Skip to content
7 retirement stocks to buy in unexpected sectors


When you think of “retirement stocks”, certain types of stocks may come to mind. For example, stocks in consumer staples companies. Or, stocks in healthcare companies, utility companies, or any other industry/sector that is generally inflation and recession resistant.

These types of stocks are known for their reliable earnings and dividend payout history. Not to mention dividend growth, as seen with Dividend Aristocrats. This term refers to stocks that have increased their dividend payments for at least 25 years in a row.

But when it comes to investing in high-quality stocks suitable for a retirement portfolio, your options are not limited to these names alone. There are dozens of other stocks in this category, all of which belong to sectors not usually associated with the highest dividend paying stocks.

For example, these seven retirement stocks, all of which get an “A” rating in my Dividend Grader. Despite being in more cyclical sectors, the strengths specific to companies outweigh the uncertainties inherent in their respective industries.

CSVI IT services $36.85
DRI Dard Restaurants $115.27
QUICK Fastenal Company $50.19
GLP LP Global Partners $22.93
CPG Genuine Parts Company $131.54
HPQ HP $33.89
LCII LCI Industries $107.4

Retirement Stocks: IT Services (CSVI)

Source: Peshkova / Shutterstock

Based in Paducah, Kentucky, IT services (OTCMKTS:CSVI) has been in business since 1965. It has also increased its regular dividend for 49 consecutive years. Given that it trades over-the-counter (OTC), it might not be a household name. But this company, which provides IT services to financial institutions, is a high-quality retirement stock hiding in plain sight.

Down since the beginning of the year by the massive sale of the market, this is the ideal time to initiate a position. Why? With a history of steady revenue and earnings growth, it will likely continue to perform well operationally. This will likely allow CSVI stock, once market volatility dissipates, to rally.

Add to that its dividend (term yield of 2.84%). On top of that, its price is reasonable (18x earnings multiple). Looking for portfolio securities that offer the potential for income and capital growth? Think of CSVI as a purchase.

This title gets an “A” rating in my Dividend Grader.

Darden (DRI) Restaurants

7 retirement stocks to buy in unexpected sectors

Source: Shutterstock

A restaurant operator best known for its Olive Garden and Longhorn Steakhouse chains, inflation and recession worries have hit Dard Restaurants (NYSE:DRI) down about 23.2% since the start of the year. Yet, although the restaurant business is cyclical, you might want to make it a holding company. Even so late in the business cycle.

The market may be overestimating the impact of a recession. Although it owns high-end brands like Capital Grille and Eddie V’s, affordable chains like Olive Garden are its core business. Additionally, due to the pandemic, Darden has streamlined its business model.

This, too, could also signal strong results, should a recession end up happening. With a quarterly dividend of $1.10, DRI stock has a forward yield of 3.87%. It could increase that dividend even further, as it should see continued long-term earnings growth. After the uncertainties knocked him down, now is the time to buy some DRI stock.

This title gets an “A” rating in my Dividend Grader.

Retirement Stock: Fastenal Company (FAST)

7 retirement stocks to buy in unexpected sectors

Source: Igor Golovniov / Shutterstock.com

Fastenal Company (NASDAQ:QUICK) is a wholesale distributor of industrial supplies. For example, fasteners, as its corporate name suggests. A prosaic business, to be sure, but one that did well for many years.

This is evident from its long track record of dividend growth. It has increased its dividend (expected yield of 2.49%) 24 years in a row. It has increased its dividend by an average of 13.74% per year over the past five years. Trading for 26.25 times forward earnings, FAST stocks can look expensive compared to most of the stocks listed above and below.

Why? Slower earnings growth. Earnings are expected to grow by around 19% this year, but in coming years growth will drop to high single digits. Still, its valuation is sustainable, considering its operational track record. Not to mention the strong potential it has to continue to increase its payout rate.

This title gets an “A” rating in my Dividend Grader.

