Investing in the stock market can get you closer to retirement. Portfolios compound over time as investment opportunities realize their potential.
Some investors accumulate growth stocks and hope that those stocks will appreciate significantly within a few decades. However, some of these corporations have high risks that can deteriorate shareholder value.
Retirement stocks offer more stability. Corporations under this category already have large moats and continue to gain market share. These companies are less likely to endure dramatic price swings and can provide cash flow.
Wall Street analysts compare many retirement stocks to decide which ones make the most sense at current prices. These are some of Wall Street’s top retirement stocks.
Visa (V)
Visa (NYSE:V) is rated as a Strong Buy with an average price target that suggests an 11% upside. The stock has 23 Buy ratings and 3 Hold ratings. The highest price target of $335 suggests the stock could gain an additional 21% from current levels.
The fintech company earns a percentage of each credit and debit card transaction that involves its products. The business model continues to grow while generating net profit margins above 50%. The company continued its growth trend in the first quarter of fiscal 2024. Visa reported a 9% year-over-year (YoY) revenue growth and 17% YoY net income growth.
Visa’s dividend yield is only 0.75%, but has a low dividend payout ratio. The company has hiked its dividend by an average of 18.18% each year over the past decade. Visa has 15 years of consecutive growth and the financial strength to continue raising its dividends for many decades to come.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) doesn’t offer a dividend quite yet, but the company has received plenty of praise from Wall Street analysts. The stock is rated as a Strong Buy among 37 analysts and has a projected 6% return based on the average price. The highest price of $185 per share implies the stock can gain an additional 18% from current levels.
The tech giant has two vibrant businesses: advertising and cloud computing. Advertising is still the main revenue driver, but the company has been gaining ground in the cloud computing industry. Artificial intelligence opens up additional opportunities.
Alphabet stock only trades at a 27 P/E ratio and is rapidly expanding its profit margins. Revenue grew by 13% YoY in Q4 2023, a good baseline. However, net income soared by 52% YoY. Alphabet is continuing to cut costs and get more efficient with its capital. The stock is up by 156% over the past 5 years.
Walmart (WMT)
Walmart (NYSE:WMT) offers the highest dividend yield of the bunch and has many fans on Wall Street. The stock has a projected 10% upside and a Strong Buy rating among 28 analysts. The highest price target of $76 per share indicates that the stock can still rally by 27% from current levels.
Walmart has been a top retailer for people who want more affordable products. Higher inflation and interest rates can bring more people to the iconic American brand. However, the stock has two additional catalysts that can generate additional growth.
Global e-commerce sales increased by 23% YoY in the fourth quarter of fiscal 2024. Walmart is gaining market share in the industry, but it’s also getting more traction with its advertising segment. Walmart’s global advertising business grew by 33% YoY. The segment will increase profit margins, and the company recently said it was acquiring Vizio Holdings (NYSE:VZIO), accelerating its growth in this industry.
On this date of publication, Marc Guberti held a long position in GOOG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
