Portfolio construction is not a uniform phenomenon, especially when looking for retirement stocks. However, a common denominator is that an individual’s career stage must be considered. Some people who are over 50 may be entering peak wealth accumulation while others are eyeing retirement. As such, it is not just a case of age but also the remaining horizon of your active income.
Despite the career differences among people over 50, I think we can all agree that nobody wants to lose their hard-earned money. Therefore, lets look at three retirement stocks that blend growth, value and income-based attributes.
UnitedHealth Group (UNH)
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Fundamentals suggest UnitedHealth’s (NYSE:UNH) prospects are bright. Firstly, the producer price index for health and medical insurance has increased by approximately 1.5% since the turn of the year amid a hard pricing environment. UnitedHealth owns about 12% of the U.S. health insurance market. That means that UNH is positioned to reap the full benefits of higher industry pricing.
Furthermore, UnitedHealth’s Optum platform is in scintillating form. The segment delivered $56.74 billion in revenue during Q3, amounting to year-over-year (YOY) growth of 21.8%. Optum’s latest results echo the potential embedded in the IT healthcare space, which is forecasted to grow at an annualized rate of 19.8% until 2030.
UnitedHealth’s Optum is balanced by its UnitedHealthcare unit. The latter phases out risks embedded in the IT arena by delivering sustainable revenue from traditional healthcare benefit schemes. The segment achieved $69 billion in revenue in Q3 boasting a YOY growth rate of 12.8%.
UnitedHealth’s business model provides a perfect blend of sustainability and growth. In fact, these features are reflected in UNH stock’s forward dividend yield of 1.39% and its forward EPS growth ratio of 13.81%.
Barrick Gold (GOLD)
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Like many mining stocks, Barrick Gold (NYSE:GOLD) is cyclical by nature. Therefore, the asset probably introduces more risk than most low-risk investors are willing to tolerate. However, GOLD stock has earned a spot on this list as its gold mining operations present diversification benefits. Investing in GOLD stock can lower an investor’s overall portfolio risk.
Barrick Gold’s Q3 results reminded everybody of its fundamental resilience. The firm published its quarterly results in early November, showcasing $2.86 billion in revenue and an EPS beat of four cents. Moreover, Barrick’s cash from operations settled at $1.127 billion, accumulating to a 48.7% YOY increase, concurrently adding to the firm’s liquidity needs.
Furthermore, Barick’s production is looking up after suffering from maintenance and restructuring delays in previous quarters. The firm’s gold production rose by approximately 5.16% YOY to reach 1039,000 ounces. And it could could increase further in the next few years as catalysts have emerged. More specifically, Barrick is about to restart production at its Porgera mine in Papua New Guinea after a three-year delay triggered by a governmental dispute. In addition, investors could soon price the Reko Diq mine’s prospects as its year-end completion target is nearing.
GOLD stock’s price-to-book ratio of 1.2x is in fairly value territory. However, I believe the ratio will improve as Barrick has the latitude to increase production.
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Coca-Cola (NYSE:KO) as KO stock’s low beta coefficient and phenomenal dividend track record make it an automatic addition to any list of retirement stocks. Additionally, Coca-Cola is a noncyclical company with a dazzling business model that holds down a significant market share.
Coca-Cola’s recent operating performance is nothing shy of what we have all become accustomed to. The firm delivered scintillating Q3 results, achieving 11% in organic YOY growth to reach $11.91 billion in revenue and an operating margin of 29.7%.
Developed regions such as North America remain Coca-Cola’s salient markets. However, the company’s expansion into emerging markets suggests that reinvigorated growth rates are on the horizon. Let’s use Latin America as an example. Coca-Cola’s successful expansion into Latin America was again illustrated by 24% YOY regional revenue growth, amounting to 4x the company’s North American growth rate.
Another factor to consider is that Coca-Cola is on a growth-by-acquisition spree. The company recognizes that it cannot rely on its in-house drinks for perpetual growth. As such, it has diversified into differentiated products by acquiring brands like MOJO Beverages, Fairlife and Organic & Raw Trading. In my view, revenue diversification lowers KO’s risk profile and adds valuable synergies to its business model. Actually, I think its external growth portfolio is somewhat of a hidden asset.
On the date of publication, Steve Booyens 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.
Steve Booyens co-founded Pearl Gray Equity and Research in 2020 and has been responsible for institutional equity research and PR ever since. Before founding the firm, Steve spent time working in various finance roles in London and South Africa. He holds an MSc in Investment Banking from Queen Mary – University of London. Furthermore, Steve has passed CFA Levels 1 & 2 and is working toward his Ph.D. in Finance. His articles are published on various reputable web pages such as Seeking Alpha, TipRanks, Yahoo Finance, and Benzinga. Steve’s articles on InvestorPlace form an interesting juxtaposition between mainstream opinion and objective theory. Readers can expect coverage on frequently traded stocks, REITs, fixed-income funds, CEFs, and ETFs.