With the world seemingly attempting to destroy itself, investors could use some under-the-radar retirement stocks. No, these ideas won’t make you rich. Instead, they’re more aligned with keeping your portfolio relatively safe through the storm. A combination of steady dividend payments and 10% upside potential by end of 2023 should make these ideas even more attractive.
Of course, most folks arguably want the hottest tips on Wall Street. The problem with going through this approach is the broader context. Right now, the U.S. economy operates ambiguously amid the Federal Reserve’s hawkish monetary policy. Beyond our borders, the Ukraine crisis will probably drag on at least for the next several months. On top of all this, we have global recession fears.
Under this framework, under-the-radar retirement stocks with 10% upside potential carries a premium. Below are some compelling ideas to consider.
Tractor Supply (TSCO)
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A boring name but a necessity, Tractor Supply (NASDAQ:TSCO) is an American retail chain of stores. Specifically, the company specializes in the home improvement, agriculture, lawn and garden maintenance, livestock and equine sectors. In addition, it provides pet care products for recreational farmers and ranchers, pet owners and landowners.
By nature, Tractor Supply represents one of the under-the-radar retirement stocks to buy. However, on a technical basis, shares slipped nearly 14% on a year-to-date basis, providing a relative discount. In addition, Tractor Supply provides a forward yield of 1.83%. It’s not the greatest thing in the world but it’s something.
Per Gurufocus.com, TSCO rates as a fairly valued investment. Based on its core attributes – strong three-year revenue growth rate and a highly profitable business – TSCO should gain a little over 10% by the end of 2023. Other factors to bolster Tractor Supply’s case is decent stability in the balance sheet. As well, the company features a return on equity of 53%, one of the highest metrics in the industry. Therefore, it’s a high-quality business.
Robert Half (RHI)
Admittedly, you’re probably not hearing too many great reports about staffing agency Robert Half (NYSE:RHI). With the labor market remaining tight, people who want jobs can get jobs. So, why bother with Robert Half? At the same time, this inquiry’s underlying sentiment makes RHI one of the under-the-radar retirement stocks.
True, indicators such as the latest September jobs report does seem to suggest that employers hire like there’s no tomorrow. But tomorrow does exist. His name is Federal Reserve Chair Jerome Powell. Committed to cooling inflation, Powell seems ready to cool off the labor market, or at least uppercut it, if necessary. But under those circumstances, many folks will enter desperation mode. That’s why RHI represents one of the under-the-radar retirement stocks. It’s all about looking ahead.
Fundamentally, Robert Half represents a full stack. First, it features a forward yield of 2.16%. Second, the company enjoys a robust balance sheet, solid growth and excellent profitability metrics. Based on its projected fair valuation trends, RHI should easily be up 10% by end of 2023.
Amdocs (NASDAQ:DOX) specializes in software and services for communications, media and financial services providers and digital enterprises. Given the relevance of this industry, Amdocs achieved a rare feat in 2022. It’s up for the year, to the tune of 5.5%.
Not discussed with much regularity, the lack of exposure makes DOX one of the under-the-radar retirement stocks to buy. For the income-seeking folks, Amdocs features a forward yield of 2%. Moreover, it boasts nine years of consecutive dividend increases. In contrast, the technology sector’s average yield sits at 1.37%. More importantly, Amdocs carries strong financial metrics. Anchored by a decently stable balance sheet, the company commands excellent income statement metrics. For instance, its three-year free cash flow (FCF) growth rate stands at 34.7%, beating out the industry median of 11.5%. As well, its net margin of 12.1% beats out nearly 82% of the competition.
Based on prevailing valuation trajectories, DOX should gain close to 10% by end of 2023. However, if you can wait till the middle of 2024, DOX has a better chance of shining.
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A business software giant, SAP (NYSE:SAP) undergirds the supply chain flow of several Global 500 companies. Of course, the problem right now is that with global supply chains snarled, SAP ironically struggled for relevance. For the year, shares slipped a staggering 42%, disheartening market participants.
