Retirement Stocks to Buy: 7 Picks Offering Value, Growth and Dividends

Stocks to buy

Finding the best retirement stocks that perfectly align with every investor’s portfolio is challenging. Numerous factors influence the decision tree, including your retirement account’s tax structure, age, risk tolerance and personal investment preferences. Nonetheless, a robust retirement plan usually involves diversification across multiple industries, offering exposure to a broad array of investments. It’s never too early to start considering retirement investing; starting yesterday is best, but the second best time is now.

When refining their retirement stock selections, investors should focus on companies with a proven track record of performance, potential for future growth and investor-friendly financial metrics. Dividends are particularly important for those nearing retirement, as they provide a steady income stream within their accounts. Conversely, younger investors can leverage dividends to increase their holdings through reinvestment automatically.

While many investors may tweak their retirement portfolios to decrease risk as they near retirement, three stocks currently stand out as excellent candidates for an immediate buy-and-hold strategy. Incorporating these retirement stocks into your portfolio now could significantly reduce the need for future adjustments as you approach your golden years.

Valley National Bancorp (VLY)

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If you’re looking for retirement stocks, an affordable bank stock operating in the emergent cannabis industry that’s undervalued and gives investors a 6.37% total yield sounds like a dream come true. In the short term, Federal Reserve rate cuts gradually take effect, and smaller regional banks like Valley National Bancorp (NYSE:VLY) might experience relief from oppressive borrowing rates and reduced consumer loan interest.

Valley National stands out as an attractively priced regional bank, trading at just 0.6x book value and 7.75x earnings, making it both undervalued and often overlooked. The bank boasts a strong balance sheet and a low debt-to-equity ratio of only 0.56, compared to the industry average of 1.2, underscoring its minimal leverage relative to its peers. Its recent stock buyback initiative and a 6.37% total yield also underscore its financial stability.

Analysts largely view Valley National as undervalued, with an average price target of $9.44 — about 31% above its current share price. Sentiment around the bank’s stock is improving, with 44% of analysts now recommending a “hold” on Valley National, a significant improvement with 300% greater positive sentiment than the previous polling period.

Markel Group (MKL)

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Finally, insurance company Markel Group (NYSE:MKL) is among one of today’s top retirement stocks, but not due to its inherent industry strength — instead, buying Markel Group today may be like buying a slightly riskier Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) in the 1980s when the Class A shares traded at “just” $1,200 per share. Of course, a $1,200 investment exploded by more than 47,000% today, and Markel Group may be on a similar trajectory.

The company bucks insurance agency tradition by leveraging its vast cash sums, some of which is their “float,” or paid insurance premiums that are investable, into solid but somewhat speculative investments. It’s essentially the same model Warren Buffett used at Berkshire’s outset to great success. Markel Group’s specific holdings include Berkshire (of course) and a range of both tech-centric and value offerings like Meta (NASDAQ:META), on one hand, and Lowe’s (NYSE:LOW), on the other. In addition to a range of public and private investments, Markel also owns a slew of insurance and reinsurance subsidiaries that credit rating agencies consistently assess as investment-grade and keep plenty of cash coming in to fuel Markel’s long-term, strategic investment selection.

Sharkninja (SN)

Retirement Goals

Incorporating a consumer discretionary stock, especially from an appliance manufacturer, into your retirement stocks portfolio might not seem like the wisest decision due to the sector’s relative volatility in uncertain economic conditions. However, Sharkninja (NYSE:SN) consistently defies this trend, having achieved a 20% compounded annual growth rate in sales since 2008, despite various challenging market environments.

Having gone public just last summer, Sharkninja’s shares have already delivered a 77% return to early investors, outperforming the S&P 500’s return threefold over the same period. There is little sign of this momentum waning anytime soon. The company’s most recent quarterly report shows a 25% spike in sales, a standout achievement, particularly when compared to the significant sales declines at major retailers like Target (NYSE:TGT). With its strong position in the consumer market and diverse product lineup, Sharkninja is a compelling choice for inclusion in retirement stocks today.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is the biggest blended tech player on this list of retirement stocks for its stability, modest yield and forward-looking strategy. In contrast to Google (NASDAQ:GOOG, NASDAQ:GOOGL), Microsoft offers both institutional and individual investors smart money management, substantial long-term growth potential, and forward-thinking management that continues to drive innovation, regardless of the company’s large size.

