Hopefully, if you are over the age of 50, you have already built up a significant nest egg for retirement. With your golden years approaching, the best retirement stocks for investors over 50 tend to be conservative. After all, if an investment doesn’t work out, there’s much less time to make up the money.
However, the average retirement age in the United States is 62 for women and 65 for men. So those in their early 50s could have another decade or so left before they leave the workforce. This means they have time to add a significant amount of money to their retirement portfolios and make up for any non-catastrophic losses they endure in the near to medium term.
With this in mind, some older investors may want to allocate a portion of their retirement portfolio to stocks that aren’t quite so conservative. Those are the names you’ll find on today’s list of the best retirement stocks for investors over 50.
| CTAS | Cintas | $410.61 |
| MGM | MGM Resorts | $33.32 |
| AVGO | Broadcom | $479.50 |
| CPNG | Coupang | $21.03 |
| FLNG | Flex LNG | $29.90 |
| KRE | SPDR S&P Regional Banking ETF | $61.75 |
| FLR | Fluor | $28.93 |
Cintas (CTAS)
A leading provider of work uniforms, Cintas (NASDAQ:CTAS) recently surprised the Street by reporting better-than-expected earnings and upping its full-year revenue and earnings-per-share guidance.
Specifically, earnings for its fiscal first quarter came in at $3.39 per share, easily beating the $3.13 per share analysts expected. Revenue climbed 14% year over year to $2.17 billion, also beating estimates.
Following these strong results, management increased its full-year revenue guidance to a range of $8.58 billion to $8.67 billion from $8.47 billion to $8.58 billion previously. And it now expects EPS in the range of $12.30 to $12.65, up from $11.90 to $12.30 previously.
Despite a challenging macroeconomic environment, Cintas CEO Todd Schneider was upbeat on the company’s earnings call, saying, “new business is quite robust” and calling the company’s total addressable market “incredibly large and growing.”
The labor market remains tight with many employers looking to hire new workers. This strength bodes well for Cintas’ continued growth and profitability for the foreseeable future. Additionally, the uniform provider should benefit from the federal aid given to state and local governments in recent years.
Another plus for older investors looking for retirement stocks to buy is the fact that Cintas is a Dividend Aristocrat. The company has raised its dividend for each of the past 38 years, and CTAS stock currently throws off a 1% yield.
MGM Resorts (MGM)
While games of chance and online wagering have no place in a retirement strategy, their popularity makes MGM Resorts (NYSE:MGM) one of the best retirement stocks for investors over 50 looking for stability and high-return potential.
In August, research firm Macquarie said online search data showed demand in Las Vegas remained strong: “Despite fears around peak Las Vegas demand, our monthly survey highlights continued visitation demand into the fall.”
MGM operates 13 casinos in Las Vegas, which have experienced a post-Covid resurgence. Additionally, its BetMGM online sportsbook, a joint venture with Entain (OTC:GMVHF), is expected to generate net revenue of more than $1.3 billion this year and achieve positive EBITDA next year. The long-term EBITDA margin is expected to be in the range of 30% to 35%.
On Sept. 19, Bank of America analysts noted a 77% year-over-year increase in the number of sports betting app downloads on Apple’s (NASDAQ:AAPL) iOS through the first two weekends of September, which they attributed to the NFL season getting underway. And among the iOS sports app category, BetMGM was the 19th most downloaded app.
The forward P/E ratio of MGM stock is a reasonable 27.9, and its price-sales ratio of 1.3 is very attractive.
Broadcom (AVGO)
Chipmaker Broadcom (NASDAQ:AVGO) should benefit from resilient cloud spending in 2022 and 2023, according to Bank of America, which recently reiterated its “buy” rating on the stock. Despite macroeconomic pressures, the bank expects overall spending on the cloud to climb 20% this year and 7.5% in 2023. Moreover, Bank of America identified Broadcom as one of the companies that could take market share from Intel (NASDAQ:INTC).
Broadcom is also a leading provider of several types of automotive chips. The company should benefit from the shift toward artificial intelligence and autonomous driving systems in the automotive industry.
The forward P/E ratio of BRCM stock is just 11.8. UBS recently noted the company’s attractive valuation “given its steady revenues growth and strong free cash flow generation.”
