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These 2 companies could help you retire early: Coca-Cola Amatil Ltd and Macquarie Group Ltd

With the ASX falling by 5% since the turn of the year, it may seem as though buying stocks is not a great way to plan for retirement. After all, 2014 was another disappointing year, with the ASX posting a gain of just 2%. In fact, during the last five years Australia’s main index has delivered an annualised return of just 3%, which is hardly likely to bring retirement a big step closer for many investors.

However, that’s not to say that shares should be avoided when it comes to pension portfolios. Quite the opposite, since stocks such as Coca-Cola Amatil Ltd (ASX: CCL) and Macquarie Group Ltd (ASX: MQG) have huge potential to deliver excellent total returns and bring forward your retirement date.

In the case of Coca-Cola Amatil, it is a business in the midst of transformational change. For example, it has successfully reduced its cost base and is seeking to implement greater efficiencies over the medium term. The changes should have a positive impact on the company’s margins and push its earnings upwards after a disappointing number of years where Coca-Cola Amatil has seen its bottom line fall at a rapid rate, for example  by 25% on a per share basis last year.

In addition to cutting costs, Coca-Cola is also focused on raising revenue both in the Australian market and also abroad. In Australia it is attempting to move with consumer tastes towards a healthier lifestyle and its introduction of the Coca-Cola Life brand has been a successful step in the right direction on this front.

Additionally, Coca-Cola Amatil is expanding into faster growing markets such as Indonesia which, alongside improved marketing and higher advertising budgets, should deliver better sales growth than the 1.8% per annum posted over the last decade.

Certainly, Coca-Cola Amatil trades at a premium to the ASX based on the price to earnings (P/E) ratio, with it standing at 18 versus 15.4. However, with the improvements being made to its business, its share price looks set to rise and reverse the 17% fall of the last five years.

Similarly, Macquarie is adapting its business model to a changing operating environment. For example, it is seeking out annuity-style businesses which offer a more appealing risk/reward opportunities, with recent acquisitions of an aircraft leasing operation and the Esanda Dealer Finance unit being notable examples.

Furthermore, with the outlook for the Australian economy being downbeat and the mining boom which had a positive impact on the country apparently over, Macquarie’s global footprint could prove to be a major asset over the long run. This should allow the company to tap into potentially higher rates of growth outside of Australia and also benefit from a potentially weaker Aussie dollar over the short term.

With Macquarie trading on a P/E ratio of 14.8, there is upward rerating potential on offer. And, with it having a yield of 4.3% and double-digit annual dividend growth forecasts, its total return looks set to be relatively high in 2016 and beyond.

Despite this, there is another ASX stock that I believe could outperform Coca-Cola Amatil and Macquarie.

In fact, it's recently been named as The Motley Fool's Top Stock For 2015 and could make a real impact on your bottom line as we move through the year. As a result, it's well worth finding out more about it.

Click here to do so - it's completely free and comes without any obligation.

Motley Fool contributor Peter Stephens has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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