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3 Attractive Retirement Portfolio Stocks
These 3 stocks are attractive for retirement portfolios. They have stable earnings growth, low P/Es, and higher than average dividend yields. These three stocks are JPMorgan Chase (JPM), AT&T (T), and FS KKR Corp (FSK).
Let's look at these 3 stocks.
JPMorgan Chase & Co (JPM)
This is a cheap bank stock with an outsized yield. Analysts are expecting $2.93 per share in GAAP and non-GAAP EPS. This is higher than the prior quarter’s EPS of $2.63. Its forward price-to-earnings ratio is low at 9.9x this year’s forward earnings forecast of $11.33 per share.
Moreover, the bank pays a $4 dividend quarterly. This gives JPM stock a run rate dividend yield of 3.48% at today's price of $115.05. For the past 5 years, the bank’s average yield has been 2.56% each year. This implies that the stock could rise 35.8% to $156.25, its target price if the stock were to have a 2.56% yield with a $4 dividend.
Last quarter the bank spent $1.7 billion on share buybacks, putting it on a $6.8 billion run rate for the year. This is based on a new $30 billion share repurchase program put together in May 2022. That could take several years. This works out to 9% of its stock market value.
AT&T (T)
AT&T pays a $1.11 annual dividend after the recent spinoff of its Warner Media division. That gives the stock a dividend yield of 5.35% with AT&T stock at $20.75.
That division was merged with Discovery Inc and spun off to AT&T shareholders (71%) and Discovery shareholders (29%). It formed Warner Brothers Discovery (WBD) in early April.
AT&T also received $47 billion in cash from WBD as part of the transaction. That money was to be used by AT&T to pay down its debt. That theoretically lowered the company’s interest costs during the quarter.
If that is the case, the company could earn more. Analysts now project 62 cents in non-GAAP EPS for the quarter and an EPS of $2.56 this year. This puts T stock on a forward P/E of just 8.1x. Given its low valuation, and high yield, AT&T stock is one of the best retirement stocks.
FS KKR Corp (FSK)
FS KKR Capital Corp is a business development company that buys middle-market company loans. FSK stock’s quarterly dividend announcements bounce around depending on every quarter’s profits.
For example, last quarter FSK paid a 68-cent dividend, up from 63 cents in the quarter before that and 62 cents earlier. So, with an annual dividend at $2.72 if the 68-cent quarterly dividend, at its price of $20.75 today, the stock has a dividend yield of 13.1%.
Moreover, FSK stock trades well below its quarterly NAV price. Last quarter its NAV was $27.33, up from $27.17 at the end of Dec. 31. 2021. At $20.75, that puts it at just 76.4% of its NAV.
So, given its low valuation and high yield, this makes FS KKR Corp a very appealing candidate for a retirement portfolio stock.
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