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10 Best Retirement Stocks To Buy Now

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In this article, we discuss the 10 best retirement stocks to buy now. You can skip our detailed analysis of these stocks and the current market situation, and go directly to 5 Best Retirement Stocks To Buy Now.

A comfortable retirement is something many Americans dream of, and spend their lives working towards. However, retiring comfortably requires more than simply dreaming — it often means being strategic with your money and savings, usually through investments. While the average age of retirement in the United States is 62, longer life expectancies mean that someone retiring at age 65 can expect to live 22.9 additional years on average. According to a 2020 report by the Federal Reserve, 27% of adults considered themselves to be retired, despite a few of them still working in some form.

Although 77% of American workers are saving for retirement through employer-sponsored retirement plans as well as other options, that still leaves 33% of workers without any real retirement savings plan. A survey conducted by the Transamerica Institute revealed that many workers are dreaming of an active retirement. Traveling is their most frequently cited retirement dream, followed by spending time with family and friends, and pursuing hobbies. On the other hand, some of the most frequently cited retirement fears include outliving savings and investments, declining health that requires long-term care and a reduction in or elimination of Social Security in the future. While a majority of workers have some form of financial strategy for retirement, of these, only a few have the means to enact their plans, while 24% of the survey participants reported not having any retirement plan at all.

Retirees, lacking a paycheck from a job, must find a different way to generate sufficient income to make ends meet while also ensuring they do not outlast their income stream. In order to successfully navigate retirement in increasingly uncertain situations, it is important to have more sources of passive income other than pension and Social Security. This is where dividend stocks truly shine. As a proven way to amass a reliable stream of income that will make retirement more comfortable, owning a portfolio of quality businesses can deliver predictable, growing dividend income in all manner of market environments. Some of the best retirement dividend stocks to consider include The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), and PepsiCo, Inc. (NASDAQ:PEP), among others listed below.

Photo by Ovidiu Gruescu on Unsplash

Our Methodology 

For our list, we selected dividend stocks that recently received optimistic analyst ratings, are strong industry players with a reliable performance record, and have a proven history of resilience in the face of a volatile macro environment.

The hedge fund sentiment around each stock was derived from Insider Monkey’s database which tracks 912 hedge funds as of the first quarter of 2022.

Best Retirement Stocks To Buy Now

10. McDonald’s Corporation (NYSE:MCD)

Dividend Yield as of June 7: 2.22%

Number of Hedge Fund Holders: 58

McDonald’s Corporation (NYSE:MCD) is an American-based multinational fast food chain, founded in 1940 as a restaurant by Richard and Maurice McDonald. Alongside a strong foothold in the real estate industry, the fast food corporation has a solid history of consistent dividend increases for 45 years.

On May 26, McDonald’s Corporation (NYSE:MCD) declared a $1.38 per share quarterly dividend, in line with previous. The dividend will be distributed to shareholders on June 20. The company’s dividend yield on June 7 stood at 2.22%.

On June 7, UBS analyst Dennis Geiger maintained a Buy rating and $290 price target on McDonald’s Corporation (NYSE:MCD), saying that the company is well positioned as a “high quality, defensive compounder” that should prove resilient thanks to the relative benefits from pressured consumer spending and drivers that support solid sales momentum.

Earlier this April, McDonald’s Corporation (NYSE:MCD) released its earnings report for the first fiscal quarter of 2022. The company announced an EPS of $2.28, beating estimates by $0.11. Revenue for the year grew 10.56% on a year-over-year basis to $5.67 billion, topping market consensus by $94.35 million.

According to Insider Monkey’s Q1 data, 58 hedge funds were long McDonald’s Corporation (NYSE:MCD), with collective stakes valued at $2.73 billion. Jim Simons’ Renaissance Technologies is the biggest shareholder of the company, with 2.53 million shares worth $625.96 million.

Similar to The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), and PepsiCo, Inc. (NASDAQ:PEP), McDonald’s Corporation (NYSE:MCD) is a decent stock for a retirement portfolio.

9. The Procter & Gamble Company (NYSE:PG)

Dividend Yield as of June 7: 2.49%

Number of Hedge Fund Holders: 72

The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods corporation headquartered in Cincinnati, Ohio. Involved in the manufacturing and distribution of a broad range of personal care and hygiene products, the company ranks among the lists of dividend kings, with 65 consecutive years of dividend increases and a 2.49% yield as of June 7.

On June 1, Deutsche Bank analyst Steve Powers lowered his price target on The Procter & Gamble Company (NYSE:PG) to $171 from $177 and maintained a Buy rating on the shares of the company. Based on the analyst’s remarks, he feels like something “has to break” across the U.S. consumer products space after six months of outperformance against an increasingly difficult cost, consumer, supply, and macro backdrop.

