These rock-solid income stocks, with yields ranging from 5% to 7%, can pad aged investors’ pocketbooks while making them richer.
This year has served as an unpleasant reminder that the stock market doesn’t move up in a straight line. Since the year began, the benchmark S&P 500 and growth-centric Nasdaq Composite have each fallen into a bear market with peak declines of more than 20%. To boot, the U.S. economy has delivered back-to-back quarters of gross domestic product declines on the heels of historically high inflation.
In other words, it’s a worrisome time for investors — and especially retirees who can’t afford to lose their principal investment. Image source: Getty Images. But when trouble looms on Wall Street, historically, so does opportunity. That’s because every major stock market correction has eventually been cleared away by a bull market rally. This means that in spite of heightened volatility in the short run, it’s the perfect time for aged investors to pounce.
What follows are three ideal high-yield dividend stocks for retirees that have the potential to turn an initial investment of $350,000 into $1 million by 2030. Walgreens Boots Alliance: 5.62% yield
The first perfect high-yield dividend stock that can generate a 186% return for aged investors by 2030 is pharmacy chain Walgreens Boots Alliance ( WBA -1.47%). Walgreens has been paying a consecutive dividend for more than 89 years and has increased its base annual payout for the past 47 years .
What typically makes healthcare stocks such a genius investment is their defensive nature. No matter how poorly the U.S. economy or stock market perform, there’s always going to be demand for prescription drugs, medical devices, and healthcare services.
However, the COVID-19 pandemic proved to be one of the few exceptions to this rule, at least for Walgreens Boots Alliance. Because Walgreens is reliant on foot traffic into its stores, the lockdowns associated with the pandemic hurt its sales and bottom line. Like other retailers, it’s also contending with historically high inflation and the negative effect that can have on consumer spending.
And yet, there are numerous reasons to be excited about Walgreens’ prospects as it enacts a multipoint turnaround strategy designed to boost its operating margins, organic growth rate, and customer loyalty.
To begin with, management noted at the end of fiscal year 2021 (the company’s fiscal year ends on Aug. 31) that it had surpassed $2 billion in annual cost savings a full year ahead of schedule. But it’s not the company’s cost-cutting that’s going to raise eyebrows. It’s where management is aggressively pulling levers.
One area where Walgreens Boots Alliance is sparing no expense is with its various digitization initiatives. Even though the company will continue generating most of its revenue from its brick-and-mortar stores, the pandemic has demonstrated the value of having a more prominent online presence. Walgreens has invested heavily in its direct-to-consumer platform, which should lead to healthy organic sales growth.
What’s more, Walgreens Boots Alliance has partnered with (and become a majority investor in) VillageMD. The duo has opened 120 co-located, full-service health clinics, as of May 31, 2022, with a goal of opening 1,000 clinics in over 30 U.S. markets by the end of 2027. Offering physician-staffed clinics differentiates Walgreens’ clinics from its competition and should drive repeat business.
Valued at roughly seven times Wall Street’s forecast earnings for 2023, Walgreens has a safe floor to go along with its promising upside and rock-solid 5.6% yield. Innovative Industrial Properties: 7.04% yield
A second ideal high-yield income stock that has the capacity to turn a $350,000 investment into a cool $1 million over the next eight years is cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties ( IIPR -2.26%). Over the past five years, IIP, as Innovative Industrial Properties is more commonly known, has grown its quarterly payout by 1,100% .
Just 20 months ago, marijuana stocks were all the rage on Wall Street. With Democrats taking narrow control of Congress and Joe Biden winning the presidency, the expectation was for sweeping federal cannabis reforms. Unfortunately, no reforms have taken shape and pot stocks have been pummeled as a result.
However, individual states maintain the right to legalize and regulate marijuana. Around three-quarters of all states have given the green light to medical cannabis, which provides more than enough opportunity for a company like IIP to profit.
Innovative Industrial Properties’ business model is just like any other REIT… except for the cannabis focus. As of early September, IIP had purchased 111 medical marijuana cultivation and processing facilities spanning 8.7 million square feet […]
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