These seven retirement stocks offer diversification and a reliable, steady income
- If you’re looking for the best retirement stocks for long-term growth and income, consider adding these seven to your portfolio.
- BCB Bancorp (BCBP): This regional bank offers a safe, solid dividend, and trades at a discounted valuation.
- Global Partners (GLP): High gas prices points to further gains/distributions ahead for this energy MLP.
- Hawkins, Inc. (HWKN): The specialty chemical maker remains well-positioned to deliver continued earnings and dividend growth.
- ServisFirst Bancshares (SFBS): A recent post-earnings sell-off has created an opportunity to lock down a position in this growth-focused bank.
- Sisecam Resources (SIRE): This soda ash processor is an indirect beneficiary of the EV revolution.
- Turquoise Hill Resources (TRQ): If investors reject a takeover offer from its majority owner, this mining company could make a great long-term holding.
- Veritiv (VRTV): This “dull” business trades at a super-attractive (i.e. very low) valuation, and is generating ample cash flow for buybacks.
As the bear market continues, the opportunity remains to load up on the best retirement stocks at favorable prices. Macro uncertainties may be putting pressure on these names in the near-term, but over a long timeframe, these types of stocks can generate strong returns.
First, through steady dividends. These payouts should provide a baseline of returns as you’re growing a retirement nest egg and can provide income in your golden years. Second, via price appreciation. Each of these stocks represents ownership in a high-quality business.
Over time, this points to consistent growth, which will translate into higher prices for their respective shares. Not to mention, higher dividend payouts over time as well.
Each of the seven names below, all of which earn an A rating in Portfolio Grader, fit the criteria of best retirement stocks. Consider them great additions to your portfolio at current prices.
BCB Bancorp (BCBP)
BCB Bancorp (NASDAQ:BCBP) is a regional bank, with branches across New Jersey as well as in New York. Admittedly, regional banks are a dime a dozen in the public markets, but this is one of the best retirement stocks for a reason.
BCBP stock offers investors a safe, solid dividend. While yielding 3.37%, this bank’s payout ratio is only 24.6%. That means BCB pays out less than a quarter of its earnings right now as dividends, signaling sufficient room for dividend growth.
Also, BCBP also sports a super-low valuation. Today, you can buy it for only 6.6 times earnings, a meaningful discount to the price-to-earnings (P/E) ratios of peers. This may explain management’s latest move to increase the size of its share repurchase program by more than six-fold.
Global Partners (GLP)
As I discussed last month, Global Partners (NYSE:GLP) has been on a tear. High oil prices have translated into high earnings for this gasoline wholesaler and retailer. This has resulted in high earnings for this master limited partnership (or MLP).
Between the 19.2% jump in the price of GLP stock since January and the payout of $1.78 per share in distributions, GLP’s investors have generated high returns during this down year overall for the stock market. High energy prices will enable Global Partners to maintain its current rate of payout.
This payout currently gives GLP stock (which earns an A in my Portfolio Grader) a 8.41% yield. Global is also investing its high earnings back into the business, through efforts such as its purchase of Tidewater Convenience.
After completing this deal, this Northeast-centric firm will further increase its presence in the mid-Atlantic United States.
Hawkins, Inc. (HWKN)
A distributor of specialty chemicals for water treatment, food products and industrial end-users, Hawkins Inc. (NASDAQ:HWKN) is hardly a household name. HWKN should, however, be considered one of the best retirement stocks out there.
Buying up five competitors in the past two years, at first this company may seem to be little more than a “roll-up” acquirer. However, this has been the main factor behind its growth. As seen in recent results, organic growth has played a leading role in increasing the company’s revenue and earnings.
Given its low valuation (13.4 times earnings), the market has yet to become fully appreciative of HWKN stock (which earns an A in Portfolio Grader).
In time, however, this is likely to change. As steady growth continues, and its 1.35% dividend (which has increased 11 years in a row) keeps growing, this stock will likely receive a much-deserved re-rating.
ServisFirst Bancshares (SFBS)
Based in Birmingham, ServisFirst Bancshares (NYSE:SFBS) is a regional lending institution, with operations throughout the Southern United States. Holding steady for most of 2022, in recent weeks SFBS shares have taken a dive.
Loan charge-offs resulted in a surprise earnings miss, causing this bank stock to plunge from around $85 per share to around $70 per share. With this in mind, I still consider SFBS stock (which earns an A in Portfolio Grader) a great retirement stock.
Recent performance notwithstanding, forecasts continue to call for this growth-focused bank to keep steadily increasing its earnings.
Its earnings growth makes the current multiple of 15.2 more than reasonable. This growth also points to ServisFirst continuing to grow its dividend. Although yielding just 1.31% today, SFBS’s payout has grown by an average of 37.09% annually over the past five years.
Sisecam Resources (SIRE)
Sisecam Resources (NYSE:SIRE) is another master limited partnership worth considering, for both its dividend (8.81% yield) and capital growth potential. This MLP is a miner of trona ore, which it then processes into soda ash.
Among a plethora of commercial and industrial applications, soda ash is also used in the production of lithium batteries.
This indirect connection to the electric vehicle (or EV) revolution helps to explain the big jump in Sisecam earnings over the past year. During the summer, this MLP’s general partner made an offer to buy out holders of its publicly-traded partnership units.
Yet based on the negative response from investors, chances are SIRE’s days as a publicly traded security aren’t numbered. As Sisecam continues to profit from robust demand for soda ash, everyday investors will stay able to join along for the ride, by purchasing SIRE stock, which earns an A in Portfolio Grader.
Turquoise Hill Resources (TRQ)
Turquoise Hill Resources (NYSE:TRQ) is based in Canada, but its main asset is literally on the other side of the world.
Developing the Oyu Tolgoi copper-gold mine in Southern Mongolia, there is a lot of long-term upside potential with this stock. That is, if a pending takeover offer from its majority owner doesn’t go through.
Last month, Rio Tinto (NYSE:RIO) raised its offer to buy out public shareholders of TRQ stock. Offering a large premium (67%) to the stock’s pre-bid trading price, there is a good chance this offer is accepted.
Or is there? The leading proxy advisors are split on whether shareholders should accept this deal. If this transaction does not go through, shares are likely to take a dive, as merger arbitrageurs cash out. Yet for long-term investors, this could create an ideal buying opportunity for TRQ stock, which earns an A in Portfolio Grader.
Packaging products provider Veritiv (NYSE:VRTV) is in a dull business, but that’s not a reason to skip out on this “boring” stock.
With the prosaic nature of its business keeping “hot stock” investors away, this is a great value opportunity.
Today, VRTV stock trades for only 5 times earnings. Part of this low valuation is due to the expectation of a moderately-high decrease in profitability next year. Even so, when valuing it on next year’s reduced earnings, Veritiv remains cheap. Based on 2023 analyst forecasts, this stock still sports a single-digit price-to-earnings (or P/E) ratio (6.7).
Profitability improvements in recent years have enabled Veritiv to pay down debt. Now with low-leverage, management can now return much of this cash to shareholders via share buybacks. A stable business at a dirt cheap price, VRTV stock (earning an A in Portfolio Grader) is one of the best retirement stocks.
On the date of publication, Louis Navellier held GLP and VRTV. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.