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7 Retirement Stocks to Buy for a Bear Market

·8 min read

Retirement stocks should have reliable cash flows, higher dividend yields and represent a relatively low-risk business.

Given the backdrop of high inflation and geopolitical turmoil, investors are increasingly focused on searching for high-quality retirement stocks to buy. In today’s uncertain stock market, long-term portfolios should consist of businesses insulated from inflation and market downturns.

Americans have a longer life expectancy than before and concurrently face the highest inflation rate in four decades. According to IRS data, someone retiring at age 65 can expect to live an additional 22.9 more years on average. Therefore, financial planning for those golden years is crucial.

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Many companies on our list of retirement stocks offer above-average dividend yields, as well as significant long-term upside potential. Against this backdrop, investors may consider these seven retirement stocks to buy for a bear market.

AMD

Advanced Micro Devices

$89.30

DLR

Digital Realty Trust

$128.93

EPD

Enterprise Product Partners

$25.46

MRK

Merck

$84.63

SO

Southern 

$66.57

TROW

T Rowe Price

$110.07

WPC

W.P. Carey

$82.55

Advanced Micro Devices (AMD)

Image of the Advanced Micro Devices (AMD) logo outside of a corporate building
Image of the Advanced Micro Devices (AMD) logo outside of a corporate building

Source: Sundry Photography / Shutterstock.com

52 week range: $78.96 – $164.46

Chip heavyweight Advanced Micro Devices (NASDAQ:AMD) develops a wide range of processors for the consumer and enterprise markets. Its Radeon graphics cards and Ryzen PC processors contribute to the bottom line. It also continues to gain market share in the CPU and GPU segments.

Advanced Micro Devices released Q1 results on May 3. Revenue increased 71% year over year to 5.89 billion. Adjusted earnings came in at $1.13 per diluted share, up 117% year over year from 52 cents. Cash and equivalents ended the period at $6.5 billion.

AMD’s recent acquisitions of Xilinx and Pensando will bring increased momentum to its data center business. Management will add artificial intelligence (AI) capabilities to its offerings. Meanwhile, the chip darling raised its 2022 guidance, anticipating revenue to increase roughly 60% year over year to $26.3 billion.

Because AMD stock has lost more than 40% year-to-date, it is one of those retirement stocks that will pay off nicely. Shares are trading at 23.4 times forward earnings and 6.5 times sales. Wall Street’s 12-month median price forecast for AMD stock stands at $140.

Digital Realty Trust (DLR)

Real estate investment trust REIT on an office desk.
Real estate investment trust REIT on an office desk.

Source: Vitalii Vodolazskyi / Shutterstock

52-week range: $124.35 – $178.22

Real estate investment trust (REIT) Digital Realty Trust (NYSE:DLR) invests in data centers and provides colocation and interconnection services. The REIT has developed more than 300 data centers worldwide. 

Management issued Q1 metrics on April 28. Revenue came in at $1.1 billion, up 3% year over year. It reported core funds from operations (FFO) per share of $1.67.

Digital Realty delivered record bookings in the first quarter, driven by solid demand for data center solutions. The global data center industry is forecast to grow at 5% every year, from $215.8 billion in 2021 to $288.3 billion by 2027.

DLR stock has declined 26% in 2022, putting it among retirement stocks likely to make a big comeback. Shares currently generate a 3.6% dividend yield.  Meanwhile, the 12-month median price forecast for DLR stock is at $162.

Enterprise Product Partners (EPD)

A magnifying glass zooms in on the website of Enterprise Product Partners (EPD)
A magnifying glass zooms in on the website of Enterprise Product Partners (EPD)

Source: Casimiro PT / Shutterstock.com

52-week range: $20.42 – $28.49

Enterprise Product Partners (NYSE:EPD) is one of the largest midstream services providers stateside. It moves oil and natural gas from production to the refineries. It also stores crude oil, natural gas liquids, and petrochemicals.

The midstream group released Q1 results on May 2. Revenue increased 42% year over year to $13 billion. Fully diluted earnings came in at 59 cents per share, down from 61 cents in the prior-year period.

Acting as the middlemen in the energy chain enables Enterprise Product Partners to generate predictable fees that account for 82% of its gross operating margin. As a result, it is in part protected from choppiness in oil and natural gas prices.

So far in 2022, EPD stock has returned 12% on the year, but the stock is essentially flat over the last 12 months. In addition, the company has increased its annual dividend payout for the past 23 years, generating a generous 6.5% yield, making it among the most reliable retirement stocks to buy.

Shares are trading at 11.25 times forward earnings and 1.3 times trailing sales. Analysts’ 12-month median price forecast for EPD stock stands at $31.

