If you're looking for top stocks for your retirement portfolio, the current stock market situation might have you feeling really lost. After all, millions of businesses have shut down, and tens of millions of Americans are out of work, but the stock market is down less than 10% for the year. Are we headed for another huge drop? Will the recovery come quickly, or slowly?
Nobody knows what's going to happen over the next few months, but your retirement savings should be focused on the next few decades. With that in mind, here are three beaten-down stocks, poised for success over the long term, could make you a millionaire retiree.
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Energy's present and future
Energy giant NextEra Energy (NEE -1.36%), one of the largest energy companies in the world, is a hybrid company of sorts. On the one hand, it's the largest electric utility in the U.S., controlling the mammoth Florida Power & Light as well as the smaller Gulf Power in the Florida panhandle, and all of their customers' energy-hungry air conditioners. But NextEra is also the world's largest producer of wind and solar energy, with a network of renewable energy assets stretching from coast to coast.
Renewable energy has steadily been taking a larger and larger share of the U.S. energy market. With oil and gas markets in turmoil, renewables could see even faster growth, which would benefit NextEra. Meanwhile, Florida is the fifth-fastest-growing state in the U.S. by percentage, and the second-fastest-growing by number of new residents. These trends should help power NextEra's growth.
NextEra has a solid balance sheet and pays a dividend that's currently yielding 2.2%, and which is expected to grow by 10% per year through 2022. With the stock down 5.1% year to date, now is a great time to pick up shares of NextEra.
Speaking of Florida
Things are looking gloomy in the Sunshine State for entertainment behemoth Disney (DIS -0.04%). The company's theme parks, including its flagship Walt Disney World resort, are closed indefinitely, it has had to pull movies from shuttered theaters and delay production on numerous projects, and its ESPN sports network is starved for content due to coronavirus-related sports season cancellations.
Small wonder, then, that shares are down 31% so far this year.
But long-term investors should view this as a buying opportunity. People are not going to stop watching sports because a season is cancelled. Kids aren't going to stop begging (and begging, and begging) their parents for a Disney vacation permanently. Plus, Disney's massive content stable, which includes the Marvel Cinematic Universe, Star Wars, and now The Simpsons, will hold on to its value far into the future.
The House of Mouse is currently yielding 1.8%, which makes this a great time to pick up shares.
All three companies' share prices have fallen in 2020. NEE data by YCharts.
And everything else
Okay, maybe not everything else, but investment company Brookfield Asset Management (BN 1.81%) controls a whole lot of stuff through its master limited partnership (MLP) subsidiaries like Brookfield Infrastructure Partners and Brookfield Renewable Partners. Those MLPs, incidentally, are solid investments in their own right, but their MLP status isn't always compatible with retirement accounts.
Toll roads in Brazil? Brookfield owns some. Australian ports? Brookfield owns some. Fiberoptic transmission lines in Paris and hydroelectric dams in the U.S.? Brookfield owns some of those, too. The company's diverse set of assets should help it keep growing even if it experiences a setback in one or more of the sectors in which it operates (like, for example, when high numbers of the retail properties owned by Brookfield Property Partners were shut down due to coronavirus).
Concerns about how this and other coronavirus-related issues might affect Brookfield's performance have led to a 13.3% share-price decline so far in 2020. It now yields 1.3%, but the bigger draw is Brookfield's top-notch management team, which should be able to make the necessary changes to the company's portfolio to drive continued growth in the coming years.
Don't delay
In uncertain times, it's tempting to wait until you're sure that the danger has passed before committing your money to an investment. Unfortunately, by the time the skies are clear, you may have missed out on the best buying opportunity. The best thing to do is to regularly put money into top-quality stocks, and if their share prices drop after you buy, look at it as another opportunity to buy some more (as long as your thesis is still holding up).
Whether you have years or decades until your retirement, though, starting to invest wisely as soon as possible is your best shot at millionaire status. NextEra Energy, Disney, and Brookfield Asset Management are top picks to start you on that journey.
