Retirement may feel distant, but it’s important to save up now. Accumulating more money will give you more choices when you are ready to retire. Even if you want to work forever, extra cash gives you more options about the type of work that you pursue.
Retirement stocks can help investors reach their long-term financial goals sooner. Capital gains and dividends can lead to a higher net worth. Solid retirement stocks like the ones on this list can generate those results. These stocks have impressive records and have been around for a while. There’s a time and place for high-risk, high-reward investment opportunities, but retirement stocks tend to offer more stability.
Investors should look for companies with multiple decades of experience, rising revenue, and improving profit margins. These components are the foundation for many top-tier retirement stocks. The stock market offers many choices, but investors who want stability and have multi-decade time horizons may want to consider these picks.
Alphabet (GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) combines value with growth. The tech giant trades at a 27.5x price-to-earnings ratio while offering a 0.45% yield for investors. Shares are up by 27% year to date and gained 226% over the past five years.
While the company makes most of its revenue from advertising, Google Cloud has become a larger segment of the corporation’s business model. Google Cloud made up over 10% of the company’s revenue in the first quarter. The quarter also featured 15% revenue growth from a year ago and 57% net income growth.
Alphabet’s net income should continue to exhibit an elevated growth rate as the company trims costs and becomes more efficient. Artificial intelligence can also lead to more revenue growth for the company. Gemini is Alphabet’s response to ChatGPT, and AI can also increase demand for cloud computing platforms. A potential acquisition of HubSpot (NYSE:HUBS) would expand Alphabet’s offerings and can help the company reach new heights.
Crowdstrike (CRWD)
Crowdstrike’s (NASDAQ:CRWD) current valuation doesn’t resemble a retirement stock. The company trades at a P/E ratio north of 700x, but its 87x forward P/E ratio makes it look more reasonable.
Crowdstrike continues to achieve impressive revenue growth while many competitors are struggling. Revenue increased by 33% year over year to reach $921 million in the first quarter of fiscal 2025. Annual recurring revenue grew at the same rate, reaching $3.65 billion. Crowdstrike’s annual recurring revenue gives it a good foundation to deliver compelling growth rates.
Net income has been surging for the cybersecurity firm, and that can result in a more favorable P/E ratio for patient investors. Crowdstrike reported $500,000 in GAAP net income in Q1 2023. Meanwhile, GAAP net income came to $42.8 million in Q1 2024. Companies will have to invest more money to strengthen their digital defenses. Crowdstrike looks like a top beneficiary of this trend, and investors with a five- to 10-year horizon can be greatly rewarded.
Texas Roadhouse (TXRH)
Texas Roadhouse (NYSE:TXRH) is a steakhouse restaurant chain with fast-food restaurants. The company presents “growth at a reasonable price,” as it trades at a P/E ratio of 34x. Other fast-growing restaurant stocks have much higher P/E ratios. Texas Roadhouse stock is up by 42% in 2024 and has more than tripled over the past five years. Investors receive a 1.4% yield while they wait for the stock price to rally.
Recent financial results suggest Texas Roadhouse can continue with its growth streak. Revenue increased by 12.5% year over year in the first quarter while net income sprang up by 31.4% year over year. Texas Roadhouse commanded an 8.4% year-over-year increase in comparable restaurant sales at company-owned restaurants. Comparable franchise restaurant sales were up by 7.7% year over year.
Texas Roadhouse currently has 753 total restaurants. The split comes to 644 company-owned restaurants and 109 franchise-owned restaurants. The restaurant chain opened 12 additional restaurants this quarter.
Chipotle (CMG)
If you want to diversify into multiple fast-food restaurant stocks, you may also want to consider Chipotle (NYSE:CMG). The restaurant chain has healthier food options than most fast food giants. This distinction helped Chipotle set higher prices for its food without losing customers.
The company’s stock is up by 39% year-to-date leading to its 50-for-1 stock split that will take effect June 26. Shares also gained 322% over the past five years. Financials continue to be an area of strength for the chain. Revenue increased by 14.1% in the last year to $2.7 billion in the first quarter. Net income grew by 23.2% to $359.3 million. Chipotle closed the quarter with a 13.3% net profit margin, which is above average.
Chipotle remains on pace to open 285 to 315 new restaurants this year. Each time Chipotle opens that many restaurants, the company puts itself in a good financial position to open more in the following years. It’s feasible to see Chipotle open more than 1,000 new restaurants before 2030. That development should result in meaningful gains for long-term investors.
Visa (V)
Visa (NYSE:V) is a leading credit and debit card issuer that charges a percentage of every transaction. These plastic cards are more convenient than cash and offer enticing rewards and enhanced security.
Debit and credit cards will be used across multiple generations, and that should result in steady revenue growth for Visa. The fintech firm reported 10% year-over-year improvements to its revenue and net income in the second quarter . Visa’s leadership regularly rewards shareholders with dividends and stock buybacks. The company allocated $3.8 billion in the most recent quarter toward those initiatives.
Visa only has a 0.7% yield, but it maintained an annualized 18% growth rate over the past decade. This high growth rate can result in significant cash flow by the time you are ready to retire. Visa stock is up by 6% year to date and gained 62% over the past five years. The firm regularly has net profit margins that exceed 50%.
Walmart (WMT)
Walmart (NYSE:WMT) outperformed the S&P 500 with a 26% year-to-date gain. Shares of the global retailer are up by 84% over the past five years. While Walmart is a reliable resource for groceries and affordable prices, the company is dabbling in two verticals that can stimulate growth.
E-commerce is the first exciting opportunity. While Walmart reported 6% year-over-year revenue growth in the first quarter of fiscal 2025, e-commerce was up by 21%. Walmart’s continued success in e-commerce can help it compete with Amazon (NASDAQ:AMZN), and it can gobble up market share from Target (NYSE:TGT).
Walmart’s advertising segment is another area of strength, but it will take longer for advertising to meaningfully impact Walmart’s financials. Advertising increased by 24% year over year, including a 26% growth rate for Walmart Connect in the U.S. Investors with lengthy time horizons can see advertising impact Walmart’s profit margins meaningfully. Most of Walmart’s business model revolves around low-margin sales. Growth in Walmart’s advertising segment should translate into healthier profit margins.
Meta Platforms (META)
Meta Platforms (NASDAQ:META) has been a top online advertising stock for several years. While a poor 2022 resulted in a meaningful price cut, the company flipped the script last year and recently touched an all-time high. Shares are up by 45% year-to-date and gained 177% over the past five years.
Just like Alphabet, Meta Platforms trades at a reasonable valuation. Meta Platforms has a P/E of 29x and offers a 0.4% yield. Recent financial results suggest that Meta Platforms can become more affordable for long-term investors.
Revenue increased by 27% year over year while net income was up by 117%. Meta Platforms continues to trim its headcount, which is 10% lower now than it was last year. Meta Platforms also wrapped up the quarter with $58.12 billion in cash, cash equivalents, and marketable securities. The social media giant has plenty of capital to invest in new ventures while generating healthy profit margins for its investors.
On this date of publication, Marc Guberti held long positions in GOOG, CRWD, and TXRH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
