Close to retirement? These actions will pay you for life

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AAt the end of your workday, you can take a moment to congratulate yourself. Then you should look at your financial situation. After all, the end of a regular salary requires some adjustments.

Most likely, your goal will be to generate regular income even if you don’t have a job. While Social Security can help, the average monthly Social Security salary is less than $ 1,600 per month.

This is where dividend paying stock investments can help. Obviously, you need to be careful about choosing stocks that have the means to keep making payments (as well as periodically increasing those payments) for years, in good and bad economic conditions.

Image source: Getty Images.

Today we’re going to talk about three companies that all qualify as Dividend Kings, which means they’ve increased their dividend payouts every year for at least fifty consecutive years. More importantly, these companies have the means to continue to do so.

1. Procter & Gamble

Procter & Gamble (NYSE: PG), a manufacturer of consumer products in areas such as beauty, grooming and baby care, operates dozens of well-known and popular brands. The company has a 20% market share in the highly competitive beauty products industry and sells 60% of razors and blades globally. Its brands include Head & Shoulders, Gillette, Pepto-Bismol, Downy and Pampers, to name a few.

These products help the company generate ample free cash flow – $ 15.6 billion in the most recent fiscal year ended June 30. This easily covered the $ 8.3 billion in dividends paid in fiscal 2021.

The demand for these products generally remains stable no matter what happens with the economy. It’s no wonder Procter & Gamble has been paying a dividend for over 130 years. Earlier this year, the board of directors increased the quarterly payment by 10% to $ 0.87 per share. It has been 65 consecutive years since shareholders received a dividend increase.

2. Target

Target (NYSE: TGT) is a retail giant, selling a wide array of merchandise and generating billions in revenue ($ 93 billion in 2020). It differentiates itself from some competitors by offering dozens of its own exclusive brands and selling the products of other companies.

Looking to the future, management is investing heavily in the digital channel. This includes the acquisition of Shipt, a same day delivery platform, in late 2017.

As the results attest, these efforts continue to bear fruit. Its second-quarter same-store (coms) sales increased 8.9%. But digital compositions were up 10%, thanks to same-day delivery service, which saw sales increase by 55%.

When it comes to free cash flow, last year’s $ 7.9 billion more than covered the $ 1.3 billion in dividend spending.

In June, after announcing it was increasing the quarterly dividend by 32% to $ 0.90 per share, Target extended its round of annual increases to 50 years. This means the company has entered the rarefied world of Dividend Kings.

3. Coca Cola

Coca Cola (NYSE: KO) is so well known that it sells four of the five best-selling soft drinks in the world. But it also sells other drinks like fortified water and sports drinks.

It might not sound like an exciting business, but it does produce a great amount of free money. Its free cash flow stood at $ 8.7 billion last year, despite the pandemic that severely affected the company’s out-of-home operations. Despite the drop in revenues, Coca-Cola still had enough money to cover the $ 7 billion in dividends it pays.

The strong generation of cash flow is not a recent phenomenon either. It’s no wonder this stock has long been a Warren Buffett favorite. Still, you don’t need to have the wealth of the legendary investor to benefit from Coca-Cola’s strong cash flow. Coca-Cola has long shared wealth with its shareholders, increasing dividends for 59 consecutive years.

Find stocks that can pay you back in retirement

Investing in stocks can be risky, but with bond yields staying so low for so long, sometimes it is necessary. Choose great dividend-paying stocks can be a viable alternative to generate reliable and growing income after the end of your working days. just choose the right ones.

These three companies have proven to prioritize dividends and have increased payouts for many years in all kinds of economic environments. Their stock prices generally do not suffer as much volatility. It should help you really relax in retirement, knowing that your investments are working for you.

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Lawrence Rothman, CFA has no position in the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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