These mid-sized companies have great dividend paying records, and could be just the ticket for your retirement portfolio.
The economy's still shaky. Investors are scared. The markets aren't being friendly. How are you supposed to make money in an environment like this?
Stagnant markets are never easy to navigate, especially coming off a big rally like the one we saw during most of last year. Year to date, the FTSE 100 is virtually unchanged. Nevertheless, there are opportunities that smart investors can take advantage of. Even though they may not be glamorous, they're the most likely candidates to get your portfolio ready for your retirement, or any other long-term financial goal you have.
Ding the bling
You won't find the best shares to save your retirement on the list of top gaining shares over the past few months. Sure, companies like ASOS (LSE: ASC) and ARM Holdings (LSE: ARM) have seen strong advances in the last six months, but they both now trade at lofty valuations. You'd think the big money has already been made on those shares.
Nor should you automatically look for shares that have dropped enough to land in what seems to be the bargain basement. Yell Group (LSE: YELL) and Connaught (LSE: CNT) might look more attractive to value hunters, but these companies are just as likely to fail completely as to shoot to the sky. Why take the risk?
Both of these sets of companies have gotten a lot of attention from investors looking for tomorrow's best shares. But time and time again, history has shown that the best shares for the future usually come straight from left field, where no one expects to see them.
Finding buried treasure
A lot of people -- ourselves included -- have been recommending big blue-chip dividend payers for those who are concerned about the market right now. There's a lot of merit to that, as some of the best known names in the market are also among those with the healthiest balance sheets, the most stable prospects going forward, and are just plain cheap.
Consumer staples giant Unilever (LSE: ULVR) isn't going to hit any home runs even by going abroad to cultivate new markets, but for solid growth and stable dividends going forward, you'll have to look hard to find a better choice.
To give you some more ideas to think about, we've turned to mid-sized companies trading at reasonable multiples to earnings. We also wanted to focus on companies that paid dividends, that weren't too large, and weren't so widely followed that everyone already knew about them. Here are some of the shares we came up with:
From industrial engineering, exhibitions, oil services, electrical equipment and chemicals, these six companies represent a decent cross-section of the overall health of UK PLC.
They're all reasonably priced without being red-light specials, and none of them have sky-high dividend yields that so many people are flocking to. In fact, most of them have largely avoided the gaze of investors entirely -- you could even call them boring.
If you look back, you'll notice that most of these companies have a good track record of performance, including steady and constant increases in their dividends. Halma in particular has increased its dividend every year for as long as we can remember.
Solid, unobtrusive companies like these won't show up on many investors' radar screens, but that only makes them more attractive for the Fools disciplined enough to dig for them.
Get on the road to retirement
Right now, it's just as important to preserve your capital as it is to make it grow. Fortunately, though, you don't have to choose between one or the other.
With the right shares, you can both protect your portfolio and set yourself up for good-sized gains during the next bull market.
More on the economy and the markets:
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> A version of this article, written by Dan Caplinger, was originally published on Fool.com. Bruce Jackson has updated it.
