3 Dividend Stocks That Are Perfect for Retirement

While they're often grouped together, not all dividend stocks are the same. Some that are sporting the highest yields only do so because their payouts aren't dependable. Others offer strangely low yields, but those payouts may rise dramatically each and every year. Still, others boast average yields and average payout growth but have paid and increased their annual dividends for decades. Investors should look at every facet of a dividend-paying stock to get a better sense for which type they might own or consider purchasing. This is especially true for retirees, many of whom rely on dividend income to pay their bills.

Between potential pitfalls like price regulation and "patent cliffs," it has traditionally been tough to trust pharmaceutical stocks as income engines. But some drug companies have gotten very good at navigating around these headaches. Among the most learned is Merck (NYSE:MRK). They may be boring to the point of being mind-numbing, but utility stocks make good sense for income-seeking investors. While consumers may postpone a vacation or skip a trip to the mall when times are tough, they generally do whatever it takes to keep the lights on. Their reliable monthly payments translate into equally reliable quarterly dividends for shareholders of utility names. The pick of the litter right now is Edison International (NYSE:EIX). Its yield of 2.4% isn't thrilling, but a closer look makes Clorox (NYSE:CLX) a surprisingly compelling dividend payer. Its payout has been growing at an annualized clip of 7.6%, and perhaps more important, its dividend has grown every year for the past 43 years.

Source: Motley Fool

Related Articles:

- 7 Dividend Stocks With A Low P/B Ratio

- 7 Higher Yielders With A Low Free Cash Flow Payout

- 3 Dividend Stocks For A Confident And Secure Future

- 4 Low P/E Value-Stocks, Yielding 2% Or Higher

- High-Yield, High-Return Investments To Increase Income While Waiting On Dividend Growth