Connect with us

Stocks

7 Retirement Stocks to Buy to Turbocharge Your Savings

Buying quality retirement stocks can provide both safety and growth to keep savings goals on track
AbbVie (ABBV): With revenue concerns abating, it’s time to take a fresh look at this dividend king.
Amgen (AMGN): This biotech giant has a…

  • Buying quality retirement stocks can provide both safety and growth to keep savings goals on track
  • AbbVie (ABBV): With revenue concerns abating, it’s time to take a fresh look at this dividend king.
  • Amgen (AMGN): This biotech giant has an ideal combination of in-market products and products in its pipeline.
  • Apple (AAPL): Make this tech giant prove that the bears are right before abandoning its stock.
  • Dollar General (DG): Inflation and a weakening economy will help keep the revenue coming.
  • Western Union (WU): In tough times, the company’s reliability helps keep investors afloat.
  • Schwab U.S. Dividend Equity ETF (SCHD): An ETF that tracks the Dow Jones U.S. Dividend 100 index.
  • ProShares S&P 500 Dividend Aristocrats ETF (NOBL): This ETF invests exclusively in the elite group of companies known as dividend aristocrats.

Source: kenary820 / Shutterstock

For many years, the model for finding retirement stocks to buy got clouded with some FOMO (fear of missing out) and YOLO (you only live once). Investors got conditioned to years where a 20% or higher return was the normal.

However, to borrow an axiom from golf, 2022 is turning out to be a stark reminder to investors that “sometimes par is a really good score.” Whatever happens over the next few years (and I’ll always remain a cautious optimist), the new reality is that investors who get high single-digit growth will be doing well.

Advertisement

One way to boost the total return of your portfolio is with quality dividend stocks. Reinvesting these regular dividends is a simple way to boost the total return of your portfolio. That makes them the ideal choice for long-term retirement portfolios where safety and security should be the top priority.

  • 7 Hot Energy Stocks to Buy on the Dips

So let’s get right to it. Here are seven retirement stocks to buy that combine modest growth with safe dividends.

Ticker
Company
Current Price
ABBV
AbbVie
$149.11
AMGN
Amgen
$251.89
AAPL
Apple
$140.36
DG
Dollar General
$195.95
WU
Western Union
$17.36
SCHD
Schwab U.S. Dividend Equity ETF
$76.11
NOBL
ProShares S&P 500 Dividend Aristocrats ETF
$89.67

Advertisement

AbbVie (ABBV)

The first of the retirement stocks to buy is AbbVie (NYSE:ABBV). Concerns about expiring patents for its flagship drug, Humira, gave analysts reasonable concerns about the company’s revenue outlook. However, the company’s most recent earnings report should quell those concerns.

First the company is showing that sales of Humira in Europe (where Humira has lost its patent protection) are not declining as rapidly as expected. Second, AbbVie has in-market replacements for Humira that are delivering strong year-over-year revenue growth.

Advertisement

My InvestorPlace colleague Josh Enomoto also reminded investors that AbbVie is likely to benefit from its acquisition of Allergan, which put Botox into the company’s product portfolio.

Investors also get a stock that remains up 11% for the year and recently joined the ranks of dividend kings. This means it has increased its dividend each year for 50 consecutive years. And ABBV stock has a dividend yield that currently is 3.73%.

Advertisement

Amgen (AMGN)

Sticking in the biotech space, Amgen (NASDAQ:AMGN) is another company that is up 10% for the year. One reason for this is that investors are no longer chasing after speculative biotechs that were competing in the Covid-19 vaccine race.

Advertisement

That is putting attention back on companies that are delivering revenue and earnings today and will continue to do so tomorrow. That’s Amgen. The company’s portfolio focuses heavily on treatments for heart disease and cancer which means demand will stay high.

And, as Tezcan Gecgil points out, the company is building a new manufacturing plant in North Carolina. With supply chains likely to become shorter in future years, this should aid the company’s efficiency as well as lower costs.

Advertisement
  • 7 Bargain Cryptos to Buy After the Crash

Amgen has increased its dividend in each of the last 11 years and currently has a dividend yield of 3.14%.

