Analysts recommend these stocks for older investors.
Most financial advisors would say stocks should play an important role in retirement investing at any age. However, the percentage of your retirement portfolio allocated to stocks and the types of stocks you own should change as you approach retirement age. Older investors have less time to recover from any financial setbacks, so a more conservative approach to investing is usually better. In addition, investors over 50 may want to focus more on stocks with reliable cash flows, higher dividend yields and relatively stable, low-risk businesses. Here are eight stocks to buy for investors over 50, according to CFRA Research.
JPMorgan Chase & Co. (ticker: JPM)
JPMorgan Chase is the largest U.S. bank by market capitalization and is an attractive stock for older investors. Earnings per share and revenue are up 11.9% and 3.2%, respectively, over the past three years. The stock pays a 2.3% dividend, and it trades at a modest 10.5 price-to-earnings ratio. Analyst Kenneth Leon says JPMorgan has the best management team of any large, diversified bank and should capitalize on elevated commercial and consumer lending. Rising interest rates could also boost net interest margins. CFRA has a “buy” rating and a $179 price target for JPM stock.
Morgan Stanley (MS)
Morgan Stanley is one of the largest U.S. investment banks and financial services providers. Morgan Stanley has outpaced JPMorgan’s earnings and revenue growth in the past three years. In addition, the stock pays a 2.7% dividend and trades at just 14.4 times forward earnings. Leon says Morgan Stanley is likely to continue to outperform other large banks, thanks to momentum in its investment banking business. The bank is also one of the top initial public offering underwriters in a booming IPO market. CFRA has a “buy” rating and a $115 price target for MS stock.
BHP Group PLC (BBL)
BHP is one of the world’s top producers of petroleum, minerals and base metals. The company’s EPS growth over the past three years is 46.9%, and it has also grown revenue in the low double digits during that time. BHP shares trade at just 13.5 times forward earnings, and the stock pays a 5.4% dividend. Analyst Wan Nurhayati says BHP has done a tremendous job of reducing its net debt from more than $20 billion in fiscal 2016 to just $4.1 billion today. CFRA has a “buy” rating and a $70 price target for BBL stock.
Royal Bank Of Canada (RY)
Royal Bank Of Canada is the largest commercial bank in Canada. The bank generated 5.1% revenue growth over the past three years, and EPS is also up slightly in that time. Royal Bank of Canada shares pay a 3.3% dividend and trade at just 11.6 times forward earnings. Analyst Angelo Zino says the stock has an attractive valuation and a sustainable dividend given its large capital cushion. In addition, he projects roughly 4.5% revenue growth in fiscal 2021 and 2022. CFRA has a “buy” rating and a $113 price target for RY stock.
Lockheed Martin Corp. (LMT)
Lockheed Martin is one of the largest U.S. defense contractors. Lockheed has grown EPS and revenue in recent years, yet its stock has lagged the market. This lag has created a potential buying opportunity for value investors who appreciate its 12.4 forward earnings multiple and income investors who like its 3% dividend. Analyst Colin Scarola says Lockheed shares recently traded at roughly a 30% discount to their historical average forward earnings multiple, thanks to misguided market fears of potential U.S. defense spending cuts. CFRA has a “strong-buy” rating and a $463 price target for LMT stock.
Truist Financial Corp. (TFC)
Truist Financial is one of the 10 largest U.S. banks by deposits. Despite low interest rates pressuring margins, Truist has increased its revenue and EPS by 25.5% and 3.9%, respectively, in the past three years. Truist trades at 11.2 times forward earnings and pays a 3.3% dividend. Analyst Tuna Amobi says Truist has a diversified business mix and significant exposure to the fast-growing mid-Atlantic and Southeast regions. Amobi is also anticipating a bullish inflection in loan balances in the second half of 2021. CFRA has a “buy” rating and a $65 price target for TFC stock.
MetLife Inc. (MET)
MetLife is a leading diversified U.S. life insurance and financial services company. MetLife has grown EPS by 16% and revenue by 2.8% in the past three years. The stock trades at a forward earnings multiple of 8.3 and pays a 3.2% dividend. Analyst Catherine Seifert says the company’s efforts to streamline its business should help unlock value for investors. MetLife has also decreased its sensitivity to interest rates, which could help provide exactly the type of earnings stability retirement investors are looking for. CFRA has a “buy” rating and a $74 price target for MET stock.
Allstate Corp. (ALL)
Allstate is a leading U.S. personal lines property and casualty insurance company. Allstate’s revenue has grown by 5.1% in the past three years, while EPS has risen 27.1% during that stretch. Today, Allstate shares trade at just 10.2 times forward earnings, and the stock pays a 2.5% dividend. Seifert says Allstate’s recent $2.8 billion sale of its life insurance business to Blackstone Inc. (BX) frees up capital that Allstate can commit to its higher-return property and casualty business. The sale could also unlock value for investors. CFRA has a “strong-buy” rating and a $160 price target for ALL stock.
Stocks to buy if you’re over 50:
— JPMorgan Chase & Co. (JPM)
— Morgan Stanley (MS)
— BHP Group PLC (BBL)
— Royal Bank Of Canada (RY)
— Lockheed Martin Corp. (LMT)
— Truist Financial Corp. (TFC)
— MetLife Inc. (MET)
— Allstate Corp. (ALL)
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Update 09/13/21: This story was originally published at an earlier date and has been updated with new information.