3 Great Shares For A Beginners’ Portfolio: GlaxoSmithKline plc, Schroders plc & Latchways plc

GlaxoSmithKline plc (LON:GSK), Schroders plc (LON:SDR) and Latchways plc (LON:LTC) are three shares that could help transform your wealth.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

gskMulti-billionaire Warren Buffett, probably the world’s most famous and successful investor, follows a strategy of buying great businesses with a view to holding his shares ‘forever’.

What’s good enough for octogenarian Buffett should be good enough for an investor just starting out on the road to long-term wealth accumulation.

Today, I’m going to tell you why I think GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US), Schroders (LSE: SDR) and Latchways (LSE: LTC) are worth consideration for a beginner’s portfolio.

GlaxoSmithKline

Pharmaceuticals giant GlaxoSmithKline has a market capitalisation of £70bn, and is the fourth-largest company in the FTSE 100. The company is a ‘core’ holding for many investors.

Size, prodigious cash generation and the ‘non-cyclical’ nature of the pharma industry make Glaxo a relatively steady share through all economic conditions. The company has a great dividend history, and the prospective dividend yield is currently 5.7% at a share price of 1,434p. Reinvest the dividends to buy more shares year after year and the value of your investment should snowball over the long term.

Schroders 

Asset manager Schroders (founded in 1804) is also in the FTSE 100. With a market capitalisation of £6.5bn, Schroders may not be in the ‘megacap’ league of Glaxo, but I believe it has attractions for long-term investors.

The nature of Schroders’ business means its shares tend to exaggerate the returns of the wider market. Shareholders have to steel themselves when markets wobble, but because markets rise over the long term (multi-decades) the reward should be outsize returns if Schroders continues to do what it’s done successfully for over 200 years.

Unusually, the company has two classes of share: voting shares (ticker SDR) and non-voting shares (LSE: SDRC). Small private investors have little to gain from holding the voting shares. The non-voting shares are cheaper (currently 1,851p versus 2,435p for the voting shares), and provide a bigger dividend yield: 3.7% versus 2.8%.

Latchways

Smaller companies are considered inherently more risky than big companies — but they also have potential to grow faster. Furthermore, some smaller businesses have the kind of qualities Buffett looks for, and even a beginner may want to consider including a smattering of such shares in a portfolio.

Latchways, which has a market capitalisation of £109m, is the global leader in fall protection equipment for people working at height. Safety is not something employers can afford to skimp on. Latchways’ reputation as the number one — built over 30 years — and increasing safety regulation around the world, give the company plenty of scope to continue growing strongly.

Recent cyclical weakness is some of Latchways’ markets, notably commercial construction in parts of Europe, means investors today can buy the shares at a lower price (965p) than would otherwise have been the case. It also means that the prospective dividend yield (4.4%) is higher than usual.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

G A Chester has no position in any shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. The Motley Fool UK owns shares of Latchways. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »

Three signposts pointing in different directions, with 'Buy' 'Sell' and 'Hold' on
Investing Articles

Just released: Share Advisor’s latest ‘Hold’ recommendation [PREMIUM PICKS]

In our Share Advisor newsletter service, we provide buy, sell, and hold guidance for our universe of recommendations.

Read more »

Investing Articles

Investing £5 a day could help me build a second income of £329 a month!

This Fool explains how £5 a day, or one less takeaway coffee, could help her build a monthly second income…

Read more »