The Motley Fool

Reckitt Benckiser Group plc isn’t the only growth stock you could retire 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.

Stack of new bank notes
Image source: Getty Images.

The latest financial update this week from Reckitt Benckiser (LSE: RB) may have cast doubt over its reputation as a go-to stock for growth investors.

I for one remain compelled by the Nurofen and Durex manufacturer’s long-term earnings outlook, however, and consider current trading problems in some of its regions as nothing more than a few bumps in the road.

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...

I plan to delve into Reckitt Benckiser’s brilliant investment potential in some detail. But before I do, I would like to look another London-quoted share making the headlines this week with fresh profits news of its own, namely food ingredients and nutrition specialist Glanbia (LSE: GLB).

Earnings grow again

On Wednesday, the company announced that 2017 revenues had jumped 7% to €2.39bn, a result that powered pre-tax profit 2% higher to €229.7m.

Meanwhile, Glanbia saw pro-forma adjusted earnings per share rise 10.2% at constant currencies, the eighth successive year of double digit earnings expansion. However, news that the business expects growth on a comparable basis to slow to between 5% and 8% in 2018 sent investors scurrying for the exits (the foodie firm was last 6% lower from Tuesday’s close).

 City analysts had expected Glanbia to record an earnings rise of 9% in 2018 and to follow this with an 8% advance in 2019. But even if these figures undergo some downward adjustment, I believe the company remains a compelling growth pick for the years ahead.

You see, the Irish giant is taking steps to become, as it says, “one of world’s top performing nutrition companies.” And in keeping with this goal, Glanbia added that its focus in 2018 “will be on volume-driven revenue growth across [its] wholly-owned growth platforms of Glanbia Performance Nutrition and Glanbia Nutritional.”

The ingredients giant has invested heavily in brand development and product launches in recent years, while it has also forked out a fortune in boosting its plant and IT systems at both divisions, as well as building a new innovation centre at GPN. It’s also been busy building a presence in the nutritionals segment through targeted M&A and last year it bought Amazing Grass of the US and the Netherlands’ Body & Fit for a combined €168.2m.

Ongoing investment doesn’t come cheap but these vast near-term costs should provide the basis for Glanbia to make a significant splash in this fast-growing market. I believe a forward P/E ratio of 16 times is a compelling level at which to latch onto this exciting growth play.

In great health

Now for Reckitt Benckiser. Also trading outside the widely-accepted value territory of 15 times or below, the FTSE 100 business is dealing on a forward P/E ratio of 16.9 times. Like Glanbia, it’s also expected to generate earnings growth of 9% this year and 8% in 2019.

But in my opinion, the brilliant earnings visibility created by its raft of market-leading labels warrants this slight premium, as does Reckitt Benckiser’s sprawling presence across both developing and emerging markets.

With the acquisition of Mead Johnson helping it on its way to become a major player in the consumer healthcare segment (this division finally returned to growth at the back end of last year), I reckon the Footsie firm has everything to make investors a fortune in the years ahead.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Reckitt Benckiser. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his 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 click below to discover how you can take advantage of this.