Almost all retirement investment strategies advocate generating a steady income from dividend payments from well-established, safe stocks. And while it’s an effective and secure strategy, dividends don’t always cut it. Whether you’re looking for growth opportunities or are just trying to bridge your financial gap with capital gains, these investments can help.
The stocks discussed here are all good growth and value blend investments. For reduced risk, only large-cap companies with a relatively low beta and healthy balance sheet are shown. And finally, the most important part: each company listed has a promising business strategy that has a lot of driving factors for the future.
A bio-innovator
Celgene Corporation (NASDAQ:CELG) is a biotech company with multiple pharma products and subsidiaries that cover a wide spectrum of health solutions. The company is most notably involved in cancer treatments and the sale of its staple product, Revlimid. But the true value of the company comes from its product pipeline and aggressive business partnering. The company partnered with Agios Pharmaceuticals to work on cancer research using enzyme technology, and is also responsible for 19 pipeline programs and 100 sponsored clinical trials.
In Q1 of this year, sales were up 15% year-over-year and the company bought back 4.2 million shares. And even still, the company’s price-to-earnings growth still falls way below most competitors at 0.9, indicating Celgene Corporation (NASDAQ:CELG) is a great growth prospect for the money. Even so, the company’s balance sheet is stable, and its huge size and low beta of 0.7 assures security in this investment that’s bound to pop.
“Green” natural gas
Halliburton Company (NYSE:HAL) has never been a “conventional” energy company. The natural-gas harvester was a pioneer in hydraulic fracturing and is now working to innovate in the same area. Fracturing is a controversial but effective way of harvesting energy. Halliburton Company (NYSE:HAL) is working to innovate and make the process much more eco-friendly and effective.
The company also created 100 natural-gas powered trucks and plans to make its harvesting equipment run on natural gas in the future. Halliburton’s chemical formulations and CleanSuite technologies hold promise in an industry that’s going to rapidly expand in the coming years. The U.S. Energy Information Administration projects that worldwide consumption of natural gas will increase 50% from 2008 through 2035.
Source: EIA.Gov
Halliburton Company (NYSE:HAL) has a high beta of 1.6, but it still falls bellows the competitor average. The company’s PEG comes in at 0.8, which affirms the idea that Halliburton Company (NYSE:HAL) is a solid long-term investment.
The health-conscious boom
Companies that can identify powerful trends and benefit from them are worth my investment dollars. Starbucks Corporation (NASDAQ:SBUX) does just that. Starbucks Corporation (NASDAQ:SBUX) is already wildly successful in the U.S., but the company plans to rapidly expand in Asia. The coffee shops in Japan and China consistently have lines flowing out the door. As a result, Starbucks Corporation (NASDAQ:SBUX) projects that by 2014, China will be the second- biggest market for the company, trailing the U.S. Starbucks Corporation (NASDAQ:SBUX) expects stores in excess of 1,500 throughout China by 2015. Domestically, the company has bought two new companies, which may do well in the coming years given new consumer trends.
The company speculates that the newly established health trends aren’t fads, and people are more conscious of what they eat and drink. In response, Starbucks Corporation (NASDAQ:SBUX) bought Evolution Fresh, a fresh juice manufacturer that uses special technology to produce some of the most nutritious juice on the market. To capitalize on growing demand for hot tea, Starbucks acquired Teavana, a chain of high-end tea bars. The company also boasts an 18.5% average retained earnings growth for the past four years.
Bottom line
Starbucks Corporation (NASDAQ:SBUX) and Halliburton Company (NYSE:HAL) both have dividends, but they aren’t large yields by any means. The driving factors for these companies are their growth prospects in the coming years. And while the stocks listed are riskier than most you might see in a retirement portfolio, they provide a great risk-reward ratio and offer an alternative strategy for those who can forego the big dividend paycheck.
The article Dividends, Schmividends originally appeared on Fool.com and is written by Ryan Gilbert.
Ryan Gilbert has no position in any stocks mentioned. The Motley Fool recommends Celgene, Halliburton, and Starbucks. The Motley Fool owns shares of Starbucks. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
