Want $1 Million in Retirement? 3 Stocks to Buy Now and Hold for Decades | The Motley Fool (2024)

There are many pathways to a million-dollar retirement portfolio. For example, investing $300 per month into an investment earning 10% annually would grow into $1 million in about 34 years. That's a very achievable return. It's slightly less than theover the last 30 years.

Meanwhile, you could become a millionaire even faster by increasing your monthly investment or finding higher-return investments. Many stocks offer the potential of earning a high sustained total return over the years to come.Brookfield Renewable(BEPC 1.13%) (BEP 2.01%),Blackstone(BX -1.22%), andMid-America Apartment Communities(MAA 0.81%) have delivered high returns over the years, which seems likely to continue in the future.

Powerful returns

Brookfield Renewable Partners has delivered an outstanding 16% average annualized total return since its formation over 20 years ago. Therenewable energyproducer has grown its earnings brisky by acquiring and developing income-producing renewable energy assets. That has given it the power to increase its above-average dividend (currently yielding 4.7%) at a 6% compound annual rate.

The company is in an excellent position to continue producing strong returns in the years to come. As a leader in renewable energy, it's capitalizing on the growing demand for lower-carbon energy. Brookfield currently has a massive backlog of projects under development that should help power growth. It's also benefiting from steadily rising power prices and widening margins as it continues to scale. Add in the impact of acquisitions, and Brookfield expects to grow its funds from operations (FFO) by more than 10% per year through at least 2027.

That earnings growth should support Brookfield's ability to increase its already high-yielding dividend by 5% to 9% per year. The company's continued income and earnings growth should give it the fuel to deliver total returns in the 12% to 15% range over the long term.

A massive untapped opportunity

Blackstone has delivered a 12.9% average annual return since its initial public offering in 2007. The leading alternative asset manager has capitalized on the steady shift toward alternative investments as investors increase their allocation to these higher-return and lower-volatility investments.

Blackstone has grown its assets under management (AUM) to $1 trillion by delivering differentiated returns for investors and developing new investment products. That has rapidly grown the company's fee-based income and performance revenues. Over the last 10 years, Blackstone has increased its distributable earnings by more than 20% annually, double the rate of the broader market. That has allowed Blackstone to steadily pay a higher dividend.

The company should continue growing briskly as more investors turn to alternatives. A major opportunity for the company ishigh-net-worth individuals. This group currently only allocates about 1% to 2% of their portfolio to alternatives compared to 25% to 30% for institutional investors. That leaves a nearly untapped $85 trillion opportunity for Blackstone to capitalize on in the future. It has developed several investment products specifically designed to meet the needs of individual investors.

Cashing in on the migration trend

Mid-America Apartment Communities, MAA, has delivered a 12.7% average annual total return since its initial public offering in 1994. The apartment landlord has benefited from the rising demand for rental housing.

The company currently owns more than 100,000 apartment homes, primarily in the Sunbelt region, and it's benefiting from the continued migration trend to warmer and cheaper cities in the southern half of the country. The Sunbelt migration trend is driving demand for housing, which is keeping apartment occupancy levels high, driving above-average rent growth.

In addition to rising rents, MAA is also able to build new apartment communities. Theresidential REIThas a strong balance sheet to support its continued expansion.

Those dual growth drivers should continue, especially since the country continues to have a housing shortage. They should enable the REIT to continue growing its FFO at an above-average rate, allowing it to increase its dividend.

The strong total returns should continue

Brookfield Renewable, Blackstone, and MAA have strong track records of delivering above-average total returns. They're in excellent positions to continue producing high-total returns in the future because they focus on cashing in on large market opportunities. That should enable them to grow their earnings and dividends at healthy rates. Those strong returns could allow their investors to eventually retire as millionaires.