Can Vodafone Group plc, Kier Group plc And Young & Co.’s Brewery plc Help You Retire Early?

Should you buy these 3 stocks for the long haul? Vodafone Group plc (LON: VOD), Kier Group plc (LON: KIE) and Young & Co.’s Brewery plc (LON: YNGA)

| 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.

For most investors, a key reason to invest their hard-earned cash in shares is to try and bring retirement a step closer. Clearly, it takes time for this aim to be achieved, but by investing in the right stocks at the right time, you may be able to shave time off your working life and also enjoy a more abundant lifestyle once you do walk away from full-time employment.

One stock that could help you to do so is Vodafone (LSE: VOD). It has benefitted considerably from improved investor sentiment in the last year, during which time its shares have risen by an impressive 19%. That’s despite the Eurozone, which is a key market for Vodafone, having endured a very challenging period, with slow-growth still being a reality and fears surrounding a possible Grexit causing share prices for companies operating in the region to come under a degree of pressure.

Clearly, though, Vodafone has held up relatively well and this bodes well for its long term future. That’s because, even while Europe is struggling, Vodafone continues to offer capital gain potential and, looking ahead to next year, it is expected to post a rise in earnings of 18%. That would be hugely impressive given the challenges that Vodafone faces with regard to increasing competition in the UK mobile market and the aforementioned problems in Europe. As such, with the prospects for Europe in the long run being relatively bright, Vodafone could see its financial and share price performance exceed current expectations.

Meanwhile, UK construction continues to be a boom sector, with continued low interest rates set to lead to high demand for services provided by companies such as Kier (LSE: KIE). In fact, Kier is forecast to increase its bottom line by 19% in the current year, followed by 12% next year. This means that in 2016 its profit could be as much as a third higher than it was last year, which could cause investor sentiment in the stock to rise.

And, with Kier having a price to earnings growth (PEG) ratio of just 1.1, there is plenty of scope for an upward rerating. Furthermore, a dividend yield of 4.4% means that Kier appears to offer a potent mix of growth, value and income potential, with today’s contract win for the development of Smart motorways yet another positive piece of news flow for the company.

However, not all stocks may help you to reach retirement more quickly. Certainly, Young & Co (LSE: YNGA) has a very sound business model and a bright future, but its current valuation appears to more than adequately take this into account. In fact, Young & Co trades on a price to earnings (P/E) ratio of 22.6, which is relatively high, and yet is forecast to increase its bottom line at a rather modest pace over the next couple of years.

For example, earnings in 2016 are set to be 6% higher than last year, while in 2017 the rise is forecast to be just 4%. As such, Young & Co has a PEG ratio of 5, which appears to be too high to warrant investment at the present time.

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.

Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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

Happy young plus size woman sitting at kitchen table and watching tv series on tablet computer
Investing Articles

Could Raspberry Pi shares hit £5 by 2030?

After a strong start out of the blocks this month, our writer asks whether Raspberry Pi shares could move further…

Read more »

Close-up of British bank notes
Investing Articles

Five 5%+ yielders I’d buy for an ISA today!

Our writer identifies a handful of FTSE 100 and FTSE 250 firms each yielding at least 5% he'd happily buy…

Read more »

Front view photo of a woman using digital tablet in London
Investing Articles

5 stocks with 5%+ yields I’d love to buy and hold in a Stocks and Shares ISA

Harvey Jones is keen to add these five FTSE 100 high-yielders to his Stocks and Shares ISA, ideally before they…

Read more »

A young Asian woman holding up her index finger
Investing Articles

I’d target £880 of passive income annually, spending £10K now on this FTSE 100 share

Our writer explains how he would add to his diversified portfolio happily by investing in this FTSE 100 passive income…

Read more »

Light trails from traffic moving down The Mound in central Edinburgh, Scotland during December
Investing Articles

3 reasons I think the Scottish Mortgage share price could keep rising

Christopher Ruane explains a trio of reasons he thinks the once-mighty Scottish Mortgage share price could be set to increase…

Read more »

Syringe and vial on blue background
Investing Articles

Is this forgotten FTSE share about to make investors rich all over again?

Not long ago, this FTSE share was all the rage before demand dropped off and things went south. Is it…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

I’d use these 5 Warren Buffett approaches to build wealth

Christopher Ruane outlines a handful of investing lessons from billionaire Warren Buffett that he thinks can help a small investor…

Read more »

US Stock

Nvidia stock: 3 things investors need to know as it surges towards $150

Nvidia is a stock that's had an extraordinary run in 2024. Edward Sheldon highlights some important things investors should know.

Read more »