Microsoft’s strategic investment in AI is poised to benefit the company significantly. Even if you’re skeptical of some of the more ambitious AI claims, it’s evident that AI is disrupting legacy search engines and providing new productivity tools that enhance Microsoft’s existing software suite. Microsoft’s partnership with leading AI firm OpenAI positions it at the forefront of major technological advancements.

We are in a situation reminiscent of the early 2000s, when the potential of search engine technology was just beginning to unfold, and its future profitability was not yet fully understood. No public company is as well-aligned with that future potential as Microsoft, making it a standout choice that aligns well with nearly every prudent investment strategy.

Intuitive Surgical (ISRG)

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Intuitive Surgical (NASDAQ:ISRG) stands out as a dominant force among retirement stocks, masterfully blending innovative technology, robotics and the expanding global healthcare market alongside a small buyback-based yield. A crucial component of both the S&P 500 and NASDAQ-100 indices, Intuitive Surgical is a trusted provider of high-end, specialized medical equipment renowned for its stability and reliability.

Setting itself apart from competitors focusing on conventional medical hardware, Intuitive Surgical has revolutionized the surgery field to improve provider efficiency and patient outcomes.

The company aggressively expands its global presence as the healthcare industry rebounds post-pandemic. The latest quarterly report showcased a significant 16% year-over-year increase in the global usage of its flagship robotic surgery system, the da Vinci platform, with a steady installation rate (312 units in Q1, 2023 and 313 this year).

Alongside this progress, an 11% sales growth and a net income increase to $545 million from $355 million underscore Intuitive Surgical’s status as one of the top stocks to invest in today.

Keep an eye on Intuitive Surgical as it prepares to launch its next-generation da Vinci platform this year. CEO Gary Guthart has indicated that this new model will feature “10,000 times the processing power” of current models, dramatically improving data analysis, sensing technology, and digital and analytical functions.

Deere & Co (DE)

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Deere & Co (NYSE:DE) is one of my top picks for retirement stocks as it seamlessly blends innovative growth, especially in robotics and automation, with solid income at an 8.4% total yield. While robotics and automation are trending topics, Deere often goes underappreciated in a market that typically favors startups and niche companies. This oversight may reverse as Deere reveals the full scope of its robotics capabilities, potentially positioning it as a leading robotics stock globally.

Deere’s premier innovations include fully autonomous tractors and tillage machines that utilize advanced mapping and sensing technology. This technology significantly saves agricultural producers time and energy during field preparation and harvesting.

Currently, Deere’s autonomous tractors demonstrate clear and viable operational prospects. However, the potential for significant revenue through licensing agreements for its newly developed technologies could be substantial. For instance, self-driving car companies might license parts of Deere’s neural network sensing mechanisms to assess terrain safety, or drone delivery startups could use Deere’s mapping tools to develop urban delivery networks.

Acuity Brands (AYI)

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Boring but with a bright future — that describes Acuity Brands (NYSE:AYI), a lighting company offering surprising expansion and a 2.95% total yield. Acuity is one of the world’s largest lighting companies and provides a diverse range of products, from bathroom fixtures aimed at DIY home improvers to extensive streetlights designed for municipalities. Acuity has expanded its market presence dramatically over the past 20 years by actively acquiring smaller companies.

Since 2010, Acuity has maintained a nearly 10% compounded annual earnings growth rate, a robust endorsement of the company’s performance amid market fluctuations. The company continues to build on this strong track record, as CEO Neil Ashe highlighted in the first-quarter call: “We increased our adjusted operating profit, adjusted operating profit margin, and adjusted diluted earnings per share. We generated significant free cash flow, and we allocated capital effectively to drive value.” Despite market instability, Acuity Brands appears resilient and well-positioned for continued growth.

On the date of publication, Jeremy Flint held a long position in the Markel Group. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Jeremy Flint, an MBA graduate and skilled finance writer, excels in content strategy for wealth managers and investment funds. Passionate about simplifying complex market concepts, he focuses on fixed-income investing, alternative investments, economic analysis, and the oil, gas, and utilities sectors. Jeremy’s work can also be found at www.jeremyflint.work.

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