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Retirement saving! A stock I’d buy today and hold all the way to 2050

Financial markets are taking their cue from developing events in China on Monday. The number of people infected by the coronavirus is growing despite the best efforts of authorities in the region. This, and fears of contagion further afield, is sending investor appetite for riskier assets like stocks through the floor.

That said, there are a number of companies whose shares could rise later this week, one of which is McCarthy & Stone (LSE: MCS). This may depend on signs that conditions are beginning to improve in China, though I’m excited at what this stock’s latest financial update will throw up.

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Ready to impress?

McCarthy & Stone certainly impressed last time it updated the market in November. Signs that the buyer appetite has improved across the broader housing sector adds to my hopes that another strong update could be in the offing.

Last time out McCarthy & Stone — which builds and manages residential complexes for retirees — said revenues for the 14 months to October 2019 were expected to come in at £720m, up 7% year on year. Despite the impact of “political and economic uncertainty on the secondary housing market” total completion numbers rose to 2,301 units from 2,134 units, it said. Meanwhile average selling prices rose around 3% to £308,000.

With the Conservatives’ victory at December’s general election, I’m expecting the FTSE 250 firm to follow the housebuilders’ lead and comment soon that trading has got even better in recent weeks. The full-year trading release for fiscal 2019 is set for release tomorrow (January 28).

I’m also excited to see whether the company’s newly-launched rental property programme has continued to pick up momentum. News that it remains on track to hit its 15% operating cost margin could stoke stock buyer appetite too.

One to hold for decades

While McCarthy & Stone could well build on recent strength and punch more near-term gains, this share is by no means a flash in the pan. It estimates the number of citizens aged 65 and over will balloon by 5m (or 43%) between now and 2043 to 17.4m. And yet a huge shortfall of available properties is opening up. As a major supplier of retirement living spaces, this is one firm in the box seat to reap the rewards.

It doesn’t matter to me that the builder trades on a slightly-elevated forward price-to-earnings (P/E) ratio of 17.5 times. I reckon its exceptional long-term structural opportunities, allied with its enormous market share, makes it worthy of such a rating. The business accounts for an impressive 70% of all owner-occupied retirement and extra-care housing in Britain.

The business also offers up a big 3.5% dividend yield for fiscal 2020, one which surpasses the 3.3% forward average for UK mid-cap. All things considered, this is a brilliant share to buy today and hold all the way through to 2050.

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