Ask me to give you a list of brilliant income shares to help you create a comfortable retirement and I’ll happily provide a list as long as my right arm.
Here though, I’m concentrating on Reckitt Benckiser Group (LSE: RB), a top income share from the FTSE 100 I think has what it takes to make you a tidy nest egg to enjoy once you’ve hung up those proverbial workgloves.
The brand bruiser
The brilliant strength of its branded products, and the ability to grow revenues in even the toughest of economic conditions, is what’s made the household goods manufacturer such a dependable profits and dividend raiser for many, many years.
Latest research from Kantar Worldpanel shows just how successful Reckitt has been in developing its brands, making them consistent profit creators whatever the weather.
According to its annual Brand Footprint report released this month, the manufacturer’s Dettol disinfectant product line recorded one of the biggest global penetration gains in 2018, rising 0.9% year-on-year. It was only beaten by Kinder confectionery, Vim cleansing goods, and Brooke Bond tea.
Dettol is only one of four brands in its annual list of the 50 best-loved global brands to have grown every year since Kantar started the survey back in 2014.
Reckitt also has its finger firmly on the pulse of the consumer and changing retail trends and, through product innovation and clever marketing, it knows exactly how to keep maintaining eye-popping volumes.
Investing for global growth
And there’s another couple of reasons why investors can look forward to the business continuing to deliver strong and sustained profits growth long until I’ve retired, at least.
Firstly, the vast amounts it’s investing in e-commerce give plenty of reasons to be optimistic. Recent trading in China, where Reckitt is developing its multichannel strategy, shows just why. Some 58% of Health product sales (excluding baby milk) in the territory were attributable to online in 2018.
Secondly, the rate at which population levels, disposable incomes, and appetite for leading consumer brands in emerging markets, is another reason to expect shareholder returns to keep ballooning well into the future.
In 2010, Reckitt generated around a quarter of all its business in these developing territories. But through a combination of product development, operational improvements, and those aforementioned demographic factors, this figure has risen to more than 40%.
And there’s plenty of evidence to expect sales to keep on detonating. The World Bank, for one, expects GDP growth in the company’s largest emerging markets to keep swelling for some time yet.
In Brazil, economic growth is anticipated to lift more than 2% through to 2021. But in Reckitt’s other mighty market, India, growth is expected to stampede 7.5% higher each year over the period. In China, meanwhile, economic growth is expected to remain above 6%.
Many more stocks on the FTSE 100 carry forward yields bigger than Reckitt Benckiser (which currently sits at around 3%). But there aren’t many others I’d tip to provide such sustained dividend payouts decades into the future.
This makes the household products maker such an income star and, in my opinion, a brilliant blue-chip to buy today.
