7 Blue Chip Stock Picks Perfect for Retirement


Choosing the right stocks for a retirement portfolio is a balancing act. Investors need growth to outpace inflation, but they also want to protect their nest egg from market volatility. This dual purpose makes blue chip stock picks popular among retirement investors.

While no investment is completely foolproof, putting capital into blue chip stocks is about as safe as any investor can get, other than maybe buying US Treasuries. Indeed, blue chips are well-known companies that hold dominant positions in the industries in which they compete, are profitable, produce consistently strong profits, and reward shareholders with dividend income.

Here are seven blue-chip stock picks that are perfect for retirement.

KO Coca Cola $59.53
WMT walmart $140.73
BAC Bank of America $35.87
noir black rock $648.98
MSFT Microsoft $226.75
NFLX netflix $296.94
PG Procter & Gamble $131.88

Coca-Cola (KO)

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Considering it’s been in business since 1892 and essentially sells the same soft drink today as it did over a century ago, one would assume that Coca Cola (NYSE:KO) would be a bit obsolete as an investment at this point. But this is not the case. The Atlanta-based company is continually finding ways to reinvigorate its business and keep sales high, regardless of the current economic climate.

The company’s third quarter results provide an excellent case study for investors. Despite inflationary pressures and a slowing economy, the company beat Wall Street forecasts and raised its full-year guidance. Management achieved this feat by leveraging its pricing power, which is the ability to raise prices without losing customers. Specifically, the company said it raised prices to help offset its high input costs. In addition to its price increases, Coca-Cola said it was appealing to price-sensitive consumers through product offerings such as smaller bottles and multi-packs with fewer cans.

As a result, the company managed to record year-over-year increases of 10% in net revenue, 16% in organic revenue, and 14% in profit. For the full year, the company says it now expects adjusted earnings per share to grow 6% to 7%, down from a previous forecast of 5% to 6%.

Thanks to Coca-Cola’s loyal customer base and sound business management, the stock was up 0.5% over the year, while the S&P500 is down 20% and yield 3%.

Walmart (WMT)

Walmart sign in front of Walmart store at sunset

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It’s not glamorous, exciting or fashion-forward, but detailing walmart (NYSE:WMT) is the type of stock investors can rely on. So far in 2022, WMT stock is down just 3%. Over the past five years, stocks have gained 60%.

The company owes this strong performance to its huge retail presence in the United States and Canada, as well as its focus on low prices. Consumers are reacting to Walmart’s rebates this year as inflation hits its highest level in 40 years and food prices, in particular, have soared.

Strong sales and customer loyalty allow Walmart to post strong and reliable profits in any economy. In August, the company announced better-than-expected second-quarter results and maintained its guidance for the year. Earnings per share of $1.77 were much better than the $1.62 analysts had forecast for the second quarter. Revenue rose 8% to $152.86 billion, also beating estimates, and U.S. same-store sales were up 6.5% from a year ago, excluding fuel.

Shares of WMT trade at 21 times forward earnings, which isn’t that exorbitant given the size of the company and its $380 billion market capitalization. The stock has a dividend yield of 1.6%.

Bank of America (BAC)

A photo of the Bank of America (BAC) logo in neon red and blue on a beige wall.

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Bank of America (NYSE:BAC) remains a solid blue chip stock, perfect for retirement. The second largest financial institution in the United States, Bank of America can be counted on in good and bad economic times. This year, BAC stock is down 22%, mirroring the drop in the benchmark S&P 500 index.

The bank is starting to see real benefits from higher interest rates, recently announcing better-than-expected third-quarter profit, largely due to gains on its interest income. Earnings per share were 81 cents versus 77 cents estimated on Wall Street. Revenue of $24.61 also beat estimates and was up 8% year over year. Management said the higher interest rates charged on its loans produced more revenue, enabling it to generate higher profits even as other areas of its business, such as investment banking, declined.

Bank of America shares have gained nearly 30% over the past five years, trade at less than 10 times forward earnings and offer shareholders a quarterly dividend that pays 2.5%.

Microsoft (MSFT)

Image of a corporate building with the Microsoft logo above the entrance.

