One needs to be careful choosing retirement stocks. While you might think you have many years to go, they’ll pass by in a blink and you will curse yourself for not planning the retirement earlier.
If you are looking to make investments that will give you a comfortable and safe retirement, consider high-quality stocks. Look for stable businesses that have the potential to continue growing over the years, irrespective of the market condition.
Such companies bring stability to your portfolio and generate passive income in the form of dividends. If you are looking for best stocks for peaceful retirement, here are the safe retirement stocks to keep on your radar.
| MSFT | Microsoft | $332.58 |
| JNJ | Johnson & Johnson | $154.54 |
| PEP | PepsiCo | $182.19 |
Microsoft (MSFT)
If you are looking to buy and forget about it, Microsoft (NASDAQ:MSFT) is one stock you should add to your portfolio.
The tech giant is a leader in the industry and is a well-established business that could reach new highs over the coming years.
Credit Suisse analyst has a price target of $420 while Piper Sandler analyst has a price target of $400. One solid reason to buy the stock is the company’s radically growing investments in the artificial intelligence segment.
The partnership with OpenAI is just a start and it brought Microsoft to the forefront in the world of AI but there is a lot more to come. The company has a ChatGPT-integrated version of the Bing search engine which is already attracting users.
Microsoft has an edge over other AI startups in terms of experience, talent, and money. It already has the capabilities and it is capable of monetizing them. MSFT is one of the best retirement stocks for stability.
The company has recently received approval for the acquisition of Activision Blizzard from the European Union and this could open new opportunities. Securing approval from the U.K. and U.S. remains a challenge but if the deal goes through, Microsoft will add some of the top game franchises to its gaming service.
Besides gaming and AI, Microsoft is also growing its cloud services. The company saw a 27% year-over-year growth in cloud services revenue. When looking for a retirement stock to own, you need to look for stable businesses and Microsoft is just that.
The valuation might seem high right now but several factors can justify the same. Microsoft has a dividend yield of 0.83% and has recently announced a quarterly dividend of $0.68.
Johnson & Johnson (JNJ)
When it comes to safe retirement stocks and solid businesses, one cannot forget to mention Johnson & Johnson (NYSE:JNJ).
Already a big player in the medical industry, the company is more than its med tech business. It has a consumer health unit that is in the process of a spin-off. The one reason to bet on JNJ is that it will never go out of business since the products will always remain in demand.
The company beat analyst expectations in the first quarter and reported a revenue of $24.75 billion and an EPS of $2.68 adjusted. However, the shares took a beating after the results since the company revised the guidelines and lowered the sales target of 2025 to $57 million from $60 million.
For 2023, the company raised guidance and is looking at sales of $97.9 billion to $98.9 billion and earnings of $10.60 to $10.70 per share.
JNJ stock is down in the past six months. This dip is a good chance to get your hands on the stock. It strengthened its position in the market with the acquisition of Abiomed, a heart pump maker.
This addition led to a rise in sales of medical devices by 7% from the first quarter of 2022. For long-term investors, JNJ offers a solid history of dividend growth. It has a dividend yield of 3.07% and recently announced a dividend of $1.19. The business is stable with steady growth and consistent payouts, making it an ideal addition to your portfolio.
PepsiCo (PEP)
Another one of the secure retirement stocks to buy is PepsiCo (NASDAQ:PEP).
The blue-chip company has pivoted away from the sole business of carbonated beverages and this has allowed it to continue growing despite the market uncertainty.
PepsiCo acquired Frito-Lay, which is a snack-food division and it helped diversify the business. It is a big reason the stock is moving upwards. In 2022, it reported a revenue of $23.3 billion which accounted for 27% of the total revenue.
The brand now takes up a large part of a grocery store, right from the snacks to the beverages and the demand for its products is not going to slow down anytime soon.
While many investors think it is too late to buy the stock, I don’t agree. I believe this is one stock to buy and hold forever.
It will bring stability to your portfolio and will continue generating dividend income. Pepsico stock is up 85% in the last five years and the company enjoys a dividend yield of 2.77%. The dividend aristocrat recently announced a dividend of $1.26.
The company had a solid quarter and reported revenue of $17.85 billion and EPS of $1.50. It saw a 10% rise in net sales and a 14% rise in organic revenue. It has surpassed expectations over the last four quarters. Following this, the company raised its outlook for the year and it led to the shares rallying.
One thing about PepsiCo is its stability. While the business may see minor ups and downs, the economy or market instability will not have a huge impact on the numbers. I believe PepsiCo has the potential to beat the market and generate solid returns for long-term investors.
On the date of publication, Vandita Jadeja did not hold (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.
