When it comes to stock investing while in retirement, dividend stocks tend to be some of best investments you can make. Not only do they tend to be less volatile stocks that help you preserve your nest egg, but they also throw off cash you can use to supplement your income without having to draw down on your principal.

So we asked three of our contributors to each highlight a dividend stock they think are great investments in a retirement portfolio. Here's why they picked Verizon Communications (VZ -0.53%), STAG Industrial (STAG 1.66%), and NextEra Energy (NEE -1.03%)

An elderly couple sits looking over a document together.

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Verizon has everything a retiree should be looking for

Brian Stoffel (Verizon): I'm still in my 30s. Retirement is a long way off. So I don't own shares of Verizon. But if I were advising my nearly retired relatives where to put their money, Verizon would be at the top of my list.

Right now, the company is offering a 4.4% dividend yield. Good luck finding anything like that in a money market or CD. Just as important, however, is that the business has brought in $17.6 billion in free cash flow over the past year. Just 56% of that free cash flow had to be used to pay the dividend. In other words, that payout is both safe and has room for growth.

Of course, if the stock goes to zero, all the dividends in the world aren't going to help. But I don't think that's going to happen with Verizon. The barriers to entry are enormous in telecom and Internet service providers -- both from an infrastructure and a regulatory standpoint. Verizon has long had the largest market share in mobile plans, and the fact that it was the first to offer 5G shows it still has the lead in the industry.

The stock itself may not be a market-beater in the long run. But if you're near or in retirement, that shouldn't be what you're looking for anyway. Verizon is a stable business, offering a large and sustainable dividend, and is trading for a very reasonable 13 times free cash flow. The stock should help you sleep at night.

Check out the latest earnings call transcript for Verizon, STAG, and NextEra.

Get a monthly income boost with this specialty REIT

Tyler Crowe (STAG Industrial): What's better than getting a dividend check every quarter from your stocks? How about a dividend check every month? That's what specialty real estate investment trust STAG Indsutrial does for its shareholders, and its unique approach to real estate investing and asset management makes it a compelling investment.

STAG invests in industrial spaces like distribution warehouses and other large single-tenant properties. Typically, asset managers and REITs avoid these kinds of properties because of high vacancy risk at a single property. With a portfolio of 390 buildings and staggered tenant contracts, though, STAG is able to mitigate a large portion of this risk. 

By playing in a sandbox that few other REITs dare to tread, the company is able to find lots of mispriced assets. That means the company is able to acquire new facilities at relatively high capitalization rates (in real estate, the higher the cap rate, the better), and occasionally dispose of buildings for the right price. In fact, over the past two years, it has been able to dispose of 12 facilities all at internal rates of return higher than 11%. The combination of prudent portfolio management and maintaining a solid balance sheet -- debt to capital is 45%, a reasonable rate for REITs -- gives the company the ability to return loads of cash to investors on a monthly basis. 

While STAG's current dividend yield of 5.1% is on the lower end of the company's historical average, it is still an attractive yield backed by a solid business that retirees should consider for their portfolio.

VZ Total Return Price Chart

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Going green will have retirees seeing green

Sean Williams (NextEra Energy): Investing shouldn't end when you hang up your work coat for good. That's why I believe the nation's largest electric utility by market cap, NextEra Energy, checks off all of the right boxes.

When you're retired, you want the peace of mind in knowing that your portfolio holdings can survive an economic downturn, and that daily volatility won't cause your heart to flutter. With NextEra Energy you're buying into what's often the steadiest and most defensive sector: utilities. If you own a home or rent, you'll be using electricity, making it an essential service for nearly all Americans. Since electric companies tend to have monopolies or oligopolies in the territories they operate, this leads to predictable demand, pricing power, and cash flow.

It's worth noting here that NextEra's Florida electric utility, Florida Power & Light, is a regulated business. That means that while it can't just raise rates as it pleases -- it'll need regulatory approval from the state's electric commission first -- its revenue and cash flow can be forecast with a high level of accuracy. Once again, predictability is a good thing if you want peace of mind as an investor and minimal volatility.

Where we see differentiation among electric utilities is how they approach their growth. NextEra, while being somewhat aggressive over the past decade with its willingness to take on debt, derives more energy from renewable projects such as wind and solar than any other electric utility. The company is investing $40 billion in renewable infrastructure projects through 2020, which will help lower its electric generation costs and substantially boost profitability. By 2020, somewhere between 10,100 and 16,500 megawatts of annual generation will come from wind power.

NextEra's "30-by-30" project is equally exciting, with the company targeting the installation of 30 million more solar panels by 2030, which should create an additional 10,000 megawatts of production. Although these green energy projects can be costly up front, they certainly can pay for themselves (and more) over the long run.

Add this up, and NextEra can easily cover its $5 per share annual dividend, which works out to a 2.7% yield. It's arguably the best utility retirees can consider buying.