In this article, we discuss the 10 best stocks for retirement. You can skip our detailed analysis of retirement stocks and go directly to read Retirement Stock Portfolio: 5 Safe Tech Stocks To Consider.
Chalking out a financially secure retirement plan can be difficult, especially in times of financial volatility. According to a report published by Natixis Investment Managers, over 40% of the investors believe that retiring securely will be difficult, while 42% don’t take retirement as an option, considering their current financial situation.
Safe dividend stocks with a strong history remain one of the best investment options for retirement even during volatile times. For example, shares of Johnson & Johnson (NYSE:JNJ) fell by 40% during the financial crisis of 2008, but the company paid regular dividends to shareholders during that time.
Another option to save enough money for retirement is to invest in growth stocks with strong upside potential.
Moreover, businesses in nearly every sector deploy the recent technological advances, making way for tech stocks to rise. As reported by Deloitte, the tech industry is well-positioned to grow in 2021, given the current market situation. According to analysts, the EPS of tech stocks is expected to grow by 20% to 40% by 2025. Even during the global market meltdown in 2020 due to the Covid-19, the S&P 500’s technology index gained 43.89%, compared with other sectors such as financials and real estate which dipped 1.7% and 2.2%, respectively, as reported by S&P Global. Some of the notable and famous stocks for retirement include Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), QUALCOMM Incorporated (NASDAQ:QCOM), and Cisco Systems, Inc. (NASDAQ:CSCO).
Our Methodology:
Let’s analyze our list of the best retirement stocks. The companies mentioned below are the tech stocks selected on the basis of their dividend policy, future growth potential, and overall performance. In addition to this, we took into account hedge fund sentiment, analysts’ ratings, and fundamentals while choosing these stocks.
Why pay attention to hedge fund sentiment while choosing stocks?
Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Retirement Stock Portfolio: 10 Safe Tech Stocks To Consider
10. Comtech Telecommunications Corp. (NASDAQ:CMTL)
Number of Hedge Fund Holders: 13
Comtech Telecommunications Corp. (NASDAQ:CMTL), an American tech company, recently received $4.6 million in funding from the U.S. Army to refurbish the ongoing system and services. The company stands tenth on our list of the best stocks for retirement.
In October, Citigroup lifted its price target on Comtech Telecommunications Corp. (NASDAQ:CMTL), with a Neutral rating on the shares. The firm expects significant growth in company’s revenue in the second half of 2021. Comtech Telecommunications Corp. (NASDAQ:CMTL) pays an annual dividend of $0.40 per share, yielding 1.70%. Its dividend payout ratio stands at 51.9%.
Royce & Associates is the company’s largest shareholder, with shares worth roughly $24 million. Overall, 13 hedge funds tracked by Insider Monkey reported having positions in Comtech Telecommunications Corp. (NASDAQ:CMTL) in Q2, up from 10 in the previous quarter. The total value of these stakes is over $5.1 million. Comtech Telecommunications Corp. (NASDAQ:CMTL) delivered a 118.2% return in the past 5 years, while its 12-month returns stood at 43.66%.
9. ADTRAN, Inc. (NASDAQ:ADTN)
Number of Hedge Fund Holders: 15
ADTRAN, Inc. (NASDAQ:ADTN), an American technology company, has recently entered into a strategic partnership with Germany-based telecommunications company, ADVA, in a deal worth €759 million. This collaboration is aimed to develop and deliver leading global fiber networking solutions. The company ranks ninth on our list of the best stocks for retirement.
In Q2 2021, ADTRAN, Inc. (NASDAQ:ADTN) posted an EPS of $0.16, beating the estimates by $0.04. The company’s revenue for the quarter stood at $143.2 million, up 11.3% from the prior-year quarter. ADTRAN, Inc. (NASDAQ:ADTN) pays an annual yield of $0.36 per share, yielding 1.89%. The stock gained 75.9% in the past year.
This August, Northland lifted its price target on ADTRAN, Inc. (NASDAQ:ADTN) to $27.50, while keeping an Outperform rating on the shares. In Q2 2021, 15 hedge funds tracked by Insider Monkey were bullish on the company, up from 10 in the previous quarter. These stakes are valued at $91.4 million.
Bernzott Capital Advisors mentioned ADTRAN, Inc. (NASDAQ:ADTN) in its Q2 2021 investor letter. Here is what the firm has to say:
“Adtran (ADTN): A leading provider of broadband equipment solutions for high-speed digital communications. The company should benefit from the increasing global demand for broadband connectivity, which has accelerated as a result of the pandemic. There are significant amounts of funding both domestic and abroad supporting a multi-year roll-out of broadband infrastructure which should benefit ADTN in the coming years. Additionally, the potential for a US infrastructure bill passing could be additive to an already robust spending backdrop. Gross margins should benefit as revenue mix improves as a result of their increasing exposure to higher margin software sales. ADTN also has significant operating leverage to an improving environment based on the fixed cost nature of their expenses, which should translate into accelerating earnings growth and robust free cash flow generation.”
8. Corning Incorporated (NYSE:GLW)
Number of Hedge Fund Holders: 42
In October, Matthew Niknam of Deutsche Bank appreciated the high-quality products of Corning Incorporated (NYSE:GLW), an American multinational telecommunications company, and their importance in the growing tech market. The firm initiated its coverage on the stock with a Buy rating and a $45 price target, which implies a 25% upside. Corning Incorporated (NYSE:GLW) ranks eighth on our list of the best stocks for retirement.
