We recently published the best retirement portfolio for a 65-year-old. In this article, we are going to take a look at where Walmart Inc. (NYSE:WMT) stands against other stocks in the best retirement portfolio.
The American retirement system is feeling the strain, with challenges like shrinking fees, underfunded plans, and an aging population slowing down industry growth. Over the last decade, 401(k) expense ratios have declined by a third, according to a PwC report, and recordkeeping fees dropped 8% between 2015 and 2019, making it harder for retirement firms to stay profitable. Some companies have had to merge or shut down, but there is still a big opportunity. Businesses that offer better retirement benefits, financial advice, and affordable plans for small companies could attract more people and unlock an extra $5 trillion in retirement savings.
The urgency is real. A quarter of US adults have no retirement savings at all, and only 36% feel on track. Even those who are saving may not have enough. For people nearing retirement, between the ages of 55 to 64, the median savings of $120,000 might provide less than $1,000 a month for 15 years. This is hardly enough, especially with longer life expectancies and rising healthcare costs.
For most Americans, retirement means either living off of savings or finding ways to generate passive income. While some can count on Social Security or a pension, many have to plan their own financial future. Savings usually involve withdrawing money over time, while passive income could mean anything from rental properties to online businesses. Brian Bollinger, founder of Simply Safe Dividends, believes dividend-paying stocks can be a game-changer. Instead of selling stocks to make money, retirees can rely on regular dividend payments, helping stretch their savings.
Dividends have been a huge part of stock market returns, making up about 45% of the broader market’s total gains since 1900. But despite their importance, they are often overlooked when planning for retirement, especially as baby boomers look for reliable income sources. According to Thornburg Investment Management, retirees typically fund expenses through either a total return approach, investing for growth and selling assets as needed, or a high-income approach, relying on high-yield investments for steady income. The first risks selling in down markets, while the second limits portfolio growth. A better strategy combines both; investing in stocks that not only pay dividends but also increase them over time can provide a steady income while allowing retirees to grow their wealth. Unlike bonds with fixed returns, dividend stocks can grow income, offering both stability and long-term financial growth. Over 30 years, dividend income has outpaced bond payouts, making it a strong option for retirees. With that investing strategy in mind, let’s take a look at the best retirement portfolio for a 65-year-old.
A manager standing in a hypermarket, pointing out items available for wholesale.
Our Methodology
For this article, we searched the internet for widely recommended retirement stocks and selected those with at least a decade of consistent dividend growth and an average 5-year return of 50% or more as of March 24. We also selected stocks from different industries to make a well-rounded portfolio. Additionally, we have mentioned the hedge fund sentiment for each stock, as per Insider Monkey’s database of Q4 2024, and ranked the list based on that data.
Why are we interested in 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 116
Number of Consecutive Years of Dividend Growth: 52
Average 5-Year Share Price Returns: 107.76%
American retail giant Walmart Inc. (NYSE:WMT) ranks 4th on our list of stocks for the best retirement portfolio. In December 2024, the company completed the acquisition of VIZIO for $2.3 billion, bringing its SmartCast Operating System into the mix. This deal gives Walmart new ways to enhance customer shopping experiences and offers advertisers more ways to connect through Walmart Connect since VIZIO has a strong ad business with over 19 million active accounts.
Walmart Inc. (NYSE:WMT) had a strong fourth quarter, with revenue coming in at $180.6 billion, up 4.1% from last year. eCommerce sales jumped 16%, and US comparable sales grew by 4.6%, driven by solid performance in general merchandise. Operating income was up 8.3%, helped by better margins and increased membership revenue. Walmart’s advertising business also saw big growth, rising 29% globally. Looking ahead, the company expects 3-4% net sales growth in FY26 and plans to grow adjusted operating income by 3.5-5.5%.
On February 20, Walmart announced a dividend of $0.94 per share for FY 2026, a 13% increase from last year’s $0.83. This marks the 52nd consecutive year of dividend growth. The dividend will be shelled out in four quarterly installments of $0.235 per share, with the first payout scheduled for April 7 to shareholders on record as of March 21.
Among the hedge funds tracked by Insider Monkey, 116 funds were bullish on Walmart Inc. (NYSE:WMT) at the end of Q4 2024, up from 88 funds in the last quarter. Rajiv Jain’s GQG Partners was a prominent stakeholder of the company, with 11.8 million shares worth $1 billion.
Overall, Walmart Inc. (NYSE:WMT) ranks 4th on our list of the best retirement portfolio for a 65-year old. While we acknowledge the potential of WMT to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than WMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
