The most recent presidential debate underscored one serious issue with the current U.S. taxation structure for Social Security: it simply doesn’t work and is unsustainable. Both candidates openly acknowledge that the system is struggling to survive and is quickly running out of money. As a result, many politicians on both sides of the aisle have called for either a remedy or an end to Social Security. This means that now, more than ever, knowing which dividend stocks to buy can greatly increase the chances of a comfortable retirement.
To determine which stocks are worthy investments for the long run, investors should consider the role those companies play in the broader market alongside their financial health, dividend yield and history. As such, here are three different dividend stocks to buy to hedge against a potential future without government-sponsored Social Security.
Procter & Gamble (PG)
When it comes to discussing the best dividend stocks to buy, one of the longest-standing and best examples of stability is Procter & Gamble (NYSE:PG). The company is one of America’s most dominant producers of household goods and has remained relevant throughout the country’s history.
Due to the nature of the products it sells, PG rarely has to worry about losing revenue or becoming uncompetitive in the marketplace. Its sheer size enables it to produce some of the cheapest soaps, detergents and cleaning products that have earned a reputation for quality in the United States.
Through its chemical formula, prowess and large-scale operations, PG is likely to continue raising its dividend and producing long-term gains for investors well into the future. As a result, investors can rest assured that PG still remains one of the best dividend stocks to buy. Right now it’s annual dividend yield is 2.43%.
Philip Morris International (PM)
If you had asked most investors and analysts what the future would be for a big tobacco company like Philip Morris International (NYSE:PM) 20 years ago, most would have bet against the legacy nicotine provider. Yet through its innovation, the company has found one of the most successful ways to remain relevant in the modern world. While smoking cigarettes may no longer be popular, its newest products certainly are.
One of the company’s recent releases, Zyn, has seen such explosive growth in demand that it may have created an entirely new form of, and culture around, nicotine consumption. Cigarettes were once a cultural icon showing up constantly in film and TV. Today, Zyn has its own culture around stimulating productivity and has become something of a meme as its demand among users skyrockets.
Pair this with PM’s 4.91% dividend yield and this stock will likely be a strong provider of returns for a long-term investment portfolio.
Fidelity High Dividend ETF (FDVV)
If picking individual stocks for your retirement portfolio isn’t your thing then the Fidelity High Dividend Yield ETF (NYSEARCA:FDVV) might just be the way to go. Stable and relatively safe, this exchange traded fund (ETF) has seen tremendous performance in the last eight years since its inception.
Of course, part of this is due to the broader successes of the stock market in the post-pandemic economy. But it is also a sign of Fidelity’s intelligent management of fund structures to maximize returns for investors.
Take into consideration that $10,000 invested in the ETF at inception eight years ago would be nearly $25,000 today. That’s a stunning 150% growth in just eight years of reinvesting dividends. Now imagine putting away consistently into that ETF. Investing in a high-yield, high-growth fund like FDVV could be instrumental in warding off inflation and the pending collapse of Social Security.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.