Retirement stocks are typically value stocks with a high dividend yield and low-risk, with a moderate-to-high medium term growth rate that doesn’t raise the blood pressure of senior folks. Most retirees would like to have a fixed flow of income. However, investing in fixed income securities like the U.S. treasury bonds will give you just 2%-3% annual return. That is unsustainable, especially with an inflation brewing.
So what do you do? One of the best ways I can think of is to diversify your holdings with a few retirement stocks. Here is a list of our three picks which are a must to have in your portfolio right now. I have selected them keeping in mind certain key metrics. Let us take a look at each of these and rate the stocks according to these metrics.
|Stock||Market Cap||Volatility||Dividend Yield||Medium Term Growth|
|Duke Energy||$51 billion||Medium||High||High|
Retirement stocks should be less risky and possess low volatility. They should not be highly sensitive to the market index. In this way retirees can feel safe to have them.
Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is one such stock. Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is a part of the retail estate industry, specializing in group oriented, destination hotel assets in urban and resort markets. The company has a market capitalization of $2.2 billion. Shares are up 39% year-on-year, which easily exceeds the performance of the broader market.
Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) typically doesn’t move with the market. To give you an example, last year, once when S&P fell 0.5%, Ryman moved up 1%. That means even in adverse market conditions, this stock is a safe buy.
Cablevision Systems Corporation (NYSE:CVC) operates TV/data/voice and has the largest Wi-Fi internet network across the U.S. Although the Q4 2012 revenue growth was lower due to cable lines affected by hurricane Sandy, Cablevision Systems Corporation (NYSE:CVC) has been successful in adding more subscribers. This shows the riskiness factor in this stock is low and it can perform well in times of adversities.
Duke Energy Corp (NYSE:DUK) operates as part of the electric utilities sector in the United States and Latin America. In spite of utilities sector being highly capital-intensive, Duke Energy Corp (NYSE:DUK) has maintained a low debt to equity ratio of 0.9. By having less leverage on its balance sheet, Duke Energy Corp (NYSE:DUK) certainly possess less risks of repaying back the debt and will be able to pay dividends on time.
High dividend yield
The dividend yield of Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is currently 4.4%. Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) is a real estate investment trust (REIT) and receives preferential tax status by distributing a significant portion of its taxable income to shareholders. So, I think this high dividend yield is here to stay.
Cablevision Systems Corporation (NYSE:CVC) is a media and telecommunication company and the fifth largest cable company in the U.S. Since 2008, the company has been increasing dividends. Currently it has a yield of 4.20% at $0.60 a share. The company is expecting strong cash flows in the coming years which makes the dividend yield sustainable.
Duke Energy Corp (NYSE:DUK) has a history of increasing dividends regularly, with the current yield standing at 4.2%. It has incurred huge capital expenditure in the recent past. In spite of that, it has been able to increase dividends year on year. This shows that it is expecting positive cash flows and consistent earnings growth from its prior investments.