Inflation increases the difficulty of saving for retirement, but it also highlights why it's extremely important to keep saving. There's always that uncertainty in the future that investors should prepare for and saving more helps to do that. Whether it's a surprise expense, an unexpected medical bill, or higher rent, there is no shortage of reasons for investors to have some money set aside. The sooner you start, the better off you'll be.
Even if you don't have thousands of dollars ready to invest right now, putting any available money aside in dividend stocks can be a great way to grow your nest egg over the years. Three income stocks that can help you save for your retirement are Johnson & Johnson (JNJ +0.18%), Toronto-Dominion Bank (TD 0.76%), and Verizon Communications (VZ 0.22%).
Let's find out a bit more about these three high-yielding dividend stocks that can help you save for retirement.
NYSE: JNJ
Key Data Points
1. Johnson & Johnson
Johnson & Johnson is an excellent example of a healthcare stock that's ideal for long-term investors. A Dividend King, the company has an impressive track record for growing its dividend payments (61 consecutive years and counting), giving investors the ability to collect more recurring income just for holding on to the investment. And at 3%, the dividend yield is much higher at the moment than the S&P 500 average of 1.6%.
What makes Johnson & Johnson a good income-generating investment is that it isn't volatile, and it generates stable, consistent earnings numbers.
JNJ Operating Margin (Quarterly) data by YCharts.
Spinning off its consumer health business this year should allow the company to focus more on growth initiatives. And by having a potential agreement in place to settle its talc lawsuits, the legal risk surrounding the company could soon be much lower.
Johnson & Johnson makes for an attractive dividend stock to buy up right now while it's trading near its 52-week low.
NYSE: TD
Key Data Points
2. Toronto-Dominion Bank
Another dividend stock with a terrific track record is Toronto-Dominion Bank. While it may not have a long streak of increasing its payouts, it has been making dividend payments since 1857. Its dividend yield of 4.8% is even higher than Johnson & Johnson's, giving investors a way to earn a higher payout right now.
This is yet another consistent business to invest in. Despite the volatility of the pandemic, TD generates strong profits, as it has over the past decade.
TD Net Income (Quarterly) data by YCharts.
Stable, consistent earnings are why TD can make for a strong investment to hang on to for the long haul. The bank has a sizable presence in both Canada and the U.S., giving investors some added diversification and stability, making it a safer option than many other bank stocks.
Although the stock is down 18% over the past 12 months, with solid financials and a great yield, now may be an opportune time to invest in the stock while its yield is high.
NYSE: VZ
Key Data Points
3. Verizon Communications
The highest yield on this list belongs to telecom company Verizon, which pays 7.4%. The company hasn't made for a popular investment option this year as underwhelming growth numbers led investors to focus on other stocks to buy. This year, the company anticipates the growth in wireless service revenue could be as low as 2.5%, which would be a big drop from 8.6% in 2022.
The markets have been sensitive to any kind of slowdown, and a modest forecast hasn't been helping Verizon's stock. Its shares are down 30% over the past 12 months, pushing the yield up as a result of the bearishness. But in the big picture, this has been a fairly consistently profitable business to invest in over the past decade:
VZ Operating Margin (Quarterly) data by YCharts.
There's plenty of bearishness surrounding the telecom stock, but Verizon still makes for a great investment to own for the long haul. It's one of the top telecom providers in the country, and while its growth may struggle in the near term, the company's business remains solid, and the stock should recover.
