Most investors save to create long-term wealth and enjoy a comfortable life in retirement. While there are several asset classes you can buy in 2022, equities have proved to be the most effective in terms of consistently outpacing inflation over multiple decades.
For example, the S&P 500 index has surged by 10% annually in the last 20 years despite the dot-com bubble, a financial crash, and the ongoing pandemic. The S&P 500 index provides investors access to the top 500 companies in the U.S. and has created massive wealth for long-term investors.
It makes sense to allocate a significant portion of your investments to this index and benefit from inflation-beating returns over time. However, you can also accelerate your retirement plans by purchasing stocks of companies that are growing at a faster pace than their peers.
Here, we look at four such stocks that can turn $100,000 into $500,000 by the time you retire.
Brookfield Asset Management
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM) is among the leading alternate asset managers globally. Over the years, alternate asset classes have grown in prominence and touched US$10 trillion in 2020, with predictions this number will rise to US$14 trillion by 2023. Investments in alternate assets, including private equity and infrastructure, are forecast to rise 10% annually through 2025, making Brookfield Asset Management a top bet right now.
The company has US$725 billion of assets under management across verticals such as renewable power, real estate, infrastructure, and private equity. If the number continues to move higher, BAM should benefit from higher management fees and carried interest income.
Cresco Labs
A U.S.-based cannabis stock, Cresco Labs (CNSX: CL) is a multi-state operator with a presence in 10 states south of the border. The international stock is prominent in various high-dollar markets, including Illinois.
Earlier this year, Cresco Labs announced its intention to acquire Columbia Care in an all-share deal, which will expand its retail locations to over 130 in 18 states. It strategically targets states that are primarily limited license markets to limit its competition. It’s future state expansion means it could be a good investment for new cannabis industry investors.
Shares of Cresco Labs are down almost 80% from all-time highs valuing the stock at US$1 billion by market cap, which is very reasonable given its revenue is forecast to rise by 9.3% to US$900 million in 2022.
Restaurant Brands International
Valued at $35 billion by market cap, Restaurant Brands International (TSX: QSR)(NYSE: QSR) offers investors a tasty dividend yield of 3.7%. It has more than 29,000 fast-food outlets in 100 countries. The company both owns and franchises these outlets. Generally, franchisees pay the majority of their up-front store costs to open, allowing QSR to rapidly expand its presence.
It’s an asset-light model that generates significant cash flows in the form of royalties. In some cases, QSR also owns the real estate that is rented out to franchisees, allowing the company to generate revenue via lease payments.
Its portfolio of fast-food chains includes Burger King, Popeyes, and Tim Hortons, which will allow QSR to increase sales by 47% to $7.31 billion in 2022.
Algonquin Power & Utilities
The final stock on my list is Algonquin Power & Utilities (TSX: AQN)(NYSE: AQN), a Canada-based utility company. Its regulated business provides electric, natural gas, water distribution, and wastewater collection utilities across North America. It also has a renewable energy business that accounts for a third of total cash flows.
Algonquin is highly diversified both in its service mix as well as geographically, operating in numerous states south of the border. Plus its renewable energy assets provide added potential for long-term growth. This makes it a highly defensive and resilient stock that is less vulnerable to market volatility.
AQN stock offers investors a dividend yield of 5.1%, which is quite juicy. Between 2010 and 2020, these payouts rose by 10% annually, and the company raised dividends by 6% in Q1 of 2022.
