This is Part Three of “How to Not Wake Up Broke in Your 80s.”
Stick with known, long-term trends in essential industries. If you are being realistic and understand how long most of us will live, you have to look at long-term growth trends, not just income.
By now, everyone knows the U.S. is the Saudi Arabia of natural gas, and they know shale gas could make us energy independent in as little as eight years.
Analysts predict we could be using gas as our primary transportation fuel in as little as 10 years. And, the U.S. will be exporting liquid natural gas (LNG) to both Asia and the EU even sooner.
It’s difficult for anyone who lived through the oil embargos of the 70s to imagine we will be an energy exporter. Amazing!
Natural gas could easily dwarf the returns oil gave its investors in the twentieth century, and drive a resurgence in manufacturing in the U.S., as well.
That is what I call an essential industry!
I talked about pipeline and storage companies a few weeks ago, but exploration and development companies have a lot to offer as well… not the kind of dividend potential we see in pipelines plays, but lots of long-term upside.
Here are three names, with big institutional ownership.
Anadarko (NYSE: APC), EOG Resources (NYSE: EOG) and Devon Energy (NYSE: DVN).
Both Anadarko and EOG have great earnings and revenue numbers – and estimates are calling for big increases in both next year. Their annual growth estimates per year for the next five years are an incredible 21% and 20%, respectively.
Devon shows big earnings and revenue increases, but its growth rate is at 6%. We might tread lightly here. As I said, to fund all of our retirement years, we will need long-term growth. Six percent isn’t as good as it could be.
To sum it up, we’ve got big earnings and revenue increases, bigger long-term growth estimates for EOG and Anadarko, and an industry that, for the next 50 years, will have to try to not make money.
How do you not wake up broke in your 80s? Invest in essentials, think long-term growth and bet on natural gas!
Publisher’s Note: Is it possible to fund an entire retirement… with just one stock?
Imagine buying a stock that is more profitable than any other company.
Now imagine being able to buy the same stock for three times cheaper than any of its competitors.
You probably don’t believe such a situation exists. But it does. Here’s the proof.