If You're Retired, Consider Buying These 3 Stocks

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If you're retired, you probably already know that investing primarily in bonds isn't likely to give you the level of income that you need. It's not that bonds don't deserve a prominent spot in your portfolio, but to boost your income you'll need to invest even more heavily in stocks. Not just any kind of stocks, though. You need solid dividend stocks.

The good news is that there are plenty of attractive alternatives. Three stocks that retirees should especially consider are Brookfield Infrastructure Partners LP (NYSE: BIP), EPR Properties (NYSE: EPR), and Pfizer (NYSE: PFE). Here's what makes these dividend stocks stand out.

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1. Brookfield Infrastructure Partners LP

Retirees basically need two things from a stock. First, the stock should pay a high dividend yield. Second, the dividend should be pretty safe. And if the stock can deliver growth as well, that's even better. Brookfield Infrastructure Partners LP delivers on all three counts.

The company's dividend currently yields 4.62%. How safe is that dividend? Brookfield Infrastructure uses around two-thirds of its funds from operations (FFO) to fund its distributions to its general partners and other unitholders. That gives the company plenty of flexibility to keep the dividends flowing.

But it's Brookfield Infrastructure's business model that should make retired investors most comfortable with the dividend. As its name indicates, the company is in the infrastructure business. Brookfield owns and operates utilities, railroads, toll roads, ports, energy transmission systems, cell towers, and more. These infrastructure assets provide steady revenue streams to the company.

Increased economic development and urbanization across the world should drive growth opportunities for Brookfield Infrastructure. The company thinks that there will be more than $3 trillion in municipal infrastructure spending by mid-2020. Even greater opportunities exist over the longer term, with $26 trillion in infrastructure investments in Asia by 2030 and $6.7 trillion in investments for water supply and sanitation needed by 2050.

2. EPR Properties

Retirees belong to the largest generation in history -- the baby boomers. At least it was the largest generation until the Millennials came along. One great stock to take advantage of the economic impact of the Millennial generation is EPR Properties, a real estate investment trust (REIT) that owns entertainment, recreational, and educational properties.

EPR Properties definitely meets the requirements of retired investors. The company's dividend yields nearly 6.5%. EPR Properties current dividend payout is less than 75% of its estimated adjusted FFO for 2018, a level that should give investors a warm-and-fuzzy feeling about the sustainability of the great dividend.

The REIT's entertainment properties primarily consist of megaplex theaters. Its recreational properties include ski resorts and golf entertainment complexes. EPR's educational properties include public charter schools, early education centers, and private schools. All three areas of focus for the company benefit from increased numbers of millennials who are driving what has been called "the experience economy" and who now have school-age children.

EPR Properties thinks it will be able to grow by expansion in its current core businesses as well as moving into similar areas. For example, the company is considering adding entertainment properties such as zoos, athletic stadiums, live theaters, and race tracks.

3. Pfizer

Many retirees might have already thought about including Pfizer in their portfolios. The big drugmaker has long been a favorite among dividend-seeking investors. If you haven't bought Pfizer yet, though, the stock is certainly worth a look.

Pfizer's dividend yield stands at 3.66%. The company has paid a dividend for 319 consecutive quarters -- that's nearly 80 years of dividend payments. Pfizer's payout ratio is around 57%, which indicates that the company is in a solid position to keep that streak going.

While Pfizer hasn't generated significant growth in recent years, that could be about to change. The big pharmaceutical company expects that the negative impact of declining sales of older drugs that have lost exclusivity will decrease over the next few years. Pfizer is also addressing technical issues with its sterile injectables business that have weighed on sales.

More important, though, Pfizer claims several current products and pipeline candidates that should drive growth. Ibrance ranks as one of the fastest-growing cancer drugs in the world. Sales are soaring for anticoagulant Eliquis, which Pfizer co-markets with Bristol-Myers Squibb. Pfizer's pipeline includes 28 late-stage programs. The company also awaits regulatory approval for several more, notably including lung cancer drugs dacomitinib and lorlatinib.

No stock is perfect

I think that all three of these stocks should be great additions to retirees' portfolios. Remember, however, that no stock is perfect.

Both Brookfield Infrastructure Partners LP and EPR Properties could be negatively affected by rising interest rates. Pfizer faces the risks of clinical setbacks and competition from other drugmakers. All three of the stocks could be pulled down in a major economic downturn.

Still, each of these companies should be winners over the long run. And they should be able to pay out nice dividends year in and year out -- exactly what retired investors want.

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Keith Speights owns shares of Pfizer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.