We recently published a list of Retirement Stock Portfolio: 12 Safe Tech Stocks to Consider. In this article, we’ll take a look at where Global Payments Inc. (NYSE:GPN) stacks up against other safe technology stocks in the retirement portfolio.
In the past, retirees could rely on bonds for steady income, with 10-year Treasury yields around 6.50% in the late 1990s. However, current rates are significantly lower, resulting in a major impact over time. For example, a $1 million investment in 10-year Treasury bonds now yields more than $1 million less than it did 20 years ago. Added to this concern is the fact that today’s retirees are increasingly uncertain about the future of Social Security. Americans with employer-provided retirement plans estimate they will need $1.2 million to retire comfortably, according to a survey by investment manager Schroders. However, almost half expect to save less than $500,000. Another study from the Transamerica Institute shows that only 1 in 5 middle-class individuals are confident in their ability to retire or maintain a comfortable lifestyle during retirement. Many of these anxious pre-retirees plan to start receiving Social Security benefits before age 67, even though waiting until at least age 70 would maximize their monthly payments for life. Overall, retirement anxiety appears widespread.
That said, the world of retirement may not be as bleak as it first appears. According to this year’s survey by the Employee Benefit Research Institute (EBRI) and Greenwald Research, nearly 80 percent of retirees believe they can spend money however they want, and an even higher percentage believe live the retirement lifestyle they envision. In addition to managing their current expenses, more than half of retirees are still saving for the future. Key factors contributing to this success include planning, such as deciding when to apply for Social Security, preparing for emergencies, estimating the length of retirement, and periodically reviewing and rebalancing asset allocations to stay on track in the face of market fluctuations.
Additionally, inflation slowed last month to its weakest pace in more than three years, as price increases continued to ease from their generational highs. With concerns about the rising cost of living playing a central role in the presidential election campaign, the Bureau of Labor Statistics released its final report on inflation before voters go to the polls. The consumer price index rose 2.4% year-on-year in September, slightly above economists’ expectations of 2.3% but down from 2.5% in August. The “core” index, excluding the volatility of food and energy prices, increased by 3.3% over one year. On a monthly basis, prices increased by 0.2%. Meanwhile, the U.S. economy as a whole remains strong, with employers adding 254,000 jobs in September, countering fears of a labor market slowdown.
That said, in tough economic times, investors, especially those looking to secure their retirement, often turn to low-risk stocks that offer stable returns amid uncertainty. Healthcare and consumer stocks are generally favored in such conditions, but technology stocks can also be a smart investment if chosen wisely. Technology stocks have consistently outperformed the broader market for several years and now represent more than 30% of total market holdings. That said, here we present a list of 12 safe tech stocks to consider for a retirement stock portfolio.
Our methodology
For our list of the 12 best safe stocks for a retirement portfolio, we used stock screeners, ETFs, and online rankings to identify mega-cap tech stocks with low beta values, a history of consistent dividend payments and well-established businesses. These stocks were then ranked based on hedge fund sentiment, as reported in the Q2 2024 Insider Monkey database.
At Insider Monkey, we’re obsessed with the stocks hedge funds are piling into. The reason is simple: our research has shown that we can outperform the market by imitating the stocks selected by the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Global Payments Inc. (GPN): A Fintech Innovator for Retirement Portfolios
A payment terminal in action with customers outside the experience.
Beta value: 0.99
Dividend yield: 1.0%
Number of hedge fund holders: 66
Global Payments Inc. (NYSE: GPN) is a United States-based financial technology company providing payment technology and software solutions. Its extensive global commerce network includes 4.6 million merchant accounts, 4,000 technology partners, 1,500 financial institutions and spans more than 100 industries.
In the second quarter, Global Payments Inc. (NYSE: GPN) reported strong financial results, with adjusted net revenue up 6% to $2.32 billion and adjusted earnings per share up 12%. % to $2.93.
Barclays recently reaffirmed its overweight on Global Payments Inc. (NYSE: GPN) with a price target of $120, despite investor concerns about a potential slowdown in the company’s Merchant Solutions segment in 2025. Barclays countered fears of the market regarding a loss of market share, noting that the slowdown is not as alarming as it seems. The company highlighted that over the past year, the company’s point-of-sale (POS) and software products grew by 10%, in-app and in-app products by 8%, and core payments by 5%, resulting in overall single-digit growth.
At the end of the second quarter of 2024, 66 hedge funds tracked by Insider Monkey held positions in Global Payments Inc. (NYSE:GPN), worth a total of $3.678 billion. Pzena Investment Management was the largest shareholder during this period.
Overall, GPN ranks 3rd on our list of safe tech stocks in the retirement portfolio. While we recognize the potential of GPN as an investment, our conviction lies in the belief that AI stocks hold more promise in terms of higher returns in a shorter time frame. If you’re looking for an AI stock that’s more promising than GPN but is trading at less than 5x earnings, check out our report on cheapest AI stock.
