10 Best Retirement Stocks to Buy and Hold in Your Golden Years

Tue., August 28th, 2018 | Chris Markoch

Retirement sure isn’t what it used to be. People are living longer, which means many people who retire in their sixties are looking at a potential need for 30 years of income in retirement. Oh, and health care costs continue to soar and show no signs of stopping as the Baby Boomers age.

Retirees are also facing a changing investment formula. Low-interest rates and the erosion caused by inflation (even with inflation at historically low levels) make shifting all their assets into fixed income securities an unappetizing, and perhaps unwise, proposition. At the same time, unprecedented volatility in the stock market makes it risky to rely on growth stocks to increase the value of their portfolio.

Fortunately, there are a number of stocks that you can add to your portfolio that offers stability, provide competitive advantages and, in some cases, returning consistent value to investors in the form of regular dividend payments.

Click the “Continue to Slide #2” button to view the first company.

#1 - Walmart Inc. (NYSE:WMT)

Walmart Inc. (NYSE: WMT) - Walmart (WMT) has a 45-year history of not only paying out dividends but increasing its dividend as well. That's reason enough to look beyond the fact that the dividend yields have been slowing in recent years. For retirees, WalMart is committed to returning value to their shareholders. However, there's another compelling reason for retirees to want to have this giant retailer in their portfolio: e-commerce. You heard that right. E-commerce from a retailer not named Amazon. Walmart made strategic acquisitions of Jet.com in 2016 and of Flipkart in May of this year. What first looked like desperation is now being rewarded by analysts as a savvy move that could have the company see online sales jump from their current rate of 5% of total sales to as high as 15% in a few years. And with a presence in 28 countries and revenue of over $500 billion, Walmart is not going to be giving up its ability to influence pricing or distribution anytime soon.

About Walmart

Walmart, Inc engages in retail and wholesale business. The company offers an assortment of merchandise and services at everyday low prices. It operates through the following business segments: Walmart U.S., Walmart International, and Sam's Club. The Walmart U.S. segment operates as a merchandiser of consumer products, operating under the Walmart, Wal-Mart, and Walmart Neighborhood Market brands, as well as walmart.com and other eCommerce brands. Read More

Current Price: $147.40
Consensus Rating: Buy
Ratings Breakdown: 24 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $166.13 (12.7% Upside)

#2 - Bank of America (NYSE:BAC)

Bank of America (NYSE: BAC) - When retirees are thinking about safe ports in which to dock their retirement savings, a bank that was synonymous with the financial crisis of 2008 would not be their first choice. But a closer look at Bank of America shows a company that has weathered a difficult storm and now looks poised to benefit from rising interest rates and an outlook for continued economic growth. For starters, in their second-quarter earnings report, the bank cited net consumer charge-offs at low levels not seen since before the financial crisis. Their performance on credit metrics also continues to improve which is a sign of a company that's learned its lessons. Their investment unit Merrill Lynch has record margins. A dividend yield of 1.9% may not excite investors, nor will the idea of investing in a heavily regulated industry. However, the government regulations exist for all banking stocks, and BAC can still point to the fact that no less than Warren Buffett's Berkshire Hathaway Inc. is its largest shareholder. That's a pretty strong vote of confidence.

About Bank of America

Bank of America Corp. is a bank and financial holding company, which engages in the provision of banking and nonbank financial services. It operates through the following segments: Consumer Banking, Global Wealth and Investment Management (GWIM), Global Banking, Global Markets, and All Other. The Consumer Banking segment offers credit, banking, and investment products and services to consumers and small businesses. Read More

Current Price: $27.79
Consensus Rating: Hold
Ratings Breakdown: 10 Buy Ratings, 6 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $36.77 (32.4% Upside)

#3 - AT&T (NYSE:T)

AT&T (NYSE: T) - When looking for a retirement stock, it’s important to look at the present and the future. AT&T has been returning quarterly dividends for over 30 years. And its current dividend yield of 5.6% makes it even more attractive. more of the industry’s profits. To be sure, wireless technology has become more competitive. The company, along with its largest competitor Verizon controls over 70% of the wireless market and even more competitive, but AT&T has a scale that ensures it’s going to be around awhile. In fact, it is showing an increase in both prepaid and postpaid wireless subscribers. But what does that future look like? AT&T has made significant acquisitions. First, there was DirecTV and recently they finalized their acquisition of WarnerMedia. At first glance, this would seem to put AT&T squarely against a rising backlash among consumers who are moving away from traditional pay-TV options and into the world of streaming media. It ran into further headwinds with the recent anthem controversy in the National Football League that may have caused an erosion in DirecTV’s competitive advantage, their role as the exclusive provider of the NFL Sunday Ticket. With all that said, relying on growth purely from its wireless market would not seem to be the way to go. AT&T has the resources to make future acquisitions while still providing value to its shareholders.

