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3 of the Safest Dividend Stocks Retirees Can Buy Right Now

3 of the Safest Dividend Stocks Retirees Can Buy Right Now
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You probably don’t need a reminder, but it’s been a testing year for Wall Street and investors. As each of the three major U.S. stock indexes hit all-time highs between mid-November 2021 and the first week of January 2022, they fell between 22% and 34% from their respective peaks. In other words, they are all officially a bear market.

The unpredictability and speed of negative moves that accompany bear markets can often leave investors questioning whether they want to stay there. This can be especially difficult for retirees, who have less tolerance for risking their principal investments.

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But There is good news for senior investors: Every bear market throughout history has proven to be a buying opportunity.

It’s also a great time to put your money to work dividend stocks. Since most income stocks are profitable and time-tested, there is minimal concern about their survival in relatively short-term bear markets. And of course, it doesn’t hurt that dividend stocks have a long history of easily outperforming peers that don’t offer payouts.

Below are three of the safest dividend stocks that retirees can buy right now to continue growing their wealth.

Johnson & Johnson: 2.8% yield

A healthcare giant where retirees can confidently buy their first ultra-safe income fund amid bear market volatility Johnson & Johnson (JNJ -0.31%). In April, J&J, better known as Johnson & Johnson, increased its payout for the 60th consecutive year. Only a handful of publicly traded companies offer a longer streak of consecutive base annual payout increases.

Great thing about it healthcare resources they have a defensive nature. No matter how poorly the stock market or the US economy performs, there will always be demand for prescription drugs, medical devices and healthcare services. This provides stable and predictable cash flow for a healthcare behemoth like J&J.

On a more company-specific basis, Johnson & Johnson benefits from its operating segments they complement each other perfectly. For example, J&J has derived more and more of its revenue from pharmaceuticals over the years.

Branded drugs can generate juicy margins but have finite sales cycles. To counter these recent patent losses, J&J can rely on its leading medical device segment, which is perfectly positioned to take advantage of an aging global population and access to preventive care.

If you need one more reason to trust J&J, consider this: This It is one of only two publicly traded stocks It is listed on a major US stock exchange to have an AAA credit rating by Standard & Poor’s (S&P). S&P Global. This is one grade higher than the US government’s AA rating. In short, S&P has more confidence that Johnson & Johnson will pay its debts than the US government.

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Image source: Getty Images.

York Water: 2% yield

Little is known about another safe dividend that retired shareholders can add to their portfolios water service York water (YORW -3.67%). When I say little known, I mean it. York serves a total of 51 municipalities in three counties in South-Central Pennsylvania.

If you think healthcare stocks are defensive, take it up a notch when you’re talking about utility providers. If you own or rent a home, your need for water and sewer services is really high. In addition, most utilities have monopolies or duopolies in the areas they serve, leading to highly predictable cash flows because residents have little or no choice about which company provides service.

The best thing about York Water’s operating model is that this is a custom utility, which means it needs permission from the Pennsylvania Public Utilities Commission to raise rates for its customers. While this may seem like a hassle, it’s actually great news because it ensures York avoids any uncertainty about price volatility. This predictability of cash flow allows the company to make acquisitions and allocate capital for infrastructure improvements without negatively impacting profits or dividends.

Speaking of dividends, you might think of York’s 2% yield and wonder why it’s on this list. The answer is simple: there were no public companies paying consistent dividends over a longer period of time. According to the company, it has made consistent dividend payments to its shareholders since James Madison became president in 1816. No one has a more solid repayment history than York Water.

Walgreens Boots Alliance: 5.9% yield

Pharmacy chain Walgreens Boots Alliance (WBA -0.69%) A third type of income that retirees can now comfortably buy is stocks. Walgreens has increased its principal annual payout in each of the past 47 years and has been on track for 89 consecutive years of dividend payments. Its profitability is 5.9% high watermark on this list.

Although healthcare stocks there is Walgreens, which defends it, found a bit of a loophole in that thesis during the COVID-19 pandemic. Because his stores depend on foot traffic, early lockdowns hurt his business. But that’s now in the rearview mirror. Walgreens makes for a genius buy at depressed levels, moving forward with a decidedly profitable and multi-point turnaround plan.

While cost-cutting is part of the plan — Walgreens is a year ahead of schedule in cutting more than $2 billion in annual costs — what’s more interesting is where Walgreens is does to spend the money. For example, there is a company paid special attention to increasing its online sales. While brick-and-mortar stores will remain its main source of sales, the convenience of online sales and drive-thru pickup should boost its organic growth rate.

In addition, Walgreens and VillageMD are working together to open up to 1,000 co-located, full-service health clinics in Walgreens stores by the end of 2027. The presence of doctors sets these clinics apart from the competition. Most importantly, he provides a catalyst to drive repeat visits and create loyal customers.

With a forward annualized price-to-earnings ratio of less than 7, shares of Walgreens Boots Alliance appear to be in incredibly safe territory, along with a solid payout.

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