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Nearing Retirement? These Stocks Are as Safe as They Come

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The closer retirement gets for some people, the more apprehensive they get about finances. It can be nerve-wracking to think about living off of a fixed income. Things can get even more anxiety-producing when considering how to invest your retirement savings.

Fortunately, there are ways to invest that can provide income without a huge amount of risk. Are you nearing retirement? These stocks, listed in alphabetical order, are as safe as they come and are worth a look.

1. Johnson & Johnson

Few stocks offer as long and successful of a track record as Johnson & Johnson (JNJ 0.29%). The company was founded in 1886 and has weathered lots of storms since then, growing into one of the biggest healthcare giants in the world.

Johnson & Johnson will report its fourth-quarter and full-year 2023 results on Jan. 23 and is expected to post revenue of close to $84 billion. The company is highly profitable with sustained earnings growth. J&J also sits atop a hefty cash stockpile of around $23.5 billion.

Retirees have long viewed the stock as a great source of income — and for good reason. Johnson & Johnson is a Dividend King with 61 consecutive years of dividend increases. Its dividend yield currently stands a little under 3%.

Like all drugmakers, J&J will face patent expirations for key products from time to time. However, the company invests heavily in research and development (nearly $15.6 billion over the last 12 months) to ensure that it has new products to fuel sustained growth. This is without question the kind of stock you can comfortably buy and hold for decades.

2. Lowe’s Companies

Lowe’s Companies (LOW 0.82%) stands out as another well-run company that has survived and thrived for more than a century. It started in 1921 as a small hardware store in North Carolina. Today, Lowe’s ranks as the second-largest home improvement retailer.

The company hasn’t reported its 2023 sales yet, but they are expected to be in the ballpark of $86 billion. Its net profit margin is a respectable 8.5%. Lowe’s offers a level of financial stability that should be reassuring to retirees.

Like Johnson & Johnson, Lowe’s is a Dividend King. The company has increased its dividend for 51 consecutive years. Over the last 10 years, its dividend has grown by more than 6 times, with a current yield of 2%.

Sure, Lowe’s can face challenges when consumers reduce their spending. However, the long-term prospects for the home improvement industry remain strong.

3. Walmart

You might say that Walmart (WMT -0.53%) is the baby of the group. The company was founded in Arkansas in 1962. However, this baby has grown to become the largest retailer in the world.

The low end of Walmart’s guidance for full-year sales for fiscal year 2024 is $641 billion. Although the discount retailer’s profit margin is low, such a high level of revenue translates to huge profits.

Walmart’s dividend yield of 1.4% isn’t anything to get excited about, however, you expect the dividend to grow quite a bit over time. The company joined the Dividend Kings in 2023 with its 50th consecutive year of dividend increases. Over the last five years, Walmart has grown its dividend by nearly 68%.

Shoppers will always look for low prices. Walmart’s scale gives it a big competitive advantage in giving customers what they want. The company has also positioned itself to compete effectively in the e-commerce market. Like Johnson & Johnson and Lowe’s, Walmart appears to be one of the safest stocks around for retirees to buy and hold.

Keith Speights has positions in Lowe’s Companies. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Johnson & Johnson and Lowe’s Companies. The Motley Fool has a disclosure policy.

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