Investing after 50 is all about balance. On the one hand, you want to grow your money in the period up to retirement. On the other, you don’t want to take huge risks. Your retirement is at stake.
Here, I’ll highlight two FTSE stocks that I believe are well suited to investors who are 50 or older. These stocks offer the potential for both capital gains and dividends, yet are not too risky.
A low-risk play on the growth of online shopping
To my mind, Tritax Big Box (LSE: BBOX) is the perfect kind of stock for investors in their 50s. It’s a FTSE 250 real estate investment trust (REIT) that invests in large, sophisticated warehouses. These are let out to major retailers who use them to streamline their operations.
In terms of growth, the company looks very well placed to benefit from the shift to online shopping. As the e-commerce industry continues to grow, retailers will need access to more warehouse space.
The company also has defensive attributes, though. Tritax’s warehouses are let out to blue-chip customers such as Tesco and Amazon that operate predominantly in defensive sectors. This means there’s little risk of customers failing to pay their rents. Just recently, the company advised that it was expecting 97% of Q3 rents to be collected by August. This defensive focus means BBOX is a sleep-well-at-night type of stock.
As a REIT, BBOX is required to pay out a large proportion of its income as dividends. This means that investors stand to pick up some healthy dividend payouts. Last year, the payout was 6.85p per share, which equates to a yield of 4.6% at the current share price.
All in all, there’s a lot to like about Tritax Big Box. If you’re aged 50 or older and building a retirement portfolio, I think it’s a top choice. The FTSE 250 stock currently trades on a forward-looking P/E ratio of 21, which seems reasonable to me.
A FTSE stock to benefit from ageing populations
Another stock I believe is well suited to those who are 50 or older is Smith & Nephew (LSE: SN). It’s a FTSE 100 healthcare company that specialises in joint replacement systems (hip and knee implants), advanced wound management solutions, and surgical robotics.
Smith & Nephew looks set to benefit from one of the most powerful trends on the planet today – the world’s ageing population. By 2030, it’s expected that there will be roughly 1.4bn people around the world aged 60 or older. That represents an increase of 55% on the number of over-60s worldwide back in 2015. This growth in the number of over-60s is almost certainly likely to drive demand for hip and knee implants upwards, meaning there’s plenty of potential for growth here.
At the same time, the company has defensive qualities. This is illustrated by the fact that during the Global Financial Crisis of 2008/09, Smith & Nephew continued to grow its earnings and dividends. I’ll also point out that since 1937, it has paid dividends on its ordinary shares every single year.
Smith & Nephew shares are a little out of favour right now because Covid-19 has slowed sales temporarily. But I see the recent share price weakness as an attractive buying opportunity. The stock currently trades on a forward-looking P/E ratio of 18.7 using next year’s earnings, which I think is good value.
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.
Edward Sheldon owns shares in Tritax Big Box REIT and Smith & Nephew. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Tesco and Tritax Big Box REIT and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. 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.