3 Solid Dividend Stocks To Stash In Your Retirement Income Portfolio | Investing.com

If you’re planning to start out saving in your retirement, it’s essential to maintain some high quality dividend-paying shares in your portfolio. Companies that supply dependable and predictable proceeds in addition to long-term development potential will help present earnings while you want it most in your golden years.

A problem novices face, nonetheless, is learn how to discover these corporations. One strategy to make it simpler is to give attention to the Dividend Aristocrats Index, which incorporates corporations which have hiked their dividends for at the least 25 consecutive years.

A dividend track-record spanning greater than 1 / 4 of a century is a strong indicator that these corporations can produce regular, dependable earnings for buyers, not simply through the good occasions, but in addition throughout downturns and recessions.

Since 1926, dividends have contributed roughly 32% of whole returns for the , whereas capital appreciation has contributed 68%, in response to analysis supplied by S&P Dow Jones Indices.

Below, we have put collectively a listing of three dividend shares from this group to offer a way of their power.

1. Johnson & Johnson

Health care shares may also present a daily and rising earnings stream to retirees. Health care suppliers supply providers that stay mandatory even throughout a recession. Plus, financial swings don’t usually curb the roll-out of recent medicine and medical units.

In this area we like the worldwide pharma firm, Johnson & Johnson (NYSE:). The New Jersey-based JNJ is strictly the sort of dividend inventory that retirees—or these planning to retire—should purchase.

When it involves rewarding buyers, few corporations have performed higher than Johnson & Johnson. The firm has elevated its quarterly dividend yearly for 58 consecutive years.

This exceptional efficiency places Johnson & Johnson amongst an elite group referred to as Dividend Kings, corporations with at the least 5 many years of annual dividend hikes. JNJ pays $1.06 a share quarterly with an annual yield of two.64%.

The company’s latest guidance shows that its are recovering quickly after the COVID-19 induced slowdown in their business segments, such as its medical device division. The unit was hit hard amid the pandemic as elective procedures were cancelled. Sales from that unit climbed 63% to $7 billion in Q2—higher than pre-pandemic sales of $6.5 billion in the second quarter of 2019.

“All three segments are hitting on all cylinders,” Chief Financial Officer Joseph Wolk told Bloomberg TV in July. “I take that as a very strong sign of the health of the company. We’re better positioned today than entering the pandemic.”

2. PepsiCo

Food companies may not provide a hefty capital gain, but the shares of some companies within this group offer a steady income stream for retirees. The snack and beverage giant, PepsiCo (NASDAQ:) is one of our favorites from this group.

In , Pepsi has reported stronger-than-expected sales, helped by homebound consumers stocking up on snack foods during the pandemic. Pepsi is well-positioned to benefit from these evolving eating habits as it has a diversified portfolio of snack items, like Tostitos, Fritos, Ruffles, and Cheetos.

Yesterday, Pepsi raised its sales forecast for this fiscal year on rising demand for its beverages and snack foods. Full-year revenue should increase 8% on an organic basis, the company said, having previously forecast 6% growth. The company also said core earnings per share will at least reach its $6.20 target.

PepsiCo Weekly Chart.

PepsiCo Weekly Chart.

Along with a diversified product portfolio, Pepsi is also a reliable dividend provider. It has hiked its payout for 49 years in a row, showing that the company’s dividend is very safe, making it a comfortable choice if you’re a risk-averse income investor.

The stock currently pays $1.075 a share quarterly dividend, which translates into a solid 2.9% annual yield. Given this impressive track record, the company should have little trouble continuing to raise its dividend for many years.

3. Target

When picking dividend-paying stocks for a retirement portfolio, the biggest concern to address is whether the company is capable of producing strong cash flows in both good and bad times. Minneapolis-based retailer Target (NYSE:) certainly fits that bill.

The company has steadily increased its dividend every year for the last 50 years, a period that covers crises such as the dot-com collapse of the early 2000s, the financial crash of 2008-2009, and the COVID-19 pandemic of the past year. While delivering cash to investors each quarter, the discount retailer has also maintained a very conservative payout ratio of about 22%, a level below the industry average.

Target Weekly Chart.

Target Weekly Chart.

Target pays $0.9 a share quarterly with an annual dividend yield of 1.58%, after the retailer announced a whopping 32% hike in its payout in June this year.

That comes from Chief Executive Officer Brian Cornell’s efforts to make Target’s retail outlets more attractive. He spearheaded the remodeling of hundreds of stores, introduced many affordable fashion brands, and bolstered the retailer’s e-commerce offerings. Starting with the pandemic, Target has been using its stores more as mini distribution centers for its booming digital business, to better fulfill online orders.

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