In this article, we will take a look at 12 safe tech stocks to consider for a retirement stock portfolio.
In the past, retirees could rely on bonds to provide steady income, with 10-year Treasury yields around 6.50% in the late 1990s. However, current rates are significantly lower, resulting in a major impact over time. For instance, a $1 million investment in 10-year Treasuries now yields over $1 million less than it would have 20 years ago. Adding to this concern, today’s retirees are increasingly uncertain about the future of Social Security. According to a survey by investment manager Schroders, Americans with employer-provided retirement plans estimate they’ll need $1.2 million to retire comfortably. However, nearly half expect to have less than $500,000 saved. Another study by Transamerica Institute shows that only 1 in 5 middle-class individuals feel confident in their ability to retire or maintain a comfortable lifestyle during retirement. Many of these anxious pre-retirees plan to start Social Security benefits before age 67, even though waiting until at least age 70 would maximize their monthly payments for life. Overall, pre-retirement anxiety appears to be widespread.
That said, the retirement realm may not be as bleak as it appears at first. According to this year’s survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research, nearly 80% of retirees feel they can spend money as they wish, and an even higher percentage believe they are living the retirement lifestyle they envisioned. In addition to managing their current expenses, over half of retirees are still saving for the future. Key factors contributing to this success include planning—such as deciding when to claim Social Security, preparing for emergencies, estimating retirement duration, and periodically reviewing and rebalancing asset allocations to stay on track during market fluctuations.
Additionally, inflation slowed down to its weakest pace in over three years last month, as price increases continued to ease from their generational highs. With concerns about the rising cost of living playing a central role in the presidential election campaign, the Bureau of Labor Statistics released its final inflation report before voters head to the polls. The consumer price index rose 2.4% year-over-year in September, slightly above economists’ expectations of 2.3% but down from 2.5% in August. The “core” index, excluding volatile food and energy prices, climbed 3.3% annually. On a monthly basis, prices increased by 0.2%. Meanwhile, the broader U.S. economy remains strong, with employers adding 254,000 jobs in September, countering fears of a labor market slowdown.
That said, during economic challenges, investors—especially those focused on securing their retirement—often gravitate toward low-risk stocks that offer steady returns amidst uncertainty. Healthcare and consumer stocks are typically favored in such conditions, but tech stocks can also be a smart investment if chosen wisely. Tech stocks have consistently outperformed the broader market for several years and now make up over 30% of the market’s total holdings. With that said, we’re here with a list of 12 safe tech stocks to consider for a retirement stock portfolio.
Image by Mike Flynn from Pixabay
Our Methodology
For our list of the 12 best safe stocks for a retirement portfolio, we used stock screeners, ETFs, and online rankings to identify mega-cap tech stocks with low beta values, a track record of consistent dividend payments, and well-established businesses. These stocks were then ranked based on hedge fund sentiment, as reported in Insider Monkey’s Q2 2024 database.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12. Jack Henry & Associates, Inc. (NASDAQ:JKHY)
Beta Value: 0.64
Dividend Yield: 1.22%
Number of Hedge Fund Holders: 29
Jack Henry & Associates, Inc. (NASDAQ:JKHY), a Missouri-based IT company, primarily provides payment processing services to the financial industry. As of September 6, it offers a quarterly dividend of $0.55 per share, with a dividend yield of 1.22%.
In fiscal 2024, Jack Henry & Associates, Inc. (NASDAQ:JKHY) delivered strong results, generating $2.2 billion in revenue and $489.4 million in operating income. The company also achieved a significant rise in sales bookings, including major contract wins with large financial institutions. Citi maintained a Neutral rating on the stock, while Compass Point initiated coverage with a Neutral rating and set a 12-month price target of $186. Both firms acknowledged Jack Henry’s strategic emphasis on business banking and investment in innovative products as key growth opportunities.
Additionally, the company has also reported integrating generative AI into its ‘Conversations’ product and detailing 22 competitive core wins during the final quarter.
By the end of the June quarter, 29 hedge funds tracked by Insider Monkey held stakes in Jack Henry & Associates, Inc. (NASDAQ:JKHY), up from 28 in the previous quarter, with a total value exceeding $168.2 million. Balyasny Asset Management was the largest shareholder among these hedge funds.
11. Sony Group Corporation (NYSE:SONY)
Beta Value: 0.95
Dividend Yield: 0.60%
Number of Hedge Fund Holders: 29
Sony Group Corporation (NYSE:SONY) is a global leader in technology, specializing in the design, development, and production of electronics for consumers worldwide. Its product lineup includes gaming consoles, televisions, and mobile devices. The company’s Game & Network Services division has seen growth, driven by the expanding PlayStation 5 user base and strong software sales. Additionally, the Music segment has benefited from increased streaming revenue and growth in emerging markets. Sony’s new division, Sony Pictures Experiences, is focused on strengthening its live entertainment business.
CFRA recently upgraded Sony Group Corporation (NYSE:SONY) shares from Hold to Buy, raising the price target to $102 from $88. This followed Sony’s fiscal Q1 2024 financial results, which met expectations. The company reported a 6% increase in net profit to JPY 231 billion and a 2% revenue rise to JPY 3.0 trillion. Operating profit also climbed to JPY 279 billion, a JPY 26 billion boost attributed primarily to favorable foreign exchange rates.
According to Insider Monkey’s Q2 2024 data, 29 hedge funds held positions in Sony Group Corporation (NYSE:SONY), up from 24 in the preceding quarter.