2 Safe High-Yield Stocks for Baby Boomers Seeking Stability

With stock valuations climbing across the board and concerns about an AI-driven market correction mounting, Baby Boomers approaching or in retirement face increasing pressure to find investment strategies that prioritize stability and income generation. The current market environment, characterized by heightened volatility in technology stocks and speculative AI plays, has many investors seeking refuge in defensive positions that can provide consistent cash flow regardless of share price movements. For those who believe prospective market returns may be lower in the coming years, the appeal of high-yield dividend stocks becomes particularly compelling.

The strategy of rotating into defensive dividend payers offers Baby Boomers multiple advantages: quarterly cash payments provide reliable income streams for living expenses, while stocks with low beta coefficients—measuring their correlation to the S&P 500—can help insulate portfolios from broader market downturns. Unlike covered call ETFs that cap upside potential, traditional dividend stocks allow investors to maintain exposure to potential price appreciation while collecting substantial yields. This balanced approach makes particular sense for retirees who need income stability but don’t want to completely sacrifice growth opportunities.

Pfizer (NYSE:PFE) represents a compelling opportunity for income-focused investors, trading at just 13.0 times trailing price-to-earnings with a substantial 7% dividend yield. The blue-chip biopharmaceutical company has been largely forgotten by many investors who exited positions after COVID-19 vaccine sales declined dramatically. The stock’s current valuation reflects this pessimism, creating what could be a significant value opportunity for patient investors willing to collect the hefty dividend while waiting for the company’s turnaround story to unfold.

Despite the uncertainty surrounding Pfizer’s near-term growth prospects, the company’s oncology pipeline presents substantial long-term potential. If late-stage drug candidates successfully graduate to become major revenue drivers, the high-yield dividend heavyweight could finally establish a bottom and begin a sustainable recovery. The stock’s 0.46 beta indicates it’s likely to be less affected by any significant downturn in the S&P 500, providing an additional layer of protection for retirement portfolios. For investors comfortable with the inherent uncertainty of biopharmaceutical investing and willing to be patient while collecting dividend payments, Pfizer at under $25 per share offers both value and yield.

Verizon (NYSE:VZ) presents another attractive high-yield opportunity, offering a 6.81% dividend yield while trading at just 9.4 times trailing earnings. The telecommunications giant has faced recent pressure, with shares declining 6% in the past month alone, but this weakness may represent a buying opportunity for income investors. With an exceptionally low 0.37 beta, Verizon shares are significantly less likely to experience outsized declines during broader market downturns, making them particularly suitable for risk-averse Baby Boomers.

The company’s strategic positioning for future growth includes ongoing 5G expansion, new device upgrade cycles, and eventual 6G development—all of which could fuel a multi-year recovery in the stock price. Verizon’s recent partnership with AST SpaceMobile (NASDAQ:ASTS) for satellite connectivity initiatives represents another potential growth driver. While aggressive promotional activities may temporarily pressure margins, these strategic moves could ultimately boost wireless subscriber growth. With market expectations currently quite low, Verizon stands as one of the market’s more intriguing dividend value plays, offering both defensive characteristics and long-term growth potential.

For Baby Boomers constructing retirement portfolios, the combination of Pfizer and Verizon offers a balanced approach to defensive income investing. Both stocks provide yields substantially higher than the S&P 500’s average, with reduced correlation to broader market movements. This combination addresses two primary concerns for retirees: generating sufficient income to cover living expenses and protecting principal from significant market declines. The quarterly dividend payments from both companies provide predictable cash flow that can be reinvested or used to cover expenses regardless of share price performance.

The current market environment, with its focus on AI and technology stocks, has created valuation dislocations in more traditional sectors like healthcare and telecommunications. This presents an opportunity for contrarian investors to establish positions in high-quality companies at attractive prices. While both Pfizer and Verizon face their respective challenges—Pfizer with its patent cliff and post-COVID normalization, Verizon with competitive pressures and margin concerns—their current valuations appear to adequately reflect these risks while offering substantial compensation through dividend yields. For Baby Boomers seeking to reduce portfolio volatility while maintaining income generation, these two stocks represent practical solutions in an increasingly uncertain market landscape.