I’m a firm believer that investing in quality FTSE stocks can vastly improve my chances of retiring early. But separating the wheat from the chaff is no easy task. Can ChatGPT do the leg work on my behalf?
For a giggle, I asked it to identify one UK company that could help turn this dream into a reality.
And the winner is…
To be fair, the AI bot began by correctly stating that no single stock will guarantee early retirement. I’m not sure that’s revelatory but it does at least chime with our philosophy at The Motley Fool. Relying on one company to deliver the goods could be disastrous if that business were to fail.
That said, ChatGPT did then throw out a FTSE name that it believes will give me a “credible shot” at making an early exit: FTSE 100 giant RELX (LSE: REL).
For those unfamiliar with it, this firm sells data, analytics, and risk tools to businesses, governments, insurers, and lawyers. And it’s big business.
Strange choice
Justifying its choice, the AI bot stated that RELX boasted “insanely high-quality cash flows” and benefitted from strong pricing power (because clients are compelled to keep paying for its services). The £52bn cap’s global reach and history of compounding wealth over the long term were also highlighted.
There are other attractions. While a forecast dividend yield of 2.7% is unlikely to get income investors salivating, ChatGPT was correct when it stated that RELX has a great history of growing the amount of cash it dishes out.
Notwithstanding all this, the AI bot’s selection raised an eyebrow. The shares have fallen over 30% in value in the last 12 months!
At least some of this appears to be related to concerns surrounding, somewhat ironically, AI and the possibility that generative tools to rival those offered by the company might steal some of RELX’s lunch. The gradual shift away from tech-related growth stocks into less expensive options has likely played a role too.
Still expensive?
Anyone thinking that the shares now occupy a place in the bargain bin might be disappointed.
As I type, the stock changes hands at a forecast price-to-earnings (P/E) ratio of 20 for 2026. That is quite a bit lower than its average P/E over the last five years (28).
But whether this represents a wonderful opportunity is debateable. On the one hand, RELX continues to generate excellent returns on the money management puts to work. Paying a higher-than-average price should therefore be expected.
On the other hand, margins could come under attack as AI gets increasingly more sophisticated. Previously ‘sticky’ clients could also be lost, impacting confidence in the company’s ability to continue growing.
Forget the bot
As things stand, trusting ChatGPT to help me retire early would be reckless and decidedly un-Foolish. Even so, this little exercise has been successful in bringing a stock to my attention that had slipped off my radar. And while there’s no guarantee that things won’t get worse for existing holders, it does feel like a lot of worry is already priced in.
I’m going to do a bit more research before deciding whether to add RELX to my potential buy list. Reading the latest set of full-year results — due 12 February — will be a start.
