Long-term retirement stocks often avoid the extremes of investing. One extreme feature is high gains that aren’t sustainable and can lead to significant losses once the music stops. The other extreme is a high-yield dividend stock that only offers cash flow and nothing else. These stocks stay flat over many years, while growth stocks blow them in the dust.
Retirement stocks have to avoid the pitfalls of excessive volatility and cash flow without any appreciation. These three stocks check the boxes and are attracting a lot of fanfare among Wall Street analysts.
Alphabet (GOOG, GOOGL)
A low valuation and a compelling business model make Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) a stock to consider. The firm has a vibrant advertising business thanks to Google and YouTube, two of the most popular websites on the web. Alphabet’s advanced targeting capabilities and reach have turned it into a go-to destination for small businesses and corporations.
The company also makes money with Google Cloud, which is growing at a faster rate than the overall business. Revenue growth in this segment came to 25.7% year-over-year in the fourth quarter of 2023. Overall revenue increased by 13% year-over-year, while net income was up by 52% year-over-year.
Shares only trade at a 25 P/E ratio, which is lower than the other Magnificent Seven stocks. Alphabet stock has more than doubled over the past five years, and analysts are still feeling bullish. The stock is rated as a Strong Buy among 36 analysts and has an average price target that suggests an 11% upside.
Chipotle (CMG)
Chipotle (NYSE:CMG) has established itself as a top fast-food restaurant choice for people who want healthier meals. The company is still growing at a fast clip based on its 15.4% year-over-year revenue growth in the fourth quarter of 2023. Net income growth was even higher and came in at 26.1% year-over-year.
CMG has momentum on its side based on a 728 gain over the past year. Shares have rallied by 314% over the past five years and can still go higher in the long run. The company opened 271 restaurants in 2023 and has plans to open 285 to 315 additional restaurants in 2024.
The fast-food restaurant chain is still expanding and has the financial strength to open up more locations. Many of these new locations will include Chipotlanes, which enable faster checkouts for people who make their orders online or through the mobile app. Lines move quicker, allowing Chipotle to serve more customers each day.
Walmart (WMT)
Walmart (NYSE:WMT) has slower growth rates than Alphabet and Chipotle. The stock makes up for it with more stability and gains that mirror the S&P 500. Shares are up by 30% over the past year and have a 5-year gain of 87%. Walmart currently has a 32 P/E ratio and a 1.36% dividend yield.
The company reported 5.7% year-over-year revenue growth in the fourth quarter of 2023 and hiked its dividend by 9%. That’s the company’s highest dividend growth rate in more than a decade.
E-commerce makes up a larger percentage of total revenue and has grown by 23% year-over-year. E-Commerce sales exceeded $100 billion compared to $648.1 billion in total revenue for the full year 2023.
The global advertising business is a smaller segment that only brought in $3.4 billion in 2023. Although this segment is small, a 28% year-over-year growth rate and good margins make this part of Walmart’s financials worth a closer look. Walmart also recently announced it was acquiring Vizio (NYSE:VZIO) to accelerate its advertising revenue.
On this date of publication, Marc Guberti held a long position in GOOG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
