However, saving for retirement isn’t easy. A lot can change in 50 years, and finding the companies today, that will still be around decades from now is difficult.

Still, a long-term buy-and-hold strategy is worth pursuing because it can pay off in a big way if you get it right. Here are three companies that I believe will still be around in 2068.

Consumer goods

Dairy Crest Group (LSE: DCG) tops my list because this business has already been operating for nearly 40 years, although in one way or another, the company, which was the marketing arm of the UK’s Milk Marketing Board, has been around since 1933.

I believe this is just the start of the Dairy Crest story. The firm’s Cathedral City brand is one of the most popular consumer brands in the UK, and sales are growing. Meanwhile, the company’s cooking spray and infant formula business provides an excellent hedge against volatile milk prices. 

Dairy Crest has a stable of products that are change-resistant. As long as people keep eating cheese, cooking food and feeding babies, Dairy Crest should continue to prosper. The shares yield 4.9% and change hands at 12.8 times forward earnings.

Death and taxes

They say there are only two certainties in life: death and taxes. So if you’re looking for a long-term buy, investing in one of these trends certainly makes a lot of sense.

Dignity (LSE: DTY) is an excellent play on the former. The largest, and only publicly listed, funeral provider in the UK, Dignity offers size and scale that no other company can match.

The firm is currently trying to cope with a wave of bad publicity regarding its pricing policies but management has acted to stem the issues. It introduced a low-cost alternative and is planning to invest £50m over the next three years to deliver £8m of annualised additional underlying operating profit by 2021. Despite having already rolled out the lower price options to customers, Dignity’s revenues rose during the first half. 

As long as the company does not overstretch itself, Dignity should continue to produce returns for investors for decades to come. Trading on a forward P/E of 14 and yielding 2.4%, the stock does not look too pricey either.

Self-storage

My final buy for the next five decades is self-storage company Big Yellow Group (LSE: BYG).

Big Yellow has built a robust business model. Properties are located in highly attractive positions, specifically in urban areas with excellent transport connections. They’re also large billboards for the business, which cuts down on marketing costs.

What I like about this business is its property estate. The company has 57 Big Yellow self-storage centres, on which it owns the freehold across London, the South East and large metropolitan cities. This works out at around 78% of its property portfolio.

These properties are an insurance policy for the group. If the self-storage business does not work out, Big Yellow can always sell or let its properties to developers or other companies. With most of the portfolio located in built-up areas, demand will be high. I’m confident the firm will be around, in one form or another 50 years from now. It currently yields 3.7%.

The post 3 stocks that should pay you for the next 50 years appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

Published today, the figures show that the group, which produces the Cathedral City cheese brand as well as Clover spreads, Country Life butters and Frylight oils, saw a 10% overall rise in revenue for the period. Adjusted pre-tax profits — which strip out exceptional items — increased 3% to £63m. 

The company has managed to achieve this performance despite “unprecedented cost inflation in the butters market,” thanks mainly to the exploding demand for Cathedral City.  In fact, demand for cheese is so healthy that management is now planning to spend £85m on an expansion programme of its cheese and whey production facilities.

Keeping up with demand

“As a result of growing demand for cheese, the company expects cheese production capacity constraints within its existing facility at Davidstow in Cornwall in the coming years,” today’s earnings release notes. The firm is tapping institutional investors for £70m to fund part of the expansion, issuing shares equal to 9.98% of its current share capital at a price of 495p. 

And with demand for its flagship product outstripping supply, Dairy Crest looks to me to be an excellent income investment. Indeed, rising demand for cheese should only boost the group’s bottom line, and with an operating profit margin in the low teens, the firm should have plenty of cash left to return to investors even after funding its investment programme. 

At the time of writing, the shares a support of dividend yield of 4.3%, and City analysts expect the payout to rise at around 3% per annum for the next few years, a little faster than inflation. 

However, I believe there is scope for these forecasts to be revised higher as Dairy Crest expands operations. As well as the bright dividend outlook, the stock also looks slightly undervalued. The shares trade at a forward P/E of just 14 based on current City numbers, which is a discount of nearly 20% to the broader food and tobacco industry sector.

Overall, Dairy Crest looks to me to be an undervalued, defensive income champion. On the other hand, I believe income investors should avoid struggling FTSE 100 security business G4S (LSE: GFS). 

Weak balance sheet 

After a string of high-profile disasters, G4S’s reputation is not as strong as it once was and growth has taken a hit in recent years. 

However, City analysts are expecting growth to return with a vengeance this year. Analysts have pencilled in earnings per share growth of 20% for 2018, up from just 11% year-on-year for fiscal 2017. 

Still, while growth is picking up, G4S’s balance sheet is weak and the group’s operating profit margin of 6.4% (for fiscal 2017) does not give much financial flexibility, which is concerning. After stripping out cash, net gearing (total debt compared to shareholder equity) is 180%, and that’s excluding a sizable pension deficit. 

In my opinion, the best dividend stocks are those with wide profit margins and cash-rich balance sheets to protect against any unforeseen developments. 

So, even though G4S might look attractive from an income perspective, with a dividend yield of 3.8%, the company’s weak balance sheet is enough to put me off the business.

The post Why I’d dump this FTSE 100 dividend dud for this income champion appeared first on The Twelfth Magpie.

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Rupert Hargreaves owns no share 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.

