Saving for retirement is one of the most important financial responsibilities people have, but simply putting the money aside every month is only half the battle. The real secret to reaching your financial goals in retirement is what you invest in, so that your nest egg grows in the decades leading up to retirement and provides steady income when you do retire.
With that in mind, we asked three of our top contributors to offer up a stock they think is ideal for retirement investors. If you're looking for stocks that can help fund your retirement, there's a good chance one of these could be perfect for your portfolio.
This large-cap pharma stock offers unusual growth potential
George Budwell: Perhaps the best way to fund your retirement is to buy stocks with long-tailed growth trajectories, and Bristol-Myers Squibb (BMY 0.31%) fits that description to a T. After struggling to replace revenues from former top-sellers like blood thinner Plavix, Bristol's strategy of reorganizing its business around the red-hot cancer immunotherapy space is starting to pay dividends.
The short story is that Bristol's PD-1 inhibitor Opdivo has emerged not only as a true franchise-level product by generating $1.54 billion in sales during the first half of 2016, but as a viable candidate to become the world's best-selling drug by the mid-2020s. EvaluatePharma, for instance, is already forecasting a staggering $11 billion in Opdivo sales by 2021. And with numerous possible label expansions and combination therapies currently being evaluated in the clinic, Bristol appears primed to strengthen its grip on the cancer immunotherapy space over the next decade.
Here's arguably the best part: Based on Opdivo's current run rate, and not even factoring in the stellar growth being exhibited by other brands like Eliquis, Orencia, or Sprycel, Bristol's top line should sport a compound annual growth rate in excess of 6% over the next five years running. That's stellar growth for a large-cap dividend stock -- and a compelling reason for investors to add this big pharma play to their portfolios right now.
Time to take a bite of B-Dubs
Jason Hall: Buffalo Wild Wings (BWLD) is feeling the same pinch many of its casual eatery peers are, with declining same-restaurant sales over the past several quarters. After years of high-flying comps growth at both company-owned and franchise locations, this negative trend has played a role in turning investor sentiment against B-Dubs. As of this writing, shares are down 20% from last year's all-time high, even after having recovered from the lows in April.
In other words, buying shares now is in part a bet that the recent negative trends in traffic across the casual restaurant industry is cyclical, and not a long-term shift in consumer taste away from chains like B-Dubs. Even if traffic stays soft across the casual restaurant segment, Buffalo Wild Wings has some differentiation from cheaper fast-casual competitors as a destination for sports fans. That's something many of its peers can't really say.
Looking beyond the recent weakness, the long-term growth prospects are solid. The company has about 1,200 locations right now, with a goal of 1,700 total locations in North America plus hundreds more overseas -- a reasonable target that could grow even larger over time. Simply put, there's a lot of upside for years and years of steady growth. There are also multiple channels for B-Dubs to grow sales at each restaurant, including efforts to expand lunch sales, catering, and even delivery.
And even if these other efforts fail to drive big growth, wings, sports, and beer seem like a solid bet to continue bringing patrons to B-Dubs in growing numbers for years to come. It's a solid buy-and-hold stock for retirement investors.
Buy this stock and never look back
Steve Symington: As of this writing, Gentex (GNTX -2.06%) is up more than 13% since I pounded the steering wheel for dividend-seeking investors to buy shares of the auto-dimming mirror specialist in March. But after reflecting on its impressive second-quarter earnings report last month, I still think Gentex stock is a great option for retirees since it offers a healthy combination of dividend income and share price appreciation.
More specifically, Gentex's quarterly revenue climbed 11.7% year over year, to $423.8 million, driven primarily by a 13% increase in auto-dimming mirror shipments. That growth easily outpaced the industry's modest 3% increase in light-vehicle production over the same period, and it continued to demonstrate Gentex's ability to embrace innovation and more deeply penetrate its core markets. To be sure, Gentex had 26 new nameplate launches of interior and exterior electrical mirrors and advanced electronic features in Q2, roughly two-thirds of which included advanced features and added electronic content (compared to around half in Q1).
Meanwhile, management described increased traction for Gentex's Full Display Mirror (FDM) offering, which is now seeing interest from both its original OEM launch partners and additional OEMs. And though competition will almost certainly attempt to steal some attention from Gentex's FDM products going forward, Gentex is in the unique position of being able to offer its full suite of complementary functionality in a single package, notably including its popular electrochromatic mirror features.
Finally, in addition to Gentex's healthy dividend (which yields just over 2% annually at today's prices), the company is supplementing its capital returns efforts by opportunistically repurchasing shares, including around 3.1 million shares of common stock bought back last quarter alone at around $15.48 per share. If Gentex can continue using its high-tech products to further penetrate and outgrow the light vehicle market going forward, I see no reason the stock won't also continue to deliver market-beating returns for investors.