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3 Stocks That Could Help You Retire a Millionaire

Motley Fool - Mon Nov 14, 2022

It might seem impossible that you could become a millionaire, but for most of us, it's quite possible. You just need to be making regular contributions to your investment accounts, have investments that are growing at a respectable clip, and time. The more you have of any of those, the faster you'll get there. The table below will help you see how money can grow.

Growing at 8% for

$7,000 invested annually

$15,000 invested annually

5 years

$44,351

$95,039

10 years

$109,518

$234,682

15 years

$205,270

$439,864

20 years

$345,960

$741,344

25 years

$552,681

$1,184,316

30 years

$856,421

$1,835,188

35 years

$1,302,715

$2,791,532

40 years

$1,958,467

$4,196,716

Data source: Calculations by author.

So what should you invest in to get that respectable growth rate? Well, a simple low-fee, broad-market index fund can be all you need, delivering roughly the overall market's return -- which has been close to 10% over very long periods. But if you want to aim for faster growth, consider stocks like the ones below.

1. Walt Disney

Walt Disney(NYSE: DIS) is a familiar juggernaut, with valuable assets such as Disney theme parks, Walt Disney Studios, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, 20th Century Studios, Searchlight Pictures, Lucasfilm, ABC TV, FX, National Geographic, ESPN, the Disney+ streaming service, and a chunk of Hulu.

Disney's stock has been crushed this year, with its shares recently 44% below their 52-week high. There's plenty of reason to be optimistic about the company's future, though, given its powerful and dominant businesses.

Disney just reported its fourth-quarter and full-year results, featuring revenue up 9% year over year for the quarter and up 23% for the full year. One highlight was that the Disney+ streaming service grew its subscribers by 20% year over year, to 46.4 million in the U.S. and Canada.

Disney's stock is looking attractively priced, with a forward-looking price-to-earnings (P/E) ratio recently near 19, well below the five-year average of 37. Its PEG ratio was recently only 0.62, well below the five-year average of 3.36, also suggesting undervaluation.

2. Boston Beer

Boston Beer(NYSE: SAM), with a recent market value near $4.3 billion, is a major name in the craft beer business. It was launched in 1984 and today has a large portfolio of brands, including Truly Hard Seltzer, Twisted Tea, Angry Orchard Hard Cider, Dogfish Head Brewery, Hard Mountain Dew, and Sauza Agave Cocktails, among others. Its stock has been a solid grower, averaging annual growth of more than 12% over the past decade.

The company's third quarter featured revenue rising 6.2% year over year. This was an improvement over the disappointing second quarter, which reported a small drop in revenue and an uninspiring outlook.

Boston Beer's stock has been hit hard in the recent market downturn, with its shares recently about 35% below their 52-week high. That presents an intriguing buying opportunity for long-term believers in the business. Its forward-looking P/E ratio was recently 30.5, below its five-year average of 36.7.

3. CarMax

CarMax(NYSE: KMX) is another company looking undervalued, with a PEG ratio recently near 0.88, well below its five-year average of 1.55, and a forward-looking P/E ratio of 12.6, well below the five-year average of 18.

CarMax is the largest used car retailer in the U.S., with more than 230 locations, and it's focused on offering transparency in its dealings as well. It sold some 1.6 million units in fiscal 2022, and raked in $32 billion, with its auto loan portfolio reaching a value of $16 billion.

The company's second quarter featured revenue up 2% to $8.1 billion, and total retail used units sold declining by 6.4% year over year -- disappointing results driven in part by rising interest rates. That helped depress the stock, which was recently down 58% from its 52-week high. Low interest rates won't last forever, so interested investors might keep an eye on CarMax -- either buying in incrementally over time, plunging all in now, or just adding it to a watch list, waiting for less economic uncertainty.

These are just a few of many companies worth your consideration for a berth in your long-term portfolio. Take a closer look at any that interest you. With the market having slumped so much this year, there are many stocks that could help you become a millionaire by retirement.

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Selena Maranjian has positions in Walt Disney. The Motley Fool has positions in and recommends CarMax and Walt Disney. The Motley Fool recommends Boston Beer and recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.

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