SBNY - The 3 Most Promising Retirement Stocks to Own Now

2023-08-31 14:08:10 ET

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Patient investors have a golden opportunity to look for the top retirement stock picks primed for a robust decade ahead. Persistent economic chatter can rattle even seasoned traders. Still, the goal for those aiming to craft a retirement portfolio is straightforward: Target resilient, retirement-friendly stocks that can weather any storm.

Investing isn’t just about chasing dividends; it’s about betting on companies with robust foundations that can tackle market volatility head-on. Such stalwarts possess stellar balance sheets and an innate ability to shine, irrespective of the broader market dynamics. Hence, if you’re on the hunt for stocks for your retirement portfolio, prioritize firms equipped to survive and thrive amidst any economic backdrop. These three fit the description perfectly.

Apple (AAPL)

Regarding tech behemoths, Apple (NASDAQ: AAPL ) continues to shine with its groundbreaking innovations. The company’s spectacular business model and the unwavering surge of its stock have consistently drawn the attention of investment moguls such as Warren Buffett. While the world remains enamored with the iPhone, its diversified arsenal of products and unmatched customer loyalty set it apart from the competition. Its unique strengths allow for premium pricing, ensuring a gusher of quarterly cash flows. It’s no wonder Buffett lauds Apple as the crown jewel of his portfolio, making it his investment firm’s most significant holding.

Market titans Paul Tudor Jones and Jim Simons amplified their stakes in the tech giant by triple-digit margins. Moreover, Apple isn’t just about hoarding its earnings. Since 2012, it channeled over $500 billion into share repurchases, and in the last quarter alone, it returned a staggering $24 billion to its shareholders, maintaining a tradition of annually hiking dividends since 2013. Sitting atop a cash war chest worth $62.48 billion and boasting a 0.5% dividend yield with nine consecutive years of growth, Apple continues its reign as an investor’s dream.

Bank of America (BAC)

This year has been remarkably turbulent for bank stocks, with the sector grappling with the aftershocks of the Signature Bank (OTCMKTS: SBNY ) and Silicon Valley Bank (OTCMKTS: SIVBQ ) debacles. To rub salt in the wounds, the banking realm has faced additional pressure from prominent credit rating agencies downgrading several entities. However, amid this financial storm, Bank of America (NYSE: BAC ), the nation’s second-largest lender, seems to have weathered weather the storm effectively while trading near its 52-week low prices.

Surprisingly, this dip in Bank of America’s trajectory comes after the financial giant surpassed Wall Street’s second-quarter estimates across both lines. With elevated interest rates propelling its income, the bank reported an earnings-per-share of 88 cents, outshining the anticipated 84 cents. The quarterly revenue, too, was at an impressive $25.2 billion against the projected $24.9 billion. However, despite these optimistic numbers, BAC has waved a cautionary flag about a deceleration in its loan and deposit growth amidst the cooling U.S. economy.

Nevertheless, BAC’s robust shareholder rewards program offers confidence. The bank boasts an enviable track record of dividend payments spanning 23 years, with an impressive nine consecutive years of payout surges, dwarfing the sector’s median of a mere two years. Furthermore, it offers a remarkable 3.4% yield complemented by a 5-year growth rate of 12.9%.

NextEra Energy (NEE)

NextEra Energy (NYSE: NEE ) is forging an optimistic path into the future, effectively replacing harmful fossil fuels with cleaner alternatives such as wind and solar. Its dedication to a sustainable world involves generating power that respects our planet’s ecological balance.

Over the years, it has operated a remarkably consistent business, generating strong growth across both lines. Moreover, its second-quarter financials reflect its determination to push forward despite market headwinds, showcasing an astounding profit of $2.795 billion, nearly doubling the previous year’s $1.38 billion.

Beyond financial success, NextEra is diving into pioneering territory, partnering with CF Industries Holdings (NYSE: CF ) to explore the vast potential of hydrogen as a green energy source. The collaboration could potentially usher in a new dawn for renewable power.

More importantly, NEE is a dividend aristocrat for retirement stock investors, having raised its payouts for the past 26 consecutive years. Yielding an impressive 2.8%, it boasts a 5-year dividend growth rate of 11.6%.

On the date of publication, Muslim Farooque 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.

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