Best Dividend Stocks for Retirement Planning

Published 19-10-2020, 09:25 am
COAL
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Today is a great time for income investors and those who love dividend stocks: This is not because of "value investing" which has resulted in outperformance especially in growth stocks, but because "value stocks" are comparatively cheaper and capable of producing higher than average yields. In fact, "value stocks," including most high-dividend stocks, are the cheapest they have been in decades. Today, you can get a lot of mileage out of each Rupee invested, while the relative valuation gap between growth and value stocks is pushing record levels.
 
Stock dividends tend to grow over time, unlike the interest from bonds. That's one of the main reasons why stocks should be a part of every investor's portfolio, however, with limited exposure. Furthermore, dividend growth has historically outpaced inflation. For those investors with a long timeline, this fact can be used to create a portfolio that is strictly for dividend-income living.
 
E.g. Investors of Coal India (NS:COAL) earned Rs 166.5 a share as a Dividend Income since Listing. Coal India Ltd. has declared 15 dividends since Feb. 18, 2011.
Coal India Dividend

Coal India

A smart strategy for people, who are still saving for retirement, is to use those dividends to buy more shares of stock in firms. That way, they will receive even more dividends and be able to buy even more shares.
 
When you're shopping for a dividend stock for your retirement portfolio, but it requires a lot of research and powerful decision making. If you search for companies that issue the large dividends based on yield alone, you'll likely end up with a handful of highly unstable stocks that might not maintain those dividends when economic conditions change. On the other hand, if you look for stocks that have an ironclad history of issuing larger and larger dividends with each passing year over the course of decades, you'll find more winners than you know what to do with.
Coal India

The above-mentioned stocks can be considered as Portfolio for retirement as the current dividend yield is more than the Bank FD at this point in time. Also, these stocks have shown consistency in paying dividends to their investors. So, if you are planning for retirement, you can definitely have a look at these stocks.

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