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Will National Grid plc, Capita plc and Experian plc help you retire early?

While interest rate rises could hurt investor demand for income stocks, National Grid (LSE: NG) is likely to remain a very popular company to own in the long run. A key reason for this is its defensive profile, with it having a highly robust and consistent business model. This makes it a top-notch defensive play so that when booms turn to busts and stock markets become increasingly volatile, investors are likely to flock to perceived safer stocks such as National Grid.

Evidence of its defensive characteristics can be seen in its beta, with National Grid having a beta of just 0.6 at the present time. This means that for every 1% move in the FTSE 100, National Grid’s shares should move in value by just 0.6%. Furthermore, National Grid also lacks the political risk of a number of its utility peers. While domestic energy suppliers are often criticised by the media and politicians, National Grid seems to escape this and is largely left alone to deliver gradual rises in profitability. As such, and while there may be more exciting and faster growing stocks on offer, National Grid remains a key defensive play for the long haul.

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Grwoth and defensive strength

Also offering a sound defensive profile is process management specialist Capita (LSE: CPI). Over the last five years it has increased its bottom line in every year, with it rising at an annualised rate of just under 10%. That’s a hugely impressive rate of growth and shows that even during a period of austerity and difficult economic circumstances, Capita is still able to deliver a relatively strong financial performance.

Looking ahead, Capita is forecast to increase its bottom line by 6% in the current year and by a further 5% next year. While this rate of growth is somewhat lower than in the recent past, Capita’s price-to-earnings (P/E) ratio of 13.4 indicates that it offers scope for an upward rerating. Furthermore, its dividend yield of 3.4% also has appeal, with shareholder payouts being comfortably covered by profit at 2.2 times.

One to watch rather than buy

Meanwhile, information services specialist Experian (LSE: EXPN) is another highly consistent stock for the long haul. Over the last four years it has delivered a profit in each year and while the 2016 financial year is set to see its bottom line fall, Experian is due to return to earnings growth of 8% in each of the next two financial years.

Despite this, Experian may be worth watching rather than buying right now. That’s because it trades on a rather generous valuation that lacks a sufficiently wide margin of safety. For example, Experian has a P/E ratio of 19.2 and while it’s a high quality company with upbeat and robust growth prospects, it appears to be rather fully valued. Therefore, the likes of National Grid and Capita could help you to retire a little quicker.

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Peter Stephens owns shares of National Grid. 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.