The incredible volatility in the market can open doors for investors looking at various income-generating opportunities right now. In the world of stocks, a number of high-quality retirement-centric investments should be on the radar, given the market’s tilt toward defensive, lower-risk assets. Right now, investing in no-brainer retirement stocks regardless of the market downturn may be the painful, yet profitable, action.
I define no-brainer retirement stocks as those companies with an incredibly consistent track record of rewarding shareholders. These rewards can include dividends, share buybacks, or capital appreciation over time. Investing in such stocks will enable investors to grow their wealth and ensure a smooth retirement.
It’s often the more established ideas that flourish as retirement stocks. Consequently, in compiling this list, you’ll find some of the most popular names in the stock market that continue to grow investor wealth at a remarkable pace each year. That said, let’s look at seven no-brainer retirement stocks you should wager on for the long-haul.
|IBM||International Business Machines||$140.66|
|MKC||McCormick & Co.||$81.28|
BCB Bancorp (BCBP)
BCB Bancorp (NASDAQ:BCBP) is a leading regional bank with branches spread across New Jersey and New York. BCBP stock offers investors a solid forward dividend yield of 3.2%, with two years of dividend expansion. Moreover, the company’s payout ratio of 24.6% indicates massive room for dividend growth. Also, the stock sports a low valuation, trading at 2.8-times forward sales.
In its most recent quarter, BCB posted a healthy 24% bump in revenues, with considerable expansion in net incomes. The company reported stellar loan growth in the first nine months this year and is expected to see strong growth and margin expansion over the next several months. Furthermore, the firm is investing heavily in its digital capabilities, which should solidify its balance sheet.
Consumer electronics giant Apple (NASDAQ:AAPL) has been an incredible business and wealth compounder for long-term investors. Apple’s eye-catching shareholder rewards have been driven by its robust business, which continues to produce consistently-growing earnings and revenues. Looking at APPL stock’s impressive 250% rise over the past few years, it’s easy to forget about the rather lackluster performance this stock (and the market in general) has seen of late.
Interestingly, Apple is one of the few tech companies that pays a quarterly dividend. This dividend distribution has grown for nine consecutive years, now yielding roughly 0.6%. Moreover, the company is a heavy purchaser of its own shares, buying back more of its stock than any other entity in the U.S. Last year, it spent a whopping $85.5 billion in buybacks, and followed it up with $90 billion in 2022. With its business as strong as ever, I expect that number to grow consistently for the foreseeable future, making AAPL stock a no-brainer retirement investment.
Berkshire Hathaway (BRK-B)
Investing mogul Warren Buffett isn’t infallible, but his impeccable track record as the CEO of conglomerate Berkshire Hathaway (NYSE:BRK-B) suggests otherwise. Under his leadership, Berkshire has delivered a spectacular 20.1% annual average return, making it one of the most attractive long-term holdings for any investor.
Buffet has done a remarkable job of picking stocks that have stood the test of time and continue to deliver above-average returns. Berkshire’s investment portfolio includes multiple cyclical stocks that align with the U.S. economy. Periods of expansion are typically much longer than recessions, making cyclical stocks tremendous bets.
Another aspect of the company portfolio is it’s packed with reliable dividend stocks. The company will collect more than $5 billion in dividend income this year, which adds a superb buffer, given the current economic climate.
Merck (NYSE:MRK) is one of the most successful and profitable drug makers that has flown under the radar due to the buzz surrounding the coronavirus vaccines. Merck’s most popular drug in its portfolio is Keytruda, a lucrative cancer treatment that forms a huge portion of its colossal revenue base. Moreover, the company’s Papillomavirus vaccine called Gardasil has impressively complemented sales of Keytruda over the years. Hence, Merck boasts a marvelous track record, growing sales and EBITDA by 9.5% and 15.5%, respectively, year-over-year.
In its most recent quarter, company sales shot up 14% from the prior-year period to $14 billion, generating earnings per share of $1.85, 14 cents over consensus estimates. Sales from Keytruda climbed 26% to $5.4 billion, while Gardasil’s sales rose 20% on a year-over-year basis, excluding a $2.3 billion charge. Its magnificent results have allowed Merck to maintain its A-graded dividend profile, with a dividend yield of over 2.7% and 11 consecutive years of growth in its payouts.
Kinder Morgan (KMI)
Kinder Morgan (NYSE:KMI) is a top midstream player in the energy sector. The company has interests in or owns 141 terminals, as well as 83,000 miles of pipelines. The current robust pricing environment for commodities has allowed the firm to produce stellar results in recent quarters. Indeed, I think the recent strength we’ve seen in fuel prices is likely to continue for the foreseeable future, making Kinder Morgan a business that’s relatively resilient to economic headwinds.
Furthermore, the company’s distributable cash flows are growing at an impressive pace, indicative of the quality of its business. And distribute its cash flows Kinder Morgan has. The energy giant currently offers a remarkably 6.1% forward dividend yield with 5 years of consecutive growth in payouts. Moreover, the company paid out roughly 56.6% of its distributable cash flows as dividends, which gives it enough room to grow its payments while also making new investments in its pipeline infrastructure.
International Business Machines (IBM)
Tech giant International Business Machines (NYSE:IBM) had long been considered an afterthought in the tech sector. Its competition had embraced the changes in the this sector, investing in new areas such as the blockchain, cloud computing, and the Internet of Things. At the same time, Big Blue maintained its popular hardware business. However, over the past couple of years, its brand has evolved and has forayed into new profitable tech industries.
Also, with IMB being a predominantly business-to-business enterprise, it has effectively shielded itself from the weaker elements of the market, such as consumer-facing offerings. The company is witnessing strong growth in the new elements of its business portfolio, including key growth areas of consulting, infrastructure, and software. Moreover, IBM offers an attractive forward yield of around 5%, and its investors have enjoyed 22 years of consecutive dividend increases.
McCormick & Co. (MKC)
McCormick & Co. (NYSE:MKC) is a leading producer of spices, condiments, and seasonings. Its brand is tied to the food industry, which enables McComick’s business to enjoy stable demand. Growth and stability are shown in its operating performance over the past five years, where it has grown its sales and earnings by single-digit margins.
The firm has expanded organically and through strategic acquisitions. Moreover, McCormick’s investment in its sales channels has allowed it to grow sales without compromising on its margins. Gross margins have dropped slightly over the years, but it hasn’t been anything too concerning. With its strong business performance, MKC offers a forward dividend yield of just under 2% and boasts 36 years of consecutive dividend increases, making this stock a dividend aristocrat worth considering for investors nearing retirement.
On the date of publication, Muslim Farooque did not have (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.