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Tech giant Microsoft (NASDAQ:MSFT) is going through a tough time, but it’s still a great long-term investment. Investors should use the current decline in MSFT shares as an opportunity to buy stocks at a low price. This is especially true after Microsoft’s post-earnings sale following the release of its fiscal first quarter results.

Microsoft reported slightly better-than-expected revenue of $50.12 billion and earnings per share of $2.35. However, it caused a kerfuffle by lowering its forecast, saying it now expects revenue of $52.35 billion to $53.35 billion in the current quarter, representing growth of around 2% in the middle. of the fork.

On a conference call with analysts and the media, management said its business was being affected by “cyclical trends” and announced plans to slow hiring. Microsoft also introduced “Viva Engage”, a new feature in the Teams communication app that allows users to share videos.

Despite the current headwinds, MSFT stock remains a solid blue-chip choice for any portfolio. While stocks are down 33% year-to-date, stocks are up more than 260% in the past five years. Since its IPO in 1986 at $21 a share, the stock has gained 980%. Additionally, the company has paid (and increased) a dividend for 20 years, with the stock currently yielding 1.1%.

Black Rock (BLK)

A BlackRock (BLK) sign in front of a BlackRock office in San Francisco, California.

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black rock (NYSE:noir) is the world’s largest asset manager with $8.5 trillion in assets under management. The potential for a global recession does not appear to have hurt BlackRock. The New York-based financial firm, led by Wall Street legend Larry Fink, posted better-than-expected third-quarter results.

BlackRock reported a 12.8% drop in third-quarter earnings to $9.55 per share. But even with the drop, the company’s earnings were much better than the $7.06 per share that Wall Street analysts had expected. Fixed income inflows of $90.6 billion during the quarter were a positive for the company. And it saw $2.6 trillion in net inflows into its exchange-traded funds.

While BlackRock’s stock is down 29% this year, it has gained 37% over the past five years and risen 242% over the past decade. The title also yields 3.1%.

Netflix (NFLX)

The Netflix logo on a tablet with headphones and a bowl of popcorn nearby.

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What a difference a quarter can make. Shares of the streaming giant netflix (NASDAQ:NFLX) jumped 13% immediately after the company reported better-than-expected third-quarter results, adding 2.4 million net new subscribers between July and September. While shares of NFLX are down more than 50% year-to-date, shares are up 33% in the past month.

The turnaround comes after investors dumped NFLX shares in the spring after the company reported weak financial results and falling subscriptions. However, the recent recovery gives a good indication that Netflix has resilience and a bright future.

The company’s prospects will largely depend on its ability to continue to attract subscribers with hit TV shows and movies such as “Stranger Things” and “The Gray Man.” The company must also demonstrate to analysts and shareholders that it can adapt its business in the face of growing competition. To that end, Netflix is ​​launching a new low-cost ad-supported streaming tier in November. The company also said it cracks down on password sharing to help boost revenue.

NFLX stock is up nearly 50% over the past five years and has gained nearly 1,880% since its IPO in 2002 at $15 a share.

Procter & Gamble (PG)

A photo of a number of Procter & Gamble (PG) products.

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Procter & Gamble (NYSE:PG) is another relatively boring but stable stock, perfect for a retirement portfolio. In business since 1837, Procter & Gamble sells the household items people need in their daily lives, even though they rarely pay attention to them. Its products include Tide laundry detergent, Gillette razor blades and Crest toothpaste.

Procter & Gamble’s household essentials make the company and its stock largely immune to economic downturns and recessions like the one economists expect us to enter in 2023. When the surge hits, consumers will continue probably to buy deodorant even if they cut back on discretionary items. like potato chips.

The necessity of its products and its pricing power have allowed Procter & Gamble to continue to generate strong profits despite many challenges. The company just posted a better-than-expected third quarter of $1.57 in earnings per share on $20.61 billion in revenue.

PG shares are down 19% for the year. The shares trade at 23 times forward earnings and offer a quarterly dividend that pays 2.8%.

As of the date of publication, Joel Baglole held long positions in BAC and MSFT. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a reporter for the Wall Street Journal and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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