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Getting Ready to Retire? 3 Stocks That Are Safe as They Come

Many market pundits expect a recession in 2023 as policymakers continue raising interest rates to cool the economy and quell inflation. Retirees looking for stable passive income might consider adding fundamentally sound dividend-paying stocks, Walmart (WMT), Kellogg Company (K), and Cardinal Health (CAH), to their portfolios now. Keep reading…

With inflation still running red hot at 7.1% in November 2022 and potential recession peeking around the corner, market volatility is widespread. Last month the Federal Reserve raised the interest rates by a 50-basis-point. As the economy faces high inflation and the Fed continues to hike interest rates in an effort to limit the rising prices, the U.S. could be headed for a recession in 2023.

In a Bankrate survey, economists predicted a 65% chance of a recession in 2023. Meanwhile, a December-end American Association of Individual Investors (AAII) survey showed nearly twice as many investors predict that the stock market will go down in the next six months than those who think it will rebound. Also, the International Monetary Fund, in its latest outlook, projected that global growth would fall to 2.7% in 2023.

However, a portfolio of quality stocks that deliver solid returns can help ride out market uncertainties. Investors might scoop up high-yield dividend stocks to ensure attractive returns and hedge against the recessionary environment.

We think fundamentally strong dividend-paying stocks Walmart Inc. (WMT), Kellogg Company (K), and Cardinal Health, Inc. (CAH) might be safe additions to your retirement portfolio.

Walmart Inc. (WMT)

The retail giant WMT operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, membership-only warehouse clubs, and e-commerce websites, including and, and others.

The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club.

On December 15, 2022, WMT Canada announced its plans to open a first-of-its-kind distribution center in Quebec in addition to two distribution centers that opened earlier that year. And another distribution center in Mexico is strengthening its logistics and supply chain networks across the entire Southeast region.

Such investments in infrastructure, logistics, and supply chains will enable the company to bolster its distribution networks and offer a brisker shopping experience to its customers.

WMT’s four-year average dividend yield is 1.69%, and its forward annual dividend of $2.24 translates to a 1.56% yield. Its dividend has grown at a 1.8% CAGR over the past three years and a 1.9% CAGR over the past five years. The company has a record of 49 consecutive years of dividend growth.

For the fiscal third quarter that ended October 28, 2022, WMT’s total revenues increased 8.7% year-over-year to $152.81 billion. Its adjusted operating income grew 4.6% from the year-ago value to $6.06 billion, while its adjusted EPS came in at $1.50, representing an increase of 3.4% year-over-year.

Also, the company’s total assets increased by 1.1% from the prior-year value to $247.66 billion.

Analysts expect WMT’s revenue for the fourth quarter (ending January 31, 2023) to increase 4.3% year-over-year to $158.08 billion, while its EPS is expected to amount to $1.50. It has surpassed the Street EPS estimates in three of the trailing four quarters. Over the past six months, the stock has gained 17.1% to close the last trading session at $143.60.

WMT’s strong fundamentals are reflected in its POWR Ratings. According to our proprietary rating system, it has an overall rating of A, translating to a Strong Buy. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Sentiment and a B for Stability. Among 39 stocks in the A-rated Grocery/Big Box Retailers industry, it is ranked #9. Click here to see the other ratings of WMT for Growth, Value, Momentum, and Quality.

Kellogg Company (K)

K manufactures and sells snacks and convenience foods through its four segments: North America; Europe; Latin America; and AMEA (Asia, Middle East, Africa). Its main offerings include crackers, crisps, savory snacks, cereal bars, noodles, etc. The company sells its products to retailers through direct sales personnel, brokers, and distributors.

On December 12, 2022, K’s Board of Directors adopted a $1.5 billion share repurchase authorization, under which the company may buy back Kellogg’s shares at its discretion from January 1, 2023, to December 31, 2025. The company can opportunistically return capital to shareholders using the buyback program while offsetting dilution from option exercises and other stock grants.

On December 15, 2022, the company paid the shareholders a dividend of $0.59 per share on its common stock. K has raised its dividends for 18 consecutive years and pays a $2.36 per share dividend annually, which translates to a 3.31% yield on the current price.

Its dividend payments have grown at a CAGR of 1.2% over the past three years and 2% over the past five years. The company’s four-year average dividend yield is 3.57%.

K’s net sales increased 8.9% year-over-year to $3.95 billion in the third quarter that ended October 1, 2022. Its adjusted gross profit grew 4.1% from the prior-year value to $1.22 billion, while its net income increased 2.3% year-over-year to $312 million. The company’s EPS came in at $0.90, a 1.1% increase from the year-ago value.

The consensus EPS estimate of $0.85 for the fourth quarter ended December 31, 2022, indicates a 2.6% year-over-year improvement. The consensus revenue estimate of $3.64 billion for the last quarter indicates a 6.4% increase from the same period last year.

The company has an impressive earnings surprise history, surpassing the consensus EPS estimates in each of the trailing four quarters. Shares of K have gained 10.2% over the past year to close the last trading session at $71.27.

K’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system. It has a B grade for Quality. Out of 83 stocks in the B-rated Food Makers industry, it is ranked #27.

Click here to see additional ratings of K for Growth, Value, Momentum, Stability, and Sentiment.

Cardinal Health, Inc. (CAH)

CAH is a provider of integrated healthcare services and solutions. It offers customized solutions for healthcare organizations like hospitals, pharmacies, ambulatory surgery facilities, clinical laboratories, and patients receiving care at home. The company operates through two segments: Pharmaceutical and Medical.

On November 15, 2022, CAH launched Velocare, a supply chain network and last-mile fulfillment solution that can deliver vital goods and services needed for hospital-level care at home to patients in a couple of hours. Considering the complexity of supply chain logistics being one of the major challenges to health systems, this alliance will transform patient care delivery.

Through Velocare, CAH will demonstrate its capacity to function and expand within the changing hospital-at-home paradigm and advance the concept of care anywhere. Additionally, the collaboration will increase scalability and effectiveness, ultimately leading to better patient results.

On November 8, 2022, CAH’s Board of Directors approved a quarterly dividend of $0.4957 per share from the company’s capital surplus, payable on January 15, 2023, to its shareholders.

The company has raised its dividends for 28 consecutive years and pays a $1.98 per share dividend annually, which translates to a 2.58% yield on the current price. Its four-year average dividend yield is 3.64%.

For the fiscal 2023 first quarter ended September 30, 2022, CAH’s revenues increased 12.8% year-over-year to $49.60 billion. Its revenue for the pharmaceutical segment rose 15.1% year-over-year to $45.83 billion, while profit for the same segment increased 6.2% from the year-ago value to $431 million.

Street expects CAH’s EPS and revenue for the current fiscal year (ending June 2023) to increase 5.3% and 10.9% year-over-year to $5.33 and $201.04 billion, respectively. Over the past year, the stock has gained 47.5% to close the last trading session at $76.73.

CAH has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. It has a B grade for Growth and Value. Within the Medical – Services industry, it ranks #3 of 78 stocks.

Beyond what we stated above, we also have CAH’s ratings for Momentum, Stability, Sentiment, and Quality. Get all CAH ratings here.

WMT shares rose $0.10 (+0.07%) in premarket trading Wednesday. Year-to-date, WMT has gained 1.21%, versus a 0.14% rise in the benchmark S&P 500 index during the same period.

About the Author: Shweta Kumari

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.


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