Apple (AAPL)

When considering retirement stocks to buy, you may challenge my decision to put Apple (NASDAQ:AAPL) on this list. There are bearish views of the “FAANG” stock. And AAPL stock is down 22% so far in 2022.

Advertisement

However, much of the concern about Apple’s growth is based on its iPhone. But the company has shown over the last few years that its Services division is responsible for a good bit of the company’s growth in recent years.

And while Apple doesn’t offer a particularly impressive dividend yield, it has been increasing its dividend in each of the last 11 years. Plus, the company has a history of share buybacks.

Advertisement

That’s why you should make Apple prove that it’s not a great long-term growth stock before you abandon it.

Advertisement

Dollar General (DG)

Inflation is taking a bite out of consumer’s take-home pay and that is showing up in the results of many retailers. And that includes discount stores such as Dollar General (NYSE:DG). I’m writing this a few days before the company reports earnings. If the trend continues, Dollar General is likely to deliver guidance that reflects the effect that inflation is having, and will continue to have on its business.

  • 7 Blue-Chips Stocks to Buy at an All-Time Low

However, the company has a business model that puts its store locations in areas that are not easily serviced by the larger chains. This is likely to give the company a distinct advantage as consumers will be looking to find ways to save money on gas as well as on their groceries. And Dollar General is putting more emphasis on allowing customers to use their stores as a one-stop location, which should be an additional catalyst.

Advertisement

Western Union (WU)

Many economists are predicting a recession in the United States if not in 2022, then sometime in 2023. If you share that view, then Western Union (NYSE:WU) may be worth a look. The company remains a reliable option for the underbanked or unbanked. This group may rely on the company’s ability to facilitate peer-to-peer money transfers as well as providing bill payment services. The company is also embarking on an internal strategic review, which may lead to greater efficiency in the company’s operations.

WU stock is down 6% this year and currently has a consensus Hold rating. However, the stock is still a favorite among institutional investors. And it currently has a dividend yield of over 5% with a seven year streak of raising its dividend.

Advertisement

Schwab U.S. Dividend Equity ETF (SCHD)

An alternative approach to finding retirement stocks to buy is to look at dividend-focused exchange-traded funds (ETFs). I have two on this list. The first is the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD).

Advertisement

This ETF tracks the performance of the Dow Jones U.S. Dividend 100 index. This means the fund invests in high-yielding U.S. stocks that are financially sound and have a history of paying consistent dividends. In fact, one of the fund’s largest holdings is Amgen which is also on this list of retirement stocks.

This is reflected in the fund’s dividend yield which is over 3% (3.04%) at the time of this writing. The fund also has what an amazingly low expense ratio of just 0.06%. That means that for a $10,000 investment investors pay just $6.

Advertisement
  • 7 Hot Energy Stocks to Buy on the Dips

The fund is down about 7.5% for the year. However, much of that loss has occurred with the broad selloff in mid-May.

ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

The last security on this list of retirement stocks to buy is the ProShares S&P 500 Dividend Aristocrats ETF (NYSEARCA:NOBL). As its name implies, the benefit of this fund is that it invests exclusively in companies that are part of the dividend aristocrats club. This means that the companies have increased their dividends for at least 25 consecutive years. Companies that prioritize a dividend in this fashion are much more likely to prioritize the dividend.

Advertisement

Another feature of the fund is that it does not allow any sector carry more than 30% of the weighting in the fund. The top three weighted sectors in the fund are consumer staples, industrials and materials.

The fund has an expense ratio of 0.35%, which is considered a bit expensive. And it has not been spared from the market selloff. The fund is down 10% in 2022.

Advertisement

On the date of publication, Chris Markoch had a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

More From InvestorPlace

  • Stock Prodigy Who Found NIO at $2… Says Buy THIS
  • It doesn’t matter if you have $500 in savings or $5 million. Do this now.
  • Get in Now on Tiny $3 ‘Forever Battery’ Stock

The post 7 Retirement Stocks to Buy to Turbocharge Your Savings appeared first on InvestorPlace.

Advertisement

InvestorPlace| InvestorPlace

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *