When it comes to retirement, it’s important to set a goal. Many investors may be looking for capital appreciation for their assets, to grow their assets faster than inflation over a certain time frame. This kind of strategy is what most investors are looking for. And given how high inflation has been in recent years, the capital appreciation that most assets offer is becoming increasingly important.

However, it is also important to find stocks that can also provide reliable income over the long term. After all, about a third of all long-term stock gains come from the dividend component of the stock market.

For those looking for sustainable cash flow streams for retirement, but still want exposure to long-term growth trends, owning a well-diversified stock portfolio is becoming increasingly important. Here are three companies that I believe can provide long-term investors with the kind of total returns they’re seeking today.

Key points about this article:

• For people approaching or entering retirement, it is increasingly important to find stocks that can deliver consistent total returns over the long term.
• Those looking for assets that can offset the impact of inflation over the long term may want to consider the following three stocks.
• If you are looking for stocks with great potential, make sure to grab a free copy of our brand new report “The Next NVIDIA”It includes a software stock that we are confident has 10x potential.

PepsiCo (PEP)

Shaquille O’Neill in front of a Pepsi Diner plate

PepsiCo (NASDAQ:PEP) is one of the world’s leading consumer staples stocks. With a portfolio of sustainable brands including Pepsi, Gatorade and Doritos, the company has boosted many investors’ portfolios over the past few decades.

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

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

The company has increased its dividend by 6.6% over the past five years and its latest Dividend increase of 7.1% reflects strong management confidence. With 52 consecutive years of dividend growth and a payout ratio of 66%, PepsiCo can maintain its dividend while investing in growth and share buybacks. That’s a winning combination for investors with a long-term horizon.

Cisco (CSCO)

A Cisco logo on a sign in front of the company’s headquarters

Stronger reporting finances in Q4 2024, Cisco systems (NASDAQ:CSCO) reported adjusted EPS of $0.87, beating estimates of $0.85. Revenue reached $13.6 billion, beating forecasts despite a 10% year-over-year decline. The company also announced a restructuring plan that included job cuts and pretax charges of $1 billion for severance. Accordingly, Cisco expects to record $70 million in charges through 2025 as part of this restructuring.

Cisco CEO Chuck Robbins 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 is forecasting revenue to be in the range of $13.65 billion to $13.85 billion and adjusted EPS to be in the range of $0.86 to $0.88, slightly above analysts’ previous expectations.

Cisco’s full-year guidance calls for revenue in the range of $55 billion to $56.2 billion and adjusted earnings per share of $3.52-$3.58. The company reported a non-GAAP gross margin of 67.9% in the fourth quarter, the highest in 20 years. In that report, Piper Sandler maintained a neutral rating but noted potential improvements in the company’s outlook as a positive sign. Additionally, Cisco also announced a dividend of $0.40 per share, payable on October 23, 2024, giving investors a healthy 3.2% dividend yield.

Microsoft (MSFT)

A Microsoft logo consisting of large parachutes being held by people on the side of a building

Microsoft’s (NASDAQ:MSFT) fiscal Q4 resultsreleased 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 capitalize on its operating system overhaul and potential future acquisitions in AI and cybersecurity. Given its attractive valuation, MSFT stock appears to be a solid choice for conservative investors seeking exposure to Big Tech.

Azure saw a significant 29% revenue growth in the last quarterlargely driven by AI-related products, with growth in this area from seven to eight percentage points. CFO Amy Hood predicted accelerated growth for Azure in Q2, fueled by higher capital spending on AI services. Bank of America noted that increasing adoption of Microsoft’s AI services on Azure was positive for the company’s 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 this year and more than double to 103 million next year. This trend contributed to a 9% increase in Windows PCs priced over $800.

While growth may not be explosive given its large size and a sluggish PC market, Microsoft’s strong position in the AI ​​sector and reasonable valuation make it attractive to conservative investors looking for exposure to big tech stocks with decent growth prospects. The company’s 0.7% dividend yield is really just icing on the cake.

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