10 Best Stocks to Buy for Early Retirement

·8 min read

In this article we will take a look at the 10 best stocks to buy for early retirement. You can skip our detailed analysis of these companies and go directly to 5 Best Stocks To Buy for Early Retirement.

Most working people are not prepared well to meet the challenges that retirement brings. A study by California-based financial resource firm GOBankingRates claims that 64% of workers in the United States have less than $10,000 saved for the exit from full-time employment. Of those aged 55 and older, almost 40% have no savings at all. The numbers indicate how important it has become to invest in reliable stocks for an income stream that can sustain an active and happy post-retirement life.

Some of the best options in this regard are stocks that offer regular and steadily increasing dividend payments. These normally tend to be concentrated in established business sectors like real estate and consumer staples. However, technology-related growth stocks have made giant strides in this regard in recent years. Cisco Systems, Inc. (NASDAQ: CSCO), a tech-related hardware and software firm, has consistently paid a dividend for more than a decade. Cisco Systems, Inc. (NASDAQ: CSCO) also has a history of raising the payout each year.

Another solid bet for dependable income is The Coca-Cola Company (NYSE: KO), the beverage firm that makes and sells drinks that are household names across the world. The Coca-Cola Company (NYSE: KO) has in the recent past started investing more in energy drinks, juices, coffee, water and other beverages to complement the sales of carbonated sodas. The company has a strong brand name and has consistently increased dividend payments for shareholders going as far back as 1962.

As the energy needs of the world continue to grow at an explosive rate, the stocks of companies like Duke Energy Corporation (NYSE: DUK) can also be a reliable investment for the next few decades. Duke Energy Corporation (NYSE: DUK) has an impressive dividend history stretching back almost a century and the company is one of the largest electrical power generating firms in the US. Duke Energy Corporation (NYSE: DUK) has stepped up investments in clean energy to keep with the times and owns 21 wind, 150 solar, and 13 battery storage and fuel cell facilities.

In addition to paying attention to the strong business fundamentals that these stocks have to offer, people planning for early retirement should also strategize by consulting finance advisors, assessing risk tolerance, identifying sources of income, and setting goals for the post retirement years. All these would go a long way towards securing a financial future that eludes many in the world today. Even market experts have been baffled by stock volatility and tech-related disruption that has pummeled entire investment portfolios in recent years.

The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Best Stocks to Buy for Early Retirement
Best Stocks to Buy for Early Retirement

Photo by Ovidiu Gruescu on Unsplash

With this context in mind, here is our list of the 10 best stocks to buy for early retirement.

Best Stocks to Buy for Early Retirement

10. Main Street Capital Corporation (NYSE: MAIN)

Number of Hedge Fund Holders: 10

Main Street Capital Corporation (NYSE: MAIN) is a Texas-based investment company founded in 2007. It is placed tenth on our list of 10 best stocks to buy for early retirement. The firm primarily offers long-term debt and equity capital to lower middle market businesses and debt capital to middle market firms that have revenues of less than $150 million. These investments are used for acquisitions, management buyouts, growth financings, and recapitalizations. Main Street stock has returned more than 35% to investors over the past year.

Main Street Capital Corporation (NYSE: MAIN) posted earnings results for the first quarter of 2021 earlier in May, reporting earnings per share of $0.62 that beat market estimates by $0.07. The revenue over the period was over $62 million.

Just like Cisco Systems, Inc. (NASDAQ: CSCO), The Coca-Cola Company (NYSE: KO), and Duke Energy Corporation (NYSE: DUK-PA), Main Street Capital Corporation (MAIN) is one of the best stocks to buy for early retirement.

9. Healthcare Trust of America, Inc. (NYSE: HTA)

Number of Hedge Fund Holders: 17

Healthcare Trust of America, Inc. (NYSE: HTA) is an Arizona-based trust that owns several buildings housing medical facilities. It was founded in 2006 and is ranked ninth on our list of 10 best stocks to buy for early retirement. The firm makes use of an integrated asset management platform that offers on-site leasing, property management, engineering and building services, and development capabilities. Healthcare stock has returned more than 4% to investors over the course of the past twelve months.

