There are some retirement stocks to sell in May this year. As we enter the second quarter, it’s a good time to reassess your retirement portfolio and make strategic adjustments. Certain stocks that may have once seemed like stable investments can become liabilities.
It’s essential to ensure that your retirement portfolio is not only diversified but also composed of stocks that can provide steady growth and income over the long term.
Also, around retirement age is when one should consider investing in less volatile and more stable assets. The goal is to preserve capital and ensure a steady income stream to support your lifestyle. As you approach or enter retirement, reducing exposure to high-risk investments and focusing on reliable, income-generating assets becomes increasingly important.
With that said, here are three retirement stocks that I feel are poison for a retirement portfolio.
Nike (NKE)
Nike (NYSE:NKE) has faced a series of disappointing earnings reports and lowered its sales outlook for the year.
In the third quarter of fiscal 2024, Nike reported revenues of $12.4 billion, which was slightly up from the previous year but did not meet market expectations. The company also experienced a 5% decline in net income compared to the same quarter last year.
One of the significant issues Nike is grappling with is elevated inventory levels, which have led to increased promotional activities and discounting to clear excess stock. Although inventories decreased by 14% year-over-year to $7.9 billion by the end of November 2023, the pressure on margins remains due to these promotional activities.
It’s unclear how or when NKE will recover from issues of rising costs and decreased spending. Investing in clothing companies, even as iconic as NKE, can be fickle due to changes in tastes and fashion. NKE should be considered for dropping from your portfolio.
Campbell Soup (CPB)
Campbell Soup (NYSE:CPB) has experienced a nearly 20% stock decline in the past year. The company reported low single-digit or negative revenue growth rates and minimal dividend increases over the past decade.
In Q1 2024, Campbell reported a 2% year-over-year decrease in net sales to $2.52 billion, and organic sales declined by 1%. Net earnings attributable to Campbell Soup fell 21% to $234 million, or 78 cents per share.
The company’s revenue growth has been sluggish near-term too. Low single-digit or negative growth rates were reported over recent quarters. For fiscal year 2024, Campbell expects net sales to range between a decline of 0.5% and an increase of 1.5%
Furthermore, in Q1 2024, the company’s gross profit margin decreased due to higher input costs, despite some gains from net price realization.
CPB may be seen as a safe stock, but its slow grind of capital erosion and limited income potential make it one of those stocks to drop from a portfolio.
AT&T (T)
AT&T (NYSE:T) offers a high dividend yield, but the company’s stock has declined 25.82% over the past five years. The company cut its dividend in half two years ago and has yet to raise it again.
Despite some areas of growth, AT&T has struggled with overall revenue performance. For instance, while the company reported Q1 2024 revenue of $30 billion, this fell slightly short of expectations. Additionally, the Business Wireline segment experienced a 10.3% year-over-year decline in revenues due to lower demand for legacy voice and data services.
AT&T’s financial stability is further complicated by its substantial debt load. As of Q1 2024, the company reported net debt of $128.7 billion. Managing such high debt requires significant cash flow, which can be strained by the company’s large capital expenditure needs.
AT&T has recovered slightly over the past year, but when factors in its lack of income potential and risky balance sheet, it could then be one of those retirement stocks that investors should avoid at all costs.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.