The Motley Fool

SSE PLC Could Help You Retire Early

centrica / sse

The share price chart of SSE (LSE: SSE) (NASDAQOTH: SSEZY.US) over the last year does not make for happy viewing.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Indeed, shares have been hit relatively hard by the political risk that has surrounded (and continues to surround) the electricity supply sector.

One aspect of this has been the continued criticism about energy suppliers from the public, media and, perhaps more importantly, politicians. SSE’s share price, for instance, did not react favourably to comments made by Leader of the Labour party, Ed Miliband, who said that if his party was to win the General Election in 2015, he would freeze electricity prices for 20 months while he created a new regulator in place of the incumbent, Ofgem.

So, investors in SSE must accept that there will continue to be substantial political risk in place up until the election — and possibly even more after it.

However, that uncertainty appears to be priced in — shares have fallen by just under 20% since their high in May 2013. Indeed, with a price to earnings (P/E) ratio of just 11.5, shares could offer good value for longer term investors who can stomach the potential for above-average volatility over the next few years.

Furthermore, SSE remains one of the best defensive stocks in the index, since its beta is very low at just 0.6. This means that, were the wider market to fall, SSE should (in theory) fall by 0.6% for every 1% fall in the wider index. This property could prove to be highly beneficial, since the stock market has rerated heavily over the last year in anticipation of improved profitability and better bottom-line growth. Should it disappoint on this front, ratings in the wider market could fall, leaving lower beta stocks (such as SSE) a logical place to be.

Of course, a low beta may be good news if share prices fall but is not such good news if they rise. For example, SSE should (in theory) go up by 0.6% for every 1% gain in the wider market, so in a bull market it should underperform.

However, SSE remains a company that offers good value (via a relatively low P/E) and attractive defensive properties. Shares may be volatile in future years as political risk looks set to remain high, however SSE could still be a stock to help you retire early, since much of this risk could already be priced in.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

> Peter owns shares in SSE.

Our 6 'Best Buys Now' Shares

The renowned 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 enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.