The stock market offers many opportunities for people who want to become millionaires. Investments in corporations can grow much faster than the funds in a savings account. Some stocks can soar quickly to the point where you can retire off of them.
Investors have seen this happen firsthand with several stocks. Tesla (NASDAQ:TSLA) and Nvidia (NASDAQ:NVDA) are two successful stocks that come to mind. These stocks have exceptional 5-year gains, but some investors may believe they have missed out on those opportunities.
However, if you expand your time horizons and focus on reliable companies, it’s possible to become a 401k millionaire. Let’s examine three retirement stocks that can help you achieve your financial goals.
Visa (V)
Visa (NYSE:V) makes money every time its customers use their credit and debit cards. The company has established a robust business model and is poised to become a $1 trillion company within a few years. Currently, the stock has a $570 billion market cap and is up by more than 90% over the past five years.
Truly, Visa benefits from rising consumer spending. If the economy is healthy, Visa will continue to deliver good results as it did in Q1 2024. During that quarter, revenue increased by 9% year over year (YOY) while net income jumped by 17% YOY.
Those growth rates help support a dividend program that exhibits meaningful dividend hikes each year. While the 0.73% yield is low, Visa raised its quarterly dividend from $0.45 per share to $0.52 per share in 2023. The company has regularly maintained a double-digit growth rate each year and has more than doubled its dividend from 2019 to 2023.
Investors planning for retirement don’t have to focus on current yields. The high cash flow is likely to be there by the time you need to use this stock to fund your living expenses. In the meantime, Visa’s stock price stands to grow in the coming years.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) offers great value for investors as a company that seems as if it’s doing everything right for its business. Artificial intelligence (AI) has been a hot sector, and Microsoft recently doubled down by introducing Copilot for Finance. It’s part of the company’s continued efforts to become an AI leader within the industry.
Furthermore, Microsoft is far more than an AI stock. The corporation has exposure to many verticals, but none of them are as important as Microsoft Cloud. This business segment made up $33.7 billion of the company’s $62.0 billion in Q2 FY24 revenue. Also, Microsoft Cloud revenue was up by 24% YOY and helped the company grow by 18% YOY.
That’s an impressive growth rate for a large tech company. Net income followed with a 33% YOY improvement. Microsoft will be around for many years and continually expanding into additional industries as opportunities arise. The company is well-run, and just like Visa, it offers a low dividend yield with a high annual growth rate.
Walmart (WMT)
Walmart (NYSE:WMT) isn’t going anywhere. The retailer offers affordable products, and lower prices will always be a big draw. Investors pouring money into their 401k plans want stability and the confidence that their money will grow. Walmart checks off both requirements.
Recently, the company posted 5.7% YOY revenue growth in the fourth quarter of fiscal 2024. In a show of confidence, Walmart also hiked its annual dividend by 9%. While most people know the company for its retail, a few segments stand out.
And, e-commerce sales increased by 23% YOY which will help the company take some market share from Amazon (NASDAQ:AMZN). Furthermore, the company’s global advertising business grew by an impressive 33% YOY. Finally, Walmart’s recent acquisition of Vizio will help its ad segment.
Currently, WMT trades at a 31 P/E ratio. Shares have gained 25% over the past year and are up by 81% over the past five years.
On this date of publication, Marc Guberti held a long position in MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
