5 Top Retirement Stocks to Invest in Today
The number of people retiring in the United States is rising, in part due to the high life expectancy rate. Precisely, there were more than 33.5 million people receiving social security in 2009. In 2019, the number had risen to more than 45.5 million people. In this article, we will look at some of the best retirement stocks you should invest in today.
Procter & Gamble (PG)
Procter & Gamble is an American fast-moving consumer goods company that has operations around the world. The firm is well-known for its many brands that are used in most households. They include products like Tide, Pampers, Ariel, Downy, and Always.
PG has performed well over the years. In the past twelve months, it has made more than $72 billion in revenue even with the coronavirus pandemic. Of this, it has made a profit of more than $13 billion, making it the biggest FCMG company in the world.
Procter & Gamble is also a well-respected dividend aristocrat, meaning that it has increased its dividends for more than 25 years. Today, it yields about 2.95%, and it has a payout ratio of 56%. This means that it can comfortably cover its dividend in the foreseeable future.
PG is, without a doubt, facing numerous challenges. For one, with many people shopping online, it does not have the advantage it had in the past about product placement. But it has used the online model to its benefit, where its products are constantly at the top of Amazon. Therefore, because of its strong brand, high dividends, stable growth, and healthy balance sheet, PG is an excellent retirement company.
PG vs. S&P 500
Salesforce is a company that provides customer relations management (CRM) services and other products to companies of all sizes. The company, which was recently introduced to the Dow Jones, has been on a strong organic and inorganic growth.
By inorganic, it has made several high-profile acquisitions that have made it a leading player in several industries. For example, it acquired Tableau Software for $15 billion, which made it a leading player in business intelligence. It is now in the process of acquiring Slack, which will make it the biggest player in corporate communications.
At the same time, Salesforce has managed to maintain a sizable market share in CRM despite competing with juggernauts like Microsoft and Oracle.
Salesforce revenue has been on an upward trajectory, having risen from $1.6 billion in 2010 to more than $20 billion in the past 12 months. Its net income has also soared to more than $3 billion, while its balance sheet has more than $9 billion in cash.
Therefore, while CRM does not pay a dividend, it will, in due course, which is a good thing.
Salesforce vs. S&P 500
Cisco is one of the most recognizable names in the technology industry. The company is well-known for its routers and switches that are used by all technology companies in the United States.
Over the years, Cisco has also expanded its business substantially. Today, it has products in cybersecurity, Internet of Things (IoT), Mobility and Wireless, cloud computing, data centers, and software. Cisco Webex, a product that is similar to Zoom, is one of its best-known brands.
Cisco’s revenue has been growing recently. It has moved from more than $43 billion in 2010 to more than $48 billion in the past twelve months. Its profit has also increased to more than $10 billion. It also has a relatively strong balance sheet.
Cisco makes a good retirement investment for several reasons. First, it has a strong market share in most of its industries. And it is increasing its presence in these sectors like IoT and cybersecurity.
Second, it started offering a dividend in 2011 and has been increasing it every year. It has a dividend yield of about 3% and a payout ratio of 45%. This means that the company can sustain making these payments for the foreseeable future.
Finally, Cisco is a reasonably valued company with a price-to-earnings ratio of 12, which is lower than the overall S&P 500 average of 25.
Cisco vs. S&P 500
Verizon is the largest telecommunication company in the United States with a market cap of more than $239 billion. The company operates through its consumer, business, and media divisions.
Verizon is well-known for its wireless, internet, and TV solutions, which provide a stable source of income. Indeed, its revenue has soared from more than $110 billion in 2010 to more than $128 billion in the past 12 months. In the same period, its profit has increased from $10 billion to $28 billion.
Verizon is also a well-known dividend payer. It has a dividend yield of 4.6% and a payout ratio of 51%. Therefore, while the company is highly indebted, it will always be able to cover these dividend payouts. Verizon is also a better-managed company than some of its peers like AT&T and Comcast. It has a net income margin of 14% compared to AT&T’s 6%.
Verizon vs. S&P 500
S&P Global (SPGI)
S&P Global is a leading company that very few people know about. The company provides a whole range of products and services to investors. S&P provides Global Ratings, Market Intelligence, Dow Jones indices, and Global Platts. Recently, the company announced that it would acquire IHS Markit, a leading financial market data provider.
S&P Global’s revenue has soared from more than $3.9 billion in 2011 to more than $7.3 billion in the past 12 months. Its profit has also increased from $911 million to more than $2.46 billion. It has a stable business, growing dividends, and a stable balance sheet. This makes it a great company to invest in for your retirement. Other peers you should consider are Moody’s and CME Group.
S&P 500 vs. S&P Global
Investing for retirement requires buying companies that have a moat, a strong balance sheet, high returns, and those that are relatively stable. The five companies we have mentioned here meet all these characteristics and are great options.