Finally, shares offer a significant dividend yield of 3.4%.
Coupang (CPNG)
I remained upbeat on South Korean e-commerce company Coupang (NYSE:CPNG), despite shares falling for much of 2021, due to its rapid growth in its home market and its expansion into Japan and Taiwan. For example, in November, I wrote: “I expect CPNG stock to soar over the next decade, even if Coupang does not become as profitable as Amazon.”
Based on the company’s improving profitability and the stock’s performance in recent months, it appears my bullishness was not entirely misplaced. On Aug. 10, the company reported a smaller-than-expected quarterly loss of 4 cents per share on a 12.5% year-over-year jump in revenue to just over $5 billion. Impressively, the e-commerce firm’s gross profit soared 41% YOY, excluding the impact of a fire in 2021, while its gross margin climbed 2.5 percentage points compared with Q1.
CPNG stock is up 6.4% since the company announced earnings, and shares have doubled since hitting their mid-June low around $10.50.
On Sept. 13, Bank of America reiterated its “buy” rating on CPNG stock. The bank said Coupang’s path to EBITDA gains had become more certain and that it was encouraged by management’s prioritization of profitability. BofA predicted that the company’s 2023 EBITDA, excluding certain items, would come in at $284 million and jump to $659 million in 2024.
As Coupang continues to dominate in South Korea and build momentum in Japan, I expect CPNG stock to be a solid investment for years to come.
Flex LNG (FLNG)
Flex LNG (NYSE:FLNG) transports liquefied natural gas around the world. As you might expect, its stock has done very well this year amid skyrocketing natural gas prices, driven in part by Europe’s energy crisis. Shares are up 27% year to date compared with a 20% decline in the S&P 500.
Even when the Russia-Ukraine War ends, Europe is likely to continue to import most of its natural gas from other nations that are much further away than Russia, such as the U.S., Egypt and Qatar. As a result, demand for ships that can transport LNG is likely to remain extremely strong for the foreseeable future.
According to Seeking Alpha columnist Ben Howard, roughly a dozen of Flex’s ships are booked with lucrative “long-term contracts in order to avoid short-term price volatility and ‘lock in gains.’”
Investor’s Business Daily gives FLNG stock an extremely high Composite Rating of 98 out of 100 and an RS rating of 96 out of 100, indicating shares have performed very well over the past year. Yet, even with the runup in price, FLNG stock has a forward P/E ratio of just 9.3.
SPDR S&P Regional Banking ETF (KRE)
Regional U.S. banks have a lot going for them right now. First, their net interest income is likely to get a sizeable boost from higher interest rates, an assertion that was backed last month by Robert W. Baird analyst David George.
George also expects the banks to get a significant boost from “stable credit quality and operating leverage.” And, in my view, investors are likely to see the regional banks, most of which have little to no exposure to Europe, as safe havens from the continent’s likely upcoming recession.
Speaking of a recession, while many expect the U.S. economy to contract sharply in 2023, I believe the strong employment trends will prevent a hard landing. Therefore, much of the recession fears/realities are probably already priced into regional banks’ shares, making their valuations attractive.
Finally, I expect regional banks to be big beneficiaries of the onshoring trend as automakers, chipmakers and renewable energy companies build more factories in the U.S. in the coming years.
The SPDR S&P Regional Banking ETF (NYSEARCA:KRE) is a great way for investors of any age to gain exposure to a wide range of American regional banks.
Fluor (FLR)
As I mentioned in the previous section, chipmakers and renewable energy companies are looking to build new factories in the U.S. For example, Micron Technology (NASDAQ:MU) recently announced it would spend up to $100 billion to build a chip factory in upstate New York. And, in August, First Solar (NASDAQ:FSLR) said it would build a new solar panel production plant in the U.S.
Fluor (NYSE:FLR), a leading provider of engineering, procurement and construction services in the U.S., looks well-positioned to benefit from this trend. The company has extensive experience in developing both chip and solar panel plants. Additionally, the company has experience in the construction of battery factories, a number of which are also being built in the U.S.
FLR stock is bucking the broader bear market, with shares up 17% year to date. Yet, they still trade with a reasonable forward P/E of 21.
On the date of publication, Larry Ramer owned shares of MGM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.