Advances in medicine and technology ensure we live to a ripe old age. That means our investment portfolios need to as well.
With retirement easily lasting 30 years, investors need to make sure their investments continue to generate adequate returns to fund it. At the same time, they need investments that will provide a steady stream of income that can replace their lost salaries.
Achieving that calls for a healthy heap of income-generating stocks mixed with a pinch of growth stocks. Prologis (NYSE:PLD), Toronto-Dominion Bank (NYSE:TD), and Verizon (NYSE:VZ) are three that fit the bill. Read on to learn why.
1. Prologis gives you growth and a dividend
Much has been made about the death of commercial real estate now that the world shops online. But one area of the real estate market that's booming, thanks to the growth in e-commerce, is warehouse and distribution properties. A big player in that is Prologis. Prologis is a multinational logistics real estate investment trust (REIT) that counts United Parcel Service, FedEx, and Home Depot among its customers. The company owns or has a big stake in more than 770 million square feet of commercial space and is well-diversified thanks to its presence in 19 countries.
Prologis' operations have been solid with the company reporting core funds from operations, or FFO, of 84 cents per share for the fourth quarter, up from 80 cents per diluted share a year ago. For all of 2019, FFO -- which is a key way to measure a REIT's cash flow -- was $3.31 a share compared to $3.03 a share for all of 2018. Revenue and rents were also up for the year.
Retirees get the potential for more growth out of Prologis if they believe e-commerce is only going to grow. With all those orders placed online, warehouses in close proximity to customers will be required and Prologis will be a major player in that trend. On the dividend front, Prologis pays a yield of 2.4% and has a consistent history of raising its payout for the past six years.
2. TD Bank may be down, but it's not out
Much has been made about fintech's impact on financial services, as upstart technology companies disrupt everything from investing to banking. It's one of the reasons TD Ameritrade (the online brokerage that TD Bank sold off in 2006) is now being acquired by Charles Schwab. But one traditional financial player that's stood the test the time, and has paid a dividend since 1857, is Toronto-Dominion Bank.
Unlike some of its rivals that are reliant on investment banking and trading to make money, TD makes its living through traditional lending and fee-based asset management and insurance services. The stock has suffered recently after posting fourth-quarter results that missed Wall Street views, with all business segments coming in lower than expectations. That sell-off, however, presents a buying opportunity for retirees who believe this Canadian banking institution will be around for decades to come. Year-to-date shares are flat at around $56 a share.
On the dividend front, there's a lot to like about TD Bank, even if there is a short-term blip in business. For starters, the dividend yields 4.04%, paying out $2.28 a share annually. The payout has been growing for the past three years.
3. Verizon for a play on 5G
Verizon may not be a red-hot tech stock posting double-digit growth quarter after quarter. Heck, the telecom giant more often produces just 2% revenue growth these days. But Verizon is a way for retirees to play the build-out in the 5G market, which promises to bring super speedy mobile internet to the masses. With Verizon in the 5G lead and inking deals with professional stadiums to show off its 5G chops, it gets the first-mover advantage over its rivals. Not to mention, the more 5G services it rolls out, the more money Verizon stands to make.
Wall Street isn't expecting much growth out of Verizon in the near future but if 5G takes off, it should boost shares, which are down about 3% so far in 2020. It doesn't hurt that Verizon has a dividend that yields 4.07%. It also has a 15-year history of raising dividends, something retirees really like in a stock.