DOL:CC - Retirement Planning: 3 Blue Chips Everyone Should Buy for an Affluent Retirement
2024-01-26 20:00:00 ET
An affluent retirement is a natural desire. After four to five decades of consistent work, you want your golden years to be comfortable, and a healthy nest egg is crucial to that comfort. One of the easiest ways to build such a nest egg is to start your retirement planning , saving, and investing as early as possible. Your choice of stocks will also play a great role in how financially healthy your retirement years are.
If you want to achieve optimal growth while sticking to relatively safe stocks, three blue chips should be on your radar.
A utility stock
If you strongly believe that “slow and steady wins the race,” then Fortis ( TSX:FTS ) may be among the top choices for you. It’s arguably one of the safest stocks you can buy on the TSX, as the second oldest dividend aristocrat in Canada and a utility company with a sizeable consumer base in multiple markets.
Fortis is also a slow but consistent grower. It has risen 78% in the last 10 years, and if you add the dividends into the return mix, the overall number gets quite close to 160%.
That’s a decent return rate, and since it’s an incredibly safe stock, you can divert a sizable amount of savings in this stock several times over the years. You can also enhance the return potential by buying the stock whenever it’s discounted and reinvesting the dividends instead of cashing them out.
A consumer discretionary stock
Dollarama ( TSX:DOL ) is another blue chip worth considering, especially if you lean more towards growth than dividends. The company offers dividends at an incredibly low yield of 0.28%, which is more than balanced by its compelling growth potential.
The stock has risen over 600% in the last 10 years alone. If it continues growing at this pace, it can turn even a relatively small amount of capital into a sizable sum for your retirement funds.
Dollarama has a market capitalization of about $28 billion right now, and it’s the largest Canadian retailer primarily selling items worth $5 or less. The total network has grown to over 1,000 locations, and the company’s projections for future growth are quite ambitious.
A tech giant
Constellation Software ( TSX:CSU ) is easily one of the top growth stocks you can buy in Canada in virtually any market or economic condition. The reason is its consistency. It has been going up steadily ever since its inception. In less than two decades, it has risen from a price of $18 a share to well over $3,600 a share – making it the most expensive stock by a wide margin.
However, consistency is just one part of its appeal — the other part is its growth pace. The stock rose by about 1,450% in the last 10 years alone.
That means if you had invested $70,000 in the company 10 years ago, it would have made you a millionaire by now through price appreciation alone. The dividends enhanced the total returns in the last decade to 1,760%.
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Foolish takeaway
All three of the blue-chip stocks offer their own “version” of growth and dividends. Fortis leans more towards dividends when it comes to the overall return potential, while Dollarama and Constellation Software are more growth-oriented.
However, all three can help you to an affluent retirement, assuming you stash an adequate amount of capital in these investments and hold them long enough.
The post Retirement Planning: 3 Blue Chips Everyone Should Buy for an Affluent Retirement appeared first on The Motley Fool Canada .
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Software and Fortis. The Motley Fool has a disclosure policy .
2024