Charles Lewis Sizemore, CFA

About the Author Charles Lewis Sizemore, CFA

Charles Lewis Sizemore, CFA is the founder and principal of Sizemore Capital Management LLC, a registered investment advisor. Charles has been a repeat guest on CNBC, Bloomberg TV and Fox Business News, and has been quoted in Barron’s Magazine, The Wall Street Journal and The Washington Post. He is a contributor to Forbes Moneybuilder, and has been featured in numerous publications and well-reputed financial websites, including MarketWatch, SmarterAnalyst,, InvestorPlace, GuruFocus, MSN Money, and Seeking Alpha. He is also the co-author, along with Douglas C. Robinson, of Boom or Bust: Understanding and Profiting from a Changing Consumer Economy (iUniverse, 2008). Charles holds a master’s degree in Finance and Accounting from the London School of Economics in the United Kingdom and a Bachelor of Business Administration in Finance with an International Emphasis from Texas Christian University in Fort Worth, Texas, where he graduated Magna Cum Laude and as a Phi Beta Kappa scholar. He also maintains the Chartered Financial Analyst (CFA) designation in good standing.

3 Core Retirement Stocks for Every Portfolio: McDonald’s Corporation, Realty Income Corp, Unilever plc (ADR)


Yogi Berra, the long-time catcher for the New York Yankees, might be a truly wise man… the American Confucius. Or he might actually be mentally handicapped. We’ll never really know. But his witty yogisms have left their mark on the English language over the decades. Perhaps centuries from now we will find them in fortune cookies.Well, I’m going to adapt a quote attributed to him — “The future ain’t what it used to be” — to retirement. The future of retirement ain’t what it used to be.Retirees today generally do not have a pension to fall back on, and Social Security hardly pays the bills. This means that now, more than ever, Americans are responsible for funding their own retirements.Today, we’re going to look at three stocks that I consider a solid foundation for a retirement portfolio. All pay respectable current dividends, and — importantly — all have a long history of raising their dividends. That’s critical to ensure your income stream keeps up with inflation over time.Three stocks does not make a properly diversified portfolio, of course, but these three can be thought of as core holdings you can hold through thick and thin. Buy them, collect the dividends, and put your mind at ease.



At the top of the list is a stock that has become nearly as a big of a pariah as Big Tobacco: Global fast-food giant McDonald’s Corporation (NYSE:MCD).

I know, I know. Americans are eating healthier these days, and that means fewer Big Macs and fries washed down with sugary Dr. Pepper. (Yes, Dr. Pepper. It’s a Texas thing. Deal with it.)

But keep in mind, McDonald’s has been around for a long time, and its menu has changed more times than I can count since the stock went public in 1965. As Americans’ tastes have changed, so have McDonald’s offering.

I should also add that McDonald’s is not purely an American company. In fact, it gets less than a third of its sales in the U.S. A little over 40% of sales come from Europe with most of the rest coming from Asia and emerging markets.

Why do I like McDonald’s as a core retirement stock?

It’s all about the dividend. McDonald’s has raised its dividend every year since 1977, and its dividend has been growing at a blistering pace over the past decade. Over the past 10 years, McDonald’s has grown its dividend at a 19.5% clip. Dividend growth has been a little more modest of late, growing at a 9% clip over the past three years.

That’s not half bad. McDonalds is a champion among retirement stocks, and you can buy it today with a 3.5% dividend yield.


Realty Income

Next up is a stock that I own…and have pledged never to sell: the “Monthly Dividend Company,” Realty Income Corp (NYSE:O).

I’m serious when I say that I intend to pass my shares of Realty Income to my kids.

And how can I be so confident that Realty Income will still be around decades from now?

Let’s take a look.

To start, Realty Income doesn’t really have to worry about technological obsolescence. Realty Income is a landlord with a portfolio of more than 4,300 properties, most of which are high-quality, high-traffic retail sites. A Walgreens or CVS pharmacy is a “typical” property for Realty Income. Unless we start living in underground pods like the poor souls in The Matrix, there is really not much to worry about here.

Furthermore, Realty Income’s properties are leased on a triple-net basis, meaning that the tenants are responsible for paying all maintenance, taxes and insurance.

Realty Income has paid 538 consecutive monthly dividends, and has raised its dividend for 70 consecutive quarters.

Realty Income, like the rest of the REIT sector, has taken its knocks in 2015. The share price is down nearly 20% from its recent fears due to investor concerns about rising bond yields.

Bond yields, shmond yields. At today’s prices, Realty Income yields an attractive 5.0%. And unlike bond coupon payments, which are the same until maturity, Realty Income’s dividend rises every year.



And for my final core retirement stock, I give you consumer goods and packaged foods company Unilever plc (ADR) (NYSE:UL). Pending the actual End of Days, Unilever will still be around 30 years from now and still paying a solid dividend.

How can I be so sure?

If you’ve ever set foot in a supermarket anywhere in the world, then you are familiar with Unilever’s brands. Among many others, they include: Axe, Ben & Jerry’s, Bertolli, Dove, Lipton, St Ives, VO5, and Vaseline. If there was ever a set of products that was apocalypse-proof, it would be Unilever’s.

But while its products may be mundane consumer staples in the West, Unilever has excellent growth prospects abroad. Unilever gets nearly 60% of its revenues from emerging markets, meaning that we should see healthy growth for a long time to come.

The company has raised its dividend every year for 42 consecutive years and currently yields 3.4%.

While not exceptionally cheap at current prices, Unilever is a certainly a stock to buy on any pullbacks.

Out of the 8 analysts polled by TipRanks, 2 rate McDonald’s stock a Buy, and 6 rate the stock a Hold. With a return potential of 7.15%, the stock’s consensus target price stands at $101.50.

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