Even if your retirement is many decades away, it’s never too soon to start planning for a better financial life in your future. However, if you’re aiming for the value of your retirement portfolio to hit the $1 million mark in the next decade, you would need to invest a much higher amount to begin with in order to reach this goal in that time frame. Turning an initial $300,000 investment into seven figures in a decade may seem like a lofty aspiration, but it would require an annualized return of just around 13% to make that happen.
Considering that the S&P 500 has delivered total returns of 220% over the past decade, which works out to 12.3% on an annualized basis, this begins to look like a much more attainable goal. Many investors set a goal of having a $1 million nest egg when they retire. However, the way in which you work toward that milestone — and how long it takes you to get there — will be specific to your investment preferences, risk tolerance level, the types of stocks you buy, how much you invest, and how regularly you invest, among other factors. It’s also wise to diversify your investments across various stocks and asset classes, as a more balanced portfolio promotes favorable returns in a wider range of markets.
With all that being said, if you have $300,000 available to invest right now, here are three powerhouse stocks to consider adding at least part of that amount to as you work toward your retirement goals, each of which has the potential to double or more over the next 10 years.
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX -2.40%) has built an impressive track record of growth, profitability, and returns for investors throughout the years, all thanks to its portfolio of cystic fibrosis therapies. The market for treatments for that genetic disease is expanding as more cystic fibrosis patients are living longer, increasing the number of people who might use Vertex’s therapies globally. Given that Vertex Pharmaceuticals is the undeniable leader in this space, it has not exhausted its total addressable market opportunity here.
Management said that, while roughly 83,000 individuals have been diagnosed with the genetic disease in North America, Europe, and Australia alone, roughly one-third of the patients who could benefit from taking a triple-combination therapy (such as the company’s top-selling treatment, Trikafta) are not yet doing so. Of course, this also leaves room for expansion into many other markets that are still underpenetrated and could benefit from access to Vertex’s slate of therapies in the years ahead.
Beyond the multibillion-dollar cystic fibrosis treatment market, Vertex Pharmaceuticals also has its eye on other rare disease indications. Its pipeline includes treatment candidates for acute pain, Duchenne muscular dystrophy, and sickle cell disease, to name a few.
Over the past 10 years, Vertex Pharmaceuticals delivered a total return of more than 280% to investors while growing its top and bottom lines by 204% and 789%, respectively. Meanwhile, Wall Street is estimating that the healthcare stock could grow its revenue by an average of about 10% annually over the next five years alone. Among the analysts who cover the company, the one with the highest price target expects it to rise by about 50% in the next 12 months. The company has a dominant position in the cystic fibrosis treatment market. It is also working to expand into other rare disease drug markets with needs that remain largely unmet by the broader healthcare community. These factors both bode well for its ability to deliver enviable returns for investors in 2023 as well as throughout the next decade.
2. Intuitive Surgical
Intuitive Surgical (ISRG -2.02%) built an incredibly lucrative business on its razor-and-blades business model. The company develops, manufactures, and sells robotic surgical systems — its most well-known being the da Vinci Surgical system — but it also sells services and disposable products for those devices that serve as a reliable, continuing source of revenue.
Healthcare institutions that buy Intuitive Surgical’s robotic surgical systems will also need to buy a steady stream of replacement parts and accessories that they use up during medical procedures. Intuitive Surgical even sells full-service plans for medical providers that include access to everything from customer service and technical support staff to on-call maintenance teams and integrated software solutions. All of this generates ongoing revenue beyond the initial sale of these systems, which on their own cost anywhere from around $600,000 to $2 million each. Bear in mind, Intuitive Surgical controls more than three-quarters of the surgical robotics market globally.
Intuitive Surgical’s trailing 10-year return currently sits at around 390%. During that same time frame, both its annual revenue and earnings grew by roughly 150%. Analysts think the company can grow its revenue by an average of 9% annually over the next five years. It also doesn’t seem like a stretch of the imagination that Intuitive Surgical’s share price could double or more over the next 10 years considering that Wall Street is targeting a 12-month upside for the stock of 12.5% (with one analyst going as high as 21%).
Last but not least is DexCom (DXCM -4.97%), a leader in diabetes care known for its top-selling continuous glucose monitoring (CGM) devices. The global CGM market is on track to surpass $10 billion by the year 2028. DexCom generated nearly half of all revenues from sales of CGM devices globally in 2021, giving it a market share of right around 50%.
There are many factors driving the growing adoption of CGM, including the rising prevalence of diabetes around the world and the increasing usage of these devices by both type 1 and type 2 diabetics. Both public and private insurers continue to expand their coverage to include these devices, giving more diabetics access to a technology that can, in some cases, make a life-or-death difference in their ability to monitor for blood sugar spikes and related adverse events. DexCom just picked up another huge win with U.S. regulatory approval of its new-and-improved CGM system, the G7. The launch of the G7 in the U.S. is to take place in the months ahead and is already underway in key international markets.
DexCom delivered a total return of about 300% in the trailing decade, spurred on by annual revenue growth of approximately 66% and annual earnings growth of about 53%. Analysts are not only estimating that the company can grow its revenue by 33% annually over just the next five years, but are targeting a median potential upside for the stock of approximately 18% in the next year (with a top target of 34%). Considering DexCom’s continued leadership in the diabetes care market, and its ongoing growth on the top and bottom lines, the stock looks like it has plenty of room to run for the next decade and beyond.