About AT&T

AT&T, Inc is a holding company, which engages in the provision of telecommunications media and technology service. It operates through the Communications and Latin America segments. The Communications segment offers services to businesses and consumers located in the U.S., or in U.S. territories, and businesses globally. Read More

Current Price: $15.82
Consensus Rating: Buy
Ratings Breakdown: 8 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $21.88 (38.4% Upside)

#4 - Diageo (NYSE:DEO)

Diageo (NYSE: DEO) - This beer and spirits giant is the world’s largest distiller and the parent company for some of the most iconic names in the industry including Johnnie Walker whiskey, Tanqueray Gin, Smirnoff vodka, and Guinness beer. Bucking an industry trend that has seen other beverage companies struggle to grow sales, Diageo recently reported a 4.3 percent growth in sales from their existing operations (i.e. organic growth). Diageo CEO Ivan Menezes has publicly stated that the fight over tariffs which is threatening the global beverage industry has had “minimal impact” on their business. But the news that has gotten investors excited (dare we say “high”) on this stock is the announcement that it is in discussions with several Canadian marijuana growers as it pursues the idea of cannabis-infused beverages. The stock is presently listing with a forward multiple below 20 and paying out a dividend yield of over 2%. Both hint that the stock is currently undervalued and has a lot of room to grow.

About Diageo

Diageo Plc engages in the production and distribution of alcoholic beverages. Its brands include Johnnie Walker, Crown Royal, JeB, Buchanan's, Windsor and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness. It operates through the following geographical segments: North America; Europe and Turkey; Africa; Latin America and Caribbean; Asia Pacific; ISC; and Corporate and Other. Read More

Current Price: $168.70
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 7 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $4,022.22 (2,284.2% Upside)

#5 - Medtronic (NYSE:MDT)

Medtronic (NYSE: MDT) - There is a lot of uncertainty in the healthcare sector as the debate about the future of the Affordable Care Act continues. There is less uncertainty about the continued need for the medical devices and services that are a part of healthcare in general and an aging population in particular. That's where Medtronic comes in. The medical technology company recently had a stellar earnings report on both the top and bottom line that saw its stock rise 5.7% to reach a record high of $95.17. This recent jump means the stock has risen by 18% in 2018. Fueling the rise were the company's diabetes and pain therapy devices as well as their cardiac and vascular group which includes sales of transcatheter aortic heart valve replacements (TAVR). Worldwide revenue from these sales outgrew the market by nearly 20 percent. And Medtronic has the highest market share in Western and Eastern Europe. In terms of fundamentals, the stock is currently trading at just 16x fiscal 2018 guidance of approximately $5, and it issued a respectable 2.3% dividend yield. It has strong forward guidance.

About Medtronic

Medtronic Plc is a medical technology company, which engages in the development, manufacture, distribution, and sale of device-based medical therapies and services. It operates through the following segments: Cardiovascular Porrtfolio, Neuroscience Portfolio, Medical Surgical Portfolio, and Diabetes Operating Unit. Read More

Current Price: $82.75
Consensus Rating: Hold
Ratings Breakdown: 4 Buy Ratings, 7 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $89.53 (8.2% Upside)

#6 - Merck & Co. (NYSE:MRK)

Merck & Co. (NYSE: MRK) - There are a few certainties in our society: death, taxes, and prescription drugs. OK, maybe that last one isn’t such a certainty, but it’s a market that continues to grow. Whether the economy is expanding or contracting, consumers will still budget for their prescriptions. Merck delivers on two of the important characteristics you should be looking for in a prescription stock. First, it has patent-protected products that are showing exceptional growth. The company’s Keytruda cancer treatment is showing rapid growth for patients with non-small cell lung cancer (NSCLC). The drug recorded a year-over-year doubling in sales in the second quarter. Second, they have a pipeline of new products in place when Keytruda loses its patent protection including a flagship Alzheimer’s drug that analysts are projecting could reach $5 billion in sales per year. In their most recent earnings report, Merck beat analysts’ expectations on sales that were up 5% to $10.5 billion and adjusted income that also grew 5% to $1.06 per share.

About Merck & Co., Inc.

Merck & Co, Inc is a health care company, which engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. It operates through the following segments: Pharmaceutical, Animal Health, and Other. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. Read More

Current Price: $110.96
Consensus Rating: Buy
Ratings Breakdown: 16 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $120.75 (8.8% Upside)

#7 - NextEra Energy (NYSE:NEE)

NextEra Energy (NYSE: NEE) - Utility stocks have long been the cornerstone of the buy-and-hold investors. And because they pay consistent dividends, they are a logical choice for a retirement portfolio. But in investing, as in life, you get what you pay for, which brings us to NextEra Energy. In terms of market capitalization, NEE is the largest electric utility in the United States. “But wait,” you're thinking. “If it's got such a high market cap, it's got to be overvalued, right?” In the case of NextEra Energy, the answer is not according to the numbers. The company's stock is up 30% on a year-over-year basis and it is currently trading just off its record high. Its service area is southern Florida which continues to show rapid growth. And looking ahead, its 21x forward P/E multiple is a bit high, but not for a category leader. The company currently provides a 2.7% dividend yield which is another attractive feature for investors.

