The best retirement stocks are easy enough to find if you take the time to look.
While it still is a challenging time to invest if you have a short time horizon, for investors with longer time horizons, current conditions remain favorable when it comes to entering/adding to positions in long-term opportunities.
Macro uncertainties continue to hold them at depressed prices, but over time, the best retirement stocks can generate strong returns through share price appreciation.
In the case of many names in this category, steady, growing dividends also provide a further boost to long-term total returns. It’s easy to conflate “retirement stock” with “blue-chip stock.”
Besides “blue chips,” many names better described as “growth stocks” also fit into this category. For instance, capitalizing on long-term trends, such as e-commerce or the rise of electric vehicles.
If you’re looking to grow your nest egg, consider adding these seven stocks to your portfolio. Each earning either an A in the Portfolio Grader, these are some of the best retirement stocks out there.
Occidental Petroleum (OXY)
After an incredibly strong run during 2022 with gains of 131%, thanks to the big jump in oil prices, it’s understandable if you are concerned that Occidental Petroleum (NYSE:OXY) stock is going to produce subpar returns going forward. Still, it’s no accident I’ve listed this as one of the best retirement stocks to buy.
Along with this, there may be concerns that the push for renewable energy will drive fossil fuel purveyors out of business. Factors such as tight supplies and geopolitical tensions point to crude oil staying at or perhaps moving above current prices.
Oxy is investing billions into acquisitions/projects in areas like biofuels and carbon capture. Occidental announced plans to remove as much as 1 million metric tons of carbon dioxide from the atmosphere a year, although the company is not saying when it thinks it will be able to make a profit on the venture.
All things considered, OXY, which earns an “A” in Portfolio Grader, remains a worthy choice for a retirement portfolio.
Sociedad Quimica y Minera de Chile (SQM)
Sociedad Quimica y Minera de Chile (NYSE:SQM) provides the world with a variety of basic materials, yet lately, it’s been one basic material in particular (lithium) that has had the market excited about this stock. This makes it one of the best retirement stocks to buy if you believe in the continuing EV boom.
Thanks to the EV boom, demand for lithium (essential in the production of EV batteries) has gone through the roof. As a result, spot lithium prices have spiked, resulting in a massive spike in this company’s profitability, as well as the SQM stock price.
However, despite concerns about a “lithium bust,” there’s a lot to suggest that the current lithium boom will carry on for years to come.
SQM remains a perfect fit for not just growth investors, but value and dividend investors as well. Besides offering growth potential, SQM trades at a low valuation (7.9 times earnings), and has a forward dividend yield of 9.1%.
SQM has an “A” rating in the Portfolio Grader.
Amgen (AMGN)
I recently identified Amgen (NASDAQ:AMGN) as one of my best dividend stocks to buy for 2023. For many of the same reasons, this biotech company can also be considered one of the best retirement stocks to buy out there.
Amgen provides treatment for some well-known and debilitating ailments, including bone cancer, psoriasis and rheumatoid arthritis. As long as it keeps that pipeline of medications rolling in through its R&D, Amgen stock will be a winner.
Amgen stock is up 18% so far this year, pulling back slightly as of late after popping 25% in September when the company released updated long-term positive data about the effectiveness of Repatha drug that is used to treat high cholesterol.
Now sporting a dividend yield of 3.2%, AMGN stock has an “A” rating in the Portfolio Grader.
Eli Lilly (LLY)
I really like Eli Lilly (NYSE:LLY) as a stock that investors should buy and hold. This pharmaceutical company has an outstanding pipeline of drugs that will be in demand for a long time, including tirzepatide to treat obesity and Mounjaro for its treatment of Type 2 diabetes. That pipeline will keep profits rolling in.
It’s also a relatively safe investment that your parents and grandparents would appreciate. LLY stock currently sports a five-year monthly beta of 0.35. That means that shares have typically moved slower than the overall stock market.
Even with that safety net, Eli Lilly is up 30% on the year – by far outpacing the Dow Jones Industrial Average. Analysts suggest a price target of $385, meaning that even at this price, shares have more room to run.
LLY also pays out a reliable quarterly dividend that’s grown for the last nine years. Add all that together, and you have a top retirement stock that’s worthy of its “A” rating in the Portfolio Grader.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) is another integrated energy play that’s still worthy of inclusion as a long-term position in a retirement portfolio.
Besides the strong chance of oil prices holding steady near current levels, the push for “net zero” carbon emissions is more of a catalyst than a risk for this stock.
Although the global pivot towards renewables may mean oil use peaks by the mid-2030s, the company’s pursuit of green opportunities with high return-on-investment potential could far outweigh this factor.
Furthermore, along with forward-thinking investments in carbon capture and hydrogen projects, Exxon Mobil is practicing disciplined capital allocation, by reducing operating costs.
In turn, management is returning these savings to XOM stock investors, in the form of dividends and share repurchases. Add it all up, and it’s clear XOM continues to be a great core holding for retirement portfolios.
XOM has an “A” rating in the Portfolio Grader.
Enphase Energy (ENPH)
Enphase Energy (NASDAQ:ENPH) manufactures solar energy inverters and battery storage products. The company’s microinverters are installed in customers’ homes, store gathered power on a battery and use it to power their homes during a service interruption.
Customers can also use a smartphone app to see how much power they’ve stored and to direct power to specific appliances when there’s an outage.
It’s a great business model when people in the Golden State and elsewhere have to worry about a strained power supply and the possibility of rolling blackouts.
ENPH stock is up 65% on the year as investors are piling into the company, helping to push the market capitalization over $40 billion.
ENPH gives retirement investors exposure in clean energy and access to a rapidly growing market. It has an “A” rating in the Portfolio Grader.
Gilead Sciences (GILD)
You may remember Gilead Sciences (NASDAQ:GILD) for its Covid-19 treatment drug remdesivir, but it also has a wide portfolio of treatments for HIV, hepatitis and influenza, including its Tamiflu drug.
The stock is up 32% just in the last three months, beginning its rise in September after the company settled claims with generic drugmakers over its HIV and Hepatitis B treatments. Investors obviously are excited that Gilead was able to avoid costly litigation and also secure a deal that prevents those companies from selling the generic versions of those drugs until at least 2031.
On top of that, the company beat third-quarter earnings on both top and bottom lines and raised its 2022 revenue guidance by about $1 billion.
GILD currently rewards retirement investors with a strong dividend yield of 3.4%, and has an “A” rating in the Portfolio Grader.
— Louis Navellier and the Investor Place Research Staff
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