Merck (MRK)

Merck (MRK) logo outside of corporate building
Merck (MRK) logo outside of corporate building

Source: Atmosphere1 / Shutterstock.com

52-week range: $70.89 – $94.92

Merck (NYSE:MRK) is among the top ten global pharma giants and an always reliable choice among retirement stocks.

Its health care solutions are well-diversified across treatment segments such as cardiovascular, endocrinology, oncology, as well as vaccines.

Merck announced Q1 financials on Apr. 28. Revenue increased 50% year over year to $15.9 billion. Adjusted earnings came in at $2.14 per share, up from $1.16 per share a year ago.

Keytruda, the top-selling cancer drug worldwide, generated net sales of $4.8 billion, up 23.3% year over year. Additionally, its antiviral Covid-19 drug, Lagevrio, contributed $3.2 billion in sales. The pharma giant also boasts a robust product development pipeline, with close to 100 phase-two phase-three programs.

MRK stock has appreciated 13% year to date, and generates a 3.1% dividend yield. Shares are changing hands at 12.6 times forward earnings and 4.3 times sales. Wall Street’s 12-month median price forecast for Merck is at $97.

Southern (SO)

the southern company logo displayed several times on a screen
the southern company logo displayed several times on a screen

Source: 360b / Shutterstock.com

52-week range: $60.12 – $77.23

Southern (NYSE:SO) is one of the largest U.S. utilities. It provides electricity and natural gas to roughly 9 million people across the southeast, The company has a significant presence in Georgia and Alabama.

The utility group put out Q1 metrics on April 28. Revenue increased 12.5% year over year to $6.6 billion due to higher energy costs. Adjusted earnings came in at 97 cents per diluted share, down from $1.07 a year ago. Cash and equivalents ended the period at $1.67 billion.

Southern is building two nuclear power plants that will provide carbon-free energy. They are expected to become operational in late 2023 and will be the first new nuclear plant built in the U.S. in more than three decades.

Management is projecting 5% to 7% adjusted EPS growth in 2022. Additionally, the utility boasts a 21-year dividend payout growth streak.

After a mediocre May, SO stock is flat year to date but currently generates a 3.65% dividend yield. Shares are trading at 20.6 times forward earnings and 3.3 times sales. Meanwhile, the 12-month median price forecast for SO stock stands at $75.50.

T Rowe Price Group (TROW)

Source: Shutterstock

52-week range: $112.65 – $224.56

T Rowe Price (NASDAQ:TROW) is one of the largest global asset managers, with over $1.5 trillion in assets under management (AUM). It offers retirement-focused mutual funds, managed accounts, and advisory services both for individual and institutional investors.

The financial heavyweight released Q1 numbers on April 28. Revenue increased 2% year over year to $1.86 billion. However, adjusted earnings declined 13% YOY to $2.62 per diluted share, down from $3.01 a year ago. Cash and equivalents ended the period at $2 billion.

Money management and advisory services can be regarded as a cyclical business affected by the macroeconomic climate. During Q1, T Rowe Price saw a fall in its AUM by $136 billion to $1.55 trillion. Net client outflows stood at $5.3 billion.

So far in 2022, TROW stock has tumbled 43%, making it among the retirement stocks due for a comeback. Shares are trading at a cheap 11 times forward earnings and 3.6 times sales.

Moreover, the Dividend Aristocrat has raised its dividend for 35 straight years, supporting a lucrative 3.9% yield. The 12-month median price forecast for TROW stock stands at $132.

W.P. Carey (WPC)

tiny house figures atop letter blocks spelling out REIT, representing reits to buy. stock predictions
tiny house figures atop letter blocks spelling out REIT, representing reits to buy. stock predictions

Source: Shutterstock

52-week range: $73.02 – $86.48

Our final retirement stock W.P. Carey (NYSE:WPC) is another REIT. It purchases commercial real estate properties from tenants and releases them back to the same tenants on triple net lease contracts.

Industrial and retail properties, as well as warehouses and offices, are in its diversified portfolio of over 1,300 properties in the U.S. and Europe.

W.P. Carey released Q1 results on Apr. 29. Revenue increased 12% year over year to $348.4 million. Adjusted FFO came in at $1.35 per diluted share, up 10.7% year over year from $1.22.

In addition to a 98.5% occupancy rate, W.P. Carey benefits from a weighted average lease term of 10.8 years for the capital it provides to its tenants. Roughly 95% of these leases are tied to the inflation rate or come with fixed yearly lease escalators.

The REIT is becoming a Dividend Aristocrat next year. WPC currently generates an impressive 5.1% dividend yield.

WPC stock is trading flat so far in 2022. Finally, the 12-month median price forecast for WPC stock is at $88.

On the date of publication, Tezcan Gecgil did not have (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.

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