Low-Risk Retirement Portfolio: Top 10 Stocks

In this article, we discuss 10 low-risk stocks for retirement. If you want to see more retirement stocks, go directly to read Low-Risk Retirement Portfolio: Top 5 Stocks

Average American households are behindhand when it comes to retirement planning. According to a survey conducted by McKinsey & Company in April, more than 80% of the baby boomers are unprepared for retirement and do not have access to any retirement plan. The survey further highlighted that nearly 47% of the households have not achieved financial freedom, 20% of them rely on Social Security, and 27% are financially at risk and do not have any stable financial means to sustain their spending pattern.

After the pandemic of 2020, recent economic worries have altered consumer sentiment who don’t find themselves in a retirement zone. About 59% of the respondents of a survey by Edward Jones said that they would delay their plans for retirement and would work either full-time or part-time. This was also supported by an analysis of the US Labor Department, which shows that over 1.5 million retirees have joined the US labor market over the past year due to rising cost concerns.

Considering the situation, analysts believe that people nearing the retirement age should take some strategic and deliberate steps to come up with a solid plan. One such way is to invest in stocks that offer long-term growth despite periods of market uncertainty. As major stocks and bonds have faltered this year, investors are turning their attention to stocks that generate passive income. These investments can provide a comfortable retirement when coupled with pension and Social Security payments. Some of those names include The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and Johnson & Johnson (NYSE:JNJ) among others that are discussed below.

Low-Risk Retirement Portfolio: Top 10 Stocks

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Our Methodology: 

The stocks mentioned below have strong financial fundamentals and have endured fluctuating market conditions better than their peers. In addition to this, these stocks also hold solid dividend histories. We also used Insider Monkey’s database of 912 hedge funds while choosing these stocks. The stocks in this article are popular among these funds as of the end of the first quarter of 2022.

Low-Risk Retirement Portfolio: Top 10 Stocks

10. Washington Trust Bancorp, Inc. (NASDAQ:WASH)

Number of Hedge Fund Holders: 6

Washington Trust Bancorp, Inc. (NASDAQ:WASH) is an American bank holding company that provides services in personal banking, commercial banking, and wealth management.

In Q2 2022, Washington Trust Bancorp, Inc. (NASDAQ:WASH) reported an operating cash flow of over $13 million and generated nearly $11.4 million in free cash flow. The company paid $9.4 million in dividends during the quarter, confirming its stable cash flow. Its net interest income also jumped by 7% to $37.5 million from the preceding quarter.

On June 16, Washington Trust Bancorp, Inc. (NASDAQ:WASH) declared a quarterly dividend of $0.54 per share, consistent with its previous dividend. The company has been raising its dividend consistently for the past 11 years. As of August 9, the stock’s dividend yield came in at 4.04%.

At the end of Q1 2022, 6 hedge funds in Insider Monkey’s database owned stakes in Washington Trust Bancorp, Inc. (NASDAQ:WASH), up from 4 a quarter earlier. The collective value of stakes owned by these hedge funds stood at over $18 million. Among these hedge funds, Third Avenue Management owned the largest stake in the company in Q1.

In addition to famous dividend stocks like The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and Johnson & Johnson (NYSE:JNJ), Washington Trust Bancorp, Inc. (NASDAQ:WASH) is also one of the most prominent dividend stocks to consider for a retirement portfolio.

9. Atmos Energy Corporation (NYSE:ATO)

Number of Hedge Fund Holders: 16

Atmos Energy Corporation (NYSE:ATO) is a Texas-based natural gas distribution company that serves over three million customers in the state.

In fiscal Q3 2022, Atmos Energy Corporation (NYSE:ATO) posted a GAAP EPS of $0.92, which beat analysts’ estimates by $0.07. The company’s revenue for the quarter also surpassed consensus by $128.6 million at $816.4 million, which also showed a 34.8% year-over-year growth. Over the last year, the company has beaten EPS estimates 100% of the time.

Atmos Energy Corporation (NYSE:ATO) has been making dividend payments consistently for 155 quarters and raised its payouts for 38 years in a row. It currently pays a quarterly dividend of $0.68 per share, with a dividend yield of 2.36%, as of the close of August 9.

Appreciating the company’s solid earnings growth, Wells Fargo lifted its price target on Atmos Energy Corporation (NYSE:ATO) in June to $130 with an Overweight rating on the shares.

At the end of Q1 2022, 16 hedge funds in Insider Monkey’s database owned stakes in Atmos Energy Corporation (NYSE:ATO), down from 20 in the previous quarter. These stakes are collectively valued at over $636 million, compared with $557.4 million worth of stakes owned by hedge funds in the preceding quarter.

