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The smartest stocks to buy with $ 700 right now

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You don’t have to invest a lot of money to build up a good retirement nest egg. For example, invest as little as $ 300 per month could reach over a million dollars in about 30 years, assuming an annual return of 12%. This is slightly higher than the average return on the stock market by almost 11% over the past 50 years.

The key is to buy composition machines, stocks that are expected to consistently produce above-average total returns for years to come. Three that stand out as having the potential to generate double-digit total annual returns are Brookfield Renewable Power (NYSE: BEPC)(NYSE: BEP), Real estate income (NYSE: O), and Change (NYSE: SWCH). Investing a few hundred dollars in each right now could pay off big in the years to come.

Image source: Getty Images.

A leader in the renewable energy megatrend

The global economy must invest a fortune to reduce its dependence on carbon-emitting fossil fuels and stem the impact of climate change. One estimate suggests investing more than $ 150 trillion to completely decarbonise the global economy over the next three decades.

This forecast is great news for Brookfield Renewable, a global leader in renewable energy. It has one of the largest portfolios of renewable energy assets and an even larger backlog of development projects. This development pipeline gives it a clear vision to increase its cash flow per share at an annual rate of 6% to 11% until at least 2026. Meanwhile, the company believes it can increase its bottom line by up to an additional 9% per year. through merger and acquisition activity. That’s up to 20% annual growth in the short term.

Add in Brookfield’s 3.5% dividend and it’s easy to project double-digit total annualized returns in years to come. This would stay true to its track record of success, as Brookfield has produced total annualized returns of 18% over the past two decades.

A huge set of opportunities

Owner-occupied commercial and industrial real estate in the United States and Europe is estimated at $ 12 trillion. This is a huge market opportunity for Real estate income, a real estate investment trust (REIT) focused on purchasing these types of properties. The company is set to acquire more than $ 5 billion in real estate in 2021, not counting its merger with VEREIT. These agreements position it to increase its cash flow per share by 9.2% in 2022 in the middle of its forecast range.

The steady growth of Realty Income, focused on acquisitions, has produced impressive returns over the years. The REIT has generated an annual compound total return of 15.1% since its listing on the stock exchange in 1994, driven by constant cash flow and dividend growth. The company has increased its dividend, which returns 4.4%, 114 times since its IPO. With one of the best track records in the REIT industry, Realty Income has the financial flexibility to continue to grow its portfolio. Combine its attractive yield with a huge opportunity for growth, and Realty Income looks likely to continue to deliver above-market total returns for years to come.

Change structure to lead its next phase of growth

Switch is a data center operator focused on building and operating large-scale, state-of-the-art facilities. The company is currently becoming a FPI data center, which should improve its access to capital. This should improve its ability to grow in the growing data infrastructure market.

Switch sees significant growth potential in the years to come. The company currently has several ongoing data center expansion projects with many more in the pipeline. These expansions allow it to grow its adjusted operating funds at a compound annual rate of over 12% through 2026. Meanwhile, the company has enough room at its existing sites to grow at an annual rate of over 12%. double digits over the next decade. This could give Switch the power to produce double-digit total annualized returns over the next several years.

A high probability of being long-term winners

Brookfield Renewable, Realty Income and Switch have enormous growth potential and appear to be able to deliver above average total returns in the years to come. It makes them look like smart bets for those with a few hundred dollars to invest right now.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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