If your growth-investing days are over (or nearly so) and you're more interested in steady income, start your search with all-weather stock names that are capable of healthy dividends regardless of the economy. You'll likely need such reliability when your work income stops.
Here are three such prospects that would make great dividend stocks for retirement.
1. Duke Energy
Consumers and corporations might curb spending when money gets tight, but they try to keep the lights on no matter what. That's what makes utility stocks so reliable in terms of dividends (and relatively generic in terms of stock performance).
While this means most utilities stocks are so similar that they're almost interchangeable, there is one standout within the category. Duke Energy (DUK 0.39%) currently has one of the sector's best dividend yields at 4%, and it is preparing for the future more effectively than most.
The company, which has 8.2 million customers in the southeastern U.S., is reshaping itself for greater fiscal efficiency. As an example, last month Duke Energy announced an agreement to purchase Mississippi's Wildflower Solar project, which upon completion is expected to generate as much as 100 megawatts of electricity. It already has a commitment from a nearby automobile manufacturer to purchase much of that power.
And to comply with growing numbers of state-based carbon emission reduction plans, the company is increasingly working directly with customers to help them better manage their consumption. In Indiana, for instance, Duke offers rebates on commercial electric vehicle (EV) chargers and provides credits to consumers who charge their EVs at off-peak times.
Other utilities have similar projects, but few seem as forward-thinking as Duke. So its long-standing dividend -- 96 years' worth of uninterrupted quarterly payouts -- remains protected into whatever future awaits.
2. BlackRock
BlackRock (BLK 0.88%) manages several traditional mutual funds and exchange-traded funds (ETFs) under the BlackRock banner, and it is the same company behind the popular iShares lineup of ETFs. Its iShares Core S&P 500 ETF, for example, holds roughly $300 billion worth of equities on behalf of investors.
BlackRock's revenue and earnings aren't linked to the performance of its funds and ETFs. Rather, they're largely tied to the amount of money its investors allow it to continue managing even in rocky market environments; the company still collects management fees even when stocks are tanking.
Despite this year's marketwide weakness, BlackRock took in more new investor money than it paid back in each of the first three quarters of the year. It's a testament to how well the company manages investor expectations and promotes itself even in turbulent times.
That doesn't mean BlackRock's top and bottom lines are growing. While investors are still willing to invest in the company's funds, the broad market weakness means the value of BlackRock's revenue-bearing asset base is shrinking. Last quarter's revenue was lower by 15% year over year, and per-share profits were down 16%.
This ebb and flow isn't dramatic enough to prompt a dividend cut, though. Indeed, BlackRock's dividend has grown every year since 2010 because its long-term revenue and earnings growth is so resilient. The current yield stands at 2.7%.
3. Realty Income
Lastly, add Realty Income (O) to your list of dividend stocks well suited for a retirement portfolio with its 4.8% yield.
Realty Income is a real estate investment trust (REIT), meaning it gets favorable tax treatment for passing along the majority of its rental income to shareholders. The company specializes in commercial space, with a penchant for finding reliable tenants. Its three biggest renters are Dollar General, Walgreens, and 7-Eleven. Not too much further down its tenant list you'll find FedEx, Walmart, and Kroger -- businesses built to last even when the economy's wobbling.
That shows up in one of the company's key metrics. At the end of the third quarter, 98.9% of its space was leased, and even in the throes of the pandemic, the REIT's portfolio monetization and rent collection held up pretty well.
This isn't what a current or future retiree should be stoked about, though. The more compelling attribute of Realty Income is the fact that it pays dividends monthly rather than quarterly (which it's done for 628 consecutive months -- over 52 years). And it has more than 25 consecutive years of annual dividend growth, qualifying the REIT as a Dividend Aristocrat.
The kicker: While inflation is finally starting to cool and the Federal Reserve is seemingly entertaining less-aggressive rate hikes, interest rates are still positioned to edge higher, which tends to favor the performance of Realty Income shares.