Global Partners LP (GLP)

7 retirement stocks to buy in unexpected sectors

Source: Shutterstock

Looking for a very high yielding pension stock? You might want to consider LP Global Partners (NYSE:GLP). Master Limited Partnership (MLP), Global Partners is a gasoline wholesaler/retailer.

Admittedly, soaring energy prices haven’t had the impact on GLP’s shares as they have on other energy players. The sharp rise in fuel prices could lead to a big increase in its profits, but this is not expected to be the case in 2023. Analysts expect profits to decline next year, from $3.45 to $2.70 per year. stock.

However, the current valuation of Global Partners (6x) largely takes this into account. Also, even if earnings dip next year, he will continue to have a hedge for his annual payout of $2.38 per share. At current prices, this gives the stock a forward yield of 10.29%. GLP can be an excellent choice for investors focused on portfolio income.

This title gets an “A” rating in my Dividend Grader.

Genuine Parts Company (GPC)

7 retirement stocks to buy in unexpected sectors

Source: Sopotnicki / Shutterstock.com

Like one of the other unexpected retirement stocks listed above, IT services, Genuine Parts Company (NYSE:CPG) is another with Dividend Aristocrat status. The auto parts wholesaler has increased its dividend 65 years in a row.

The current annual payout for GPC shares is $3.58 per share. This gives him a forward yield of 2.74%. As has been the case with auto parts retailers, automotive market trends have been favorable over the past year. The chip shortage, which has sent new and used vehicle prices skyrocketing, has prompted American motorists to hold on to their vehicles longer than ever.

As this trend continues, the company should continue to see strong revenue and profit growth. This allowed it to maintain its long streak of dividend growth. Trading at a more than fair valuation (16.2x forward earnings), it’s another great retirement stock to consider.

This title gets an “A” rating in my Dividend Grader.

HP Inc. (HPQ)

7 retirement stocks to buy in unexpected sectors

Source: Shutterstock

Personal computer (PC) manufacturer HP Inc. (NYSE:HPQ) may not seem like a promising opportunity. After all, it’s in a very mature segment of the tech industry. However, in recent years, the strong demand for PCs by consumers and businesses has shown that it was premature to declare it a “dinosaur”.

After a surge in PC demand in the pandemic era, growth is expected to slow. Even then, don’t assume it’s about lackluster returns ahead for HPQ stocks. A lot of pessimism is. price. This is evident from its low multiple of 7.75 times earnings. Just achieving modest earnings growth could be enough to send it higher.

HP is also an excellent dividend-paying stock, with a forward yield of 5.83%. With a payout ratio of just 16.26%, the company has the potential to continue with double-digit annual dividend growth. Over the past five years, it has increased its dividend by 12.57% per year.

This title gets an “A” rating in my Dividend Grader.

Retirement shares: LCI Industries (LCII)

7 retirement stocks to buy in unexpected sectors

Source: various photographs / Shutterstock.com

LCI Industries (NYSE:LCII) manufactures recreational vehicle (RV) components. The RV boom was, of course, a boom for him, but it’s easy to see why investors bid lower, in anticipation of tougher times ahead.

High inflation, soaring interest rates and high gas prices could put an end to the RV boom. With that, why buy LCII shares, let alone make them a long-term holding for a retirement portfolio? The market’s devaluation of it over the past few months likely accounts for a possible drop in revenue/earnings over the next couple of years.

Until the industry recovers, LCII pays a dividend of 3.96%. It has increased its dividend six years in a row, with the average annual dividend growth over the past five years standing at 12.3%. Down 34% since January, it may be time to go against the tide.

This title gets an “A” rating in my Dividend Grader.

At the date of publication, Louis Navellier has long held a position within DRI. Louis Navellier has held (neither directly nor indirectly) any other position in the securities mentioned in this article.

The InvestorPlace research staff member primarily responsible for this article has not held (directly or indirectly) any position in the securities mentioned in this article.

InvestorPlace

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.