The consumer goods giant released its quarterly earnings report for the third quarter of 2022 on April 20. Based on the report, The Procter & Gamble Company (NYSE:PG) had earnings per share of $1.33, beating estimates by $0.04. Additionally, the revenue for the quarter was reported at $19.38 billion, surpassing estimates by $687.8 million.

The Procter & Gamble Company (NYSE:PG) was held by 72 hedge funds at the end of Q1 2022, compared to 67 hedge funds in the previous quarter. Rajiv Jain’s GQG Partners, was the company’s largest shareholder for the quarter, with 9.91 million shares worth $1.51 billion.

8. PepsiCo, Inc. (NASDAQ:PEP)

Dividend Yield as of June 7: 2.79%

Number of Hedge Fund Holders: 62

PepsiCo, Inc. (NASDAQ:PEP) is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York. A leader in the bottled beverage industry, PepsiCo, Inc. (NASDAQ:PEP) has paid consecutive quarterly cash dividends since 1965, and this year marks the company’s 50th consecutive annual dividend increase.

Earlier this April, JPMorgan analyst Andrea Teixeira raised the price target on PepsiCo, Inc. (NASDAQ:PEP) to $186 from $183 and kept an Overweight rating on the shares. The analyst views the company’s updated the 2022 guidance as conservative and says its underlying performance continues to impress.

On April 26, PepsiCo, Inc. (NASDAQ:PEP) posted its earnings for the first fiscal quarter of 2022. The company reported an EPS of $1.29, beating consensus estimates by $0.06. The company also reported a revenue of $16.20 billion, an increase of 9.31% on a year-over-year basis, surpassing market forecasts by $658.69 million.

By the end of the first quarter of 2022, 62 hedge funds held stakes in the company worth around $4.86 billion. This is compared to 60 funds in the fourth quarter of 2021, with stakes worth $4.65 billion. The company has been an investor’s favorite for quite some time now, with Donald Yacktman’s Yacktman Asset Management being one of the largest shareholders in PepsiCo, Inc. (NASDAQ:PEP) owning over 4.2 million shares of the stock, valued at roughly $715.4 million.

Here is what ClearBridge Investments had to say about PepsiCo, Inc. (NYSE:PEP) in its fourth-quarter 2021 investor letter:

“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”

7. MetLife Inc. (NYSE:MET)

Dividend Yield as of June 7: 2.95%

Number of Hedge Fund Holders: 39

The Metropolitan Life Insurance Company, better known as MetLife Inc. (NYSE:MET), is among the largest global providers of insurance, annuities, and employee benefit programs, with 90 million customers in over 60 countries. The firm was given a Buy rating and a $77 price target by Citi analyst Michael Ward after he initiated coverage on May 23.

On April 26, MetLife Inc. (NYSE:MET) declared a $0.50 per share quarterly dividend, a 4.2% increase from the previous dividend amount of $0.48, which will be distributed to shareholders on June 14. The company’s dividend yield on June 7 stood at 2.95%.

As of Q1 2022, 39 hedge funds were long MetLife, Inc. (NYSE:MET) with collective stakes of $945.5 million in the insurance giant. Richard S. Pzena’s Pzena Investment Management is MetLife, Inc. (NYSE:MET)’s largest investor, owning a $330 million stake through 5.2 million shares.

6. Chevron Corporation (NYSE:CVX)

Dividend Yield as of June 7: 3.15%

Number of Hedge Fund Holders: 53

Chevron Corporation (NYSE:CVX) is an American multinational energy corporation. One of the successor companies of Standard Oil, it is headquartered in San Ramon, California, and active in more than 180 countries. Considered a dividend aristocrat, the company’s upside potential alongside a 35-year streak of consistent dividend growth make it ideal for long-term investors.

Chevron Corporation (NYSE:CVX) currently pays a quarterly dividend of $1.42 per share, in line with the previous, which will be payable to shareholders on June 10.

Earlier this May, Barclays analyst Jeanine Wai raised the price target on Chevron Corporation (NYSE:CVX) to $196 from $183 and kept an Overweight rating on the shares. The analyst updated her forecasts post earnings, and believes that the company should approach 0% net debt by 2026, even with buyback assumptions significantly ramping up.

According to Insider Monkey’s Q1 2022 database, 53 hedge funds held stakes worth $28 billion in Chevron Corporation (NYSE:CVX). This is compared to 53 funds that owned positions in the company in the previous quarter, with stakes valued at over $6.5 billion. Among these hedge funds, Warren Buffett’s Berkshire Hathaway owned the largest stake in Chevron Corporation (NYSE:CVX), worth roughly $26 billion.

Just like The Procter & Gamble Company (NYSE:PG), Exxon Mobil Corporation (NYSE:XOM), and PepsiCo, Inc. (NASDAQ:PEP), Chevron Corporation (NYSE:CVX) has a rich dividend history.

ClearBridge Investments mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the firm has to say:

“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”

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Disclosure: None. 10 Best Retirement Stocks To Buy Now is originally published on Insider Monkey.