In this article, we discuss the 11 safe dividend stocks for a retirement stock portfolio. If you want to read about some more dividend stocks, go directly to Retirement Stock Portfolio: 5 Safe Dividend Stocks to Consider.
Across the world, investors have been scrambling to find ways to strengthen their portfolios and reduce risk as stock markets become more volatile due to rising inflation and interest rate hikes aimed at combating inflation. Ordinary people are also exploring possible investments in dividend stocks for their retirement portfolios. In this context, there has been a flurry of activity in safe dividend plays like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Home Depot, Inc. (NYSE:HD).
It is pertinent to mention that it is not always easy to set up a retirement portfolio. A study by GOBankingRates claims that 64% of workers in the United States have less than $10,000 saved for the exit from full-time employment. Among those aged 55 and older, almost 40% have no savings at all. These figures highlight the importance that an ordinary citizen must place on a retirement portfolio. Considering the present volatility of the markets, it is prudent to invest in safe dividend stocks for such a portfolio.
Our Methodology
The companies that have solid dividend profiles were selected for the list. The firms with impressive yields and a consistent history of payouts stretching back over more than a decade were preferred for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Sharon McCutcheon on Unsplash
Retirement Stock Portfolio: Safe Dividend Stocks to Consider
11. ONEOK, Inc. (NYSE:OKE)
Number of Hedge Fund Holders: 29
Dividend Yield as of November 28: 5.72%
ONEOK, Inc. (NYSE:OKE) engages in the gathering, processing, storage, and transportation of natural gas in the United States. It is one of the best dividend stocks for a retirement stock portfolio. On October 24, Guidewire, a software company which supports the entire insurance life cycle for leading insurers in 38 countries, announced that it has formed a strategic partnership with ONEOK to provide digital experiences for payments that deliver agility and flexibility throughout the insurance lifecycle from quote to claim payments.
On October 19, Morgan Stanley analyst Robert Kad maintained an Equal Weight rating on ONEOK, Inc. (NYSE:OKE) stock and lowered the price target to $70 from $74, noting that fewer significant profit beats are predicted than in the second quarter.
Among the hedge funds being tracked by Insider Monkey, Chicago-based firm Citadel Investment Group is a leading shareholder in ONEOK, Inc. (NYSE:OKE) with 1 million shares worth more than $52.7 million.
Just like Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Home Depot, Inc. (NYSE:HD), ONEOK, Inc. (NYSE:OKE) is one of the best dividend stocks for a retirement portfolio.
In its Q3 2021 investor letter, Miller Howard Investments, an asset management firm, highlighted a few stocks and ONEOK, Inc. (NYSE:OKE) was one of them. Here is what the fund said:
“In late August, we increased the portfolio’s cyclical exposure by trimming utilities after a period of relative outperformance and reallocating the capital to midstream energy, which had pulled back over the summer. We added ONEOK, Inc. (NYSE:OKE) with the expectation that it will benefit from increasing natural gas and natural gas liquids (NGL) recovery in the Bakken region.”
10. Altria Group, Inc. (NYSE:MO)
Number of Hedge Fund Holders: 47
Dividend Yield as of November 28: 8.40%
Altria Group, Inc. (NYSE:MO) manufactures and sells smokable and oral tobacco products in the United States. It is one of the top dividend stocks for a retirement stock portfolio. On October 27, Altria Group revealed a strategic alliance with Japan tobacco, a leading international tobacco product manufacturer, with a global pursuit of a global smoke-free partnership to accelerate harm reduction.
At the end of the third quarter of 2022, 47 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Altria Group, Inc. (NYSE:MO), compared to 48 in the preceding quarter worth $1.8 billion.
In its Q2 2021 investor letter, Broyhill Asset Management, an asset management firm, highlighted a few stocks and Altria Group, Inc. (NYSE:MO) was one of them. Here is what the fund said:
“Altria Group, Inc. (NYSE:MO) shook off the prospects of a ban on menthol and a potential cap on nicotine and gained 20%. We shared our thoughts on these regulations during the quarter, which are available here.
MO Valuation. MO is up ~ 18% YTD (even accounting for the recent sell-off). We expect MO to generate close to $5 in annual FCF per share over the next few years, putting the stock at ~ 10x, which is less than half the market’s multiple today. Over the last decade, shares have traded at an average multiple of 15x and within a range of ~ 10x – 20x (+/-1 standard deviation). The stock yields 7.2% at the current price, close to a 6% premium to treasuries. Historically, shares have traded closer to a 3% premium to the 10Y, which would imply a ~ $75 share price.”
9. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Dividend Yield as of November 28: 7.56%
Devon Energy Corporation (NYSE:DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids. It is one of the premier dividend stocks for a retirement stock portfolio. On November 1, Devon Energy Corp posted earnings for the third quarter of 2022, reporting earnings per share of $2.18, beating market estimates by $0.05. The revenue over the period was $5.43 billion, up 56.5% compared to the revenue over the same period last year and beating market estimates by $640 million.
On October 21, investment advisory Citi maintained a Buy rating on Devon Energy Corporation (NYSE:DVN) stock and raised the price target to $80 from $77. Analyst Scott Gruber issued the ratings update.
At the end of the third quarter of 2022, 51 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Devon Energy Corporation (NYSE:DVN), compared to 57 in the previous quarter worth $1.5 billion.
In its Q2 2022 investor letter, GoodHeaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long-time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high-return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is most variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
8. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 56
Dividend Yield as of November 28: 3.39%
Gilead Sciences, Inc. (NASDAQ:GILD) a biopharmaceutical company that discovers, develops, and commercializes medicines. It is one of the elite dividend stocks for a retirement stock portfolio. On November 2, the US Food and Drug Administration approved the expanded use of Vemlidy of Gilead Sciences to treat chronic hepatitis B virus infection in patients of 12 years age and older with compensated liver disease.
On October 31, Maxim analyst Jason McCarthy maintained a Buy rating on Gilead Sciences, Inc. (NASDAQ:GILD) stock and raised the price target to $92 from $84, noting that the company’s third quarter results were strong due to the Veklury and HIV franchise.
Among the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrow Street Capital is a leading shareholder in Gilead Sciences, Inc. (NASDAQ:GILD) with 12 million shares worth more than $742.5 million.
In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Gilead Sciences, Inc. (NASDAQ:GILD) was one of them. Here is what the fund said:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences, Inc. (NASDAQ:GILD)’s remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
7. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 59
Dividend Yield as of November 28: 2.81%
The Coca-Cola Company (NYSE:KO) is a beverage company that manufactures, markets, and sells various non-alcoholic beverages worldwide. It is one of the major dividend stocks for a retirement stock portfolio. On September 29, Molson Coors Beverage said it has expanded its exclusive agreement with The Coca-Cola Company to commercialize and develop the Topo Chico Spirited beverage. This deal is said to mark another milestone in the relationship between Molson Coors and Coca-Cola.
On October 26, UBS analyst Peter Grom maintained a Buy rating on The Coca-Cola Company (NYSE:KO) stock and raised the price target to $68 from $63, noting that the company beat third quarter expectations.
At the end of the third quarter of 2022, 59 hedge funds in the database of Insider Monkey held stakes worth $25 billion in The Coca-Cola Company (NYSE:KO), compared to 60 in the preceding quarter worth $28.4 billion.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Coca-Cola Company (NYSE:KO) was one of them. Here is what the fund said:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (The Coca-Cola Company (NYSE:KO)). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
6. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 61
Dividend Yield as of November 28: 2.00%
Lowe’s Companies, Inc. (NYSE:LOW) operates as a home improvement retailer in the United States and internationally. It is one of the prominent dividend stocks for a retirement stock portfolio. On November 3, Lowe’s Companies declared that it would sell its Canadian retail business to Sycamore Partners, a private equity firm, for $400 million, as the home improvement retailer targets a larger market share in the US.
On October 31, investment advisory Citi maintained a Neutral rating on Lowe’s Companies, Inc. (NYSE:LOW) stock and lowered the price target to $215 from $217. Analyst Steven Zaccone issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pershing Square is a leading shareholder in Lowe’s Companies, Inc. (NYSE:LOW) with 10.4 million shares worth more than $1.95 billion.
In addition to Johnson & Johnson (NYSE:JNJ), The Procter & Gamble Company (NYSE:PG), and The Home Depot, Inc. (NYSE:HD), Lowe’s Companies, Inc. (NYSE:LOW) is one of the best dividend stocks for a retirement portfolio.
In its Q4 2021 investor letter, Pershing Square Capital Management, an asset management firm, highlighted a few stocks and Lowe’s Companies, Inc. (NYSE:LOW) was one of them. Here is what the fund said:
“Lowe’s Companies, Inc. (NYSE:LOW) is a high-quality business with significant long-term earnings growth potential
Supportive macroeconomic backdrop
- Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro-project backlog
- COVID-19 causing millennials to enter the housing market
Positioned to grow EPS largely independent of market conditions
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Idiosyncratic revenue opportunities driving share gains
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Self-help initiatives catalyzing operating margin expansion
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Buybacks representing ~8% of current market capitalization planned for 2022 (…read more)”
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Disclosure. None. Retirement Stock Portfolio: 11 Safe Dividend Stocks to Consider is originally published on Insider Monkey.