Retire early on these 3 stocks
If you dream of enjoying your retirement, you had better get saving for it. Stocks and shares offer an unbeatable combination of share price growth and a rising dividend income as well. The following three companiescould form the basis of a balanced retirement income portfolio, andhelp you beattodays rock bottom savings rates.
BP
The oil sector has been volatile lately but the picture looks a little brighter now that oil has stabilised at around $50-$55 a barrel. This is a big improvement on$27, a low hit in January last year. Oil majorslike BP (LSE: BP) have worked hard to survive the current era of cheap crude, sellingoff non-core assets, slashing headcount and capex, and dropping less productive exploration opportunities. The medicine has worked, the patient is largely restored.
BP stillfaces challenges. Crudecould fall again. Recent OPEC and non-OPEC production cutshave been applied with greater rigour thansceptics anticipatedbut US shale drillers are plugging the shortfall. The days of $100 oil may never return. BP is still making money at this level, with a $400m profit for the final three months of 2016, ifbelowanalystss expectations of$567m. However, income seekers will be beguiled by its turbo-charged 6.57% yield, whichis more than 26 times base rate. Let the dividends roll
GlaxoSmithKline
Pharmaceuticals maker GlaxoSmithKline (LSE: GSK) is another FTSE 100 stalwart thathas been through a volatile time. As with BP, the future is looking brighter, itsshare price up 20% over the past year, and almost 10% in the past month. This recent spike may be down to encouraging results from clinical tests on asthma sufferers of its Relvar Ellipta inhaler treatment, which would mark another step forward in the companys drive to replenish its drugs pipeline.
Glaxo has also been upbeat aboutnew HIV drug tests and is awaitingregulatory decisions on four major products this year Shingrix, Closed Triple, Benlysta SC and sirukumab, with the results directly impacting on the share price. Glaxo currently offers dividend income of 4.8%, with the prospect of steady growth in future. The future looks promising, with forecast earnings per share growth of 9% this year and 3% in 2018. Possibly the ultimate retirement stock.
Unilever
Sorry, scrap that. Household goods giant Unilever (LSE: ULVR) is possibly the ultimate retirement stock. It has seensteady share price growth year after year, including another 25% in the last 12 months. Its current yield of 2.82% is better than it looks because managements policy has always been very progressive, its just been difficult for the yield to keep up with the surgingshare price.
I was delighted to see the$143bn takeover offer from Kraft Heinz rebuffed. This well-run company has plenty to offer shareholders overthe long term without takeover disruption. The failed attemptmay have a positive side, forcing the company to bolstershareholder returns, and target an increase inits relatively low 15% operating margins. Unilever doesnt divide investors, unlike its best-known product Marmite. They either love it, or they loveit.
Harvey Jones has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline and Unilever. The Motley Fool UK has recommended BP. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.