About NextEra Energy

NextEra Energy, Inc engages in the provision of renewable energy. It operates through the following segments: FPL and NEER. The FPL segment involves the generation, transmission, distribution, and sale of electric energy in Florida. The NEER segment produces electricity from clean and renewable sources, including wind and solar. Read More

Current Price: $72.92
Consensus Rating: Buy
Ratings Breakdown: 8 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $92.50 (26.9% Upside)

#8 - Republic Services (NYSE:RSG)

Republic Services (NYSE: RSG) - Republic Services is another defensive stock to consider. If you’re a customer, you see their name and logo every time you put out your trash for pickup. The company is the less well-known rivaling Waste Management in this sector. Republic Services has had strong growth through acquisition in the last several years. This is one reason it has outgrown Waste Management in both its sales and earnings numbers over the last five years. And investors seem to like their stock as they have it valued higher than Waste Management. A long-term benefit for Republic Services is that its growth is built on contracted revenue that it derives from local governments and municipalities as well as from its residential and business customers. Critics will point out that RSG’s earnings and cash flow growth were significantly impacted in a positive way when the U.S. corporate tax was cut at the end of 2017. However, analysts uniformly cited that the company demonstrated solid underlying business performance that made the tax cut an additive benefit, not the sole reason for growth. Its current dividend yield is 2.1%.

About Republic Services

Republic Services, Inc engages in the provision of environmental services. It operates through the following segments: Group 1, Group 2, and Group 3. The Group 1 segment focuses on the business of recycling and solid waste in geographic areas located in western United States. The Group 2 segment includes the recycling and solid waste business in geographic areas located in the southeastern and mid-western and the eastern seaboard of the United States. Read More

Current Price: $142.73
Consensus Rating: Hold
Ratings Breakdown: 5 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $145.40 (1.9% Upside)

#9 - Allstate (NYSE:ALL)

Allstate (NYSE: ALL) - The most enticing reason to buy Allstate stock at the moment is that it is trading at an exceptional value to its industry. Here are a few metrics that support this. Its forward P/E ratio is 10.69 compared to the industry's 27.42. Allstate's PEG ratio is 1.28 compared to the industry average of 3.12. A third metric where Allstate excels relative to its industry is in the P/CF ratio. P/CF measures a company's operating cash flow. Allstate's P/CF is 8.40 compared to the industry's average P/CF of 9.45. If all that wasn't enough the stock is trading at less than 14x its 2018 earnings per share estimates. If and when higher interests rates arrive, Allstate should benefit from higher investment returns, which would boost future earnings. Allstate currently has a 1.9% dividend yield.

About Allstate

The Allstate Corp. engages in the property and casualty insurance business and the provision of protection solutions. It operates through following business segments: Allstate Protection, Protection Services, Allstate Health and Benefits, Run-off Property-Liability, and Corporate and Other. The Allstate Protection segment offers private passenger auto, homeowners, other personal lines, and commercial insurance marketed under the Allstate, National General, and Answer Financial brand names. Read More

Current Price: $109.25
Consensus Rating: Buy
Ratings Breakdown: 7 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $141.31 (29.3% Upside)

#10 - Intel (NASDAQ:INTC)

Intel (NASDAQ: INTC) - Rounding out our recommendations we go a little bit unconventional, but only a little bit. Yes, Intel is a name typically associated with the cyclical, and volatile, tech sector. However, Intel is all grown up now. As proof of this, Intel is broadening its product offerings to move beyond computer processors and positioning themselves as a service provider rather than just a product producer. Their revenue is now coming from areas such as graphics processors, networking solutions, and self-driving cars. And with a 2.2% dividend yield that was raised another 10% for this year. Intel has reliably paid and increased its dividends for over 20 years. Today’s retirees need to have a few stocks in their portfolio that they can count on for stable growth. With the benefits of both a steady dividend and the potential for predictable growth, it may make sense to include Intel in your portfolio.

About Intel

Intel Corp. engages in the design, manufacture, and sale of computer products and technologies. It delivers computer, networking, data storage, and communications platforms. The firm operates through the following segments: Client Computing Group (CCG), Data Center and AI (DCAI), Network and Edge (NEX), Mobileye, Accelerated Computing Systems and Graphics (AXG), Intel Foundry Services (IFS), and All Other. Read More

Current Price: $31.13
Consensus Rating: Hold
Ratings Breakdown: 6 Buy Ratings, 19 Hold Ratings, 7 Sell Ratings.
Consensus Price Target: $31.52 (1.2% Upside)

It might seem odd to say, but it’s an exciting time to be at or nearing retirement. While the benefit of buying stable, dividend-yielding stocks remains the right strategy, there is a changing outlook for retirees. The need to not only preserve but potentially increase wealth during retirement years has brought into play some stocks that many would not have previously considered.

Now, more than ever, retirees need to make sure that the money they have on the sidelines is still working for them. The stocks that we’ve listed here all have a history of paying regular dividends but also show the possibility of upside growth in the stock price.