In this article, we discuss 10 best Roth IRA stocks to buy and hold for long term. You can skip our detailed analysis of retirement accounts and their rising demand, and go directly to read 5 Best Roth IRA Stocks to Buy and Hold for Long Term.
Over the years, a growing number of people have converted their traditional accounts into Roth IRAs. According to a report published by Wall Street Journal, taxpayers reported Roth conversions amounting to nearly $17 billion in 2019, up from $8 billion worth of conversions reported in 2014.
In 2022, investment trends are shifting from tech players like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), to income-generating stocks due to soaring inflation and rising interest rates. According to analysts, stocks with strong business fundamentals and dividend history offer the best Roth IRA investments as they generate stable income for investors, especially during these times. This uncertain market situation has resulted in the growth of Roth IRA accounts, which are up 18% in the first quarter of 2022, compared with the same period last year. Similarly, millennial Roth IRA accounts increased by 11.3% in Q1, from a prior-year period, according to recent data by Fidelity Investments. In addition to this, online trading platforms like Robinhood Markets also announced the launch of retirement accounts to facilitate its customers. In light of this, we will explore some of the best Roth IRA stocks to buy and hold.
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Our Methodology:
Stocks offering strong dividend history with low risks are the best Roth IRA accounts. In addition to this, companies with impressive balance sheets and growth potential are also considered important for retirement-related investments. In this list, we added companies with strong financials and stable dividend history. We also considered analysts’ ratings and hedge fund sentiment around each stock, according to Insider Monkey’s Q1 2022 database.
Best Roth IRA Stocks to Buy and Hold for Long Term
10. National Retail Properties, Inc. (NYSE:NNN)
Number of Hedge Fund Holders: 18
National Retail Properties, Inc. (NYSE:NNN) is a Florida-based real estate investment trust that invests in single-tenant stores. At the end of June, the company has properties across 48 states.
In June, Credit Suisse appreciated the relationship-driven acquisition strategy of National Retail Properties, Inc. (NYSE:NNN) which helps the company to expand its footprint in the country. The firm initiated its coverage on the stock with an Outperform rating and a $46 price target. Like NNN, analysts are also hopeful about Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN) for long term, despite their underperformance in 2022.
At the end of Q1 2022, National Retail Properties, Inc. (NYSE:NNN) had over $53.7 million available in cash and generated $190.2 million in revenues, up from $180 million during the same period last year. On July 15, the company declared a quarterly dividend of $0.55 per share, up 3.8% from the previous dividend. National Retail Properties, Inc. (NYSE:NNN) has been raising its dividend consecutively for the past 32 years, which is the third-longest dividend growth streak of all public REITs. As of July 15, the stock’s dividend yield came in at 4.68%.
As per Insider Monkey’s Q1 2022 database, 18 hedge funds owned stakes in National Retail Properties, Inc. (NYSE:NNN), up from 16 in the previous quarter. The collective value of these stakes is over $92.5 million. Millennium Management was the company’s largest stakeholder in Q1, with stakes worth over $19.4 million.
9. Flowers Foods, Inc. (NYSE:FLO)
Number of Hedge Fund Holders: 25
Flowers Foods, Inc. (NYSE:FLO) is a producer and marketer of packed bakery goods, which has been operating for over 100 years. The company’s products are baked and shipped daily from 46 bakeries.
At the end of Q1 2022, Flowers Foods, Inc. (NYSE:FLO)’s cash flow from operating activities grew to $124.2 million, from $98 million in the same period last year. The company ended the quarter with over $205 million in cash and cash equivalents. Moreover, in Q1 2022, the company paid $46.7 million in dividends, up from $42.5 million paid during the prior-year quarter. On May 26, Flowers Foods, Inc. (NYSE:FLO) hiked its quarterly dividend by 4.8% to $0.22 per share. The company has been raising its dividends consecutively for the past 20 years. As of July 15, the stock’s dividend yield was recorded at 3.23%.
At the end of Q1 2022, 25 hedge funds in Insider Monkey’s database held investments in Flowers Foods, Inc. (NYSE:FLO), up from 20 a quarter earlier. The combined value of these investments stood at nearly $318 million.
8. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 26
Consolidated Edison, Inc. (NYSE:ED) is a New York-based energy company that operates one of the world’s largest energy delivery systems and serves over 10 million customers.
Consolidated Edison, Inc. (NYSE:ED) currently offers a quarterly dividend of $0.79 per share. The company has been paying dividends for the past 48 years and managed to raise its payouts each year. The payout ratio of 72% is considered safe in the utility sector. Moreover, Consolidated Edison, Inc. (NYSE:ED) had over $64 billion in assets available at the end of Q1. The stock’s dividend yield came in at 3.39%, as of July 15.
Appreciating the company’s clean energy business, Mizuho set a $99 price target on Consolidated Edison, Inc. (NYSE:ED) in June, with a Buy rating on the shares.
As of the quarter ended March 2022, 26 hedge funds owned stakes in Consolidated Edison, Inc. (NYSE:ED), up from 22 in the previous quarter, according to Insider Monkey’s data. The combined value of these stakes is $485.7 million. AQR Capital Management was the company’s leading shareholder in Q1.
7. Old Republic International Corporation (NYSE:ORI)
Number of Hedge Fund Holders: 28
Old Republic International Corporation (NYSE:ORI) is an American property insurance company that provides services in mortgage guarantee, title, and life and health insurance fields.
Old Republic International Corporation (NYSE:ORI) has been making dividend payments consecutively for the past 81 years while maintaining a 41-year streak of dividend growth. Moreover, in the last five years, the company also offered generous special dividends to shareholders. Old Republic International Corporation (NYSE:ORI)’s dividends are well covered, with a payout ratio of 30%, which shows its financial strength. As of July 15, the stock’s dividend yield was recorded at 4.31%.
The number of hedge funds tracked by Insider Monkey owning stakes in Old Republic International Corporation (NYSE:ORI) stood at 28 in Q1 2022, compared with 27 a quarter earlier. The collective value of these stakes is over $314.7 million.
6. Duke Energy Corporation (NYSE:DUK)
Number of Hedge Fund Holders: 32
Duke Energy Corporation (NYSE:DUK) is a North Carolina-based electric power and natural gas holding company. In June, Wells Fargo added the company to its list of recession-proof stocks. The firm raised its price target on the stock to $120, with an Overweight rating.
At the end of Q1, Duke Energy Corporation (NYSE:DUK) reported $853 million available in cash and cash equivalents, up from $343 million in the previous quarter. On July 13, the company announced a 2% increase in its quarterly dividend to $1.005 per share. This was its 16th consecutive year of dividend growth. Duke Energy Corporation (NYSE:DUK) has raised its dividend at a CAGR of 3.1% since 2015. Though the dividend growth is slow, the company has paid uninterrupted dividends to shareholders for the past 95 years. The stock’s dividend yield was recorded at 3.74% on July 15.
Jim Simons’ Renaissance Technologies was the largest stakeholder of Duke Energy Corporation (NYSE:DUK) in Q1, owning over 1.6 million shares. Overall, 32 hedge funds in Insider Monkey’s database held stakes in the company in Q1, valued at over $1 billion.
In addition to famous blue-chip stocks like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Amazon.com, Inc. (NASDAQ:AMZN), Duke Energy Corporation (NYSE:DUK) is also gaining ground among investors.
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Disclosure. None. 10 Best Roth IRA Stocks to Buy and Hold for Long Term is originally published on Insider Monkey.
