The Motley Fool

Two high-growth large-caps I’d buy to retire 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 buying stocks with a retirement investment horizon in mind, it helps to identify long-term themes that will propel revenue growth over time. With that in mind, here are two stocks that I believe have considerable long-term potential.

G4S

With heightened levels of geopolitical risk having become the new normal in the last decade, one sector that should benefit is security, and security specialist G4S (LSE: GFS) looks well-placed to capitalise on this theme.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

G4S is a global integrated security company, employing nearly 600,000 people across 100 countries and six continents. The firm provides security solutions to industries including financial services, tourism, oil & gas and governments.  

It hasn’t been plain sailing for it in recent years as the company failed to deliver adequate security at the London 2012 Olympics, and was then named ‘worst company of the year’ at the 2013 Public Eye awards. However, in late 2013, it commenced a ‘transformation’ strategy and it appears to be paying off.

Half-yearly results released this morning showed revenue growth of 6.2%, while earnings per share rose a healthy 7.8% to 8.3p. The company’s sales pipeline stood at £7bn, and the productivity programme is forecast to generate £90m-£100m of efficiencies by 2020. Chief executive Ashley Almanza said: “We continued to make substantial progress with G4S’s transformation and this provides increased confidence in the Group’s prospects.”

The shares have pulled back 5% today on the results however, but that’s not entirely surprising after a 35% share price rise since the start of 2017. On consensus estimates, G4S currently trades on a forward P/E ratio of 17.1, and sports a forward yield of 3.1%. These metrics looks attractive in my view.

Prudential

Insurer Prudential (LSE: PRU) strikes me as the perfect kind of stock to hold for the long term. The company is the largest insurer in the FTSE 100, with a market capitalisation of £49bn, and currently serves over 24m customers across the UK, the US and Asia.

Prudential aims to capture three long-term opportunities across its key geographical markets. This includes meeting the savings and retirements needs of an ageing British population, providing asset accumulation and retirement income products to US baby boomers, and serving the protection and investment needs of the growing middle class in Asia.  

It’s the last opportunity that excites me the most, as the potential in Asia is nothing short of astronomical, in my opinion. Life insurance and mutual fund penetration remains low in this region, yet with the wealth of individuals across Asia rising at an unprecedented rate, Prudential, with 30% of its earnings coming from this area, should benefit.  

The insurer also looks like an excellent dividend play, having increased its dividend every year since 2004. While the current yield of 2.3% is lower than that of Legal & General Group (5.3%) and Aviva (4.4%), Prudential’s payout has been increased by over 70% in the last five years, and City analysts expect growth of 8% this year and next.

On a forward P/E ratio of 13.6, the stock doesn’t look expensive, although after surging 40% over the last nine months, it may be wise to wait for a pullback. The insurer reports half-year results tomorrow, and I’ll be following the company’s progress closely.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Edward Sheldon owns shares in Legal & General Group and Aviva. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.