Aristotle Capital Management mentioned Atmos Energy Corporation (NYSE:ATO) in its Q1 2022 investor letter. Here is what the firm has to say:

“Headquartered in Dallas, Atmos Energy is the largest fully regulated natural gas-only utility in the U.S. It serves over three million distribution customers across eight states, primarily in the South. Approximately 70% of its revenue comes from Texas, where it owns one of the largest natural gas pipeline systems in the state. (Click here to view the full text)

8. Pinnacle West Capital Corporation (NYSE:PNW)

Number of Hedge Fund Holders: 19

Pinnacle West Capital Corporation (NYSE:PNW) is an investor-owned electric utility company that provides innovative energy solutions to its customers.

In Q2 2022, Pinnacle West Capital Corporation (NYSE:PNW) reported an operating cash flow of $247.6 million, up from $110.3 million during the same period last year. The company’s revenue for the quarter stood at over $6 billion, showing a 6% year-over-year growth. In FY22, the company expects retail customer growth to fall between 1.5% to 2.5%.

Pinnacle West Capital Corporation (NYSE:PNW) pays a quarterly dividend of $0.85 per share and has a yield of 4.46% recorded on August 9. The company has raised its dividends consistently for the past 9 years with a 5-year dividend CAGR of 5.3%.

Following the company’s Q2 2022 results, Mizuho lifted its price target on Pinnacle West Capital Corporation (NYSE:PNW) to $77 in August and maintained a Neutral rating on the shares.

AQR Capital Management owned a $28.6 million worth of stake in Pinnacle West Capital Corporation (NYSE:PNW), becoming the company’s largest stakeholder in Q1 2022. Overall, 19 hedge funds tracked by Insider Monkey were bullish on the company in Q1, up from 18 in the previous quarter. These stakes are collectively valued at nearly $140 million.

7. Flowers Foods, Inc. (NYSE:FLO)

Number of Hedge Fund Holders: 25

Flowers Foods, Inc. (NYSE:FLO) is a Georgia-based bakery company that produces and markets packed bakery foods. In the past year, the stock gained 21.14% while its 5-year return came in at 56.9%, as of the market close of August 9.

Flowers Foods, Inc. (NYSE:FLO) ended Q1 2022 with $205.1 million available in cash and cash equivalents, up from $185.8 million in the previous quarter. The company’s operating cash flow came in at $124 million and its free cash flow stood at $73.6 million. Its dividend payments for the quarter amounted to $46.7 million, representing strong free cash flow generation.

On May 26, Flowers Foods, Inc. (NYSE:FLO) declared a quarterly dividend of $0.22 per share, up 4.8% from its previous dividend. This was the company’s 20th consecutive year of dividend raises as it has paid uninterrupted dividends for 79 quarters. As of August 9, the stock’s dividend yield stood at 3.18%.

The number of hedge funds tracked by Insider Monkey owning stakes in Flowers Foods, Inc. (NYSE:FLO) stood at 25 in Q1 2022, growing from 20 in the previous quarter. The collective value of these stakes is roughly $318 million, up from $277 million worth of stakes owned by hedge funds in the preceding quarter.

6. Old Republic International Corporation (NYSE:ORI)

Number of Hedge Fund Holders: 28

Old Republic International Corporation (NYSE:ORI) specializes in the business of insurance underwriting and also provides insurance-related services to consumers. The company pays a quarterly dividend of $0.23 per share, with a dividend yield of 4.08%, as of the close of August 9. It has been paying consistent dividends to shareholders for the past 81 years while maintaining a 41-year track record of consistent dividend growth.

In its recently published Q2 2022 results, Old Republic International Corporation (NYSE:ORI) posted an EPS of $0.69 per share, beating analysts’ consensus by $0.09. The company’s revenue of $2.13 billion also exceeded estimates by $120 million. It generated over $278 million in free cash flow during the quarter, up from $219 million during the same period last year.

As per Insider Monkey’s Q1 2022 database, 28 hedge funds owned stakes in Old Republic International Corporation (NYSE:ORI), valued at over $314.6 million. In the previous quarter, 27 hedge funds owned investments in the company, holding a total value of $397.4 million. Jim Simons’ Renaissance Technologies was one of the company’s most prominent shareholders in Q1.

Old Republic International Corporation (NYSE:ORI) is also favored by investors due to its strong dividend growth history which is at par with famous dividend stocks like The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NASDAQ:PEP), and Johnson & Johnson (NYSE:JNJ).

Click to continue reading and see Low-Risk Retirement Portfolio: Top 5 Stocks. 

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Disclosure. None. Low-Risk Retirement Portfolio: Top 10 Stocks is originally published on Insider Monkey.

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