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Smart Investors Are Already Buying These Stocks for Retirement

Investors who are stashing away shares in Royal Dutch Shell plc (NYSE: RDS-B), Procter & Gamble (NYSE: PG), and Celgene Corp. (NASDAQ: CELG)  in retirement accounts are making the right choice, according to these top Motley Fool contributors. All three of these companies have intriguing opportunities that could send shares higher over the long haul, and that might make them valuable additions to your portfolio, too.

Fixing the balance sheet

Reuben Gregg Brewer (Royal Dutch Shell plc): The company made a big and expensive natural gas bet during the oil downturn that's been a major headwind for the stock. The oil giant's more than $50 billion acquisition of BG Group pushed debt up 50% year over year in the fourth quarter of 2016, to a massive $83 billion. That's roughly 30% of Shell's capital structure, which is high relative to peers like ExxonMobil and Chevron.

IMAGE SOURCE: GETTY IMAGES.

But here's the thing: The company's debt load was even higher during the year. And that's the important takeaway. Shell is starting to dig itself out of its debt hole by selling non-core assets. As it travels down this path, meanwhile, it's going to rebalance its business with an increasing focus on natural gas -- an area in which it's already a dominant player. Natural gas is expected to grow in importance, taking share from dirtier energy options like oil and coal.

RDS.B Debt to Equity Ratio (Quarterly) data by YCharts.

Royal Dutch Shell, a company that's been around for well over 100 years, looks like it's starting to get its financial house in order after an expensive, but potentially transformational, acquisition. As it strengthens its balance sheet, the security of its dividend improves, too. This is why now could be the right time to jump on Shell's 6.8% yield. For comparison, Chevron yields around 3.9% and Exxon 3.7%.

Shell's higher yield could be a nice boost for your retirement as you wait for the rest of the market to realize that the oil giant is, indeed, resolving the debt issue.

A new look at an old business

Demitri Kalogeropoulos (Procter & Gamble): Procter & Gamble shares recently hit a two-year high to make the consumer goods giant one of the best-performing stocks on the Dow in 2017. The latest bump came after Wall Street learned that an activist investor had accumulated a big position in the company and may push management to make a few profit-boosting, shareholder-friendly moves.

But the dividend giant is already doing much of what any billionaire activist investor might recommend. It just finished its biggest portfolio reboot in its history, which knocked down the number of brands from 166 to just 65. Costs are plummeting, and executives plan to slice a further $10 billion out of expenses over the next few years. The company's capital return program is also one of the most generous on the market -- $22 billion this year alone.

The bold strategic moves appear to be working. Profitability is up, sales growth is accelerating, and P&G is poised to end a two-year earnings slump by boosting profits by around 5% this year. Its market-share slide, meanwhile, could be ending too: Management just raised its full-year organic sales growth target to 2.5% from 2%.

Thanks to its leading position across consumer staples like razors, diapers, and paper towels, P&G has long been a favorite of investors seeking steadily growing returns at unusually low risks. They moved away from the stock over the last few years as profits declined, but are rushing back in now that its business prospects are improving.

Ambitious projections from a trustworthy management

Todd Campbell (Celgene): A larger, longer-living America is one of the biggest trends, and many investors interested in profiting long-term from aging baby boomers are already stashing Celgene away in portfolios.

Celgene is the market-share-leading maker of drugs used to treat multiple myeloma (Revlimid and Pomalyst). It also markets top-selling blockbuster drugs used to treat pancreatic cancer (Abraxane) and psoriasis (Otezla). Soon, it may add yet another best-selling drug to its lineup that treats multiple sclerosis, a big-time indication valued at $19 billion annually.

Management is one of only a few out there that offers up long-term forecasts, and its forecast for the future is downright ambitious. The company hopes to grow from about $13 billion in sales this year to $21 billion in sales in 2020. If it can hit that target, then it thinks earnings per share (EPS) could exceed $13. If so, then owning shares today could prove to be very profit-friendly for long-term investors.

Couple that forecast with a rock-solid balance sheet that includes $6.1 billion in cash and equivalents and another $1.8 billion in short-term investments, and you have a well-heeled company with a proven track record of success, and the potential for significant growth. That's a pretty compelling story.

Obviously, no one knows if Celgene can continue to deliver breakthroughs that allow it to stay ahead of its competitors. However, if the past is any indication, I'm not about to bet against it -- especially since 76 million baby boomers are going to be demanding increasingly more treatment over the next couple of decades.

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Demitrios Kalogeropoulos has no position in any stocks mentioned. Reuben Brewer owns shares of ExxonMobil. Todd Campbell owns shares of Celgene. His clients may have positions in the companies mentioned. The Motley Fool owns shares of and recommends Celgene. The Motley Fool owns shares of ExxonMobil. The Motley Fool recommends Chevron. The Motley Fool has a disclosure policy.