We recently compiled a list of the 15 Best Stocks To Invest In For Retirement. In this article, we are going to take a look at where Ovintiv Inc. (NYSE:OVV) stands against the other stocks.
It is common knowledge that retirees with private sources of income, pension, or alternate employment are faring better than those relying only on social security. According to the Federal Reserve, Americans in the workforce were rather confident about their retirement savings in 2023. That year, 27% of adults had already retired in the United States, with 15% of them still working in some capacity. Retirees were working part-time rather than full-time. However, those with disabilities or low education were less prone to finding employment after retirement. 51% of adults retired to pursue passion projects or spend time with family, and 46% attributed their decision to retire to health issues, caregiving roles, or downsizing at work.
While social security remained the primary source of income for retirees, 80% of them had private sources of income as per the Fed’s 2023 report. 56% of them had pensions, 48% relied on investment income – which includes interest, dividends, or rental income, and 33% had labor income to fall back on. 92% of retirees in this 12-month survey were in the age bracket of 65 or above.
Over the last few decades, private companies have largely eliminated pension plans, shifting the onus of retirement savings to employees via 401(k)s. In 2022, only 15% of private industry workers had access to a pension. Retirement satisfaction has also dropped, with only 48% of retirees aged 62-75 commenting that they are very satisfied in 2023, down from 62% in 2020. Rising inflation has cut into retirees’ spending power, and 68% of them are burdened with credit card debt, up from 43% in 2020.
Sam Dogen, a millionaire who retired early and founded Financial Samurai, told CNBC that dividends are a source of reliable income. He commented:
“Stock dividends are my favorite passive income strategy because it is 100% passive.”
While young investors tend to reinvest dividend payouts, retirees can very well use it as a source of steady income. Dogen pointed out the consistent stock market growth over time and stated that dividend stocks are thus a dependable source of income over the long run. Given this, we will now take a look at some of the best stocks to buy for retirement.
Our Methodology
For this article, we used the Finviz stock screener to filter out stocks with dividend yields over 2% and dividend payout ratios under 30% as of February 19. We focused on picking stocks with a consistent record of paying dividends, offering dividend growth over the years, and being financially stable to steer clear of yield traps. The list below is ranked in ascending order of the hedge fund sentiment as of Q4 2024.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A drilling rig fueled by the energy and expertise of the oil & gas exploration and production company.
Ovintiv Inc. (NYSE:OVV)
Dividend Yield as of February 19: 2.70%
Number of Hedge Fund Holders: 51
Ovintiv Inc. (NYSE:OVV) ranks 4th on our list of the best stocks to buy for a retirement portfolio. It is a Denver-based energy company specializing in natural gas, oil, and natural gas liquids across the United States and Canada. Ovintiv finalized its $2.38 billion deal to acquire Montney assets from Paramount Resources on January 31, 2025. The purchase adds 70,000 BOE/d of production, 900 well locations, and 109,000 acres, boosting its presence in the region with solid infrastructure access.
On November 8, Ovintiv Inc. (NYSE:OVV) declared a $0.30 per share quarterly dividend, in line with previous. The dividend was distributed to shareholders on December 31. Ovintiv pulled in $507 million in net earnings and $978 million in cash flow during Q3 2024, outperforming Wall Street expectations. The strong cash flow came from higher-than-expected production and lower costs, with output topping guidance across all products. Free cash flow hit $440 million, an improvement from Q2, even with lower oil prices. OVV distributed $240 million to shareholders, including $162 million in share buybacks and $78 million in base dividends.
According to Insider Monkey’s fourth-quarter database, 51 hedge funds held stakes worth $1.27 billion in Ovintiv Inc. (NYSE:OVV), compared to 44 funds in the prior quarter, worth $932 million. Arrowstreet Capital was the largest stakeholder of the company.
Overall OVV ranks 4th on our list of the best stocks to invest in for retirement. While we acknowledge the potential of OVV as an investment, 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 OVV 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 Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.