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3 Stocks to Add to Your Social Security Income

By Dan Caplinger – May 23, 2017 at 9:41AM

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Retirees need conservative stocks with good income. Here are three worth a closer look.

Investors who have already retired typically need income from their portfolios to help supplement their Social Security benefits. Taking undue risk is not an option for most retirees, but prudent investing calls for a smart balance between market risk and potential return. For those who need portfolio income, stocks like AT&T (T 0.16%), Johnson & Johnson (JNJ 0.13%), and Sysco (SYY 0.45%) offer a great combination of dividends and growth prospects going forward.

Call up this stock

AT&T has been a dividend giant for a long time. With a yield of nearly 5%, the telecommunications company leads these three stocks in terms of current income. Yet AT&T has also been committed to sharing long-term growth with its shareholders through consistent dividend increases. The company has a 33-year track record of annual dividend increases, with its most recent having come at the beginning of 2017.

AT&T faces plenty of challenges, but it has done a good job of facing them recently. Competitive pressures in the wireless telecom space continue to ramp up, and the resulting price wars have threatened AT&T's margin figures. Yet by aiming to offer higher-quality services, AT&T hopes that it can forestall substantial deterioration in its fundamental performance and keep delivering good results going forward. Given its history, the telecom giant has what it takes to get that job done over the long haul.

Display at AT&T conference.

Image source: AT&T.

Get healthy dividends here

Johnson & Johnson is well known as a consumer-products giant, with its Tylenol pain relief and Band-Aid bandages found in millions of households in the U.S. and around the world. Yet lately, Johnson & Johnson has gotten most of its growth from the pharmaceutical arena, where life-saving products help customers every day. Medical devices also make up a substantial portion of J&J's business, rounding out the company's status as a healthcare conglomerate that leads the industry.

For dividend investors, Johnson & Johnson has an enviable track record of annual dividend increases that spans back for 55 years. The company just announced its most recent increase for 2017, with a 5% boost that will take its payout to $0.84 per share on a quarterly basis. That works out to a yield of about 2.7%. With continued prospects for serving more customers with their healthcare needs, Johnson & Johnson has done a good job of being in the right place at the right time.

Feeding the need for income

Sysco isn't quite as much of a household name as the other two companies on this list, but it's just as ubiquitous in the domestic economy. Sysco provides food services for a wide variety of institutional food preparation specialists, ranging from sports arenas and college dining halls to restaurants across the nation. By providing the high-quality ingredients that these food preparers need to make meals, Sysco has grown to be an essential part of the dining industry.

Sysco has boosted its dividends every year for 47 straight years, with a more than 6% increase coming toward the beginning of 2017. A 2.5% dividend yield rewards income investors, but Sysco also has plenty of growth potential, especially as the restaurant industry shows signs of emerging from a recent slump. For those who are living on a fixed income and are hungry for ways to squeeze more money from their investments, Sysco offers a way to satisfy that hunger while still offering chances for fundamental growth as well.

Stocks can help retirees supplement their Social Security income, and dividend-paying stocks are especially useful in that regard. If you're looking for a way to get more money in your pocket in retirement, take a closer look at AT&T, Johnson & Johnson, and Sysco and see which of these well-known stocks fits the best in your portfolio. 

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

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Stocks Mentioned

AT&T Stock Quote
$19.12 (0.16%) $0.03
Johnson & Johnson Stock Quote
Johnson & Johnson
$177.24 (0.13%) $0.23
Sysco Stock Quote
$86.45 (0.45%) $0.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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