3 Dividend Stocks to Buy for a Relaxing Retirement

When it comes to investing for retirement, it’s hard to argue against targeting conservative equities that pay dividends. That way, investors can build a strong portfolio of companies that take some of the stress out of being exposed to swings in the market. The last thing you want is to watch your hard-earned savings dwindle as you enter your golden years, which is why it really pays off to gain an understanding of the best types of stocks for retirees to consider.

The bottom line is that focusing on income-generating stocks and avoiding risky equities can go a long way towards setting up a relaxing retirement. That's why we’ve put together a brief overview of 3 stocks to consider adding for those qualities. These are all companies with strong business models, a history of dividend increases, and financial stability, making them ideal for investors who are thinking about retirement. Let’s take a deeper look at these intriguing stocks below.

Public Storage (NYSE: PSA)

If you are trying to determine which companies are the best choices for a retirement portfolio, it helps to consider businesses that offer products and services that should see strong demand for many years to come. Public Storage definitely fits the bill, as it’s a real estate investment trust that is the largest owner of self-service storage facilities in the United States. People will always need a place to store their belongings, and Public Storage is the most trusted name in the industry. The company’s business model is attractive given that it has a dominant market position in areas of the country like California, which has zoning and property laws that make it difficult for competitors to move in.

It’s also worth considering the fact that many self-storage tenants find it a pain to move once they sign a lease, which helps Public Storage benefit from consistent revenue and the ability to increase its prices over time. Finally, the fact that this REIT has paid out dividends each year since 1981 means it offers the type of consistency that retirees can bank on. With a 2.56% dividend yield, 0.14 beta value, and a strong balance sheet, it’s evident that Public Storage is a great candidate for stocks to include in a retirement portfolio.

American Water Works (NYSE: AWK)

Another reason why you should focus on adding financially stable companies with established businesses for retirement is that they are able to support their dividend payments for the foreseeable future. American Water Works is a strong option to consider, as it’s the largest publicly traded U.S. water and wastewater utility company. As a company that serves approximately 3.5 million customers in 16 different states, this is one of the biggest utility companies in the country and a business that provides a truly priceless service.

American Water Works has historically been a great dividend growth stock for investors, as the company has averaged dividend increases of 10% over the last eight years. The company’s size is also a big advantage, as it enables American Water Works to make acquisitions of smaller utility companies that strengthen its market position. Finally, the fact that there is roughly $48 billion in funding for water infrastructure in the recently passed bipartisan infrastructure package could mean big things for this company going forward. This is a great option for investors looking to add shares of low-volatility stocks with earnings upside.

Apple (NASDAQ: AAPL)

While this is a technology growth stock that can be a bit more volatile than the other names on this list, it’s still an ideal option for a retirement portfolio for several reasons. First, Apple has a long history of innovation and continues to grow at a rapid pace, which is something that investors should expect to continue for years to come. Products like the iPhone have lots of upside in emerging markets and the rollout of 5G networks across the world also should lead to earnings growth. In Q3, Apple reported a new June quarter record revenue figure of $81.4 billion, up 36% year-over-year, which is impressive given the company’s long history of massive earnings beats.

Next, Apple’s cash position is simply massive, as the company had over $72 billion in net cash after Q3. Since Apple clearly has plenty of cash on hand, it can consistently reward shareholders via dividends and a share buyback program, which makes it a fantastic option to consider for a retirement portfolio. Finally, the fact that the stock has pulled back sharply over the last few weeks means that investors can take advantage of lower prices at this time.