Your Instant 5-Share Diversified Portfolio: National Grid plc, Shire PLC, Imagination Technologies Group plc, Imperial Tobacco Group PLC And Admiral Group plc

These 5 stocks could make a real difference to your long term returns: National Grid plc (LON: NG), Shire PLC (LON: SHP), Imagination Technologies Group plc (LON: IMG), Imperial Tobacco Group PLC (LON: IMG) and Admiral Group plc (LON: ADM)

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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.

One of the most exciting things about investing in the stock market is being able to buy companies from all sorts of sectors, and which provide a plethora of goods and services. For example, there are a number of appealing utility companies within the FTSE 100, with one of the best known and among the most appealing being National Grid (LSE: NG). It provides investors with a very stable shareholder experience, with its shares lacking the volatility of the wider index as a result of National Grid’s robust and highly consistent business model.

In fact, National Grid has a beta of just 0.9 and this means that for every 1% move in the wider index, its shares should change in value by 0.9%. And, with there being a number of potential risks ahead for the stock market (such as a Brexit/Grexit, and increasing interest rates), National Grid could be a relatively safe place to invest, while also offering a yield of 5.1%.

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Of course, National Grid isn’t the only high-yielding stock around. In fact, insurance company, Admiral (LSE: ADM), easily beats it on the dividend front. For example, it currently yields a hugely appealing 6.1%, and this makes it one of the highest yielding stocks on the UK stock market. In fact, it is difficult to find an asset that offers a better yield – even junk bonds may struggle at the moment, while sub-prime housing may come close on a before tax basis (but is unlikely to on a net basis).

In addition, Imperial Tobacco (LSE: IMT) also yields an impressive 4.3%. Its appeal, though, is wider than that of dividends, with the company moving into the potentially lucrative world of e-cigarettes. This should help to counter the fall in cigarette volumes being sold and allow Imperial to continue to provide its investors with index-beating growth over the medium to long term.

Meanwhile, health care stocks such as Shire (LSE: SHP) also offer excellent long term growth potential. While many stock market constituents rely upon the performance of the economy, pharmaceutical companies such as Shire are less highly correlated with the macroeconomic outlook, which means that even if the global economy does experience a downturn in the next few years as interest rates rise, Shire’s aim to double sales by 2020 could still be achievable.

And, for investors seeking a higher risk/higher return play, then the technology sector holds considerable appeal. A notable incumbent of the sector is Imagination Technologies (LSE: IMG). It is forecast to grow its net profit by 61% during the course of the next two years and, despite this, trades on a price to earnings growth (PEG) ratio of only 0.9. As such, and while it is likely to be relatively volatile, Imagination Technologies could be a worthy addition to your portfolio.

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Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

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Peter Stephens owns shares of Imperial Tobacco Group and National Grid. The Motley Fool UK owns shares of Imagination Technologies. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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