7 of the Best Retirement Stocks with Outsized Return Potential

The best retirement stocks for investors over 50 have reliability in common.

Retirement stocks come in a few flavors, but the best retirement stocks for investors over 50 provide a mix of growth, stability and income. First, you want growth because you’ve probably got more than 30 more years of life expectancy, and you can’t just rest on your portfolio’s laurels. You need to still see some growth.

Second, you need stability because you can’t afford a horrendous mistake causing you to lose a lot of your portfolio on a flighty pick.

And finally, the best retirement stocks for investors over 50 provide some income, usually in the form of dividend payments.

Dividend stocks are great because you get a monthly or quarterly reward for holding a stock. You can dump those profits back into your portfolio for quicker growth, or you can use them for income after you hit retirement age.

My Portfolio Grader is a great tool to help you pick best retirement stocks for investors over 50. Each of these names get a top rating in the Portfolio Grader, and are good names for any portfolio after you hit 50.

Eli Lilly (LLY)
Eli Lilly (NYSE:LLY) is already flying high, up 35% for the year as the calendar rolls over to 2023. But Wall Street is showing some caution as of late because the pharmaceutical company issued 2023 guidance that raised some red flags.

While analysts expected adjusted earnings per share of $9.16 (according to consensus estimates), LLY posted guidance in a range from $8.10 and $8.30.

I think Eli Lilly will have a strong 2023. It has a solid pipeline of drugs that should continue to boost profits, including diabetes drug Mounjaro. If Eli Lilly succeeds in getting federal approval for Mounjaro to be used as an anti-obesity drug, the company could see annual drug sales of $25 billion just from that medication. That makes LLY one of the best retirement stocks for investors over 50.

LLY stock shows a dividend yield of 1.2% and has an A rating in the Portfolio Grader.

Occidental Petroleum (OXY)
Eli Lilly had a great 2022, but that’s nothing compared to Occidental Petroleum (NYSE:OXY), which saw its stock jump 130% in 2022. But even if oil prices continue to fall, OXY is one of the best retirement stocks for investors over 50.

That’s because Occidental is investing billions of dollars into projects such as biofuels and carbon capture. For example, Oxy has plans to remove as much as 1 million metric tons of carbon dioxide from the atmosphere a year, which could be a huge money-maker as the globe finally catches on to the idea that global warming is a reality.

The only thing not to like about OXY stock is the meager dividend yield of less than 1%. The next dividend, of 13 cents per share, will be paid out on Jan. 17.

OXY stock gets an A rating in the Portfolio Grader.

Sociedad Quimica y Minera de Chile (SQM)
Materials stocks are always an attractive choice for retirement investors because even when the economy falters, you know that manufacturers will need to have raw materials whenever their factories get back up and running.

Sociedad Quimica y Minera de Chile (NYSE:SQM) is involved in making plant nutrients, iodine and industrial chemicals. But its best known – and has the best chance of making big profits – from lithium.

Lithium used to power electric vehicles, mobile phones, laptops and digital cameras. The demand for lithium is expected to triple from 2021 to 2025 to 1.5 million metric tons. Then it’s expected to double from that, to 3 million metric tons, by 2030.

Sociedad Quimica y Minera de Chile is in the enviable position of being the largest producer of lithium in the world. And while SQM stock is up 56% in 2022, the stock remains largely undervalued, trading for just 4.4 times estimated 2022 earnings.

SQM stock has an A rating from the Portfolio Grader.

Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) is up 78% in 2022 and maintained its growth even as the price of oil began to fall in the second half of the year, making it one of the best retirement stocks for investors over 50 with comeback potential.

But despite its success Exxon also has a laser-focused eye on the future, and that’s great for a retirement investor. The company says it can double its 2019 earnings by 2027 by keeping capital spending between $20 billion and $25 billion. It would use the increased earnings for share repurchases and dividends.

XOM stock has a healthy dividend yield of 3.3% right now. It has an A rating from the Portfolio Grader.

Cheniere Energy (LNG)
Cheniere Energy (NYSEAMERICAN:LNG) owns and operates two major LNG terminals in Louisiana and Texas.

It has a natural gas pipeline and is involved in LNG and natural gas marketing.

While it’s headquartered in Texas, Cheniere has a growing footprint in Europe. It’s the largest exporter of liquified natural gas in the U.S. and its finding willing customers in Europe who saw Russian supplies cut off in retaliation for Western sanctions on Moscow over the war in Ukraine.

Cheniere says it shipped 70% of its production to Europe in the first three quarters of the year, and it’s expected that to continue throughout the winter.

As long as the war in Ukraine continues and there’s instability around Russian oil and gas supplies, natural gas prices in Europe will remain high and LNG will continue to have a strong customer base.

On top of that, 2023 could see increased demand for LNG as China begins easing its Covid-19 restrictions.

LNG stock has an A rating from the Portfolio Grader.

Devon Energy (DVN)
Devon Energy (NYSE:DVN) stock is up 38% in 2022. Analysts are betting that Devon will not only hold onto those gains, but continue to build on them.

They give DVN a consensus price target of $79.48, which indicates 30% upside.

Earnings for the third quarter showed the company’s strength. Revenue of $5.43 billion and earnings per share of $2.18 beat analysts’ expectations for $4.79 billion and $2.13.

Devon has a mammoth dividend yield of 8.8%, but its not as consistent as what you might find with Exxon. Devon combines its regular dividend with a supplemental payment that is based on company performance – when the company does well, the dividend rises.

If it’s a down year, you’ll see it reflected in the dividend as well. So you can’t count the dividend growing each year, while a stock like Exxon has 40 years of consecutive dividend growth.

DVN stock has an A rating in the Portfolio Grader.

Shockwave Medical (SWAV)
ShockWave Medical (NASDAQ:SWAV) is a medical device company that’s focused on treating calcified cardiovascular disease. The ailment can restrict the supply of blood to the heart muscle and could cause a heart attack.

ShockWave’s treatment uses sound waves to pass through soft tissue to crack calcium deposits, which is less invasive than using high-pressure balloons or catheters to remove plaque buildup.

ShockWave says that it sees a market opportunity of more than $8.5 billion for its procedure. So far, it seems to be a success. Revenue in the third quarter was $131.44 million, which was more than 101% more than a year ago. SWAV also beat analysts’ expectations for $123.79 million.

ShockWave stock is up 16% over the last year, and has an A rating in the Portfolio Grader.

— Louis Navellier and the Investor Place Research Staff

Source: Investor Place