3 Reasons to Own Facebook Stock in Retirement
Retirees may spend hours a day on Facebook, but its stock, lacking a dividend, is often overlooked when it comes to their portfolios.


Retirees may spend hours a day on Facebook, but its stock, lacking a dividend, is often overlooked when it comes to their portfolios. Facebook (symbol FB, $132.78) may not hand out cash every quarter, but it can still be a good retirement stock. It trades at an attractive price and is expected to generate well-above-average profit growth. It enjoys a large and entrenched position in the digital advertising industry, which is expanding rapidly. And it has various businesses that have yet to reach their full potential, analysts say. Here are three reasons Facebook stock looks like a winner for retirees.
(Prices are as of January 26. Estimates and other figures are from Zacks Investment Research, unless otherwise indicated.)

The Price Is Right
Facebook looks like a bargain. The stock trades at 25 times expected earnings for 2017, according to Zacks Investment Research. That seems high until you consider that those estimates put 2017 earnings 28% above 2016 levels. And profits are forecast to increase 30% a year on average for the next three to five years, according to Zacks.
Facebook is not without risk, but investors who take the plunge now are getting a deal, says Credit Suisse analyst Stephen Ju. "We believe Facebook shares are mispriced,” he says.

A Stalwart in a Growing Industry
Facebook is the most popular social media network in the world. It has 1.8 billion active monthly users. Advertisers are keen to reach all those eyeballs. Market researcher eMarketer estimates that Facebook takes in 68% of all revenue generated by global spending on social media advertising. Spending in this part of the ad industry is projected to rise from $29 billion today to $50 billion by the end of 2019, or about 20% annualized, according to an analysis by Zenith Media.

More Than Meets the Eye
Facebook is more than its signature website. It also owns Instagram, the increasingly popular photo-sharing platform, and mobile instant-messaging apps WhatsApp and Messenger. And it owns Oculus, a virtual reality company. Credit Suisse's Ju contends that the market does not yet appreciate the profit potential from these and other endeavors. Wall Street analysts “continue to underestimate the long-term monetization potential of upcoming new products," he says.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
-
Stocks Slide to Start September: Stock Market Today
Seasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
Here's What You'd Have If You Invested $1,000 Into Sherwin-Williams 20 Years Ago
Sherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
AI Start-ups Are Rolling in Cash
The Kiplinger Letter Investors are plowing record sums of money into artificial intelligence start-ups. Even as sales grow swiftly, losses are piling up for AI firms.
-
Dow Rips 846 Points to New All-Time High: Stock Market Today
Fed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
-
S&P 500 Extends Losing Streak Ahead of Powell Speech: Stock Market Today
Stocks continued to struggle ahead of Fed Chair Powell's Friday morning speech at Jackson Hole.
-
Dow Retreats From a Record High: Stock Market Today
Quietly rising since April, Home Depot stock was conspicuously constructive Tuesday as high-profile tech names dragged equity indexes down.
-
What Tariffs Mean for Your Sector Exposure
New, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market Today
The last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
-
Stocks Can't Hold Meta, Microsoft Gains: Stock Market Today
The main indexes all opened higher Thursday on impressive Big Tech earnings, but momentum faded into the close.
-
Stocks Are Up and Down on Fed Day: Stock Market Today
In another sign of changing times, JPMorgan has partnered with Coinbase to enable cryptocurrency purchases with credit cards.