The Motley Fool

Forget a cash ISA! The Standard Life Aberdeen share price could help you to retire wealthy

While the performance of Standard Life Aberdeen (LSE: SLA) has been disappointing in recent months, the company’s long-term investment potential appears to be sound. Greater efficiency and resilience following its merger could reduce risk, with growth potential in a number of key markets offering high returns over the long run.

Of course, it’s not the only share that could be worth buying instead of saving through a cash ISA. Reporting on Monday was a growth stock that seems to be undervalued given its financial outlook.

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...

Improving outlook

The company in question is cloud computing specialist Iomart (LSE: IOM). It reported a pre-close trading statement for the six months to 30 September 2018, with the performance of the business being strong during the period. It has delivered profitability which is in line with expectations, with revenue and trading profit expected to be well ahead of the previous year.

Looking ahead, the company believes that cloud computing offers further growth potential. With a move to the cloud being more complex than ever, its skills and network could provide increasing value across the industry. Its broad customer base could help it to capitalise on the growth potential within cloud computing, while a significant sales pipeline could catalyse its financial performance.

With Iomart forecast to post a rise in earnings of 9% in the current year, followed by further growth of 12% next year, it seems to have a bright future. Despite this, it trades on a price-to-earnings growth (PEG) ratio of 1.9. This suggests that it may offer investment potential after a strong first half of the year.

Low valuation

As mentioned, Standard Life Aberdeen could offer long-term investment potential. It has a relatively low valuation at the present time, which suggests there is a margin of safety on offer. It is due to post a rise in earnings of 9% next year, which puts it on a PEG ratio of 1.6. For a FTSE 100 company operating in what remains a growing market, this suggests that investors remain cautious about its outlook.

Of course, the company is undergoing a period of change at the present time. It is seeking to restructure through asset disposals, while also delivering on the synergies which formed a key part of its recent merger. While this could create some weakness in its financial performance in the near term, ultimately it may lead to a stronger business over the coming years.

With a dividend yield of over 7.5%, it easily beats the return on the FTSE 100, which has a yield of around 4%. It is also ahead of inflation of 2.7%, while a cash ISA’s return of around 1% seems insignificant in comparison. As such, and with the potential for high capital returns in the long run, now could be the perfect time to buy Standard Life Aberdeen. Its risk/reward ratio appears to be highly enticing.

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...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Peter Stephens owns shares of Standard Life Aberdeen. The Motley Fool UK owns shares of Iomart Group. The Motley Fool UK has recommended Standard Life Aberdeen. 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

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.