7 Ideal Dividend Stocks to Buy for a Rich Retirement

Dividend Stocks
  • Here are the seven the best dividend stocks to buy that offer a healthy retirement income.
  • PepsiCo (NASDAQ:PEP): This inflation-resistant business will continue rewarding shareholders.
  • Intel (NASDAQ:INTC): With a strong product lineup in the coming months, Intel could reestablish its dominance in its business segments.
  • Fifth Third Bancorp (NASDAQ:FITB): FITB has healthy loan and deposit growth and exposure to profitable markets in the U.S.
  • Morgan Stanley (NYSE: MS): The investment banking giant has effectively diversified income streams.
  • United Parcel Service (NYSE:UPS): The cash flow generating machine aims to return over $7 billion to shareholders this year.
  • SL Green Realty (NYSE:SLG): Office REIT with incredible occupancy rates that should be back with a bang in the post-pandemic world.
  • AbbVie (NYSE:ABBV): ABBV is not a one-trick pony anymore, as it has other oncology products firing lately.
Source: Shutterstock

It’s perhaps never too early to plan for your retirement, especially in today’s investing environment. Allocating a small portion of your savings each month can greatly impact your retirement portfolio. Nevertheless, it helps to focus on creating a diversified portfolio with plenty of dividend stocks that substantially curb the downside risk.

You might be confronted with many uncomfortable decisions in ensuring you don’t outlive your savings. However, the best way to avoid that predicament is to invest a substantial portion of your retirement savings in dividend stocks. Moreover, with the equity market experiencing such a massive correction, investors need to consider scooping up undervalued dividend stocks to buy, which are likely to offer plenty of upside.

Here are my top seven dividend stocks to buy for a rich retirement:

Ticker Company Price
PEP PepsiCo, Inc. $169.17
INTC Intel Corporation $42.54
FITB Fifth Third Bancorp $38.33
MS Morgan Stanley $83.74
UPS United Parcel Service, Inc. $179.13
SLG SL Green Realty Corp. $62.81
ABBV AbbVie Inc. $152.93

Dividend Stocks to Buy: PepsiCo (PEP

Cans of PepsiCo's (PEP) Pepsi soda are in a bucket of ice.

Source: suriyachan / Shutterstock.com

PepsiCo (NASDAQ:PEP) is a global snack and beverage giant which has been incredibly successful in generating massive shareholder returns over the past decade. It has benefitted immensely from its strong moat and robust brand value. Moreover, its free cash flow generating machine has helped grow dividend payouts in the past 49 years. 

Recent results have shown its effectiveness in tackling the rising input rates. Its organic sales increased 13.7% during the first quarter (Q1), while its core earnings per share shot up 20% to $1.29 per share. The business expects full-year organic sales to increase by 8%, which represents a 2% increment from its previous forecast. Moreover, it has recently bumped its quarterly dividend by 7%, which takes its yield to a spectacular 2.74%.

Intel (INTC)

Sign of Intel (INTC stock) at entrance of The Intel Museum in Silicon Valley

Source: JHVEPhoto / Shutterstock.com

Intel (NASDAQ:INTC) has established itself as a dominant player in client central processing unit and server markets, with more than 75% share in both sectors. It offers investors a remarkable 3.5% yield with eight years of dividend growth.

It hs been facing tough competition from Advanced Micro Devices (NASDAQ:AMD),but the next couple of years could potentially turn the tide for the firm. It has to do with its aggressive product roadmap, backed by billions in investments. It plans to invest $20 billion in developing a couple of new factories in Ohio state and up to 80 billion euro in Europe over the next ten years.

Intel’s 7nm process launch will give AMD a run for its money in the coming years. Its 7-nm process is significantly more powerful than AMD’s 5nm process offering. Hence, Intel expects sales to increase in the long run, with 10% to 12% growth by 2026.

