2 Top Dividend Stocks to Bolster Your Retirement Portfolio in a Market Correction

The current market correction is devastating the portfolios of retirees. It’s extremely important to have exposure to stocks, even when you stop working, because your hard-earned savings need to keep up with inflation. But when your life savings go up and down and up and down — with huge losses on the screen — it can be hard to watch.

One way to survive this, of course, is not to look. But here’s a better idea: Instead of fearing these market gyrations, take advantage of what’s happening by buying stocks that will continue to provide income for your financial future by paying dividends. This way, even during market corrections like the one we’ve been seeing in 2022, your portfolio will remain more stable and you’ll continue to make money.

Two companies that are likely to keep paying you and are continuing to grow are Waste Management (NYSE: WM) and Pfizer (NYSE: PFE).

Image source: Getty Images.

Garbage as good as gold

Waste Management is full of garbage — it collects, recycles, transfers, and stores a lot of it in the U.S. and Canada. While trash may not be your favorite topic to discuss, it’s a fantastic investment because as long as there are people, there will be rubbish.

The company is the king of the waste land and handles 26% of U.S. landfills. Its closest competitor, Republic Services, controls only 19%.

In a recent interview, CEO Jim Fish indicated that the company is facing challenges due to wage inflation. But it’s also taking steps to move away from its dependence on the labor force by investing money in automation and technology. This includes spending on optical sorting machines for recyclables and switching to automated side-loading vehicles.

Fish also reiterated the company’s commitment to its shareholders, which is significant for retirees. It plans to continue raising its dividend and buying back stock, which means more money in investors’ pockets.

Image source: Getty Images.

Sustainability is a large part of both Waste Management’s and this country’s vision for the future. On Feb. 9, the company will host its 11th annual Sustainability Forum, where eco-visionaries will get together and share knowledge.

I know what you’re thinking: “The company’s commitment to the environment and its shareholders is wonderful, but what about the numbers?” They don’t disappoint.

WM recently reported fourth-quarter 2021 results, and shareholders were happy. Both adjusted earnings per share of $1.26 and total revenue of $4.68 billion easily beat analyst estimates and improved 11.5% and 15%, respectively, year over year. And there’s wonderful news in that the largest increase was in the recycling segment, which surged 55% over the previous year. I may be talking about garbage, but these growth numbers are anything but.

The dividend yield as of this writing is 1.76%, or $2.60 per share. And the company is still growing, so investors are likely to see a rising stock price in addition to that friendly dividend. Although Waste Management isn’t a Dividend Aristocrat yet, it’s well on its way. The company has increased its dividend payment annually for 18 years in a row and is only seven years from joining that aforementioned elite group.

The next time someone tells you Waste Management is garbage, you can happily say “Right on!”

Image source: Getty Images.

Get your portfolio vaccinated with growth AND yield

Although Pfizer has been around since 1849, investors didn’t fall in love with it until it unloaded its Upjohn business in 2020 (which was dragging down its revenue) and developed its COVID vaccine, in partnership with BioNTech (NASDAQ: BNTX). While 118 million people have received its jab in the U.S., 75% of its vaccine revenue comes from overseas. According to the company’s most recent earnings report, it expects vaccine revenue to reach $36 billion for 2021.

And that’s not all. Pfizer also has Paxlovid, a pill that’s given at the first sign of coronavirus infection and has received Emergency Use Authorization. Add that to its coronavirus vaccine, and Pfizer is expected to earn $50 billion from these drugs. The more money in Pfizer’s pocket, the more money in investors’ pockets, as well.

The stock prices of other vaccine makers, like Moderna, shot up much higher than Pfizer’s during the past couple of years, but the latter has a huge pipeline in which the coronavirus treatments are only a small part. Pfizer is generating blockbuster revenue from at least six other products and has 94 additional programs in various stages of testing.

But what makes this company great for a retirement portfolio is that it’s trading at only 8.5 forward earnings estimates and pays a dividend that yields just under 3%. With numbers like these, there’s room for stock-price appreciation while you’re collecting this solid dividend.

Market corrections are scary for all investors, but especially for people close to or in retirement. By purchasing companies that provide growth along with a strong dividend, you can ease some of that pain. These two dividend stocks will keep contributing to your retirement portfolio no matter what’s happening in the financial world. And this can help take the sting out of any stock market correction.

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Barbara Eisner Bayer owns Pfizer and Waste Management. The Motley Fool recommends Moderna Inc. and Waste Management. The Motley Fool has a disclosure policy.

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