Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 Safe Dividend Stocks To Boost Your Retirement Income In Times Of Distress

By Investing.com (Haris Anwar/Investing.com)Stock MarketsJun 29, 2022 09:51
ng.investing.com/analysis/3-safe-dividend-stocks-to-boost-your-retirement-income-in-times-of-distress-118159
3 Safe Dividend Stocks To Boost Your Retirement Income In Times Of Distress
By Investing.com (Haris Anwar/Investing.com)   |  Jun 29, 2022 09:51
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

During the past decade, a combination of moderate interest rates and a favorable macroeconomic environment sent growth stocks flying, casting a shadow over most value-focused, dividend-paying companies.

But with inflation surging and markets going through a rough patch, that trend seems to have reversed sharply. As a result, dividend yield and value have become equity-factor leaders for the year.

While dividend-paying companies can offer investors safer places to park their money, that doesn't mean a risk-free investment. Stocks providing higher yields, for example, often fall into a market segment where it's hard to predict the company's future growth.

Therefore, if you're picking such a stock for your retirement portfolio, due diligence is the key. It's essential to select stable companies with a solid history of rewarding their investors.

With this theme in mind, we have shortlisted three relatively safe dividend stocks you can consider holding in your retirement portfolio over the long run.

1. United Parcel Services

The time is ripe to buy United Parcel Service (NYSE:UPS) after its recent pullback. The global logistics company is down 16% this year on concerns that a looming recession will hurt demand for the shipment and logistics services.

UPS closed Tuesday at $179.92, with an annual dividend yield of 3.34%.

UPS Weekly
UPS Weekly

However, according to a Credit Suisse note this week, UPS belongs to a group of quality companies that have strong management teams and solid balance sheets to support their payouts in the long run.

The note says:

"We see many transportation companies as having strong fundamentals to support their valuations, with less dependence on upbeat narratives relative to other areas of the market. We believe current valuations present many attractive opportunities for investors with a long-term horizon."

UPS has a solid two-decade history of raising its dividend. In February, the Atlanta-based parcel company announced a 49% quarterly dividend per share hike to $1.52--the most significant dividend raise in the company's corporate history.

In the future, UPS plans to distribute 50% of its adjusted diluted EPS in dividends.

Credit Suisse rates UPS as a "best-in-class" business with a high dividend yield and "superior" margins.

"We believe UPS's discount to the broader market under-appreciates the strength of its core business and the difficulty of replicating its network in scale and service."

2. Cisco

Cisco Systems (NASDAQ:CSCO) is another well-positioned cash-rich company prepared to deal with the possible market downturn by continuing to pay uninterrupted dividends. The San Jose-based networking giant is the world's largest producer of routers, switches, and other gear companies use to connect computers. It closed Tuesday at $43.06.

CSCO Weekly Chart
CSCO Weekly Chart

Cisco has meaningfully improved its future growth prospects after an aggressive diversification drive away from hardware to a software-driven model within new, high-growth market areas, like cybersecurity, applications, and services.

These growth initiatives, coupled with the company's dominant position in the Americas, which generates most of its sales, have positioned the company to outperform when the macroeconomic risks decrease.

Cisco has also made Credit Suisse's list of outperform-rated tech stocks, which were hit hard in the current market downturn. Still, they have strong free cash flows to keep dividends coming to investors' bank accounts.

Cisco has raised its payout every year during the past 12 years, making it an attractive option for those seeking growing income. The company currently pays $0.38 a share quarterly dividend with an annual yield of 3.47%.

3. Verizon Communications

During times of economic turmoil, telecom utilities offer good value as they are considered reliable income generators. No matter the economy's direction, internet and wireless connections will be among the last items consumers delete from their must-have lists.

This predictability and stickiness increase their investment appeal to retirees. Verizon Communications (NYSE:VZ) has a solid appeal to retirees in this space. The company currently pays $0.64 a share quarterly payout which, at Tuesday's closing price of $50.46, translates into an annual dividend yield of 5.02%.

VZ Weekly
VZ Weekly

The US's largest wireless carrier is expected to produce future growth from initiatives like selling mobile subscribers higher-priced 5G unlimited data plans, offering wireless home broadband, and securing partnerships with big tech companies.

Verizon is collaborating with Facebook parent Meta Platforms (NASDAQ:META) to explore a range of metaverse opportunities from the future of hybrid work/collaboration to metaverse-related consumer experiences.

Telecom shares may not provide hefty capital gains, particularly when compared to high-growth stocks. But these stocks are defensive and help retirees in times of economic distress.

***

Interested in finding your next great idea? InvestingPro+ gives you the chance to screen through 135K+ stocks to find the fastest growing or most undervalued stocks in the world, with professional data, tools, and insights. Learn More »

3 Safe Dividend Stocks To Boost Your Retirement Income In Times Of Distress
 

Related Articles

Michael Kramer
Stocks Brace For Impact By Michael Kramer - Aug 09, 2022

The S&P 500 had risen by nearly 1% at the start of the day yesterday, but by day’s end, all the gains were gone, with the index finishing 12 bps. There are now two...

3 Safe Dividend Stocks To Boost Your Retirement Income In Times Of Distress

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email