When it comes to adding stocks to your IRA, you want companies that will last. Whether you're years from retirement or quickly approaching it, good companies are the key to a healthy retirement portfolio.
Here are three companies with the assets and ability to remain durable for years to come, making these stocks well suited for your retirement account.
Image source: Getty Images.
Apple
Apple (AAPL 0.13%) is a great stock for your IRA because the company has built up an ecosystem with staying power. Its iPhone has done well, contributing the lion's share of revenue in recent years, but the company's expansion into other areas will allow it to continue delivering solid financial results for years to come.
Its services division includes the App Store and the company's foray into fintech with Apple Pay. This segment has been delivering over $10 billion in revenue -- and growing -- for several quarters. Meanwhile, Apple's wearables division, which encompasses the Apple Watch, exceeded $10 billion for the first time in the company's 2020 first-quarter results. Apple has not only diversified its revenue streams, but also created a successful ecosystem in which its customers generate revenue across multiple parts of the business.
The company also provides a dividend, currently yielding roughly 1.1%. The company has a penchant for maintaining large stockpiles of cash and investments every quarter, like the $200 billion-plus listed in its 2020 first-quarter results, so the dividend is secure.
Walt Disney
This next pick may be controversial at the moment, given the impact of the coronavirus pandemic. But since we're talking about an IRA, this company, which has existed since 1923, has the long-term durability to benefit a retirement portfolio.
Walt Disney (DIS 3.27%) has set itself up for years of success thanks to the assets acquired under former CEO Bob Iger. During his tenure, it added the popular Star Wars franchise as well as famed comic book publisher Marvel, which resulted in a series of wildly successful movies based on characters like Captain America and Iron Man. But that's not all: Disney also acquired the film and television assets of Twenty-First Century Fox, strengthening the company through this consolidation of the entertainment industry.
More recently, and possibly the most important move of all, the company rolled out Disney+, its own streaming service. With Disney's content library and creation of original movies and shows for the service, Disney+ starts from a strong position. Now with the pandemic forcing many to remain home, a favorite pastime has been to stream content, providing a boon for Disney.
Moreover, Disney is not just a film studio. It has leveraged its film success into retail stores, theme parks, and even cruises. All of these businesses have been hurt by the pandemic, so it's possible Disney's dividend could be affected as part of cost-cutting measures. In the long run, however, these lines of business will recover. And its new streaming service has the content and fans to grow into a legitimate rival for Netflix.
Verizon Communications
A stalwart thanks to the importance of mobile phones and other wireless technology today, Verizon Communications (VZ +0.14%) is an ideal stock for an IRA. Even with the pandemic's effects beginning to be felt in the first quarter of 2020, Verizon's wireless service business remained steady, growing 6.9% year over year to $2.9 billion.
In addition, the company pays a dividend with a yield currently at 4.25%. Its free cash flow stood at $3.6 billion, up 29% year over year, and it had $7 billion in cash at the end of its first quarter, so Verizon has the ability to continue funding its dividend while maintaining its business through the pandemic.
Also, Verizon is aggressively pushing deployment of its 5G network. With more devices connecting wirelessly, from home appliances to cars, the increased speeds of 5G wireless technology will drive continued growth in Verizon's business for years to come.
My IRA
It's hard to look beyond the coronavirus pandemic, but even now, the stock prices of these companies have rebounded since the market's coronavirus-induced sell-off in March. Here's a chart showing the growth in stock price for these companies over the past month.
Data by YCharts.
Both Apple and Disney are already in my IRA account. Verizon isn't there only because my spouse works for the company and receives stock-based compensation, so I want my IRA to be diversified beyond Verizon.
No company is immune from an economic downturn, but these three are solid companies with excellent long-term prospects, and that's a great way to set up your IRA for success.
