It’s easy to get caught up in the trading frenzy that started in earnest during the pandemic. Meme stocks, special purpose acquisition companies – whatever you call it, chances are individual investors got very excited. And the FOMO movement eventually reached significant social distancing heights. This caused many to overlook solid retirement stocks in 2020.
But now we are back in a more “normal” market as the pandemic loosens its grip. And it’s time to refocus on long-term goals, like retirement. The fun stocks that have dominated the financial news aren’t the only stocks showing solid performance.
There are some quality companies that are delivering solid growth and decent dividends. That means your returns increase over time. And that’s exactly what you want for your retirement investments: solid, steady, undramatic growth.
The retirement stocks I’m covering here are quality companies with the kind of companies that may not make headlines, but certainly build comfortable nest eggs.
US financial group (NYSE:AFG)
Ally Financial (NYSE:ALLY)
Dick’s sporting goods (NYSE:DKS)
Huntington Bancshares (NASDAQ:HBANK)
Jefferies Financial Group (NYSE:JEF)
Retirement Shares to Buy: American Financial Group (AFG)
Property & Casualty (P&C) insurance companies are mandated to have significant amounts of cash or cash investments on hand if needed to settle claims. It is similar to a bank that needs reserves for withdrawals.
Most of these cash investments are US government bonds, as they support the value of the US dollar. That means when government bond yields rise, insurance companies are major beneficiaries.
AFG is a non-life insurer that focuses on the commercial side of the market. It also sells annuities to individuals, which are retirement-oriented mutual funds. It has been in this business since 1959, so it has managed to grow in good times and bad. AFG only has a market cap of $10 billion, meaning it’s more interested in running a solid business than trying to grow it aggressively. That’s a good thing and why we like it as a retirement share.
In addition, it is trading at a current P/E ratio of just 7x after a 47% run so far. It also has a respectable 1.6% dividend that can be reinvested or rescheduled. It has a Portfolio Reviewer ‘A review.
Ally Financial (ALLY)
In 2010, General Motors Acceptance Corporation, the financing arm of General Motors, became ALLY. The spin-off enabled ALLY to fund outside of the companies’ brands and expand into the broader auto finance market.
Today, it is one of the largest auto finance companies in the US, but it is also a leading bank with digital banking and financial services such as mortgages and insurance.
With a market cap of nearly $20 billion, it has also attracted new interest from investors in its efforts to become a leading digital bank. The financial technology (fintech) sector is currently one of the most dynamic sectors on the market. And ALLY has found itself as a key strategic player.
In early June, it announced it would be dropping overdrafts on its checking accounts. That’s a wake-up call for legacy banks, and it’s an example of why ALLY’s great future makes it an attractive retirement stock.
With a P/E ratio of 9x after a 44% run so far, it has a dividend of almost 2%.
Retirement Shares to Buy: Dick’s Sporting Goods (DKS)
Source: Jonathan Weiss / Shutterstock.com
Many sporting goods companies have survived the pandemic by leaning on their e-commerce arm. People could still go out and walk, drive, fish and other things, but they couldn’t shop in physical locations.
Now that’s over and team sports are back, as are group activities, including beach vacations, etc. The heat waves in the US can certainly slow down outdoor activities – unless you go to the beach or lakes – but demand is sure to grow.
DKS has been around since 1948, so it has seen many tough markets. But it remains the top sporting goods company in the US with more than 750 stores in the US. It is a solid company that is a worthy addition to your retirement shares.
DKS has a current P/E of 9x after registering a return of 76% so far, with a 1.5% dividend. It has a Portfolio Reviewer ‘A review.
Huntington Bank Shares (HBAN)
If you don’t live in the Midwest, you’ve probably never heard of HBAN. It is one of the 25 largest banks in the country by assets ($175 billion in June 2021). It operates in Ohio, Illinois, Michigan, Pennsylvania, West Virginia, Kentucky, and Indiana.
HBAN is also 155 years old. This testifies not only to its durability, but also to its ability to find opportunities in difficult times. Regional banks are currently in a good position because they have the size and branding to fight large national banks that crowd their territory. They also have the IT teams to build out digital banking platforms.
Such regional banks are solid retirement stocks because they know their market and their customers well. HBAN has a market cap of $21 billion and a generous dividend of 4.2%. The stock is up 13% so far and has a current P/E of 12x. It has a Portfolio Reviewer ‘A review.
Retirement Shares to Buy: Jefferies Financial Group (JEF)
There are several dozen financial services companies that have been around Wall Street for decades. They usually have niche markets and long-term customers who have personal relationships with the customers they serve. JEF is one of them.
With a market cap of $8 billion, it is not a small player, so it has divisions for investment banking, wealth management and investment banking. And it also has a number of joint ventures in the commercial and residential real estate sectors with some major players. The diversification makes it an attractive retirement share.
The markets will continue to keep companies engaged in trading, and low interest rates will keep financing and real estate transactions going. That’s why JEF is up 37% so far, but it’s only trading at a current P/E of 6x. It also has a dividend of nearly 3%. It has a Portfolio Reviewer ‘A review.
Source: Robert Gregory Griffeth / Shutterstock.com
Not only is this mega-retailer the most recognized retirement stock on this list, but it’s also the largest by an order of magnitude.
Five years ago, there were some perilous times when it made a massive shift to e-commerce. But it is now a powerhouse in the retail market with its brick and mortar stores and its e-commerce business. In addition, the physical stores allow for a hybrid approach. You can order online and pick up the same day. This is especially important now that consumers are on the road again.
And now that TGT has survived the transition to the computer age, this nearly 120-year-old chain is well positioned for the next century. The stock is up 42% so far with a reliable 1.4% dividend. It has a current P/E of 20x, which is pretty good considering its stability and durability. It has a Portfolio Reviewer ‘A review.
Retirement Shares to Buy: Williams-Sonoma (WSM)
Source: Designs by Jack / Shutterstock.com
From a hardware store to one of the best kitchen stores in the US, WSM has come a long way. Chuck Williams opened a hardware store in 1948, but a trip to Europe opened his eyes to the opportunity to sell high-quality kitchenware. And in 1956 he launched his first store.
Today, the company has a market cap of $12 billion and also owns high-powered, luxury American homewares, Pottery Barn and West Elm, as well as international franchises Rejuvenation and Mark and Graham.
With lockdowns, household goods and kitchenware have been very popular sectors, and spending is likely to continue as the economy returns to normal. WSM doesn’t make many retirement stock lists, but it certainly should.
WSM is up 53% so far, has a 1.5% dividend and is trading at a bargain P/E of 14x. It has a Portfolio Reviewer ‘A review.
At the date of publication, Louis Navellier holds positions in ALLY, DKS, TGT and WSM. Louis Navellier had (directly or indirectly) other positions in the securities mentioned in this article. The InvestorPlace Research staffer primarily responsible for this article had no (direct or indirect) positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publication Guidelines.
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