When it comes to retirement, setting a goal is important. Many investors may be looking for capital appreciation for their assets, looking to grow their assets faster than inflation over a given time frame. Such a strategy is what most investors are after. And given how high inflation has been in recent years, the capital appreciation most assets provide is becoming increasingly important.

However, finding stocks that can also provide reliable income over the long-term is also important. After all, around one-third of all long-term stock gains come from the dividend component of the stock market.

For those looking to create durable cash flow streams for retirement, but also still hold exposure to long-term growth trends, owning a portfolio of stocks that’s well diversified is going to be increasingly important. Here are three companies I think can provide long-term investors with the sort of total returns they may be chasing right now.

Key Points About This Article:

• For those entering or nearing retirement, finding stocks that can provide consistent total returns over a long time horizon is becoming more important.
• Those seeking assets that can offset the impact inflation will have on over time may want to consider the following three stocks.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

PepsiCo (PEP)

PepsiCo (NASDAQ:PEP) is among the world’s leading consumer discretionary stocks. With a portfolio of durable brands including Pepsi, Gatorade, and Doritos, the company has powered many investor portfolios higher over the decades.

The company’s dominant market position has led to shelf space gains over the long-term, and pricing power that remains unmatched. This has allowed the company to deliver steady revenue and earnings growth, with Pepsi’s top line recently surpassing $91 billion annually. Indeed, for investors looking for companies with sustainable long-term business models, this is a company that looks well-positioned to continue to ride its durable competitive advantage to even greater gains in the years and decades to come.

Pepsi’s performance this year has been less than stellar, with PEP stock trading roughly flat since the start of the year. However, with a strong 3.1% dividend yield, and distributions which are likely to grow over time, Pepsi is a top-tier blue chip dividend stock I think is worth picking up on dips.

The company has increased its dividend at a 6.6% clip over the past five years, and its latest 7.1% dividend hike reflects strong management confidence. With 52 consecutive years of dividend growth and a 66% payout ratio, PepsiCo can sustain its dividend while investing in growth and share repurchases. That’s a winning combination for investors with a long time horizon. 

Cisco (CSCO)

Reporting stronger financials in Q4 2024, Cisco Systems (NASDAQ:CSCO) brought in adjusted EPS of $0.87, beating estimates of $0.85. Revenue reached $13.6 billion and exceeded forecasts, despite falling 10% year-over-year. The company also announced a restructuring plan that included job cuts and pre-tax charges of $1 billion for severance. Accordingly, Cisco expects to record $70 million in charges by 2025 as part of this restructuring. 

Chuck Robbins, Cisco’s CEO, commented on the company’s strong finish to fiscal 2024 driven by robust order growth from customers who rely on Cisco for AI-era connectivity and security. For Q1 FY 2025, Cisco projects revenue to come in between $13.65-$13.85 billion and adjusted EPS within a range of $0.86-$0.88, slightly above previous analyst expectations. 

Cicsco’s full-year guidance targets revenue between $55 and $56.2 billion and adjusted EPS of $3.52-$3.58. The company reported a Q4 non-GAAP gross margin of 67.9%, the highest in 20 years. On this report, Piper Sandler maintained a Neutral rating, but acknowledged potential improvements to the company’s outlook as a positive sign. Additionally, Cisco also declared a $0.40 per share dividend, payable on October 23, 2024, which provides investors with a healthy 3.2% dividend yield. 

Microsoft (MSFT)

Microsoft’s (NASDAQ:MSFT) fiscal Q4 results, released on July 30, highlighted rapid growth in its Azure cloud division and substantial gains from the AI boom. The company is another tech giant that appears poised to benefit from its operating system refresh and potential future acquisitions in AI and cybersecurity. Given its attractive valuation, MSFT stock appears to be a solid choice for conservative investors seeking Big Tech exposure.

Azure saw a significant 29% sales boost last quarter, driven largely by AI-linked products, with growth in this area increasing from seven to eight percentage points. CFO Amy Hood anticipated accelerated growth for Azure in Q2, fueled by higher capital spending on AI services. Bank of America noted the strengthening adoption of Microsoft’s AI services on Azure as a positive for the company’s forward outlook. 

Impressively, Microsoft Windows was installed on 40% of the 8.8 million AI PCs shipped last quarter, with total AI PC shipments expected to reach 44 million for the year and more than double to 103 million next year. This trend contributed to a 9% rise in Windows PCs priced over $800.

Although its growth might not be explosive due to its large size and a sluggish PC market, Microsoft’s strong position in the AI sector and reasonable valuation make it appealing to conservative investors seeking exposure to big tech stocks with a decent growth outlook. The company’s 0.7% dividend yield is really just a cherry on top. 

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