Corning Incorporated (NYSE:GLW) has a track record of 7 years of consistent dividend growth and currently pays an annual dividend of $0.96 per share, yielding 2.55%. In Q2 2021, the company’s EPS of $0.53 beat the market consensus by $0.02. Corning Incorporated (NYSE:GLW) generated stable returns for shareholders over the years, gaining 61.2% in the past 5 years.
In Q2, Arrowstreet Capital is the largest shareholder of Corning Incorporated (NYSE:GLW), holding over 5 million shares, worth $209 million. In addition to this, 42 hedge funds tracked by Insider Monkey reported having positions in Corning Incorporated (NYSE:GLW), valued at $521.7 million. This shows that hedge fund sentiment is positive for the company as the number of hedge funds having stakes in Corning Incorporated (NYSE:GLW) was 32 in the previous quarter.
In addition to Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Intel Corporation (NASDAQ:INTC), QUALCOMM Incorporated (NASDAQ:QCOM), Johnson & Johnson (NYSE:JNJ), and Cisco Systems, Inc. (NASDAQ:CSCO), analysts and investors are also paying attention to Corning Incorporated (NYSE:GLW) in 2021.
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 47
Broadcom Inc. (NASDAQ:AVGO) ranks seventh on our list of the best stocks for retirement. A California-based semiconductor company pays an annual dividend of $14.40 per share, yielding 2.90%. The company has increased its dividend by 177.5% in the past three years.
Cantillon Capital Management is the leading shareholder of Broadcom Inc. (NASDAQ:AVGO), with roughly 1.1 million shares. Overall, 47 hedge funds tracked by Insider Monkey have positions in the company in Q2, compared with 53 in the previous quarter. The total value of these stakes is over $3.03 billion.
This September, Craig Hattenbach of Morgan Stanley lifted the firm’s price target on Broadcom Inc. (NASDAQ:AVGO) to $572, with an Overweight rating on the shares, highlighting the company’s significant EPS growth. In fiscal Q3 2021, Broadcom Inc. (NASDAQ:AVGO) posted an EPS of $6.96, beating the consensus by $0.05. The stock gained 192.3% in the past 5 years.
ClearBridge Investments mentioned Broadcom Inc. (NASDAQ:AVGO) in its Q2 2021 investor letter. Here is what the firm has to say:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience and consistency for the Strategy. We think these companies should comprise just under half of portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.
Broadcom has delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
6. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 52
Accenture plc (NYSE:ACN) recently caught the attention of investors after it announced the acquisition of Argentinian e-commerce company, Glamit, to enhance the digital commerce transformation in Argentina. Accenture plc (NYSE:ACN) stands sixth on our list of the best stocks for retirement.
Accenture plc (NYSE:ACN) is a professional IT services company, based in Ireland. On September 23, Accenture plc (NYSE:ACN) announced to increase its quarterly dividend by 10% to $0.97 per share, yielding 1.04%. The company’s dividend payout ratio stands at 47.18%. In fiscal Q4 2021, Accenture plc (NYSE:ACN) posted a GAAP EPS of $2.20, beating the estimates by $0.01. The company reported quarterly revenue of $13.4 billion, up 23.8% from the same period last year.
This September, Barclays lifted its price target on Accenture plc (NYSE:ACN) to $384, while keeping an Overweight rating on the shares. The stock gained 47.7% in the past year. The number of hedge funds tracked by Insider Monkey bullish on Dublin-based Accenture plc (NYSE:ACN) grew to 52 in Q2, compared with 48 in the previous quarter. These stakes are valued at over $3.1 billion.
Fiduciary Management Inc. mentioned Accenture plc (NYSE:ACN) in its Q1 2021 investor letter. Here is what the firm has to say:
“Even great companies can get too expensive. In early January, we sold our long-standing position in Accenture PLC after the company’s valuation exceeded 30 times next 12 months (NTM) earnings per share (EPS). We originally invested in Accenture at the launch of the FMI International strategy at a valuation below 15 times NTM EPS and held the stock for over ten years. We added to the holding numerous times in the early years, growing the position size to as high as 5.5% in late 2014, before dialing it back in recent years as the valuation became less compelling. It is one of the world’s largest information technology services firms, specializing in helping complex, global businesses navigate disruption, and focusing on next-generation services like digital, cloud, and security. For years, the investment allowed FMI to capture the inherently higher growth of technology-related industries (GDP+) without investing directly in pure “invention-oriented” technology companies. Through Accenture we were able to avoid some of the shortfalls of tech investing: technology obsolescence, short product cycles, and subpar return on invested capital (ROIC). It grew steadily, was solidly profitable, capital-light, and generated high returns, all while maintaining a rock-solid balance sheet. It compounded its business value for many years, outperforming the MSCI EAFE indices by over 450% during our holding period. Unfortunately, the market increasingly recognized the company’s positive attributes, and the stock’s discount to intrinsic value slowly evaporated. Despite our admiration for the business, it exceeded our valuation threshold. We will continue to follow the company closely for future opportunities.”
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Disclosure. None. Retirement Stock Portfolio: 10 Safe Tech Stocks To Consider is originally published on Insider Monkey.
