7 Under-the-Radar Retirement Stocks With 14% Upside Potential
Although planning for one’s golden years mostly revolves around investing in names practically everyone knows, it might help to spare some loose change for under-the-radar retirement stocks. While not providing the same level of coverage as your standard blue-chip stalwart, these relatively underappreciated ideas provide a balance of growth and stability.
Indeed, those who consider dabbling with these under-the-radar retirement stocks may enjoy 14% upside potential. How did I come up with such a figure? After filtering out fiscally stable companies, I then totaled each of their analyst price targets. On average, the return came out to 14.14%.
To be sure, some ideas are much more reliable than others, though feature lower upside potential as a consequence. With this list, you can choose your risk-reward magnitude. So, without further delay, below are the under-the-radar retirement stocks to consider.
| WSO | Watsco | $275.46 |
| INFY | Infosys | $18.52 |
| SWKS | Skyworks Solutions | $101.61 |
| HRL | Hormel Foods | $46.10 |
| NATI | National Instruments | $46.97 |
| RMR | RMR Group | $29.55 |
| CWCO | Consolidated Water | $14.69 |
Watsco (WSO)
Headquartered in Coconut Grove, Florida, Watsco (NYSE:WSO) is the largest distributor of air conditioning, heating and refrigeration equipment, and related parts and supplies in the U.S. Though a boring entry among under-the-radar retirement stocks to buy, it should command permanent relevance. In the trailing year, WSO dipped nearly 9%.
Aligned with the lackluster performance in the chart, analysts neither love nor hate Watsco. Presently, the company features a consensus hold rating. Further, the average price target is $287, indicating 4.4% upside potential from the time of writing. It’s not the greatest forecast, to be honest. Still, hedge funds have been building a position since the first quarter of 2022.
Against traditional metrics, WSO offers a reliable opportunity for those seeking long-term stability. The company features an Altman Z-Score of 8.6, reflecting very low bankruptcy risk. As well, its return on equity stands at nearly 31%, reflecting a very high-quality business. Overall, it’s not exciting but it serves its purpose as one of the under-the-radar retirement stocks.
Infosys (INFY)
Based in India, Infosys (NYSE:INFY) is a multinational information technology company, that provides business consulting, IT, and outsourcing services. Though it seems incredibly relevant, INFY suffered a tough time on Wall Street. In the trailing year, shares gave up 28% of equity value.
Similar to Watsco, analysts feature a pensive view of the enterprise. Currently, INFY has a consensus hold rating. Additionally, the experts peg INFY as hitting an average price target of $19.55, implying upside of slightly more than 6%. Keep in mind that Infosys offers a forward yield of 2.19%. That’s notably higher than the technology sector’s average dividend yield of 1.37%.
On the balance sheet, Infosys offers a stable profile. Its Altman Z-Score hit 10.3, reflecting extremely low bankruptcy risk. As well, its debt-to-equity ratio of 0.07 times rates more favorably than over 71% of the competition. Finally, INFY features excellent profitability metrics. Therefore, it’s worth consideration among under-the-radar retirement stocks.
Skyworks Solutions (SWKS)
Headquartered in Irvine, California, Skyworks Solutions (NASDAQ:SWKS) is a semiconductor specialist, delivering innovative, high-performance chips. Skyworks operates as a pivotal cog in the 5G rollout. Still, various challenges impacting the tech sector haven’t been kind to SWKS. In the trailing year, shares gave up almost 34% of equity value.
However, analysts remain undeterred, rating SWKS as a consensus moderate buy. As well, they anticipate on average SWKS hitting a price target of $109.44, implying upside of slightly over 8%. Moreover, Skyworks offers a forward yield of 2.45%, again beating the tech sector average of 1.37%. Also, the payout ratio sits at 22.2%, suggesting that the dividend is sustainable.
Objectively, Skyworks distinguishes itself for its undervalued profile. Currently, the market prices shares at 9.8 times forward earnings. In contrast, the sector median is just under 18 times. Plus, the company enjoys a decently stable balance sheet and excellent profitability metrics. Thus, it’s another worthy example of under-the-radar retirement stocks to consider.