Healthcare Trust of America, Inc. (NYSE: HTA) stock is a good option for investors as it regularly pays a dividend. On May 15, the firm declared a quarterly dividend of $0.32 per share, in line with previous. The forward yield was 4.45%.

Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Healthcare Trust of America, Inc. (NYSE: HTA) with 1.7 million shares worth more than $48 million.

8. Verizon Communications Inc. (NYSE: VZ)

Number of Hedge Fund Holders: 69

Verizon Communications Inc. (NYSE: VZ) is a New York-based multinational telecommunications firm that was founded in 1983. It is placed eighth on our list of 10 best stocks to buy for early retirement. The firm is one of the largest communications firms in the world with a market capitalization of over $230 billion. At the end of last year, the company had 94 million wireless retail connections, 7 million broadband connections, and 4 million video connections. Verizon stock has returned more than 5% to investors over the past year.

On May 20, Verizon Communications Inc. (NYSE: VZ) stock jumped more than 0.2% as the firm announced that it was the exclusive 5G internet partner of 15 teams part of the National Basketball Association in the United States, one of the premier sporting groups in the world.

Just like Cisco Systems, Inc. (NASDAQ: CSCO), The Coca-Cola Company (NYSE: KO), and Duke Energy Corporation (NYSE: DUK-PA), Verizon Communications Inc. (NYSE: VZ) is one of the best stocks to buy for early retirement.

7. MSC Industrial Direct Co., Inc. (NYSE: MSM)

Number of Hedge Fund Holders: 20

MSC Industrial Direct Co., Inc. (NYSE: MSM) is a New York-based firm that distributes industrial equipment. It was founded in 1941 and is ranked seventh on our list of 10 best stocks to buy for early retirement. MSC stock has offered investors returns exceeding 44% in the past year. The company has operations in Canada, Mexico, and the United Kingdom, in addition to the United States. Some of the products the firm distributes include cutting tools, measuring instruments, tooling components, raw materials, abrasives, machinery hand and power tools.

On April 8, MSC Industrial Direct Co., Inc. (NYSE: MSM) stock was given an Overweight rating by investment advisory Wells Fargo with a price target of $105 on the back of possible upside potential for the firm to previously identified cost actions.

Out of the hedge funds being tracked by Insider Monkey, Texas-based investment firm Yacktman Asset Management is a leading shareholder in MSC Industrial Direct Co., Inc. (NYSE: MSM) with 1.2 million shares worth more than $116 million.

Just like Cisco Systems, Inc. (NASDAQ: CSCO), The Coca-Cola Company (NYSE: KO), and Duke Energy Corporation (NYSE: DUK-PA), MSC Industrial Direct Co., Inc. (NYSE: MSM) is one of the best stocks to buy for early retirement.

6. Realty Income Corporation (NYSE: O)

Number of Hedge Fund Holders: 18

Realty Income Corporation (NYSE: O) is a California-based real estate investment trust founded in 1969. It is placed sixth on our list of 10 best stocks to buy for early retirement. Realty stock has offered investors returns exceeding 27% over the course of the past twelve months. The firm primarily focuses on dealings related to single-tenant commercial properties in the United States and the United Kingdom. The firm offers healthy monthly dividends built on the back of cash flow generated from 6,500 real estate properties owned under lease agreements.

Realty Income Corporation (NYSE: O) is another great option for an income stream for early retirement. On May 18, the real estate investment trust declared a monthly dividend of $0.235 per share, in line with previous. The forward yield was 4.3%.

Just like Cisco Systems, Inc. (NASDAQ: CSCO), The Coca-Cola Company (NYSE: KO), and Duke Energy Corporation (NYSE: DUK), Realty Income Corporation (NYSE: O) is one of the best stocks to buy for early retirement.

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Disclosure: None. 10 Best Stocks To Buy for Early Retirement is originally published on Insider Monkey.