Investing in retirement is a little different. While people may focus on growth and gains when they are accumulating wealth and trying to enlarge their nest egg, once retired, the focus tends to switch to preserving existing capital and adding new money through regular dividend payments. For these reasons, investors in retirement should seek out stable blue-chip stocks that offer a combination of safety, share price appreciation and hefty dividend payouts. Fortunately, there are plenty of these types of stocks available.
With a little research and consideration, people in retirement can find reliable stocks to add to their portfolios. Choosing wisely can enable investors to create a “set-it-and-forget-it” portfolio that provides peace of mind and is sturdy enough to weather any market storms that arise. The key is to focus on stocks that provide all-around benefits to their shareholders and have a competitive edge that’s not easily disrupted. Here are the top three retirement stocks to buy in April 2024.
Bank of America (BAC)
Bank of America (NYSE:BAC) shares are on an upswing and likely to catch a tailwind once interest rates start to move lower. The second largest lender in the U.S. has seen its stock price rise 27% over the last 12 months, including a 13% gain in 2024. The bank recently reported better-than-expected first-quarter earnings that were given a boost by higher net interest income and a rebound in investment banking activity. The bank announced earnings per share (EPS) of 83 cents versus the 76 cents that was expected.
Revenue for the January through March quarter totaled $25.98 billion compared to $25.46 billion expected on Wall Street. Net interest income, which had fallen in recent quarters, totaled $14.2 billion in Q1, topping estimates of $13.93 billion. Investment banking revenue rose 35% to $1.57 billion as deals returned to Wall Street. Bank of America said its sales and trading business turned in its best first quarter in more than a decade as the stock market boomed to start the year.
Retirees who take a position in BAC stock also benefit from a quarterly dividend payment of 24 cents per share, giving it a healthy yield of 2.54%.
Costco Wholesale (COST)
Speaking of dividends, how about Costco Wholesale (NASDAQ:COST)? The grocery and consumer goods retailer just increased its quarterly dividend payment to shareholders by 14%. Going forward, Costco will pay a dividend of $1.16 per share, up from $1.02 a share previously. The new dividend will be paid on May 10 to shareholders of record on April 26. Beyond its quarterly payout to stockholders, Costco is also known for paying generous special dividends from time to time.
On January 12, Costco paid a one-time cash dividend of $15 per share. The strong dividend payments are what attract many retirees to COST stock. However, the warehouse club also offers robust share price appreciation. In the last 12 months, COST stock has gained 40%, including an 8% increase this year. The company recently reported its March sales rose nearly 10% year-over-year, fueled by e-commerce sales that jumped 28% higher from a year ago.
Costco is also currently selling a lot of gold bars, as the price of bullion flirts with an all-time high above $2,400 an ounce.
GE Aerospace (GE)
Another reliable blue-chip stock that offers retirees the combination of strong stock performance and a generous dividend is GE Aerospace (NYSE:GE). The industrial conglomerate formerly known as General Electric has just broken itself into three separate companies. GE Aerospace retains the traditional industrial operations that include jet engine manufacturing. The stock has responded well to the break-up, having risen 89% in the last 12 months, including a year-to-date gain of 48%.
GE Aerospace also prioritizes its dividend, recently announcing a hike in its quarterly payment to shareholders by an amazing 250%. As of April 15, GE Aerospace pays a quarterly dividend of 28 cents per share, up from 8 cents previously. Earlier this year, the company announced plans to return 75% of its free cash flow to shareholders in the form of dividends and stock repurchases. GE Aerospace expects to generate more than $5 billion in free cash flow this year alone.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.