Building a million-dollar retirement nest egg might seem daunting. However, it's easier than you'd think. For example, putting $300 a month into an investment that returns 12% annually would grow into $1 million in about 30 years. While that's slightly above the stock market's average annual return of about 9.9% over the last three decades, many companies have delivered that level of return.
Three companies with a history of producing total annual returns of more than 12% are Brookfield Renewable (BEPC +0.00%)(BEP 0.13%), Enbridge (ENB +0.39%), and National Retail Properties (NNN +0.27%). While that past performance is no guarantee of future success, they have what it takes to continue delivering strong total returns. Because of that, a $300 monthly investment spread evenly across these stocks could make you a millionaire by retirement.
Powerful returns ahead
Brookfield Renewable has made its investors a lot of money over the years. The company has delivered 16% annualized total returns since its inception over two decades ago. At that pace, it could turn a $300 monthly investment into $1 million in about 24 years.
NYSE: BEP
Key Data Points
The renewable energy giant wants to continue enriching its investors in the future. It's targeting to produce a 12% to 15% annualized total return over the long term. That would put it on pace to turn a $300 monthly investment into $1 million in 30 years or less.
The company certainly has the power to deliver strong total returns in the coming years. A quartet of drivers (inflation-driven contract rate increases, higher power prices, development projects, and acquisitions) should deliver more than 10% annual growth in its funds from operations (FFO) per share through at least 2027. That should enable the company to increase its 4%-yielding dividend at a 5% to 9% annual rate. This combination of income and earnings growth should help Brookfield deliver on its goal of producing strong total returns in the coming years.
Lots of fuel to continue growing
Enbridge has produced a 14% average annualized total return over the last 20 years. There's good reason to believe the energy infrastructure behemoth can continue enriching its investors in the future.
NYSE: ENB
Key Data Points
Enbridge's lucrative dividend is a big moneymaker for investors. It currently yields over 6%, providing a nice base return. That big-time payout is on an excellent financial foundation because Enbridge has a reasonable dividend payout ratio and a strong investment-grade credit rating with a low leverage ratio. That gives it the financial flexibility to continue expanding its operations.
The company currently has billions of dollars of expansion projects under way. They lean heavily toward lower carbon energy, like new natural gas pipelines and offshore wind farms. The company currently has the financial capacity to support 5% to 7% annual growth in its cash flow per share. Add that growth to its big-time payout, which Enbridge has steadily grown over the years, and it should have the fuel needed to deliver double-digit total annual returns.
A steady grower
National Retail Properties has an excellent track record of creating shareholder value. Over the last few decades, the real estate investment trust (REIT) has delivered an average annual total return of 12.1%.
NYSE: NNN
Key Data Points
A big factor driving this strong return is its steadily rising dividend. National Retail has increased its payout for 33 straight years. That's an elite track record. It's one of only 78 companies that have delivered 33 or more years of consecutive dividend increases.
The REIT should be able to continue growing its payout, which yields 4.8%, in the future. The company's low-risk investment strategy enables it to deliver steady growth. It focuses on owning stable retail properties secured by long-term triple net leases (NNN). That lease structure provides it with steadily rising rental income. Meanwhile, it has a conservative dividend payout ratio and balance sheet. That gives it the financial flexibility to continue buying income-producing properties that grow its FFO per share and dividend. That combination of steady growth and a high-yielding dividend should enable National Retail to continue producing attractive total returns over the long term.
Slow and steady can be a winning strategy
A little money invested each month can go a long way toward achieving your retirement goals. Thanks to the power of compounding, steady growers like Brookfield Renewable, Enbridge, and National Retail Properties have been outstanding wealth creators over the years. These companies build durable businesses that should be able to continue enriching their investors in the future. Because of that, they look like great stocks to invest in over the next few decades to build a meaningful retirement nest egg.
