3 Retirement All-Stars for Steady Growth and Income

Stocks to buy

Retirement stocks are something every investor needs to look into, and when deciding on which retirement stocks to buy, you can never go wrong with Dividend Kings, S&P 500 index constituents that have raised their dividends every one of the previous 25 straight years.

Dividend growers had 11.7% compound annual returns from 1986 to 2016, while dividend payers had 9.9%. Dividend stocks are more resilient, so this outperformance is even greater during market volatility. This is great, since the markets are still not in full on recovery mode; persistent inflation means there is only one rate cut this year, further demonstrating where we sit.

However, recent evidence confirms dividend stocks’ better performance. Dividend stocks exceeded bonds in absolute gains during the last decade. The iShares Select Dividend ETF (NASDAQ:DVY) has returned 8.66% annually, compared to the aggregate bond index’s 1.5%.

Furthermore, a limited handful of highly performing mega-cap stocks—often driven by industries like technology—have made major contributions to the larger market. Look no further than Nvidia (NASDAQ:NVDA) going past Microsoft (NASDAQ:MSFT) as the world’s most valuable company thanks to an AI boom.

Dividend companies, especially those in the value range, provide a convincing prospect for investors as the earnings growth difference between these leaders and the rest of the market closes. More importantly, they also give you a valuation advantage when researching retirement stocks.

AbbVie (ABBV)

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Dividend King AbbVie (NYSE:ABBV) has raised rewards over the last 52 years. It is one of the best healthcare retirement investments. Its dividend of 3.53% is substantially higher than the 1.5% average for the health industry, even with the loss of its Humira patent.

Humira and its purchase of Botox producer Allergan are AbbVie’s most well-known products. Humira lost its U.S. exclusivity last year, but AbbVie is making up for the revenue loss with the addition of Skyrizi and Rinvoq.

On top of this, AbbVie started a Phase 3 trial for the multiple myeloma therapy ABBV-383. This experimental medication targets BCMA, found in plasma cells from multiple myeloma.

Additionally, under a worldwide licensing agreement with FutureGen Biopharmaceutical, AbbVie is developing FG-M701, a next-generation TL1A antibody for inflammatory bowel disease. This collaboration highlights the immunology and autoimmune therapy development of AbbVie.

For several cancer treatments, Elahere was granted full FDA clearance; for relapsed/refractory follicular lymphoma, it was given an Epkinly Priority Review. Good outcomes were obtained for atopic dermatitis with Rinvoq in the SELECT-GCA trial and the LEVEL UP trial comparing Rinvoq to Dupixent.

On the financial front, citing operating progress, the business increased its 2024 adjusted diluted EPS estimate from $10.97-$11.17 to $11.13-$11.33. Up 285% since 2013, AbbVie has paid a $1.55 cash dividend per share, continuing on its legacy of shareholder value, placing it well among retirement stocks.

Johnson & Johnson (JNJ)

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Investing in retirement stocks generally begins with Johnson & Johnson (NYSE:JNJ). Seniors wanting a dependable income may consider the company’s medicines, medical devices, and consumer health products activities, particularly because shares are down more than 8% since the start of the year due to a mixed quarterly report and narrower full-year expectations.

However, analysts expect JNJ to rebound. Most analysts rank the business “Moderate Buy,” with a $176 12-month target. Strategic purchases like Ambrx Biopharma and Shockwave Medical suggest a 20% gain.

Johnson & Johnson acquired clinical-stage biopharma company Ambrx Biopharma. The purchase boosts J&J’s oncology pipeline, including metastatic castration-resistant prostate cancer ADC research.

J&J acquired intravascular lithotripsy leader Shockwave Medical to treat complicated calcified arterial disease. Due to J&J’s position in high-growth nations with unmet requirements, the transaction may improve revenue.

Financially, Johnson & Johnson’s first-quarter revenues grew 2.3% to $21.4 billion; improved MedTech and Innovative Medicine fostered this rise. The business also announced regulatory clearances for TECVAYL, RYBREVANT, and DARZALEX.

Essential Utilities (WTRG)

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Essential Utilities (NYSE:WTRG) is down around 7% over the past year, with the latest quarterly earnings report contributing to the somewhat dampened sentiment; WTRG topped analyst estimates of $0.77 with $0.97 EPS. With quarterly revenues of $612.07 million, the firm fell short of its $750.08 million projection. Regulated natural gas operating income were below projections due to warmer-than-average temperatures.​

Mostly in controlled water, the company intends to invest $1.3 to $1.4 billion in 2024 and $7.2 billion by 2028 in infrastructure.

For 79 years the corporation has paid quarterly dividends; in 32 years, the payment has been raised 33 times. In June, WTRG announced a $0.3071 quarterly cash dividend, 7% more than the prior year.

Essential Utilities is expanding by buying other businesses. WTRG is signing six agreements for new wastewater systems in Pennsylvania and Illinois, serving more than 215,000 people. WTRG is also buying DELCORA for $276.5 million, a sewer authority serving 198,000 people in Philadelphia. The business wants to buy more businesses, which could bring in another 400,000 people.

Finally, Essential Utilities’ aims to cut Scope 1 and 2 greenhouse gas emissions by 60% by 2035 are significant as ESG investment grows. The company wants to make sure its water meets the latest EPA pollutants requirements to attract those looking for sustainable retirement stocks.

On the date of publication, Faizan 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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.