If you're retired -- or maybe just getting close to it -- you're probably paying extra-close attention to how you're invested. Not only do you have to make sure you have enough assets to provide for your needs now, but you'll also need a plan that will generate sustainable income and returns for the years ahead. 

And while this often means bonds or other low-volatility assets, retirees shouldn't eschew stocks entirely. The best dividend stocks can provide steady income -- often with regular increases -- while also appreciating in value over the long term. Three that are perfect for retirees are Johnson & Johnson (NYSE:JNJ)McDonald's Corporation (NYSE:MCD), and Brookfield Infrastructure Partners L.P. (NYSE:BIP)

A woman smiles at her retirement party.

Image source: Getty Images.

Here's why three of our Motley Fool investors picked these dividend stalwarts for retirees. 

The trends are its friends

Keith Speights (Johnson & Johnson): There are two trends that, in my view, make Johnson & Johnson an excellent stock for retirees. The first is the demographic trend in the U.S. 

As baby boomers age, their healthcare needs will inevitably increase. J&J's pharmaceutical segment should enjoy sales growth for many of its products, which include drugs for treating autoimmune diseases, cancer, cardiovascular diseases, neurological disorders, and pulmonary hypertension. The company's medical device segment should also experience higher demand for its wide range of surgical devices, artificial hips, and other products. J&J's consumer segment also stands to benefit from increased sales of over-the-counter products.

A healthcare professional filling out a patient's chart.

Image source: Getty Images.

The other trend is J&J's increasing cash flow. Over the last five years, the healthcare giant's free cash flow has increased nearly 30% to $17.8 billion. The company is practically minting money. J&J uses its solid cash flow to pay out dividends and buy back shares, both of which reward shareholders. In addition, it can use its cash flow to reinvest in the business.

It's this second factor that I think makes J&J stock an especially solid choice for retirees. Even if the company faces headwinds for its products, it has the ability to buy growth. That's what J&J did last year by purchasing Swiss drugmaker Actelion. 

The bottom line is that demographic and cash flow trends are likely to help J&J continues to grow and generate income for shareholders. That's exactly what retirees need.

Supersize your income stream

Demitri Kalogeropoulos (McDonald's): In your retirement years, you'll likely prize the combination of market-beating sales growth and steady income in your dividend portfolio. McDonald's stock has both of these valuable qualities. 

McDonald's new fresh beef quarter pounder.

Image source: McDonald's

The fast-food titan just closed its best year for customer traffic since 2012. A return to basics that stressed iconic brands like the Egg McMuffin and Quarter Pounder helped, but so did new product launches and food preparation improvements. Customers are loving the fresher, better-tasting menu items and demonstrating their satisfaction by returning more often.

At the same time, profitability has shot to new highs, buoyed by a refranchising plan that, by lowering the proportion of company-owned locations, is boosting operating margins to over 40% of sales. 

Investors can expect that metric to rise again in 2019 as the company completes its refranchising push. Meanwhile, management is planning to pour resources into growth initiatives including store remodels, self-ordering kiosks, and home food delivery. CEO Steve Easterbrook told investors in early 2018 that, while executives are happy with their recent wins, "we have far greater ambitions." Additional market share gains would be impressive, but investors can rest easy knowing that income gains are likely from McDonald's in the years ahead -- whether sales growth accelerates or stays put.

A top dividend growth stock on sale

Jason Hall (Brookfield Infrastructure Partners): Since going public about a decade ago, few entities have generated the incredible dividend growth -- and total returns -- that master limited partnership (MLP) Brookfield Infrastructure Partners has delivered:

BIP Dividend Chart

BIP Dividend data by YCharts.

Yet even with this thus-far amazing run of success, dividend-seeking investors and growth hounds alike could do very well to invest in Brookfield Infrastructure now. This infrastructure-focused MLP's future remains incredibly bright.

In recent years, it has become more focused on energy, transportation, water, and telecommunications. On a global basis, trillions of dollars will be invested in growing these important assets in coming decades, as the global middle class -- especially urban residents -- grows much bigger. Brookfield Infrastructure management says that it will be able to expand its existing assets, as well as continue to make savvy acquisitions, that will support its long-term goal of growing the dividend by 5%-9% on an annual basis. 

That's a goal that the company has had in place for years, and regularly exceeds under the top-notch capital allocators running the show. Furthermore, now's an excellent time to buy, with the price still down more than 10% from the peak, trading for just over 13 times funds from operations. Factor in that its revenue is largely recession- and inflation-resistant, making its 4.3% dividend dependable, and Brookfield Infrastructure is one of the best stocks retirees can own. 


This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.