Hormel Foods (HRL)
Headquartered in Austin, Minnesota, Hormel Foods (NYSE:HRL) – as its name implies – represents a food-processing firm. It actually sprung to life as a corporate entity in 1891, per its public profile. Naturally, Hormel should benefit from inelastic demand because of its critical underlying product. However, Wall Street doesn’t see it that way, with HRL declining 6% in the trailing year.
Nevertheless, analysts remain undeterred, pegging Hormel as a consensus moderate buy. In addition, their average price target calls for $50.33. This represents a potential upside of a bit over 8%. Investors should also note that the company offers a forward yield of 2.36%, beating out the consumer staples sector’s average yield of 1.89%.
According to Gurufocus.com’s proprietary calculations for fair market value, HRL rates as modestly undervalued. Objectively, Hormel’s Altman Z-Score hit 4.9, reflecting stability in its finances. Plus, the food enterprise enjoys strong profitability metrics. Therefore, you probably can’t go too wrong with HRL as one of the under-the-radar retirement stocks.
National Instruments (NATI)
Located in Austin, Texas, National Instruments (NASDAQ:NATI) is a producer of automated test equipment and virtual instrumentation software. Per its corporate profile, applications include data acquisition, instrument control, and machine vision. In the trailing year, NATI dropped a hair over 4% in equity value. But in the past five days, it’s been on the move, gaining almost 10%.
To be sure, Wall Street analysts take the optimistic side of the fence. Currently, they peg NATI as a consensus moderate buy. Further, their average price target hit $46.14, indicating nearly 15% upside potential from the time of writing. Sweetening the pot, National Instruments offers a forward yield of 2.79%. This rates slightly higher than the sector average yield of 2.36%.
Objectively, NATI enjoys an undervalued profile. Right now, the market prices shares at 15.6 times forward earnings. In contrast, the sector median stands at 24.4 times. As well, the company commands strong profit margins and decent stability in the balance sheet. Overall, it’s one of the under-the-radar retirement stocks to consider.
RMR Group (RMR)
Headquartered in Newton, Massachusetts, RMR Group (NASDAQ:RMR) inherently presents high risks among under-the-radar retirement stocks because of its core business. Per its website, RMR is a leading U.S. alternative asset management company, unique for its focus on commercial real estate and related businesses. In the trailing year, shares fell more than 13%. To be fair, though, in the trailing month, it’s up over 4%.
While only two analysts cover RMR Group, it presently features a consensus moderate buy view. Together, the experts’ price target hit $35.50 on average, implying a potential upside of over 19%. That’s a hefty tally for one of the under-the-radar retirement stocks. Also, the company offers a generous forward yield of 5.38%.
Objectively speaking, RMR Group is undervalued relative to its sales performance, with shares trading at 1.07 times sales. In contrast, the sector median stands at 2.4 times. As well, the company enjoys solid strengths in the balance sheet.
Consolidated Water (CWCO)
As a critical resource company, Consolidated Water (NASDAQ:CWCO) deserves consideration for under-the-radar retirement stocks to buy. According to its website, Consolidated Water supplies potable (drinking) water and water treatment services. It serves the Cayman Islands, the Bahamas, the British Virgin Islands, and the U.S. In the trailing year, CWCO gained nearly 43%.
To be clear, only one analyst covers CWCO, with a moderate buy view. Still, if Consolidated Water keeps delivering performances like the one mentioned above, it could attract more covering experts. Presently, the sole analyst pegs CWCO as hitting $20. This implies an upside potential of almost 38%. As a bonus, the company offers a forward yield of 2.34% (though it’s under the utility sector average of 3.75%).
On the financials, Consolidated Water enjoys excellent strengths in the balance sheet. Most notably, its cash-to-debt ratio stands at 20.4 times, above over 89% of the competition. Thus, it may make for a reliable entry among high-upside-potential under-the-radar retirement stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
