The 3 Best Retirement Stocks to Buy in July 2024

The 3 Best Retirement Stocks to Buy in July 2024

The best retirement stocks are something investors think about later in their careers, but the past few years have proven there’s never a bad time to start preparing. Covid-19, meme stocks, and a record 11 rate hikes between March 2022 and July 2023 have caused a stir, putting retirement stocks on everyone’s mind.

With the cost of living on Social Security rising 8.7% in 2023, more seniors may have to pay federal income taxes on their benefits in 2024. That’s why now is the time to consider the best retirement stocks.

I look for dividend companies with rising returns and research the best pension stocks.

From 1972 to 2019, Hartford Funds found that S&P 500 dividend-paying stocks outperformed lower-volatility dividend payers. Dividend growers and takers returned 10.19%, while nonpayers returned 4.27%.

According to Ned Davis Research, dividend-paying stocks have a lower beta of 0.89 and a standard deviation of 16.15%, making them less volatile than companies that do not pay dividends.

Plus, a company that has been profitable for the past 10 years is more likely to maintain a high dividend yield because it has weathered recessions, pandemics, and a hawkish Fed. And if the stock has a “strong buy” consensus, I think it’s a winner, even if it’s expensive. Don’t make a bad buy just because it’s cheap.

Federal Real Estate Investment Trust (FRT)

REITs buy a real estate investment trust (REIT) on a desk.

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Federal Real Estate Investment Fund (NYSE:VRT) is a contrarian pick among the best retirement stocks. FRT reported disappointing first-quarter 2024 funds from operations of $1.64 per share. The company’s shortfall in earnings has hurt market sentiment.

FRT requires special attention, as it must distribute 90% of its taxable income to existing owners as a real estate investment trust. FRT continued its 56-year streak of dividend increases with a quarterly payout of $1.09 per common share.

Federal Realty, a REIT with a “strong buy” rating and 12.2% upside potential, has been profitable over the past decade, outperforming most of the 833 REITs.

In addition, FRT is pursuing initiatives to grow profits, including a significant renovation in Bala Cynwyd, Pennsylvania. A new six-story residential building with 217 apartments and 16,000 square feet of retail space is expected to cost $90-$95 million and have a 7% ROI. FRT approved a second Bala Cynwyd phase of a $170 million community project.

FRT recently issued $485 million in senior notes due January 2029 and secured a $200 million mortgage loan to Bethesda Row for its subsidiary. The company repaid $600 million in senior unsecured debt in January, balancing financial demands with prudent management.

Walmart (WMT)

Image of the Walmart (WMT) logo in a Walmart store with a bright blue sky in the background

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Walmart (NYSE:WMT), despite fierce competition from Amazon (NASDAQ:AMZN), is the world’s largest retailer and a Dividend King, increasing its payout every year since March 1974.

WMT’s “strong buy” rating and potential upside potential of over 8%, based on a price target of $73.85, are not as high as growth stocks such as JD.com (NASDAQ:JD) or Roblox (NYSE:RBLX), but that is typical of even the best pension stocks.

Walmart has outperformed 99.67% of 299 defensive retail companies and has grown profits annually over the past decade.

Walmart’s first-quarter fiscal 2025 revenue was $161.5 billion, topping expert forecasts of $159.5 billion, and earnings per share were $1.34 instead of $1.31. WMT is targeting revenue growth of 3% to 4% for the fiscal year ending January 2025.

In addition, Walmart will Vision (NYSE:VZIO) for $2.3 billion to boost its Walmart Connect advertising business. Additionally, Walmart is partnering with Agricultural task to improve supply chain sustainability and efficiency. The company is also redesigning its $2 billion, Gen Z-focused “No Boundaries” brand.

AT&T (T)

A photo of an AT&T office building.

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AT&T (NYSE:T) rounds out our exploration of the best retirement stocks with a sector-beating 5.8% yield, a potential upside of around 17%, which supports a “strong buy” rating and shows how far it has come since the messy issues surrounding the Time Warner merger.

Since AT&T’s spinoff from Time Warner, CEO John Stankey has repeatedly pledged to build out its fiber and 5G businesses. AT&T is looking to reduce debt and aggressively focus on telecom. Total long-term debt fell to $132.8 billion in Q1, from $230 billion in March 2022; T’s targeting a debt-to-EBITDA ratio of 2.5 by 2025.

With revenue of $30.03 billion, AT&T slightly missed expert forecasts of $30.62 billion. Still, the company saw net income increase, with operating profit rising 29.3% year over year to $6.4 billion. With free cash flow of $4.2 billion, AT&T beat analyst estimates of $3.60 billion. What’s more, the company’s profitability has outpaced 53% of the telecom industry for eight of the last 10 years.

AT&T is on track to generate at least $16 billion in free cash flow for the full year. The company previously met its $6 billion cost-cutting goal; over the next three years, it plans to cut spending by another $2 billion.

On the date of publication, Faizan Farooque had no (direct or indirect) positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publication guidelines.

At the date of publication, the responsible editor did not have (directly or indirectly) access to the information he provided.
(indirect) positions in the securities mentioned in this article.

Faizan Farooque is a contributing writer for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience 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.