homebuilding market.
In anticipation of growing demand throughout the 2020s, Home Depot aims to open 80 new stores over the coming five years. This expansion strategy demonstrates management’s confidence in rising demand and positions Home Depot to capitalize on the expected increase in renovations and new construction projects as housing prices stabilize.
Home Depot continues to prioritize dividend growth and distribution, consistently raising its annual dividend for the past decade and doubling the quarterly payout since 2018. With a 0.56 payout ratio, Home Depot’s management balances shareholder value with maintaining adequate cash reserves for further expansion—a perfect blend of growth and value if you’re looking for a solid addition to your retirement investing portfolio.
Caterpillar (CAT)
Caterpillar (NYSE:CAT) produces equipment for construction, mining, and engineering projects. With a dividend yield of 1.99% and a remarkable history of raising dividends for 31 years, Caterpillar attracts long-term and retirement-focused investors.
Since January, the stock has surged by 25%, surpassing earnings and revenue expectations in the fourth-quarter and year-end reports. Caterpillar announced a 13% annual revenue increase, hitting $21.21 earnings per share.
As the world’s leading manufacturer of construction and mining equipment, Caterpillar serves as a vital indicator of the condition of the global economy. Looking ahead, Caterpillar’s investment in AI and automation marks a significant pivot towards future growth. Currently, 13% of construction professionals leverage automation tools, with 60% anticipating usage in the future.
Caterpillar leads the industry with its innovative automated construction equipment, such as self-digging solar ditch machines, demonstrating its adaptability to emerging trends while capitalizing on long-term infrastructure planning. This forward-thinking approach positions Caterpillar to harness new technologies and increase its market presence, solidifying its status as a top retirement stock. If you have retirement investing on the brain, this stock needs to be in your portfolio.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
