Our Motley Fool contributors think that sales and profit growth at Starbucks (NASDAQ:SBUX), Lockheed Martin (NYSE:LMT), and Intuitive Surgical (NASDAQ:ISRG) make them envy-inspiring additions to long-term portfolios. Are these stocks right for your retirement account? Read on to find out.
A sustained buzz for your long-term portfolio
Seth McNew (Starbucks): Already one of the most powerful brands in the world, but with plenty of growth opportunity ahead, Starbucks continues to look like a great long-term bet. The coffee behemoth is not without its own risks and competitive pressures, but its international expansion efforts and industry-leading technology should provide a steady growth runway.
Starbucks’ same-stores sales have been sluggish lately, dragged down by slow growth in North America. In the recently reported fiscal Q2, same-store sales companywide grew just 3% year over year. However, the company continues to expand its footprint, adding more than 1,000 new stores in the last two quarters to now over 26,000 worldwide. Management sees room for another 12,000 locations worldwide by 2021.
In addition, Starbucks continues to find ways to innovate, such as with its mobile strategy and the new premium Reserve stores, that should help to increase ticket prices and profit margins. The stock still isn’t cheap, as shares trade at about 25 times next year’s estimated earnings, but that gets you a company that has historically commanded a high valuation, pays a healthy and growing dividend, and appears to have set the stage for stable long-term gains — a great growth stock for retirement.
A great “defensive” investment for your retirement portfolio
Rich Smith (Lockheed Martin): Ordinarily, growth stocks aren’t what I look for in a stock for retirement. Stable income and sustainable dividends seem more appropriate objectives to me. But opinions differ, and with Americans living longer and longer in retirement these days, maybe it is time to start thinking about growth stocks as a good investment for retirement.
After all, with many Americans able to retire as early as age 62, and the average life expectancy now pushing 79 (or more!), there’s every possibility that an investment purchased at the start of a retirement will have a couple of decades in which to grow throughout retirement.