4 Dow Stocks Every Retiree Should Own

It's arguably the bluest of the blue-chip stock indexes, dating back to the 19th century.

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It's arguably the bluest of the blue-chip stock indexes, dating back to the 19th century. The Dow Jones industrial average is a bastion of large, stable companies that pay dividends and represent some of the very best firms in their respective industries. That's why a retiree looking for a high-quality company with a dependable income stream would be wise to consult the Dow. If we had to pick just four of the 30 stocks that make up the Dow, we would focus on names with some combination of high or fast-rising dividends and promising business prospects. Another requirement would be that the stock price be reasonable relative to the company's expected future earnings. And if management is sitting on loads of cash that can be returned to shareholders through dividend hikes and share buybacks, so much the better. Based on a mix of those criteria, these four Dow components stand out as must-have holdings for retirees.

Disclaimer

All prices and other data are as of January 3, 2017. Price/earnings ratios are based on the average of analysts’ forecasts for calendar 2017, as compiled by Zacks Investment Research. Stocks are listed alphabetically.

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Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.