Buying these 2 stocks now could make you a millionaire retiree

Bilaal Mohamed picks out two stocks that could help you along the road to an early retirement.

| 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.

One of the most reliable ways of achieving the dream of becoming a millionaire retiree is to buy stocks that have delivered consistent and reliable earnings growth for a number of years. That way we can feel reassured that a company’s management is delivering on its long-term growth strategy, and thus be more confident of seeing further share price appreciation in the future.

Brexit winner?

Landscaping products supplier Marshalls (LSE: MSLH) is a great example of this, with the FTSE 250-listed company delivering exceptional levels of growth in recent years, which in turn has left its shareholders enjoying spectacular returns.

In fact, Marshalls has defied the Brexit doomsayers and gone on to deliver a whopping 90% increase in its share price following the EU referendum in June 2016, and a more modest 40% gain since my own recommendation in August the same year.

UK’s leading manufacturer

The group is based in Elland, West Yorkshire, and is now the UK’s leading manufacturer of superior natural stone and innovative concrete hard landscaping products, supplying the construction, home improvement and landscape markets.

Marshalls operates its own quarries and manufacturing sites throughout the UK, including a national network of manufacturing and distribution sites, and has operations in Belgium with worldwide sales representation so it has control of its supply chain and a strong foothold in the EU.

Wider economic uncertainty

In its most recent trading update the group reported an 8% jump In revenues to £430m for the year to the end of December, including a £9m contribution from CPM group which has been trading strongly since it was acquired by Marshalls last October.

Most encouraging of all is that despite the Construction Products Association (CPA) reducing its 2018 forecasts to reflect the wider economic uncertainty, Marshalls has continued to outperform the CPA’s growth figures. At a slightly expensive 16 times forecast earnings, the shares are still a buy.

Brexit sell-off

Another construction materials firm that has enjoyed tremendous success in recent years is AIM-listed Breedon Group (LSE: BREE). Perhaps not surprisingly the share price of the group formerly known as Breedon Aggregates has followed a very similar trajectory to that of its FTSE 250 counterpart, having suffered a similar panic-induced sell-off following the 2016 referendum.

But as weaker investors were left nursing their losses, those that kept the faith have been rewarded handsomely. Not only did the company’s shares fully recover from the Brexit sell-off, but a year later went on to reach new all-time highs of 92.5p, a gain of 30% on my original buy call in October 2016.

UK’s largest

Forecasters are expecting new infrastructure and housing work to show healthy growth over the next two years, and with these market segments accounting for approximately two-thirds of Breedon’s end-use markets I believe now is not the time to be taking profits. Breedon is already the UK’s largest independent construction business, but I think there is still plenty of scope for it to grow even bigger.

Trading on a price/earnings ratio of 17, I see Breedon as another worthy construction play.

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.

Bilaal Mohamed has no position in any shares mentioned. 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.

More on Investing Articles

Investing Articles

Here’s how investing £250 a month could bag me over £10K in passive income annually

This Fool breaks down how she would go about building a passive income stream worth over £10,000 annually to enjoy…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

I’d snap this FTSE 250 stock up in a heartbeat for juicy returns and growth!

Sumayya Mansoor explains why this FTSE 250 property stock is firmly on her radar as she looks to buy stocks…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

1 dirt-cheap FTSE 100 stock investors should consider buying in June

The FTSE 100 is littered with bargains, according to our writer. She explains why investors should be taking a closer…

Read more »

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

The Legal & General share price has gone nowhere. Why?

The Legal & General share price has performed much worse than the the FTSE 100 over the past five years.…

Read more »

Investing Articles

Where will the BT share price go in the next 12 months? Here’s what the experts say

The BT share price has been sliding for years. But after the latest set of results, it looks like the…

Read more »

Investing Articles

Are National Grid shares now a brilliant bargain?

National Grid shares look exceptionally cheap following last week's selloff. Is now the time to buy the FTSE 100 firm…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Up more than 15%! — this small-cap company is delivering phenomenal dividend growth

There’s more good news in this company’s interim report and it may be shaping up as a decent dividend growth…

Read more »

Electric cars charging at a charging station
Investing Articles

Big news for Tesla stock investors!

Tesla has just quietly dropped a key target it set for itself just a few years ago. What does this…

Read more »