The constant talk of inflation and the looming fears of a recession can be scary for even an experienced investor. When it comes to investing, it is ideal to look for resilient companies that can thrive in an uncertain market. If you are like me and are looking for the best retirement stocks to buy, you need to carefully choose companies that can stand strong in the coming decade. Before you start looking for the top retirement stocks for August, you must consider the long-term potential of the company in every market situation.
While building your retirement portfolio, you not only need to look for stocks that can generate steady income but also look for companies that can withstand the ups and downs in the market. Such companies have a solid balance sheet and will continue to perform no matter what is going on in the market. Holding dividend stocks in your portfolio is an ideal way to ensure steady income, but it makes sense to look for dividend stocks that show steady growth and are reliable. Let’s take a look at the best retirement stocks to buy in August.
Visa (V)
Visa (NYSE:V) is one company that is highly resilient, and can continue to grow in any market situation. The company only ever saw its sales drop during 2020 when the world was struggling with the pandemic. Visa recently announced quarterly results and beat analyst expectations. Its revenue increased by 12%, and it also saw a rise in the cross-border payments volume. It saw a 9% rise in the payment volume, and revenge travel has also led to a surge in the volume. With the world steadily moving towards digitization, the company will continue to see growth in the volume.
The company makes money through the fees it charges on the transfer of money across its network. Since Visa has global operations and is present in multiple countries, inflation in one country will not have an impact on the company’s business. With more than 100 million locations globally, Visa’s network is only getting bigger. Visa cards have become such an integral part of our lives that a new fintech company won’t be able to achieve such a huge network in terms of merchants and consumers.
V stock is trading at $239 today and is up 15% year to date. It is moving closer to the 52-week high of $245 but I believe it has the potential to move higher. The company has a dividend yield of 0.75% and a quarterly dividend payout of $0.45. Its dividend payout ratio is 19.39% and is lower than the sector’s payout ratio, which means there is a potential for the company to raise dividends in the future. The demand for Visa is not going to slow down and besides enjoying a steady dividend income, you will also enjoy capital appreciation in the coming years. Visa is one of the top retirement stocks with growth potential.
Microsoft (MSFT)
One of the top tech companies to own, Microsoft (NASDAQ:MSFT) should be a part of every retirement portfolio. A tech dinosaur, the company has grown so much throughout the past few years that even a slowdown or a disappointing quarter does not lead to a major pullback. In the recent quarter, the company saw sales rise 8% year over year and an 18% increase in the operating income. It expects the top line in the range of $53.8 billion to $54.8 billion. While the company did report a slowdown in cloud business growth, I believe it is temporary and even if there is a slowdown, Microsoft is a diversified business and can continue generating income steadily.
There will never come a time when the world will not need computers, or data storage software or will stop playing video games and this means Microsoft will always be in demand. The company is also benefiting from the investments in AI and we will see it reflected in the revenue over the coming quarters. It has already made a $13 billion investment in OpenAI and the management believes it could become a leader in the AI space over the next decade.
OpenAI has given access to the research and development resources to Microsoft, which has allowed the company to build its own products and integrate them into the Microsoft software. MSFT is one of the must-buy retirement stocks in August. MSFT stock is trading at $326 today and is up 36% year to date. It has a dividend yield of 0.83% and paid a quarterly dividend of $0.68. The company has a dividend payout ratio of 27.73% and it has enough cash to be able to increase this in the coming years.
Apple (AAPL)
Warren Buffet’s favorite company, Apple (NASDAQ:AAPL) is a household name today, and it is one of the leading retirement stocks. The company is known for the iconic iPhone, but it has diversified into other products and services which continue to generate steady revenue. One thing that Apple has and its competitors don’t have is customer loyalty. Apple users seldom switch to other brands when it comes to phones or laptops. The loyal and satisfied customer base is the strength of the company, and consumers are ready to pay a premium for its products. That said, the company is also offering exceptional services and has seen a surge in service revenue throughout the years.
The company rewards its shareholders through share buybacks and dividends. It has a dividend yield of 0.53% and has recently paid a quarterly dividend of $0.24. The company has a dividend payout ratio of 14.82%, and it has a solid cash balance to be able to increase it in the coming years. In the last quarter, it returned $24 billion to the shareholders and it has increased dividend each year since 2013. AAPL stock is trading at $179 today and is up 43% year to date. All in all, Apple is a stellar company and you should add it to your portfolio for its growth and quality. This is one company that may see temporary ups and downs but it will continue to hold a dominant position in the market.
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.