At the same time, the red ink makes for SAP being one of the under-the-radar retirement stocks. Indeed, the volatility represents a great time to consider the company’s myriad positives. For instance, it features a forward yield of 2.5%. Again, the technology sector’s average yield sits at 1.37%.
Even better, Gurufocus.com rates SAP as significantly undervalued. Enjoying a decently stable balance sheet, SAP draws you toward its robust income statement. For example, the company features a three-year FCF growth rate of 24.5%, besting 66% of the competition. On the bottom line, SAP has a net margin of 13.4%, superior to more than 83% of the industry. As well, SAP features a high-quality business, with a return on equity of 10.6%. However, investors may need to be a little patient with this one. Fundamentally, it’s on track to be up 3% by end of 2023. By end of 2024, it could be near 10% up.
Tied to the industrial products industry, Snap-on (NYSE:SNA) enjoys everyday relevance. Manufacturing and marketing high-end tools and equipment for professional use in the transportation industry, the company is a staple among the automotive, marine, aviation and railroad industries. Following the close of the Oct. 12 session, SNA is down 2.6% for the year. That’s not bad considering the wider circumstances.
SNA brings plenty of goodies to the table among under-the-radar retirement stocks. For one thing, the company carries a forward yield of 2.73%. In contrast, the consumer discretionary average yield is 1.9%. On the financials, Snap-on commands significant strengths across the board.
On the company’s balance sheet, it features an equity-to-asset ratio of 0.63. This compares to the industry median of 0.54. Regarding income, Snap-on has a three-year book growth rate of 12%, beating out nearly 71% of the competition. Its return on equity stands at a stout 20.8%, reflecting a high-quality business.
Based on valuation trajectories, SNA may be up 5% by the end of 2023. However, if sentiment moves toward Snap-on’s stable business, shares have a solid shot at 10% up.
Skyworks Solutions (SWKS)
Skyworks Solutions (NASDAQ:SWKS) manufactures semiconductors for use in radio frequency and mobile communications systems. Because of this specialty, Skyworks commands significant relevance toward the 5G rollout. Essentially, the company undergirds the latest innovation in wireless connectivity, thereby making it one of the more compelling under-the-radar retirement stocks to buy.
While SWKS represents a known commodity, not too many folks want to touch it right now; hence its in-the-shadows profile. Since the start of this year, Skyworks tanked over 50% of equity value. However, the company could make for an interesting long-term idea for patient, volatility-tolerating investors. Notably, Skyworks provides a forward yield of 3.12%. It also features eight years of consecutive dividend increases.
Though the losses for SWKS are glaring, it might be a mistake to focus too much on this distraction. Per Gurufocus.com, SKWS is significantly undervalued. In addition, Skyworks enjoys a stable balance sheet and robust growth. Moreover, with a return on equity of nearly 25% (among the upper echelon in the industry), Skyworks represents a high-quality business.
Based on valuation trajectories, SWKS has a solid chance of breaking into double-digit territory sometime in 2024. Fundamentally, the company is tied in with one of the most enticing growth sectors in 5G.
Silicon Motion (SIMO)
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Silicon Motion (NASDAQ:SIMO) carries significant risks. It develops NAND flash controller integrated circuits for solid-state storage devices. However, because of the supply chain disruptions in the semiconductor space, along with regional geopolitical tensions, SIMO is volatile.
Since the beginning of this year, SIMO stock dropped nearly 39% of equity value. In the trailing month, it’s down 19%, reflecting ever-worsening volatility. At the same time, once the selloff fades, SIMO could be intriguing. For instance, the company features a forward yield of 3.12%. As well, it enjoys eight years of dividend increases.Now, another risk factor to consider. Gurufocus.com labels SIMO as a possible value trap, a warning that shouldn’t go ignored. However, it’s also fair to point out that the company enjoys strengths across the financial spectrum. This includes excellent growth and profitability metrics. In addition, its balance sheet carries no long-term debt.
With recent volatility, it’s a bit difficult to predict where SIMO may go. However, based on valuation trends, SIMO can easily hit 10% up by the end of 2024 if circumstances in the broader semiconductor space improves.
On the date of publication, Josh Enomoto 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.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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