Every investor has a different financial goal for retirement. Investors living in a paid-off home that anticipate a healthy pension (government and private) may need a relatively small sum to supplement their income enough to maintain a modest lifestyle in retirement.
However, if you have to take care of roughly 70-80% of your retirement expenses from investments and savings, you may need a significant sum, easily $1 million or more.
Regardless of what your savings goal is, there are three stocks you should consider looking into. You can reach the desired number by diverting adequate capital to these stocks, and it would be quite helpful if you start your retirement planning early, with decades to grow your savings via investments.
Toromont Industries (TSX:TIH) is one of the most well-known names when it comes to heavy machinery and equipment. Its equipment group is made up of seven separate businesses, including one of the world’s largest CAT dealerships, construction supply, and equipment businesses, as well as an agricultural equipment business.
Another fold of diversification is Toromont’s refrigeration business CIMCO, which has 1,200 employees and 1,500 active service contracts.
The business model is sound and has limited competition, especially in Canada. However, it’s reliant upon economic progress in general. The more construction and development there is, the higher would be the demand for Toromont’s services and equipment.
This may have been the reason behind the stock’s decline and stagnation in the last 12 months. But assuming that it may replicate the last decade’s growth in the next one, it can easily grow your capital by four-fold in the next decade.
Gold mining stocks are plentiful in Canada, but there are only a handful of gold royalty companies, and the top dog among them is Franco-Nevada (TSX:FNV). The company has developed a powerful portfolio of diversified gold and other precious metal assets.
Only about 58% of its revenues come from gold; the rest is silver and other diversified assets. Out of 404 assets in its portfolio, about 250 are in the exploration stage, indicating the company’s positive long-term prospects.
Franco-Nevada is one of the few Aristocrats in Canada’s gold industry, but its low yield doesn’t help it attract many dividend investors. What’s most appealing to most investors is its growth potential. The stock has grown over 235% in the last decade. Assuming it can continue this pace, you could easily double your capital in the company in fewer than five years.
Canadian bank stocks are a great pick for most dividend investors, but if you want to add dividends and growth inside your portfolio, National Bank of Canada (TSX:NA) may be your best pick. The stock has offered over 291% to its investors in the last decade via capital appreciation and its dividends. That’s significantly higher than all of the Big Five banks in Canada.
If it keeps growing at this pace, you may grow your investment capital by over three-fold every 11 years. This mostly domestic bank is the best grower among the major Canadian banks, and it offers generous and sustainable dividends. The current yield is about 3.8%, but you can lock in a much better one if you buy the stock when it’s slumping hard.
If the three stocks keep growing at their current pace and maintain their dividends, you could expect around three-fold growth in the next decade. So, $10,000 each ($30,000 in total) in the three stocks may result in a collective nest egg of about $90,000 in the next decade.