The key to a successful retirement – and that means you can pay your bills and afford to do more than sit on the porch and watch traffic go by – is to own companies that have long-term solid growth prospects in essential industries.
Nothing is more essential than food, and Monsanto (NYSE: MON) has most of the answers for a hungry world.
Here’s a company that has the only viable solution for not only the worldwide food shortage but drought, insects and increase-per-acre production, too.
The fact is, going forward, the world cannot feed itself without Monsanto’s products.
It expects to double its earnings in the next five years, and much of that growth is expected from its genetically modified seed (GMO) sales, especially in Latin America.
These modified seeds increase food production by as much as 50% to 100% and, as I said, are also drought- and insect-resistant. Corn production is up fivefold in areas using its modified seeds.
It recently rolled out a new soybean seed that is expected to be planted on 12 million acres in Latin America. That’s up from 3 million acres just last year.
That’s a 400% increase! That’s how necessary and productive Monsanto’s products are.
In the short run, it has announced a $6 billion stock buyback program, and is expecting 17% earnings growth next year, 13.9% annual growth for the next five years and a 6.2% growth in revenues by 2015.
And this is from a $65 billion company. Numbers like these are usually reserved for mid or small caps.
The only problem I see is that the stock recently hit a new high, so a staggered buying approach may be in order – buy a half position or maybe a quarter and look for weakness. It is just a good prudent way to buy in what most believe is a pricey market.
Yes, you may miss some of this by staggering your buying, but you may also get a better price.
Companies with strong growth prospects, solid markets and long-term stability in essential industries: That’s how you avoid waking up broke in your 80s.