3 stocks I’d buy right now to fund my retirement

Why I’d buy these three FTSE 350 stocks and hold for decades until retirement and beyond.


| 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.

Two hands holding champagne glasses toasting each other with Paris in the background

Image source: Getty Images.

I’d load up right now with the shares of at least two fast-moving consumer goods companies, and the first is the FTSE 250’s PZ Cussons (LSE: PZC). Whereas cyclical firms see demand for their products rising and falling in line with the general health of the economy, people tend to keep on buying their favourite branded consumer goods such as PZ Cusson’s Carex, Imperial Leather, and Original Source.

A fair-looking valuation

With the share price near 200p as I write, the valuation looks attractive to me. The forward-looking earnings multiple for the trading year to May 2021 sits just below 15 and the anticipated dividend yield is a little above 4.2%. Although dividends have been flat for around three years, City analysts following the firm expect a resumption of modest growth in dividend payments ahead.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

In an update at the end of September, the directors said they expect market conditions to remain challenging across the firm’s “key geographies” for the rest of the first half of the trading year to the end of November; however, they reckon there will likely be an improvement in the second half of the year. Meanwhile, the share price has slipped back in recent weeks. I think the stock looks attractive.

The second fast-moving consumer goods firm I like is the FTSE 100’s Unilever (LSE: UNLV), which owns popular brands such as Dove, Hellmann’s, Knorr, Lipton, Magnum, Sunsilk, and Surf. At 4,583p, the share price has slipped back around 9% since peaking at the beginning of July.

The forward-looking earnings multiple for 2020 stands near 19 and the anticipated dividend yield is just over 3.4%. That’s not a bargain valuation, but the company has an impressive record of rising revenue, earnings and cash flow and has always supported a high-looking valuation for as long as I can remember.

In an October update, the company said it expects underlying sales growth for the full year to be “in the lower half of our multi-year 3-5% range.”  The directors also expect an improvement in underlying operating margin to power “another year” of strong free cash flow. I reckon the outlook is encouraging for the ongoing health of shareholder dividends.

Accounting services software

The Sage Group (LSE: SGE) provides integrated accounting, payroll, and payments solutions and there’s a high degree of defensiveness in operations because once businesses have adopted the Sage solution, it’s difficult and costly to switch suppliers, so many opt to renew their contracts.

The attractions of the business have led to the shares being highly rated by the market, but in July in a trading update, the share price began a 20% slide when the company said it expected its organic operating profit margin to be at the lower end of the previously guided range of 23% to 25%. However, since the beginning of October, the shares have been climbing again.

At today’s 714p share price, the forward-looking earnings multiple for the trading year to September 2020 is just below 23 and the anticipated dividend yield is a little under 2.5%. Meanwhile, in September the company said it is evaluating its strategic options for the Sage Pay business division, including the possibility of a sale. If a deal emerges, it could add shareholder value.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

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

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Kevin Godbold has no position in any share mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK owns shares of PZ Cussons. The Motley Fool UK has recommended Sage Group. 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.

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 considered, so you should consider taking independent financial advice.

More on Retirement Articles

Hand holding pound notes
Investing Articles

Why I’d forget savings accounts and buy dividend stocks today!

Although I hold 'rainy day' money in a cash savings account, I prefer buying shares to try to grow my…

Read more »

Retirement saving and pension planning
Investing Articles

State Pension age to rise to 68? I’m buying UK shares to try to protect myself!

It's important for me to find ways to make money as the State Pension age rises. Here's why I'm choosing…

Read more »

Couple relaxing on a beach in front of a sunset
Investing Articles

Not saving enough for retirement? 2 FTSE 100 shares I’d buy to try and retire comfortably

I believe I've found the best way to try and build a big nest egg so I can retire in…

Read more »

Retirement saving and pension planning
Investing Articles

How I’m aiming to double my State Pension with just £30 a week

After making regular monthly investments while earning an average salary, this man is planning to retire early. Here's how.

Read more »

Happy retired couple on a beach
Investing Articles

Investing at 60: how I’ll handle shares in my financial autumn

Investing at 60-plus doesn't have to be dull! This is how I plan to keep on aiming to build wealth…

Read more »

Retirement saving and pension planning
Retirement Articles

State Pension: should I buy UK shares to retire in comfort?

Worries about the State Pension are soaring as chatter over the scrapping of the triple lock grows. Could buying UK…

Read more »

Investing Articles

ISA investing: here’s why I’m buying UK shares to retire in comfort!

We're all looking to build a handsome nest egg for retirement, right? Well this is how I'm using ISAs so…

Read more »

Lady researching stocks
Investing Articles

ISA investing: 3 of the best stocks to buy in May

I'm scouring UK share markets to find some of the best stocks to buy for May. Here are three I'm…

Read more »