The best retirement stocks are something investors may consider later in their careers, but the previous few years have proved that there’s no poor time to start preparing. Covid-19, meme stocks and a record 11 interest rate increases between March 2022 and July 2023 have caused upheaval, making everyone think about retirement stocks.

Due to the 8.7% Social Security cost-of-living rise in 2023, more seniors may be subject to federal income taxes on their benefits in 2024, so now is the time to consider the best retirement stocks.

I search for dividend companies with rising returns while researching the best retirement stocks.

From 1972 to 2019, Hartford Funds discovered that S&P 500 dividend-paying equities outperformed lower-volatility payers. Dividend growers and initiators had 10.19% returns, nonpayers 4.27%.

According to Ned Davis Research, dividend-paying equities have lower betas of 0.89 and a standard deviation of 16.15%, making them less volatile than companies not paying dividends.

Plus, a corporation that has earned profits over the last 10 years is more likely to sustain a high dividend yield as it withstood recessions, pandemics and a hawkish Fed. Also, if the stock has a “strong buy” consensus, it’s a winner in my eyes, even if it’s pricey. Don’t purchase a dud because it’s cheap.

Federal Realty Investment Trust (FRT)

Federal Realty Investment Trust (NYSE:FRT) is a contrarian pick among the best retirement stocks. FRT announced disappointing first-quarter 2024 funds from operations of $1.64 per share. The company’s shortfall in profits has harmed the market mood.

FRT demands particular attention since it must distribute 90% of taxable revenue to existing owners as a real estate investment trust. FRT continued its 56-year streak of dividend increases with a $1.09 per common share quarterly cash payout.

Federal Realty, a “strong buy” rated REIT with a 12.2% upside, was profitable over the last decade, outperforming most of the 833 REITs.

In addition, FRT is carrying out initiatives to grow profits, including a significant refurbishment in Bala Cynwyd, Pennsylvania. A new six-story residential building with 217 apartments and 16,000 square feet of retail space is expected to cost $90-$95 million and have a 7% ROI. FRT approved a second Bala Cynwyd phase of a $170 million community project.

Recently, FRT issued $485 million in senior notes due in January 2029 and secured a $200 million Bethesda Row mortgage loan for its subsidiary. The company paid back $600 million in senior unsecured debt in January, balancing financial demands with cautious management.

Walmart (WMT)

Walmart (NYSE:WMT), despite fierce competition from Amazon (NASDAQ:AMZN), is the world’s largest retailer and a Dividend King, raising its payment each year since March 1974.

WMT’s “strong buy” rating and potential upside of over 8%, based on a $73.85 target price, aren’t as high as growth stocks like JD.com (NASDAQ:JD) or Roblox (NYSE:RBLX), but that’s typical of even the best retirement stocks.

Walmart has outperformed 99.67% of the 299 retail-defensive companies, generating profits yearly over the last decade.

Walmart’s Q1 FY2025 sales were $161.5 billion, above expert projections of $159.5 billion, and EPS was $1.34 instead of $1.31; WMT is aiming for a 3% to 4% sales growth goal for the fiscal year ending January 2025.

In addition, Walmart will buy Vizio (NYSE:VZIO) for $2.3 billion to boost its Walmart Connect advertising business. Plus, Walmart is working with Agritask to enhance supply chain sustainability and efficiency. It’s also separately redesigning its $2 billion, generation Z-focused “No Boundaries” brand.

AT&T (T)

AT&T (NYSE:T) wraps up our exploration of the best retirement stocks with an industry-beating yield of 5.8%, a potential upside of around 17%, complimenting a “strong buy” rating, showing how far it has come from the messy Time Warner merger issues.

Following AT&T’s spinoff of Time Warner, CEO John Stankey has repeatedly pledged to build its fiber and 5G businesses. AT&T wants to cut debt and focus on telecom aggressively. Total long-term debt dropped from $230 billion in March 2022 to $132.8 billion in Q1; T’s targeting a debt-to-EBITDA ratio of 2.5 by 2025.

With a revenue of $30.03 billion, AT&T somewhat missed expert projections of $30.62 billion. Still, the business had a net profit increase, with operational income jumping by 29.3% year-over-year to $6.4 billion. With a free cash flow of $4.2 billion, AT&T exceeded analysts’ estimate of $3.60 billion. Additionally, the company’s profitability for eight of the last 10 years is better than 53% of the telecom industry.

For the whole year, AT&T is on target to generate at least $16 billion in free cash flow. Ahead of time, the company reached its $6 billion cost-cutting target; during the following three years, it intends to lower expenses by an extra $2 billion.

On the date of publication, Faizan Farooque 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.

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.