The following is an excerpt from 5 of the Best Low-Risk Retirement Stocks on the Market
When you think of “retirement stocks,” a few things come to mind. You’re generally looking for something timeless — a company that has been around for decades and appears to be future proof. After all, if you’re going to depend on this stock to support you in your golden years, you don’t want it to be at risk of technical obsolesce in a few years.
A good retirement stock also will have an iron-clad balance sheet with low or very manageable levels of debt. The quickest way to make a stable, boring business risky is simply to lever it up.
And ideally, you’d also like to see your retirement stock pay a dividend and have a long history of increasing its payout. A good dividend reduces your need to sell shares at what could be lousy prices during bear markets.
So today, we’re going to take a look at five low-risk retirement stocks that you can depend on in your golden years. I’ll give you fair warning: At today’s market prices, not all of these stocks are priced to deliver particularly high returns. You might want to wait for a pullback before really backing up the truck and buying any of these aggressively.
All the same, if you’re looking for companies that should survive the end of days, this list is for you.
I’ll start with the Oracle of Omaha’s baby, diversified conglomerate Berkshire Hathaway Inc. (BRK.B).
I’ll also warn you up front: Berkshire, unlike the rest of the stocks on this list, doesn’t pay a dividend. But there’s a reason for that. Every would-be dollar paid out as a dividend is a dollar that is no longer available for Warren Buffett to invest. When you have the most legendary stock picker in history running the portfolio, you let the man work.
Berkshire Hathaway’s portfolio is eclectic. It’s largest public holdings are the Kraft Heinz Co (KHC), Wells Fargo & Co (WFC), Apple Inc (AAPL) and The Coca-Cola Co (KO) — companies that, with the exception of Apple, all have very old business models that haven’t changed much over the decades and are themselves ideal retirement stocks. (And nothing against Apple, by the way; I’m long the company myself. It’s just not what I’d consider a prototypical “retirement stock.”)
Berkshire also owns See’s Candy, Justin Boots, Nebraska Furniture Mart and a host of other private companies that have also been around for decades with time-tested business models.
Yes, Mr. Buffett is 86 years old and won’t be running things forever. But he has assembled a fantastic portfolio of retirement stocks that should still be churning out profits decades after Mr. Buffett goes to that big stock exchange in the sky.
To read the rest of the article, see 5 of the Best Low-Risk Retirement Stocks on the Market
Disclosures: Long AAPL, EPD, O and OHI