As you approach your retirement years, your financial priorities shift toward bonds, and toward stocks that pay out big dividends. This conservative approach helps maximize income while protecting capital, which are important goals when you lack the safety of a steady paycheck. However, there's a trade-off in terms of weaker stock price appreciation.
Your peak earnings years, usually in your 40s and 50s, tend to be ideal for investing in high-quality stocks that maybe aren't yet well-established blue-chip giants. And while these investments may or may not come with dividend income, they should take full advantage of your long investing horizon.
Below, we'll look at a few companies that appear to fit that mold today.
Stretch toward apparel dominance
lululemon athletica (LULU 1.65%) is a relatively minor player in the athletic apparel industry, but that could change over the next decade or so. The retailer is enjoying surging demand for its yoga-inspired product lines and has hiked its 2018 outlook in each of the last two quarterly reports. Revenue for the most recent period jumped 25% to $725 million thanks to robust customer traffic in both its physical stores and its online sales channel.
Lululemon's profitability is jumping, too, which is rare among multichannel retailers these days. That improvement suggests strong customer loyalty and a good track record for developing premium sportswear. The company will need to rely on those assets as it seeks to expand into new markets like China and complimentary categories like men's fitness over the long term. Management's 2020 target of reaching $4 billion of annual sales, meanwhile, is looking easily achievable and might simply mark another milestone on the way toward much larger revenue figures ahead.
The machines are coming
It's easy to imagine a future in which robotic cleaning machines are constantly working in a high proportion of homes around the world. The big question is whether the current market share leader, iRobot (IRBT -1.25%), will maintain its advantage as that young product niche matures and moves into the mainstream.
Its recent results are encouraging on that score. Sales soared past expectations last quarter despite a flood of competition from lower-priced rivals. Gross profit margin is holding up well, too, which is a strong indication that iRobot holds a robust innovation lead over its peers.
CEO Colin Angle and his team believe that the next few years will determine which companies dominate the robotic cleaning space in the industry's next phase of global growth. And, through its next few rounds of Roomba and Braava device releases, iRobot is doing everything it can to make sure it tops that list.
Discounts are always in style
Off-price retailing giant TJX Companies (TJX -1.61%) is on track to post its 23rd consecutive year of comparable-store sales growth this year. That impressive record suggests the owner of the Marshall's, TJ Maxx, and HomeGoods brands knows a lot about how to thrive in a consistently changing retailing environment. It also implies that the company's army of buyers excel at accumulating on-trend merchandise at deep discounts.
TJX Companies hopes to reach as many as 6,100 locations around the world, up from about 4,200 today. Executives say that growth is supported by its flexible store layout and rising popularity among younger shoppers. Two more annual dividend raises, meanwhile, will qualify the retailer for membership in the exclusive Dividend Aristocrat club, which is restricted to companies with at least 25 years of consecutive annual payout boosts. But investors eyeing eventual retirement don't have to wait for that milestone to pass before picking up shares in this attractive retailing business.