3 Dividend Stocks Retirees Must Have In Their Portfolio

Guest contribution by Mike Heroux from The Dividend Guy Blog.

Before I became an entrepreneur, I used to be a private banker. I was in charge of covering all financial planning aspects for wealthy clients. Most of them were business owners with a large amount to invest. Interesting enough, my client’s most common concern was to survive their portfolio once they sold their business. They feared the market would take away their hard-earned money. A classic question used to come inevitably:

Past returns look great and all that, but now, is it the right time to invest?

For each year, you could come out with a very good reason not to invest in the market:

  • 2014: Don’t invest, we are the peak after 5 yrs.
  • 2015: Don’t invest, oil is collapsing.
  • 2016: Don’t invest, Brexit is coming.
  • 2017: Don’t invest, NAFTA future is unsure.
  • 2018: Don’t invest, the market is crashing.
  • 2019: Don’t invest, we are at a peak after 10yrs.

But it’s really the time to invest, here’s why.

This is how many retirees prefer to avoid getting worried and leave money aside and wait. They wait until there is a market bottom. Unfortunately, many missed the latest market opportunity as they were busy cooking on Christmas Eve.

Once you reach retirement, leaving your money in a money market fund could increase your chances of surviving your portfolio and not having enough money to support your lifestyle at retirement and take care of the ones you love.

Similar to Sure Dividend, I believe in dividend growth investing and consider holding strong companies will help me going through any stock market storm. I believe dividend growth investing is the perfect strategy to achieve my retirement goal and make sure my family doesn’t lack money.

This is why investing today in strong dividend growers will help you live a stress-free retirement and generate enough income so you can continue to enjoy your favorite activities. Even if we are currently trading at an all-time high, Mr. Market offers us a few great opportunities. Here are my favorites right now.

AbbVie: A Great Combination Of Growth And High Income

You are probably aware of the substantial sum AbbVie (ABBV) is about to disburse to acquire Allergan (AGN). On the day of the announcement, ABBV went all the way down to ~$65. But this is just another hit on a stock that isn’t doing well for the past 18 months:


Source: Ycharts

The problem with AbbVie, as well as many pharma stocks, is the continuous concern around drug patents expiring. The company sells the most profitable drug in the world, Humira with yearly sales of ~$20B in 2018. Unfortunately, Humira’s patent expired in Europe and its exclusivity days are numbered in the U.S. ABBV’s lawyers were able to extend the patent up to 2023 where biosimilars will enter the market in exchange of companies paying AbbVie a royalty. Not a bad deal.

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Disclaimer: I hold shares of ABBV, EBN, and LAZ in my DSR portfolios.

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