According to a recent CNBC survey, younger generations are planning to retire earlier than baby boomers, who said their expected retirement age was 68. Millennials (that's Generation Y) are looking to retire by 59, nearly a decade earlier. If you share that ambitious goal, one way you can improve your odds for early retirement is by investing and building up your savings over the years.
Three stocks that can be pillars for your portfolio -- likely to rise in value over time while also paying a dividend -- are Eli Lilly (LLY 1.96%), Starbucks (SBUX -0.35%), and Visa (V 0.65%).
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1. Eli Lilly
Drugmaker Eli Lilly has a solid business that has generated an annual operating profit of at least 25% in each of the past three years. And for the first six months of 2021, the company reported revenue of $13.5 billion, up 19% from the same period last year. A number of Eli Lilly's drugs have experienced year-to-date growth of more than 20%, including its top-selling diabetes drug, Trulicity. While the company got a boost from COVID-19-related sales too, overall revenue would still have been up 11% without it.
Eli Lilly's numbers could get even stronger in the not-too-distant future. The company plans to submit its Alzheimer's drug, donanemab, to the U.S. Food and Drug Administration for approval later this year -- and it could be available to patients as early as next year. Peak annual sales for a drug that is effective against the disease could top $10 billion.
There's a lot to like about Eli Lilly's business, which has proven to be adaptable during COVID-19 and still has more growth opportunities. Its 1.5% dividend yield is just the icing on top. While not huge, it's more than the S&P 500's 1.3% yield. Eli Lilly could be an ideal healthcare stock to build your portfolio around for the long haul.
2. Starbucks
A favorite consumer goods stock of mine is Starbucks. Sure, its business revolves around selling coffee and has lots of competition, but its brand resonates with customers, who are willing to spend a premium for its products. That allows the business to continue to generate strong results even though there are cheaper options out there. That brand loyalty is hard to attain and is part of the reason it's an excellent long-term buy.
Although sales were down 11% in fiscal 2020 due to store closures, the business has come roaring back. For the latest quarter ended June 27, sales were up an incredible 78% to $7.5 billion. That was largely due to the weak comparable from a year ago. Meanwhile, its loyalty rewards program in the U.S. saw a 48% year-over-year increase in 90-day active members, to 24.2 million. Management says that those members make up 51% of all spending across its U.S. stores.
In a word, it comes back to loyalty. Loyal customers are responsible for the business and its phenomenal results. And the company provides rewards for loyal investors: a dividend that yields 1.6%, which is the highest on this list. For buy-and-hold investors, Starbucks is a stock that should be near or at the top of your list.
3. Visa
Visa is another top brand. The credit card company has a strong business that benefits whether people are spending money online or in stores. Its profit margins have been at least half the company's revenue in each of the past three fiscal years.
Like Starbucks, the company saw a big boost in revenue in its latest quarter, which ended June 30. Sales were up 27% to $6.1 billion over the year-ago period. The company acknowledged that comparisons to the previous year were affected by COVID-19 when consumers' buying options were limited. However, even when compared to the first three months of 2021, sales were still up 7%.
What makes the business even more potentially attractive is its partnership with crypto lending company BlockFi) to offers a Bitcoin (BTC 0.63%) rewards credit card. That's sure to appeal to legions of Bitcoin fans. The danger, of course, is that those rewards could fluctuate in value as Bitcoin has soared as high as $64k and been as low as $10k over the past 12 months.
Overall, Visa is another buy-and-forget investment you can safely store in your portfolio for years. While its yield of 0.6% is the lowest on this list, the company has more than doubled its payouts in five years, and so that dividend could look a whole lot better in the future.
