Yahoo Finance Social Security: Consider Investing Your COLA Increase in These Promising Stocks
Social Security recipients will get a nice boost to their monthly payments in 2023 thanks to an 8.7% cost-of-living adjustment announced earlier this month. On average, benefits will increase by more than $140 a month in 2023, according to the Social Security Administration.
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While many seniors need the money to deal with soaring inflation, others might have the financial wherewithal to invest part or all of it. That can be a little nerve-rattling in the current bear market — especially when you’re on a fixed income. But there are promising stocks that carry less risk than others.
If you are considering investing your COLA increase in the stock market, look for companies that are established and stable and pay regular dividends. The dividends are especially important because they guarantee some kind of return even when the stock market is down.
Here are five stocks worth taking a look at.
Walgreens Boots Alliance (WBA)
The pharmacy chain has paid a consecutive dividend for nearly nine decades and has increased its base annual payout for the past 47 years, The Motley Fool reported. Because Walgreens mainly operates as a healthcare stock rather than retail stock, it is less susceptible to economic and market swings because there will always be a need for prescription drugs, healthcare services and medical devices. The company has also invested heavily in its online and direct-to-consumer business.
Icahn Enterprises (IEP)
Run by noted investor Carl Icahn and his son, Brett, Icahn Enterprises is a holding company that specializes in putting money into reliable performers rather than high fliers. An example of its investments is Pep Boys, the automotive service center chain that has been around more than a century. As Investor Place noted, Icahn Enterprises had a “sky high” dividend yield of 14.86% as of Oct. 23 and a share price that has managed to eke out a slight gain in 2022 despite the bear market.
JPMorgan Chase (JPM)
Among big U.S. banks, JPMorgan Chase has been the steadiest and most reliable performer in recent years, according to The Motley Fool. Unlike many of its peers, JPMorgan did not need a bailout during the financial crisis, and it has largely avoided the kinds of scandals that have plagued Wells Fargo and Citibank. Better yet, JPMorgan has paid an annual dividend for at least 50 straight years. It offers a dividend yield of 3.5% (as of Oct. 23) that should move even higher in the future.
Central Securities (CET)
This closed-end investment company might not be as well-known as the others on this list, but it has been around since 1929. Central Securities “essentially operates as a holding company,” Investor Place noted. Its holdings include insurer Plymouth Rock, oil and gas firm Hess and credit card giant American Express. Central Securities has held some of its current investments for 40 years. As of Oct. 23, Central Securities boasted a 10.6% dividend yield that it pays every six months. The end-of-year payout tends to be the highest.
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Target (TGT)
Like all retailers, Target is vulnerable to economic swings, and its earnings and stock price have taken a hit this year amid a slowdown in spending by inflation-weary consumers. Longer term, however, Target remains a top performer, with a share price that has risen about 170% over the past five years. It also boasts much better operating margins than rivals such as Amazon, Walmart and Costco, The Motley Fool reported. Target has raised its dividend for 50 straight years and offered a dividend yield of 2.7% as of Oct. 24.
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