When it comes to retirement investing, it is never too early to start. If you start early, you can build a strong retirement portfolio that takes care of your expenses while you sit back and enjoy the golden years. Investing for retirement should not be aggressive or high-risk. You need to ensure that you put your money where it will steadily grow and the chances of losing it are minimal. While there is no guarantee in the stock market, it makes sense to look out for retirement stocks to buy that have already proved their strength.
Such companies are unaffected by macroeconomic situations and they know how to handle the market ups and downs. I’ve identified three stocks worth adding to your retirement portfolio. They will ensure steady growth and passive income for years to come. These companies have a rich legacy, strong cash flow and pay dividends. Let’s take a look at them.
Retirement Stocks to Buy: PepsiCo (PEP)
When looking for retirement stocks to buy, the first thing that pops up in mind is the companies that have remained steady and strong despite market uncertainties. Such companies have the potential to keep growing and rewarding shareholders no matter what is happening in the world. Beverage giant PepsiCo (NASDAQ:PEP) is one such company with a rich legacy and high consumer loyalty.
PEP stock is down 4% year to date and is trading at $166 today. Any dip in the stock is a chance to buy. It is usually a short-lived dip that occurs due to market movement, a change in investor sentiment, or a response to the quarterly results.
One reason to hold this stock for your retirement is its diversified portfolio. The company has snacks, beverages, and nutrition products which allow it to ensure steady income over the years. It also has a strong global presence which ensures steady cash flow growth.
PepsiCo is a dividend aristocrat with a yield of 3.25% and 52 years of dividend increases. It recently raised the quarterly dividend by 7% to $1.355 per share. The management is aiming for 4% revenue growth this year. If you are a passive income investor, its solid cash flow and presence in more than 200 countries make it an ideal long-term choice.
With Pepsi, you will not see an immediate upward rally but it will continue to generate passive income while steadily moving higher. It is a safe and low-risk stock worth holding on to for years. Despite the pullback, Wall Street analysts are bullish on the stock and expect it to rebound soon.
Microsoft (MSFT)
Looking for the perfect combination of passive income and capital growth?
Here’s Microsoft (NASDAQ:MSFT).
The most valuable company in the world, Microsoft, is a tech dinosaur that has become a huge part of our lives. Its investment in artificial intelligence (AI) has already started to pay off and the numbers are proof that the company has mastered AI integration for its products.
A leader in cloud computing, Microsoft makes the most revenue from its Azure segment and the company has committed billions of dollars for the development of AI infrastructure in Japan and Sweden. It also has CoPilot which is raking in revenue each quarter. It already has more than 50,000 organizations using CoPilot and this number is only going to keep growing.
Microsoft’s AI prowess will help the company achieve revenue growth and this could take the stock to new highs. Up 22% YTD, the stock is exchanging hands for $453 and is at a 52-week high. However, there is room to grow and withMicrosoft, the sky is the limit. The stock has soared 35% in the past 12 months, showing that the company’s timely investment in AI is paying off.
The company saw a 17% YOY jump in revenue with a 20% jump in the net income. Microsoft is a highly reliable stock to own forever. It also pays a dividend and has a yield of 0.66%. If you are looking to buy just one tech stock for your retirement portfolio, it has to be Microsoft.
Procter & Gamble (PG)
A household name today, Procter & Gamble (NYSE:PG) brings us a range of products we cannot imagine life without. It has a rich legacy of over 150 years and an extensive portfolio that continues to generate income even in times of high inflationary periods. This is one company that has survived several market ups and downs and managed to thrive through it all.
There is a reason its products are industry leaders and will continue to remain so. Procter & Gamble has managed to thrive despite competition and this speaks for its strength. It is not easy to topple a market leader. The best thing about Procter & Gamble is the management’s commitment to rewarding shareholders. It has increased dividends for 68 consecutive years and holds enough liquidity to keep doing the same in the years ahead.
The company has successfully managed to focus on the core business through its massive distribution network which has led to revenue growth. In the third quarter, it generated net sales of $20.2 billion and an EPS of $1.52, up 11% YOY.
Trading at $166, PG stock is up 12% YTD and over 50% in the past five years. It has a dividend yield of 2.43% and there is a huge potential for buybacks and dividend hikes.
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.
