Building a portfolio that can see you through retirement requires finding stocks that can not only enjoy capital appreciation but also income generation. The makes dividend growth stocks an important component of an investor’s long-term strategy. Dividend growth investing has proved to be the best method of amassing generational wealth.
It is better than buying bonds, gold, real estate — or even non-dividend-paying stocks! That’s because historically dividends have made up as much as 40% of the S&P 500 ‘s annual return going all the way back to 1930. It’s been an amazingly consistent track record that investors can use to their advantage. What follows are three of the best growth stocks to buy for building a lifetime of riches.
Ulta Beauty (ULTA) The first growth stock investors should consider buying is Ulta Beauty (NASDAQ: ULTA ). The beauty products and personal care leader has a phenomenal track record of creating expanding shareholder value. Over the past decade, Ulta has quadrupled in value with a 343% return for investors.
And despite my highlighting the importance of finding dividend growth stocks to buy, the beauty care company actually does not pay a dividend. So why recommend it? Because I think it can and will pay one in the near future. Ulta has a terrific decade-long history of sharply growing sales, profits and free cash flow ( FCF ) per share.
At the same time it has reduced the number of shares outstanding and embarked on a pattern of reducing its d.