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If you’re retired or closing in on that moment, you probably already understand your investing should be more about reliability than anything — especially as it relates to income. Your paychecks are going to end and Social Security probably won’t cut it.

With this in mind, investors searching for dividend-paying stocks to own through your golden years may want to research The AES Corporation (NYSE:AES), Fifth Third Bancorp (NASDAQ:FITB) and Automatic Data Processing (NASDAQ:ADP). Let’s take a look at all three.

AES Corporation

Dividend yield: 2.2%

Dividend CAGR (5 year): 6.5%

Utility company AES should go on your list of dividend-producing stocks for your perfect retirement portfolio.

You may not be familiar with its name, but that’s for a good reason — it’s a small utility company according to most standards, with a market cap of just $18 billion. And a big portion of its power production takes place in foreign nations; AES has operations on four separate continents. Ownership of this stock grants you easy geographical diversity, plus the reliability of a utility. Consumers might cut back on spending, but they won’t cut back on electricity.

AES has a unique edge to it — it’s positioned for the “green” era of power production. The company is the biggest solar farm producer in the world, and the global leader of battery energy storage. Previously this month, the company made a deal with Hawaii to build a solar pumped storage location for a hydro power project. In Nov, the company made an agreement with the Alberta Investment Management Corporation to combine its sPower solar energy platform with AES’ clean energy business. This new group will eventually create 12 gigawatts of power, given the latest plans. Overall, AES increases its production by 2 gigawatts and 3 gigawatts every year, while it also removes coal-powered plants.

It’s hard to put a number on how the planet’s shift away from fossil will help AES. But since the International Energy Agency predicts the planet’s renewable energy power production will grow 50% between 2019 and 2024, AES is stationed to do well in the future.

Fifth Third Bancorp

Dividend yield: 3.3%

Dividend CAGR (5 year): 15.7%

Record-low interest rates have been a problem for banks. Margins on loans are directly connected to the current rates at the time. The greater the rate, the more money a loan makes. The weaker the rate, the less money is made with lending activities. Bank of America announced a 17% lowering in its 3rd quarter net interest income. Wells Fargo reported the same type of income fall for the same period. All of the biggest banks in the industry, besides Wells Fargo, have kept their dividends. It has been hard after the Federal Reserve upped their stress tests after the pandemic started.

Fifth Third Bancorp is a strange player in all of this. Its third quarter net interest income fell, but just by a small 6% year over year. Through most of 2020, their net interest income was actually up by about 1%. While the regional company did take some earnings hits in the initial quarters of last year, those problems were related to costs linked with the pandemic and not due to the decrease of profits on loans. Its Q3 per-share profit of $0.78 is close to the average, and whats more, it is more than enough to pay their dividend, which is currently at $0.27.

With that income well shielded by a very stable business, retirees can focus on this company’s better-than-average dividend yield of 3.3% and its excellent dividend growth rate.

Automatic Data Processing

Dividend yield: 2.3%

Dividend compound annual growth rate (CAGR) (5 year): 11.4%

Automatic Data Processing isn’t the type of company that investors research on a daily basis. That’s due to it being boring. The company handles payroll checks for other companies. ADP has expanded its HR tools to areas such as employee time clocks and recruitment. It’s not a super-growth industry, and there’s no barrier to entry to stop others from getting into the market.

But there’s one special thing about Automatic Data Processing’s setup that retirees should appreciate. That’s their recurring revenue. Its clients send ADP a predictable monthly fee for using their services, which means a reliable revenue flow to support its dividend. Because of this, ADP has paid dividends every quarter going on decades, and it has increased its quarterly payment every year for almost half a century.

And these increases have not been small. The dividend has increased at a compounded annualized pace of over 11% just in the previous five years. Actual growth of profits has been nearly as impressive. Clearly ADP is very good at adding and keeping customers in its client file.

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