We have recently put together a list of the 15 Top Stocks for Retirement Investment.In this piece, we will examine the position of Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) relative to other stocks.
It is widely acknowledged that retirees with private income streams, pensions, or other job opportunities are generally in a better situation than those who solely depend on social security. According to the Federal Reserve, workers appeared quite optimistic about their retirement savings in 2023. That year, 27% of adults in the United States had already retired, with 15% still engaged in some work. Most retirees opted for part-time positions instead of full-time work. However, individuals with disabilities or lower educational backgrounds faced more challenges in securing employment after retirement. A significant 51% of retired adults chose to retire to engage in personal projects or to spend time with family, while 46% attributed their retirement decision to health challenges, caregiving responsibilities, or job downsizing.
Although social security remains the chief source of income for retirees, the Federal Reserve’s 2023 report revealed that 80% of retirees had private income sources. Specifically, 56% received pensions, 48% depended on investment income—like interest, dividends, or rental income—and 33% had some employment income. Notably, 92% of retirees surveyed were aged 65 or older.
In recent decades, corporations have significantly reduced pension offerings, placing the responsibility for retirement savings onto employees through mechanisms like 401(k) plans. As of 2022, merely 15% of private industry employees had access to a pension. Furthermore, retirement satisfaction has declined, with only 48% of retirees aged 62-75 expressing high satisfaction in 2023, a drop from 62% in 2020. Escalating inflation has reduced buying power for retirees, and the incidence of credit card debt among them has surged to 68%, up from 43% in 2020.
Sam Dogen, an early retiree and founder of Financial Samurai, shared with CNBC that dividends serve as a stable income source. He remarked:
“Stock dividends represent my preferred strategy for passive income because it is entirely passive.”
While younger investors often reinvest their dividends, retirees can leverage them as a stable income source. Dogen emphasized the persistent growth of the stock market over time, suggesting that dividend stocks are therefore a reliable income stream in the long term. In light of this, we will now explore some of the top stocks to consider for retirement.
For the purposes of this article, we employed the Finviz stock screener to identify stocks with dividend yields exceeding 2% and dividend payout ratios below 30% as of February 19. We prioritized stocks with a solid history of paying dividends, demonstrating consistent dividend growth, and exhibiting financial stability to avoid yield traps. The list below is ranked in ascending order based on hedge fund sentiment as of Q4 2024.
Why are we focused on stocks that hedge funds favor? The answer is straightforward: our research indicates that we can exceed market performance by emulating the top stock selections of leading hedge funds. Our quarterly newsletter adopts a strategy that selects 14 small-cap and large-cap stocks every quarter and has achieved a return of 363.5% since May 2014, outperforming its benchmark by 208 percentage points (see more details here).
A cheerful employee in front of a contemporary building amid a lively city backdrop.
Dividend Yield as of February 19: 2.20%
Number of Hedge Fund Holders: 12
Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) is a global banking holding company based in Japan, providing services that include banking, trust, securities, digital finance, credit cards, mergers and acquisitions consulting, lending, and investment solutions. On February 17, MUFG’s subsidiary, MUMSS, unveiled MUFG Morgan Stanley Credit Solutions to enhance its private credit business and deliver improved financing options to wholesale clients. With the private credit sector expanding in the US and Europe, the company anticipates substantial growth opportunities in Japan, providing an alternative to traditional bank loans and introducing a new investment avenue. The newly established subsidiary aims to offer innovative services to bolster industry growth and support financial reforms in Japan.
For the quarter ending December 31, 2024, Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG) recorded unprecedented profits, with net operating profits reaching ¥1,714.6 billion, an increase of ¥194.4 billion year-over-year, accomplishing 87% of its FY24 target. Net income soared to ¥1,748.9 billion, marking a ¥451.0 billion rise from the previous year, equating to 99% of its annual goal. This represents the highest profit level for MUFG, fueled by substantial customer growth, gains from equity transactions, and earnings from equity method investments. For the fiscal year concluding in March 2025, MUFG declared an interim dividend of ¥25 per share on December 5, 2024, making it one of the top stocks suitable for an income portfolio.
According to Q4 data from Insider Monkey, 12 hedge funds maintained positions in Mitsubishi UFJ Financial Group, Inc. (NYSE:MUFG), a decrease from the 18 funds in the previous quarter. Ken Fisher’s Fisher Asset Management has emerged as the largest stakeholder in the company, holding 7.8 million shares valued at nearly $92 million.
Overall, MUFG places 15th on our list of the finest stocks for retirement investment. While we recognize MUFG’s investment potential, we believe that certain AI stocks may offer even greater promise for higher returns in a shorter timeframe. If you’re in search of a more alluring AI stock than MUFG that trades at less than 5 times its earnings, check out our report on the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article was originally published at Insider Monkey.
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