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3 Stocks to Bankroll Your Retirement

By James Brumley - May 29, 2021 at 8:30AM

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Only the best-grounded and most flexible companies belong in a retirement account that absolutely has to grow.

What's your ultimate investing goal? Funding a child's education isn't an uncommon answer. By and large, though, securing a comfortable retirement is the biggie for most folks.

That's easier said than done. Safety and certainty seem to come at the expense of total returns, and while equity investments in for-profit companies boast the best long-term gains, no corporation is guaranteed to thrive forever. Just look at J.C. Penney, Polaroid, Blockbuster, Toys R Us, and hundreds of others.

There is a small handful of publicly traded organizations, however, offering shareholders a mix of growth prospects, adaptability, and market leadership that makes them ideal picks to tuck away in a retirement savings account. Here's a rundown of three of the best.

Two seniors sitting on a porch.

Image source: Getty Images.

1. Alphabet's been down, but never out

Technology giant Alphabet (GOOG -1.79%) (GOOGL -1.77%) does a few different things. Its breadwinner, however, is the web ad revenue generated via its Google search engine. Advertising typically accounts for more than 90% of the company's revenue. That's fine as long as the internet ad business is thriving, but it's a pronounced risk when the business dries up, as it did in the early part of 2020 when the COVID-19 pandemic was ripping across the United States. For the first time in years, last year's second-quarter search-ad sales tumbled nearly 10%.

Without knowing how long the contagion's headwind would blow while also knowing Amazon and even Walmart are inching their way deeper into the online advertising arena, the disruption threatened a permanent shift in how -- and where -- the world's advertisers deployed their dollars.

Now we know such worries aren't merited. Last quarter's search ad revenue of $31.9 billion was up an incredible 30% year over year, making up the lion's share of record-breaking Q1 revenue of $55.3 billion. That result follows what was an absolute record-breaking top line of $56.9 billion in last year's fourth quarter, mostly driven by the 17% year-over-year growth in search advertising.

It's a testament to the company's resilient growth. More than that, though, it's a testament to how committed the world remains to Alphabet's major consumer interfaces. GlobalStats' statcounter says Google still handles more than 90% of the world's web searches, just as it has for the past 10 years. GlobalStats' data also indicates Alphabet's Android operating system is still installed on more than 70% of the world's actively used mobile devices, as it has been for the past five years despite a growing share for Apple's iOS.

Take the hint. Alphabet's biggest business is very well-grounded.

2. Walt Disney goes where the wind is blowing

Whereas Alphabet's business longevity is rooted in platforms that are here to stay, Walt Disney (DIS -1.72%) is a solid retirement investment for the exact opposite reason. That is, it can -- and does -- evolve to meet new areas of demand at the same time it gets out of businesses that no longer bear fruit.

Its most obvious evolution is the company's flagship streaming service. Disney+ has grown from non-existent a year and a half ago to a subscriber headcount of 103.6 million as of early April. Walt Disney didn't create or even mainstream the streaming market, though. Netflix did most of that heavy lifting. Disney simply adapted to the new normal.

The media giant's perpetual evolution isn't limited to its entry into the on-demand streaming business, either. The company's also making far splashier and more expensive films than it has in its past. In pre-pandemic 2019, Walt Disney released a total of 16 films, resulting in $11.1 billion worth of box office revenue that year.

Just five years earlier that figure was $7.3 billion, with the addition of blockbuster franchises like The Avengers, Star Wars, and Frozen accounting for most of this growth. The studio is simply meeting the demand for more thrilling, must-see cinema.

It's not just being able to dive into new businesses that makes Disney a pillar for retirement funds, either. The organization pulled the plug on DisneyToon Studios in 2018, ended production of its Infinity console-gaming collectibles in 2016, and will soon shut down Radio Disney. The Disney brand itself, however, lives on and that is what investors are actually buying into.

3. Consumer goods powerhouse Procter & Gamble won't be dethroned

Finally, add consumer goods powerhouse Procter & Gamble (PG -0.46%) to your list of stocks you can count on to help build a bigger, better retirement fund. You won't see the same sort of growth from P&G you'll likely get from Alphabet or Walt Disney. The trade-off's worth it, though.

See, what Procter lacks in firepower it makes up for with consistency. While organic sales and earnings aren't up on a year-over-year basis every single quarter, they're up more often than not. That's largely because the company can simply outspend any of its rivals when it comes to marketing.

Indeed, until Amazon eclipsed it last year, Ad Age consistently reported Procter & Gamble spent more money on advertising in any given year than any other organization did, and it's still the biggest spender on promotions within the staples sector, a place where advertising has the biggest effect on overwhelmed consumers. Nobody can afford to stand toe-to-toe with this behemoth when it comes to promotional spending.

The proof of this premise bears out in the numbers. P&G reports it is the market share leader in shaving, baby care, and feminine products, enjoys a 20% share of the global shampoo market, and leads the U.S. paper towel and toilet paper market with its Bounty brand's 40% control and Charmin's 25%, respectively.

Of course, the company's brand names aren't exactly tough to market. Aside from Charmin and Bounty, Gillette razors, Luvs diapers, Crest toothpaste, Tide laundry detergent, and Cascade dishwashing soap are also part of the P&G brand family. These are all recognizable names that consumers get in the habit of buying over and over again. It's much easier to remain a market leader than it is to become one.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. James Brumley owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Procter & Gamble Company Stock Quote
The Procter & Gamble Company
$149.24 (-0.46%) $0.69
Alphabet Inc. Stock Quote
Alphabet Inc.
$119.55 (-1.77%) $-2.15
The Walt Disney Company Stock Quote
The Walt Disney Company
$122.81 (-1.72%) $-2.15
Alphabet Inc. Stock Quote
Alphabet Inc.
$120.32 (-1.79%) $-2.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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