If you're a retiree, you need to be careful about which stocks are in your investment portfolio. Income is important, so you should prioritize dividend stocks. You also want to make sure that these are stable companies that won't fall off the map too quickly and drag your savings down with them. Luckily, there are a handful of great stocks that fit these criteria and can provide some modest growth as well.

Consider these three established dividend stocks with wide economic moats for your retirement portfolio.

1. Automatic Data Processing (ADP)

Automatic Data Processing (NASDAQ:ADP) provides human capital management services, such as payroll, benefits administration, HR, and productivity tracking.
ADP doesn't do anything too revolutionary these days, but it's a stable company with more than 860,000 customers spread across 140 countries. It fulfills some core administrative functions that are common to almost all businesses, and it's the leader of the space. Competition will always be a concern, especially as fintech and work culture evolve, but ADP still retains a wide economic moat due to switching costs, breadth of services, and brand strength. In short, you shouldn't expect much more growth than the 5.6% delivered annually over the past three years, but it's also unlikely that ADP will go away anytime soon.

ADP is a Dividend Aristocrat, boasting 45 consecutive years of dividend growth. Consistent income should be appealing for retirees, and there's no reason to think that will be slowing down. Analysts are projecting roughly 10% annual profit growth over the next few years, and the company produces plenty of cash. ADP's 17% net margin indicates that it's sufficiently profitable, and more than $2.6 billion in free cash flow over the past year shows that those earnings can be distributed to shareholders. The 1.9% dividend yield might not be the highest available, but it's respectable in today's market.

ADP's consistency and sustainable 64% payout ratio should instill confidence that the dividend will continue rolling into your bank account each quarter.

Retired man happy about cash flying around him.

Image source: Getty Images.

2. PepsiCo 

PepsiCo (NASDAQ:PEP) doesn't just make soft drinks. In addition to its flagship beverage brand, it has a massive portfolio of food and snack brands that generate approximately half of its revenue, including Lay's, Cheetos, Quaker Oats, Tostitos, Sabra, Doritos, and Stacy's. PepsiCo runs a diversified global consumer staples business.

That creates a level of stability retirees love. PepsiCo has remained a constant force across economic cycles. As consumer behaviors and tastes have evolved, so has the portfolio of brands carried by the company. Even in the past year, the pandemic and subsequent reopening have caused drastic changes in consumer activity. Through all of this, PepsiCo simply moved forward at a steady single-digit growth rate.

Again, it's nothing spectacular, but it's another Dividend Aristocrat with a wide economic moat. A healthy 2.8% dividend yield is also pretty great in today's market, and it provides immediate income for investors. It's hard to imagine why retirees would lose any sleep over their investment in PepsiCo.

3. Sysco

Sysco (NYSE:SYY) is a food distributor that serves more than 625,000 restaurants, healthcare facilities, and other locations at which meals are prepared. It dominates its industry, with nearly 70% market share, but that entire sector suffered dramatically through the pandemic. Many restaurants closed, students largely did not attend universities (including their dining halls), elective medical procedure volumes dropped, hotels had fewer guests to feed, and very few people attended sporting events and concerts. As consumer behavior normalizes and the world reopens, Sysco will be one of the main beneficiaries.

Sysco reported a 43% decline in sales for the fiscal year that ended in June 2020. Over the next three quarters, revenue fell an additional 20%. Despite all of these challenges, the company was still profitable for the fiscal year 2020, and it has earned $374 million over the subsequent nine months. Sysco experienced acceleration in its most recent quarter, and it seems that the company has weathered the storm while reducing debt.

Sysco maintained its dividend last year, and it was the first time in 52 years that it had not increased. Pent-up demand can quickly restore activity to pre-pandemic levels, which would allow Sysco to easily fund its shareholder distributions. The stock pays a 2.14% forward yield. The short-term uncertainty might be off-putting for some retirees, but Sysco is a great bet for stability and cash flow once things settle down.

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.