For most investors, a key reason to invest their hard-earned cash in shares is to try and bring retirement a step closer. Clearly, it takes time for this aim to be achieved, but by investing in the right stocks at the right time, you may be able to shave time off your working life and also enjoy a more abundant lifestyle once you do walk away from full-time employment.
One stock that could help you to do so is Vodafone (LSE: VOD). It has benefitted considerably from improved investor sentiment in the last year, during which time its shares have risen by an impressive 19%. That’s despite the Eurozone, which is a key market for Vodafone, having endured a very challenging period, with slow-growth still being a reality and fears surrounding a possible Grexit causing share prices for companies operating in the region to come under a degree of pressure.
Clearly, though, Vodafone has held up relatively well and this bodes well for its long term future. That’s because, even while Europe is struggling, Vodafone continues to offer capital gain potential and, looking ahead to next year, it is expected to post a rise in earnings of 18%. That would be hugely impressive given the challenges that Vodafone faces with regard to increasing competition in the UK mobile market and the aforementioned problems in Europe. As such, with the prospects for Europe in the long run being relatively bright, Vodafone could see its financial and share price performance exceed current expectations.
Meanwhile, UK construction continues to be a boom sector, with continued low interest rates set to lead to high demand for services provided by companies such as Kier (LSE: KIE). In fact, Kier is forecast to increase its bottom line by 19% in the current year, followed by 12% next year. This means that in 2016 its profit could be as much as a third higher than it was last year, which could cause investor sentiment in the stock to rise.
And, with Kier having a price to earnings growth (PEG) ratio of just 1.1, there is plenty of scope for an upward rerating. Furthermore, a dividend yield of 4.4% means that Kier appears to offer a potent mix of growth, value and income potential, with today’s contract win for the development of Smart motorways yet another positive piece of news flow for the company.
However, not all stocks may help you to reach retirement more quickly. Certainly, Young & Co (LSE: YNGA) has a very sound business model and a bright future, but its current valuation appears to more than adequately take this into account. In fact, Young & Co trades on a price to earnings (P/E) ratio of 22.6, which is relatively high, and yet is forecast to increase its bottom line at a rather modest pace over the next couple of years.
For example, earnings in 2016 are set to be 6% higher than last year, while in 2017 the rise is forecast to be just 4%. As such, Young & Co has a PEG ratio of 5, which appears to be too high to warrant investment at the present time.
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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.