Dividend Stocks to Buy: Fifth Third Bancorp (FITB)

Fifth Third Bank sign on brick building

Source: Susan Montgomery / Shutterstock.com

Fifth Third Bancorp (NASDAQ:FITB) is one of the leading regional banks operating in the U.S. It has a presence across the Midwestern and Southern regions of the country, with a healthy exposure to the fast-growing markets in Texas and California. Its business has been posting stable growth over several years and has returned over 200% in total returns to its investor base.

In Q1, average loans and leases came in at $113.46 billion, up from $108.95 billion in Q1 last year. Despite the slowdown in net interest income, loan and deposit growth was solid during Q1. Furthermore, the firm boasts an impressive dividend profile, yielding 3.21% with six years of growth in payouts.

Morgan Stanley (M.S.)

The logo for Morgan Stanley is displayed on the side of a building.

Source: Ken Wolter / Shutterstock.com

Morgan Stanley (NYSE:MS) is an investment banking giant struggling amidst the slowdown in investment activity. Investment banking revenues dropped 37% in Q1 of 2021, drastically bringing down company profits. The bank faces substantial headwinds from rising inflation rates and geopolitical factors, which have crippled investor sentiment. However, Morgan Stanley has done a great job of diversifying its income streams.

It has increased client assets by 19% to a whopping $1.8 trillion in Q1. Moreover, the company’s investment management segment saw growth of 1.6% from the prior-year period. Additionally, assets under management have increased by 1.9% to roughly $1.5 trillion. Also, its advisory revenues have soared to $944 million, representing 97% growth to offset the weak initial public offering activity. Furthermore, its ability to evolve has helped maintain its solid dividend yield of 3.41%.

Dividend Stocks to Buy: United Parcel Service (UPS)

Close up of UPS logo printed on a delivery truck. UPS stock.

Source: Sundry Photography / Shutterstock

United Parcel Service (NYSE:UPS) is the largest global package delivery enterprise. It has been growing steadily over the past year, boasting double-digit sales and EBITDA growth. Additionally, its levered free cash flows have grown over 200% in the past year, with a healthy dividend payout.

It increased its quarterly dividend and buyback targets in its Q1 earnings call. Moreover, it also maintained its incredible revenue and operating margin guidance. It expects to generate $9 billion in free cash flows, with a planned dividend payout of $5.2 billion. Additionally, the firm targets a greater-than 30% return on invested capital.

SL Green Realty (SLG)

Source: Shutterstock

SL Green Realty (NYSE:SLG) is a leading real estate investment trust (REIT) that offers property exposure to a premium retail space in Manhattan. It is a fully integrated REIT that owns roughly 5% of Manhattan’s office real estate. It is the single biggest office landlord in the borough. Its business suffered immensely due to the pandemic restrictions, so operating results were underwhelming in the past couple of years. Nevertheless, as the restrictions fade, things are looking upward.

Its occupancy rate is at 93% and its management plans to shrink the 7% vacancy. Nevertheless, a 93% occupancy rate is a mind-boggling result, considering the Manhattan market’s occupancy rates fall in the 16% to 18% range. Moreover, management plans to increase its net operating income of $605.1 million by 18% until 2024. Perhaps a bigger sweetener is its eye-catching dividend yield of 5.98%.

Dividend Stocks to Buy: AbbVie (ABBV)

abbvie (ABBV) website and logo on mobile phone

Source: Piotr Swat / Shutterstock.com

AbbVie (NYSE:ABBV) is a biopharma giant primarily focuses on oncology and immunology. It is famous for its flagship rheumatoid arthritis medicine called Humira, which makes up roughly 50% of its profits. Total sales came in 22.7% higher at $56.2 billion last year. Moreover, sales of Humira jumped 4.3% year-over-year to $20.7 billion.

In the past, ABBV has been criticized for being a one-trick pony, generating over 60% of sales from Humira. However, that seems to be changing with management actively working toward diversification of its portfolio. That is perhaps why sales of other drugs, including Rinvoq and Skyrizi, have doubled in the past year. In addition to this, ABBV is a leading dividend stock in the sector, with nine years of consistent growth in dividend payouts and a yield of roughly 3.7%.

On the publication date, Muslim Farooque did not have (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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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