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No matter when you plan to retire, it is never too early to start working on your finances if you want to enjoy a comfortable future. When you park your money in the right place, it will grow and ensure that your expenses are taken care of during the golden years.
Investing for retirement is about choosing long-term stocks that carry low risk and the potential to grow steadily. I’ve identified seven no-brainer retirement stocks that have shown tremendous performance in the past, are low-risk and highly reliable. Some of these stocks even pay a dividend!
If you have retirement on your mind, take a look at these stocks and start accumulating them to enjoy a stress-free retirement. Each of these companies is an industry leader and has proved its worth. It is time to make the most of their upward journey.
Amazon (AMZN)
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E-commerce giant Amazon (NASDAQ:AMZN) is no longer just a bookseller but has become one of the biggest diversified businesses today. Growing rapidly, the wide umbrella of products and services it offers continues to generate revenue growth.
The company has the largest market share in the cloud computing segment, and Amazon Web Services (AWS) is the biggest revenue generator for the business. Recently, it signed a $1.3 billion deal with the Australian government to build three data centers. The company is already working with the U.S. and U.K. governments with its cloud computing products.
Followed by the cloud, the company sees strong revenue growth from advertising. And, with billions of people visiting the website each day, marketers are fighting for the top advertising spot.
Trading at $199.81, AMZN stock is up 31% year-to-date (YTD) and it has the potential to keep soaring higher. It reported impressive fundamentals in the past two quarters and this momentum is set to continue.
Nvidia (NVDA)
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Tech giant Nvidia (NASDAQ:NVDA) is one of the best stocks to add to your retirement portfolio for obvious reasons. The stock has rallied throughout 2023 and generated solid returns for investors. However, there is no stopping its rally, and considering the rising demand for AI chips, Nvidia is set to benefit.
Earlier, it generated most of its revenue from the gaming sector but since 2023, it has seen a massive surge in data center revenue. In the recent quarter, the data center revenue soared 427% year-over-year (YOY) to $22.6 billion. It forms 86% of the total revenue.
Morgan Stanley noted that the demand for H20 chips is stronger than expected and this means steady revenue growth. The company has an envious clientele consisting of top organizations and different governments.
Wall Street remains bullish on the stock, and the stock split has made it easier for investors to accumulate NVDA. Buy and hold this stock for your retirement, and you will take home massive gains.
American Express (AXP)
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Long-term customers are set to benefit from the upward trajectory of American Express (NYSE:AXP). The company issues debit and credit cards and makes money from each transaction. This fee forms a large part of its revenue and ensures a steady income. AXP stock is up 25% YTD and 34% in the past 12 months. Trading at $234.38, it is close to the 52-week high.
The company’s strong global presence and robust business make it a strong buy and hold. With people shifting towards digital payments, fintech firms are set to benefit. In the first quarter, the company saw an 11% YOY revenue growth and a 34% jump in net income.
Notably, the company has successfully managed to attract young consumers and over 60% of the new account openings came from Gen Z and Millennial customers. It enjoys a dividend yield of 1.19%.
The stock looks undervalued to me and has a lot of room to run. With young consumers joining the workforce, the demand for cards will be high. And as people spend money, American Express will make money.
PepsiCo (PEP)
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Beverage giant PepsiCo (NASDAQ:PEP) is a part of a majority of retirement portfolios. A household name, the company has a global presence and is a stock that keeps giving. It has a diversified portfolio of products including healthy snacks which continue to generate steady revenue for the business.
There has been a recent selloff in PepsiCo stock which is a good opportunity to buy. Trading at $163.73, the stock is down 5% YTD and is inching closer to the 52-week low.
Rising profitability, steady growth and strong fundamentals make it an ideal company to put your retirement funds in. It is available in more than 200 countries and this diversification allows it to generate revenue even in times of market turmoil.
Also, it saw a 2.7% YOY organic growth in the first quarter and a 7% improvement in the EPS. So, PEP management is aiming for a revenue growth of at least 4% this year. PepsiCo is a dividend aristocrat with a yield of 3.33%, and it had its 52nd annual dividend increase recently. PepsiCo is a low-risk, passive income stock to own for the long term.
Microsoft (MSFT)
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Another tech stock worth holding on to for decades is Microsoft (NASDAQ:MSFT). An industry leader, Microsoft is a legacy business with a solid global presence. Having successfully integrated artificial intelligence (AI) into its products and services, Microsoft is enjoying strong returns on its investment. Trading at $466.52, the stock is up 24% YTD and 36% in the past 12 months.
It generates the majority of its revenue from cloud computing, and could soon hold the largest market share in the segment. Currently, it is only behind Amazon which holds 31% of the market share. Recently, it unveiled the new Copilot+ PCs which will have an advanced architecture to successfully run AI functions.
Additionally, Microsoft is steadily enhancing its AI offerings and will continue to integrate the same in its products and services. A tech dinosaur, the company has seen it all and thrived through the market’s ups and downs. One of the most valuable companies in the world, Microsoft will never disappoint. It has a dividend yield of 0.65%, and the stock has tremendous upside potential.
Alphabet (GOOG, GOOGL)
It is hard to imagine life without Google and if you want to invest in a stock that continues to perform in the long-term, pick Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). Just like the other tech stocks, Alphabet has also benefited from AI and its growing popularity. Up 34% YTD and 52% in the past 12 months, GOOG stock is exchanging hands for $191.61 and is at the 52-week high.
One reason to hold on to the stock is Google advertising which will continue to remain a king. Alphabet generates the majority of its revenue from ads and in the first quarter, it made $80.5 billion and 76% of it came from advertising. Google makes money whenever users click on the search ads and this has made it a cash cow.
With the integration of AI, the company will be able to explore new formats and look into new advertising opportunities. Alphabet seems to be the cheapest of the “Magnificent Seven”. Do not wait for a dip and grab this opportunity to own a world-class business. The company has a dividend yield of 0.43%.
Chevron (CVX)
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Oil and gas giant Chevron (NYSE:CVX) gains whenever oil prices rise and with crude oil trading above $80 per barrel, Chevron is set to report impressive quarterly numbers. While we are moving towards renewable sources of energy and transitioning into electrification, there is still time for it to become mainstream. And until then, Chevron is set to grow.
Trading at $154.29, the stock is up 4% YTD and has remained flat in the past 12 months. The best thing about investing in Chevron stock is the solid dividend yield. It enjoys a yield of 4.16%, and since the business generates ample cash flow, your dividend is safe.
The company has an upstream and a downstream business which ensures steady revenue. While the company did see a dip in revenue in the first quarter, it managed to maintain a strong production level. So, as the demand rises, Chevron will grow. Its merger with Hess (NYSE:HES) will also open new avenues for income. Therefore, Chevron is an ideal stock for passive income investors.
On the date of publication, Vandita Jadeja 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.
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