3 Ultra-Safe Dividend Stocks for Retirees to Buy and Hold

Dividend growth stocks can be ideal investment options whether you are a retiree or a long-term investor. The types of companies that increase their payouts regularly normally have a lot of consistency in their earnings from year to year, making them safe investments. That doesn’t mean that all dividend growth stocks are safe options, but many of them are.

Three of the safest you can put in your portfolio today are Abbott Laboratories (ABT 0.20%), Procter & Gamble (PG -0.26%)and Enbridge (ENB 0.62%). This is why these can be ideal investment options for investors who just want a stable dividend to collect and not worry about.

Abbott Laboratories

Healthcare giant Abbott Laboratories has a solid track record of paying and growing dividends. It belongs to the exclusive club of Dividend Kings, which are stocks that have increased their payouts for at least 50 consecutive years. But that’s not why Abbott is a good option for income investors. Instead, it is the stability the business has through its various operations and the promising growth opportunities that lie ahead.

In the first half of the year, the company generated positive year-over-year growth in all but one of its segments: diagnostics, which declined due to a decline in COVID-19 testing. And the company’s results remain strong enough to support its dividend, with Abbott’s payout ratio reaching around 67%. That leaves room for the stock to continue growing its dividend, which today offers 1.9% — slightly better than S&P 500his average of 1.3%.

One area where I see a lot of room for growth for Abbott is diabetes care. The company’s continuous glucose monitoring devices helped that area of ​​its segment grow organically by more than 19% in the first two quarters of 2024. Diabetes is a huge problem for the healthcare industry, and Abbott’s devices can be an effective way to to remain diabetic. above their glucose level.

Abbott’s stock has an average beta of 0.7, suggesting it is a stable investment compared to the broader markets, making it an ideal option for risk-averse investors.

Procter & Gamble

Retirees can collect a slightly higher yield with Procter & Gamble shares, which pay 2.3%. Like Abbott, this is a dividend growth stock with an impressive streak. Procter & Gamble has one of the longest dividend growth streaks you’ll find — it’s raised its dividend for 68 consecutive years.

What makes Procter & Gamble a solid option for income investors is the wide range of consumer brands in its portfolio. Whether it’s Head & Shoulders, Crest or Pampers, the business is full of recognizable and iconic brands that can provide the company with relatively stable results from year to year.

This is the kind of boring, good income stock you’ll want to own. In each of the last three fiscal years (ended in June), P&G reported sales of at least $80 billion and profits of more than $14 billion. Its payout ratio is 64%, making the dividend very manageable for the company, while also making payouts likely to continue to grow in the future.

Enbridge

You can be a little greedy and pick a high-yielding stock like Enbridge, knowing you’re not taking on too much risk with this investment. While investors may scoff at the idea of ​​owning an oil and gas stock given a long-term trend toward greener energy, that could take decades to happen — and even then, oil and gas is likely to play a vital role in the world’s energy needs.

Retirees will also be more short-term focused. And for at least the foreseeable future, Enbridge is still a solid dividend play. The Canada-based pipeline company has raised its dividend payout for 29 consecutive years, and another increase could come later this year.

This is another predictable investment to own. Last year, the company met its guidance for an incredible 18th consecutive year. That kind of predictability is hard to find in oil and gas, which is why the stock’s 6.7% yield isn’t as risky as it might seem. With lots of fixed assets, Enbridge’s depreciation costs will always be high, which is why its payout ratio can often be higher than 100%.

But the company relies on distributable cash flow (DCF) to gauge the safety of its dividend, which is a calculation of adjusted profit that excludes maintenance capital expenditures, interest expenses, taxes and other items. Last year, the company’s DCF rose to C$11.3 billion, up from CA$11 billion a year earlier.

In the first half of the year, the company’s DCF per share totaled $2.97, which is already almost as much as its annual dividend payout rate — $3.66.

Enbridge is a solid, undervalued dividend growth stock that retirees can buy and own. While there may be a little more volatility because it’s an oil and gas stock, the underlying business is solid and so is Enbridge’s payout.