Best defensive stocks for retirement – When putting together an investing portfolio for retirement you want some stability, stocks that will ride the markets and still produce. Of course we would all want that all the time but these kinds of stocks may be stable but not always the most productive. However they are essential to a good safe investment strategy.
Investopedia defines as defensive stock as:
A stock that provides a constant dividend and stable earnings regardless of the state of the overall stock market.
This is not to be confused with a “defense stock”, which refers to stock in companies which manufacture things like weapons, ammunition and fighter jets. (src)
Simple concept but obviously not that easy to find as almost all stocks are somewhat affected by the market, for obvious reasons.
So, defensive stocks, which ones! I’m no expert but Money Morning (src) recommends:
Cisco Systems Inc. (Nasdaq: CSCO)
Market Cap: $123 billion
Present Dividend Yield: 2.9%
Payment Ratio: 34% of estimated 2014 earnings
Dividend Augmentation: 216% in four-years, from $0.06 per quarter in 2011, to $0.19 per quarter today
CSCO stock currently sits at $22.84 per share, and has gone up nearly 5% over the last month.
Diageo plc (NYSE: DEO)
Market Cap: $77 Billion
Present Dividend Yield: 2.5% according to the total 2013 payouts
Payment Ratio: 48% of estimated 2014 revenue
Dividend Augmentation: 73% in ten-years, from $1.67 paid in 2003 to $2.90 in 2013
DEO stock currently costs $122.43 per share. It’s down 7.48% so far in 2014, which gives investors an opportunity to buy DEO shares at a discount.
Old Republic International Corp. (NYSE: ORI)
Market Cap: $4 Billion
Present Dividend Yield: 4.7%
Payment Ratio: 45% based on FY2013 revenue
Dividend Augmentation: 79% in ten-years, from $0.40 cents per share in 2003 to $0.72 in 2013
ORI stock currently sits at $16.45 per share and is up 28.69% since this time last year.
Huntsman Corp. (NYSE: HUN)
Market Cap: $5.5 Billion
Present Dividend Yield: 2.2%
Payment Ratio: 22% of secured 2014 earnings
Dividend Augmentation: 150% in seven-years, from 20 cents per-share in 2007 to 50-cents in 2013
HUN stock costs $25.19 per share at present. Its stock value has grown 42.11% since this time last year.
Like any investing recommendation takes these as just that, not sound fact, do your research, learn more and think about it from your own point of view (make sure that POV is educated though).