Investing

20 Dividend Stocks for All Baby Boomers to Retire On

Risks/Concerns: 3M has fallen out of favor after a poor 2018 and 2019 for its stock has taken away more than one-third of its value from the peak. While the company has plenty of operations for earnings, it has run into environmental issues that are not the norm, and it has had a hard time getting any major earnings recovery going.

16. PepsiCo
> Dividend Yield: 2.8%

Strengths: PepsiCo Inc. (NASDAQ: PEP) was diversifying away from just sugar-water beverages long before soft drinks and so-called diet sodas were targeted as public health hazards. It has Frito-Lay and many snack foods that it sells, as well as many other beverage brands in water, tea, juice and the like that it can survive and thrive in almost any economic cycle. As of 2019, PepsiCo had raised its dividend for 47 consecutive years.

Risks/Concerns: PepsiCo has found it difficult to find new avenues of growth in recent years, and the beverage industry is cutthroat and competitive, even if this company is a leader. The company also comes with a substantial premium valuation of 25 times current year earnings.

17. Procter & Gamble
> Dividend Yield: 2.0%

Strengths: Procter & Gamble Co. (NYSE: PG) is the top maker of consumer products around. It is larger than its next five consumer products and personal care companies combined. It has a long 63-year consecutive year streak of hiking its dividends, and if one company can handle competition it is P&G. It has so many brands and units that it can add to or slice off as it sees fit, creating opportunity and adding potential value.

Risks/Concerns: The consumer products business is very competitive, and the company has been in the midst of right-sizing its portfolio. Its 30% share price gain in the first three-quarters of 2019 might also scare away some investors who feel the premium for buying into the defensive consumer products giant is now just too great.

18. Quest Diagnostics
> Dividend Yield: 2.1%

Strengths: Quest Diagnostics Inc. (NYSE: DGX) is an absolute leader in the field of medical testing. It has centers tied into every major metro area and then some, and it is tied in with all major insurers and health care providers for those tests. Even in a nationalized move in health, this likely remains outside of the scope for some time. Analysts also still see no serious end to its slow and steady earnings and revenue growth at this time.

Risks/Concerns: Having any toe in health care may make a company’s pricing come under focus one day. Medicare reimbursement risks are not exactly a new issue to worry about, and there is always the risk that one day a company with the same dream of Theranos might actually succeed or be able to disrupt the business model.

19. Simon Property
> Dividend Yield: 5.8%

Strengths: This is a tier-1 mall and mixed-use property owner and operator, with many top locations for shopping and entertainment. Simon Property Group Inc. (NYSE: SPG) is well run, and its malls can be diversified in a way that may help mitigate the retail apocalypse and online retail threat brought by Amazon and others. Its stock is also down enough from its highs that some investors will feel the risks in the years ahead can keep the company interesting.

Risks/Concerns: Because it is in the mall space, some investors feel the pressure from Amazon and other omnichannel operators will make it less desirable for tenants to be mall-based in the years ahead. Many retailers and store destinations are shutting down their weaker locations to stay lean, while many others have simply died off or are at risk of doing so. The next recession also likely will be brutal on its tenants, and replacing the lost revenue may be difficult.

20. Verizon
> Dividend Yield: 4.1%

Strengths: Verizon Communications Inc. (NYSE: VZ) has chosen to remain more of a pure-bred carrier rather than making massive diversification acquisitions other than its purchases of Yahoo and AOL. This keeps Verizon less leveraged with new debt and should allow it to more easily manage its 5G buildout expenses ahead.

Risks/Concerns: The climate is mixed for wireless operators, and the never-ending Sprint-T/Mobile merger remains an unknown issue ahead. Verizon will have to fund a 5G buildout for years to come, and it will cost billions of dollars each year.

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