Having no savings at 40 does not mean it is too late to retire early. Certainly, the earlier investments are made in assets that offer long-term growth potential, the higher your chances of building a large retirement nest egg.
But with there being a variety of FTSE 100 shares offering growth potential over the long run, there may be opportunities to build a diverse portfolio of companies that can increase your chances of retiring early.
With that in mind, here are two large-cap shares that could offer capital growth potential. When purchased as part of a diverse portfolio of stocks, they could help to bring your retirement date a step closer.
Despite the UK retail sector experiencing a challenging period, Next (LSE: NXT) has been able to deliver a strong financial performance in recent quarters. For example, in its first-half results, the business recorded a 3.7% rise in sales and a 7.5% increase in earnings when compared to the same period from the previous year.
Key to the company’s improving financial performance has been its willingness to adapt to a changing retail environment. It has embraced omnichannel retailing, with major investment being made in its online profile and in maximising the use of its store network as part of its distribution network.
In the current year, Next is forecast to post a rise in its bottom line of 5%. Since it trades on a price-to-earnings (P/E) ratio of 13.4, it appears to offer good value for money given its position within the wider retail industry. Although weak consumer sentiment may harm its short-term stock price performance, in the long run the company appears to have a significant amount of growth potential.
Another FTSE 100 stock that could offer long-term capital growth potential is Standard Chartered (LSE: STAN). The global banking company reported a rise in profitability of 13% in its recent half-year results, while it appears to be making progress in implementing its strategic priorities.
For example, it is investing in a variety of digital initiatives such as the creation of a Hong Kong virtual bank. In addition, it is undertaking a restructuring in Hong Kong and Singapore in order to boost its competitiveness.
In the current year, Standard Chartered is forecast to record a rise in its bottom line of 24%. Despite its improving outlook, it trades on a price-to-earnings growth (PEG) ratio of just 0.5. This suggests that the stock offers a wide margin of safety, and that investors may be factoring in potential risks from trade tensions across the global economy.
Since Standard Chartered is expected to increase its dividends by 25% next year so that it yields around 4%, the company’s long-term total return potential seems to be high. As such, now could be the right time to buy a slice of it.
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’.
Peter Stephens owns shares of Standard Chartered. The Motley Fool UK has recommended Standard Chartered. 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.