3 Stocks Retirees Should Absolutely Love

Many retirees are investors for good reason: They can’t rely solely on Social Security to fund their retirement. Investing wisely provides a way to retire comfortably.

Three Motley Fool contributors think they’ve found stocks to buy that retirees should absolutely love. All three offer juicy dividends. Here are their cases AbbVie (ABBV -0.25%), Bristol Myers Squibb (BMY -0.28%)AND Gilead Science (GUILD -2.55%).

Everything retirees need in shares from A to V

Keith Speights (AbbVie): A reliable income (the more the better) and reasonable growth prospects. These are the top items on retirees’ wish lists when choosing stocks. AbbVie delivers both.

The big drugmaker’s forward dividend yield is almost 3.3%. It was even higher earlier this year, but AbbVie’s stock price is up more than 20%. That’s not such a bad problem.

Few companies beat AbbVie when it comes to dividend reliability. It is the Dividend King with 52 consecutive years of annual dividend increases (including when it was part of Abbott Laboratories). Over the past five years, the company has increased its dividend payout by almost 45%.

AbbVie’s strong year-to-date earnings offer a taste of the company’s growth prospects. The results may be surprising given that the drugmaker’s revenue and profits have been hit by the patent expiration of Humira, its blockbuster autoimmune therapy.

But AbbVie has done a great job of planning for the loss of Humira’s exclusivity. The company already has two worthy successors in the market, which together should eclipse Humira’s peak sales in the next few years. AbbVie has also invested in R&D and made several strategic acquisitions that have improved its growth prospects.

This dividend stock is a good investment with low volatility

David Jagielski (Bristol Myers Squibb): If you’re a retiree, one stock you’ll probably love is Bristol Myers Squibb. The healthcare company has an incredible record of growth and acquisitions over the years, not to mention paying a solid dividend.

While the stock has struggled this year, losing more than 7% in value, it is a fairly stable investment with a beta of less than 0.5.

The company faces challenges after losing exclusivity on many of its top drugs this decade, including Eliquis and Opdivo. But it has been accumulating assets over the years to build a portfolio of new growth products.

In the most recent quarter, which ended June 30, revenue from the growth portfolio rose 18% to $5.6 billion. And by 2026, Bristol Myers expects its new products to generate at least $10 billion in sales.

There will always be some risk with biopharmaceutical companies, because patents on new drugs don’t last forever. But in Bristol Myers’ case, the company is already preparing for exclusivity losses by strengthening its drug pipeline and improving its pipeline.

And it has paid dividends for over 90 consecutive years, raising them every year for 15 consecutive years. And with a yield of almost 5%, investors can collect more than three times as much as the average S&P500 shares, which yield about 1.3%. The company’s earnings per share in the last period were $0.83, which is significantly higher than the $0.60 dividend the company pays out each quarter.

For retirees, Bristol Myers is a good, stable investment to buy and hold. While investors may be put off by the uncertainty it faces, it is not as risky as it seems. I think it can be a great source of recurring income for your portfolio.

Reliable dividend payer

Prosper Junior Bakiny (Gilead Sciences): As investors reach retirement age, they typically stop looking for risky, high-growth stocks. Instead, they want stable, reliable companies that pay regular dividends. Gilead Sciences is a great choice in this regard.

The biotech’s drug portfolio includes oncology, virology and HIV products, in which it is a leader. Gilead has the world’s best-selling HIV drug in Biktarvy. It was the fifth best-selling drug in the industry last year. The company should continue to move in the right direction and gain market share, as it has always done.

Gilead won’t be relying solely on its HIV portfolio, however. The company has made significant investments in oncology, where it hopes to become a leader. Sales of oncology drugs have grown faster than the rest of its business in recent quarters, although they still account for a relatively small share of overall sales. The biotech is hard at work developing new products.

Its pipeline includes dozens of programs, with a focus on oncology, HIV and inflammatory diseases. Gilead’s ability to innovate, combined with the fact that patients will not be tempted to stop taking their medications even in an economic downturn, means the company is able to deliver stable financial results over the long term.

The biotech’s dividend record is also solid. Gilead Sciences has increased its payout by 22% over the past five years, and its forward yield now exceeds 4.15%.

In my opinion, retirees and income seekers of all kinds can’t go wrong with this option.