As you approach retirement, you generally want to dial down the risk profile of your portfolio to protect your nest egg from unrecoverable losses. This doesn’t mean you should eliminate all equities from your accounts as you cross over into retirement, however.
Longer life expectancies mean that someone retiring at age 65 can expect to live 18 to 20 additional years on average, according to Statista. Meanwhile, the S&P 500 has never experienced a loss over any 20-year rolling period, so having a portion of your portfolio in dependable equities rather than speculative stocks can be a great way to make sure you don’t outlive your retirement savings. Here are 10 safer stocks to get as you head toward retirement.
UGI has raised its payout for 35 years and has regularly paid dividends for 138 years. As a regulated gas utility and propane distributor, the services provider maintains a consistent cash flow from several angles. UGI was able to maintain a consistent cash flow during the financial crisis that occurred throughout the pandemic of 2020 as people continued relying on gas and propane. The company is planning on relying less of fossil fuels in the future and moving towards a cleaner future and more renewable energy sources, such as using gas harvested from landfills. The current yield on the stock sits at 3.28%.
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United Parcel Service (UPS)
The United Parcel Service is the world largest postal service and has been in business since 1907 and paying consecutive dividends since 1969. The business displays its wealth through an impressive fleet of trucks, aircraft and stores throughout the world that deliver packages to millions of people in a timely manner. UPS has the same predictable cash flow characteristics as UGI and others on this list, currently paying a 3.39% dividend. UPS has grown its dividend 53 years in a row and is likely to continue to do so for years to come.
Chevron is a cash flow machine, and it shares this wealth with its shareholders, paying a stout 3.12% dividend. Although the oil and gas industry has been vilified for years, particularly by environmentalists, the fact remains that oil and gas are vital to the U.S. and global economies and will remain so for the foreseeable future. Chevron has been riding the wave of rising oil prices that have bounced tremendously off their 2020 coronavirus pandemic lows. Proving its resilience in any type of economy, Chevron has raised its dividend for 35 consecutive years.
Duke energy is one of the largest electric companies in America and features an impressive dividend. In 2022, the company celebrated its 96th consecutive year the regulated utility has paid a cash dividend on its common stock. Duke plans to continue modernizing and expanding its reach and plans to move to using more renewable energy sources in the future. The company currently pays a hefty 3.56% yield and is anticipating 5% to 7% growth per share through 2026.
Walgreens Boots Alliance (WBA)
A number of factors go into making a stock “safer” than others. One is a reliable cash flow, based on a product line that sells even in a bad economy. The other is a high dividend yield that rises consistently. Walgreens Boots Alliance qualifies in both of these categories. The company is an integrated healthcare, pharmacy and retail operation that competes with the likes of CVS. Walgreens has raised its dividend 46 consecutive years and currently pays a fat 4.50% yield to its shareholders. The stock’s five-year beta, which is a rough gauge of volatility, is 0.54, meaning its share price swings about half as wildly as the market as a whole.
Leggett & Platt
Leggett & Platt, a manufacturing company of bedding, cars, flooring, furniture and other durable goods, has an impressive dividend yield. The company has increased its dividend for 51 years and currently stands with a 4.53% dividend yield. The company attributes its dividend success to the firm’s emphasis on making products that are essential to consumers but a small portion of the product’s cost. The company plans to further expand its markets to feature a 6% to 9% annual growth and is a great option for retirement stocks for those looking for a high dividend.
With a dividend yield of 2.41% and an unbroken string of 59 years of dividend increases, Colgate-Palmolive is the very definition of a defensive stock. The manufacturer of some of the most well-known consumer products brands in the world — from Irish Spring and its namesake Colgate and Palmolive brands to Ajax, Speed Stick, Soft Soap and countless others — CL has the type of brand portfolio built to withstand tough economic conditions. After all, even in a recession, consumers are still going to clean their dishes and brush their teeth, making Colgate-Palmolive a good option for those seeking safer stocks.
Kimberly-Clark is a solid defensive stock, selling products like toilet paper, diapers, paper towels and feminine care items that consumers tend to purchase whether the economy is growing or shrinking. As a result, the company’s cash flow is strong, supporting a current 3.54% dividend. Kimberly-Clark’s consumer product line is so diverse that even if certain areas are underperforming, the company has enough other quality products to offset that weakness. As a result, Kimberly-Clark has been able to raise its dividend for 49 years straight.
Cardinal Health (CAH)
Healthcare is a defensive industry by nature, as even in rough times people need to attend to their health needs. Cardinal Health is a distributor of pharmaceuticals and also manufactures and supplies medical and laboratory products across the globe. The company’s generous 3.70% dividend reflects the high cash flow it generates, which has allowed Cardinal Health to increase its dividend for 36 years running. In its fiscal 2021 alone, Cardinal Health generated $162.48 billion in revenue. The stock’s volatility tracks roughly in line with the market as a whole.
Walmart is the largest retailer in the world, and it has set its sites on battling e-commerce giant Amazon when it comes to online sales as well. If you need to buy something, from home electronics to groceries to home furnishings, Walmart likely has options for you, and at one of the best prices available. This combination of factors has always drawn shoppers to Walmart, making it one of the safer stocks you can buy for your retirement portfolio. As with most of the stocks on this list, Walmart qualifies as a dividend aristocrat, having raised its dividend an impressive 48 years in a row to its current 1.82% level.
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