It's never too early to start buying strong, growing companies for your retirement. The earlier you start, the more time you have to compound the returns and grow your money into a big retirement pot.
My retirement may still be some time off, but I still want to start filling my portfolio with the best ASX stocks available. So here are five companies I would start buying for my retirement today:
1. SKYCITY Entertainment Group Limited-Ord (ASX: SKC)
SkyCity has a significant competitive advantage as a monopoly and niche casino operator, but still offers geographic diversification with operations in Australia and New Zealand.
The company pays a consistent dividend, currently yielding 4.8%, and is undertaking significant expansions in Auckland and Adelaide casinos.
2. ERM Power Ltd (ASX: EPW)
ERM Power is a company I recently suggested as one to hold for worry free retirement. The company's share price has increased marginally since then but can still be bought for a reasonable 17 times underlying earnings.
The company offers an enticing 5.75% fully franked dividend and is still forecasting electricity sales growth of 28% in 2014 and 20% in 2015.
3. Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)
Fisher & Paykel competes against ResMed Inc. (CHESS) (ASX: RMD) designing and manufacturing masks and breathing devices to assist sleep. I expect both companies to grow significantly in the next five to ten years, but Fisher & Paykel is the smaller and more nimble of the two with world-class management.
4. Contango Microcap Limited (ASX: CTN)
To gain exposure to companies outside of the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) I would buy investment company Contango Microcap. Contango's returns have proven enticing and it offers exposure to a wide range of small, but highly prospective companies in one tidy, diversified package.
5. Santos Ltd (ASX: STO)
Santos in my view is an overlooked dividend stock which has strong cash producing potential in the next ten years. The company takes a long-term view on its investments, which is evident from its involvement in current key projects like PNG LNG and Queensland's GLNG.