However, Dairy Crest (LSE: DCG) bucks this trend. Unlike its peers, shares in the company currently trade at a mid-teens earnings multiple compared to the likes of Unilever, which currently trades at a forward P/E multiple of 20.4.

I believe that Dairy Crest does not deserve this lowly valuation. Indeed, as the company reported in a trading update today, sales are expanding steadily, and the outlook for the group is bright. 

Too cheap to pass up

The producer of dairy brands Cathedral City, Clover, and Country Life today reported that for the nine months to the end of December, revenue from these key products rose 7% year-on-year. A spreadable version of the company’s leading cheese brand, Cathedral City has won ‘Product of the Year 2018’ in the UK cheese category. Meanwhile, all of the group’s spreads brands reportedly continued to gain market share throughout the period.

The company is set to report its full-year results for the 12 months to the end of March 2018 at the end of May. City analysts are expecting the firm to report earnings per share growth of 4% and earnings growth of between 5% and 6% for the next two years.

Nevertheless, despite this steady growth, and the company’s defensive nature, the shares trade as a relatively modest forward P/E of only 15.5, falling to 14 for the year ending 31 March 2020. As well as this modest valuation, it also supports a dividend yield of 4% and the payout is covered 1.6 times by earnings per share. 

All in all, I believe this defensive income stock could make a great addition to your portfolio.

Enormous opportunity 

Small-cap biotech firm Angle (LSE: AGL) flies under the radar of most investors, but I believe you should not overlook this future growth monster.

It is a leader in the process of liquid biopsy, which involves searching for cancer cells in blood samples, or pieces of cancer DNA floating in the bloodstream in an attempt to find the illness at an early stage. 

The market for any potential products is massive and Angle is already making a dent. According to the firm’s interim results for the six months to 31 October, 145 of its Parsortix liquid biopsy systems have been deployed around the world (up from 120 in the previous period). Further, during the period the company completed two large-scale ovarian cancer clinical studies, which demonstrated “potential for a Parsortix-based blood test to significantly outperform current standard of care.”

Unfortunately, as this business is still in its early stages of development, for the next few years City analysts are expecting it to report losses, although sales are expected to leap 600% to £7.8m by 2020, from an estimated £1.1m for the fiscal year ending 30 April 2018. A recent placing that raised £14.4m net of expenses should give the company enough financial firepower to be able to keep the lights on for next two years as it progresses towards profitability.

The post 1 cheap income stock and one growth monster I would buy for 2018 appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
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Rupert Hargreaves owns shares in Unilever. The Motley Fool UK owns shares of and has recommended Unilever. 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.

Hik-cup

Hikma Pharmaceuticals (LSE: HIK) fell more than 6% this morning after its trading statement cut forecasts for its generics business for the third time this year, blaming challenging US market conditions. The group now expects around $600m revenue from the business for the year, with core operating margin in the low-single-digits. It expects the challenging market conditions to continue next year and is actively pursuing new commercial opportunities and turning to its pipeline to offset continuing price erosion, as well as looking to identify further cost savings.

Hikma also gave an update on its generic version of GlaxoSmithKline’s asthma treatment, Advair, following “constructive discussions” with the the US Food and Drug Administration, which clarified most issues aside from one, where it disagrees with the FDA’s position and is progressing with a dispute resolution process. We will know more in the first quarter of 2018. Hikma and partner Vectura “remain confident in the approvability of our product” and are looking to bring it to market as soon as possible.

Bought the pharm

I am always on the lookout for stocks that have taken a beating on publication of results, because many sellers take a short-term view while the Fool prefers to recommend stocks for the long term. Broker Numis reckons the morning sell-off was overdone and has upgraded the stock to ‘buy’, heralding Hikma’s diverse growth potential and long-term prospects through organic growth and M&A. 

I echo that but the road ahead will be bumpy, with earnings per share (EPS) forecast to fall 21% this year. However, City analysts reckon 2018 will deliver 10% EPS growth and today’s valuation of 14.9 times earnings is hardly overstretched. Hikma’s forecast yield of 2.1% covered 3.1% times also helps. However, you may prefer this other drug developer, which recently spiked 20% in a day.

Buttered up

In July I wrote that Dairy Crest Group (LSE: DCG) is a forgotten stock with serious growth potential and today’s interim results showed a 16% rise in first-half revenue to £220.1m with adjusted profit before tax at 8% to £20.6m.

CEO Mark Allen hailed “an encouraging first half”, with brands Cathedral City, Clover and Frylight delivering good volumes and value growth. Cathedral City saw “exceptional growth” of 10% over the period. The good profit growth was despite a record high cream price, which has driven up input costs in the group’s butter and spreads business.

Crest of a slump

The wholesale cream price has risen by 65% over the last year to hit record highs of nearly £3 per litre, although there are signs this is now reversing. In July I wrote that this £787m business still has plenty to offer investors despite negligible share price growth over the past two years. It is up 4.5% since.

City analysts are forecasting 4% EPS growth this year and 6% next, aided by plans to sell infant milk formula into the Chinese market. The stock currently has a forecast yield of 3.7%, covered 1.8 times. Trading at 16.6 times earnings, it isn’t cheap, but it isn’t expensive either. Worth investigating.

The post Are these two beaten-up FTSE 250 turnaround plays buys after today’s results? appeared first on The Twelfth Magpie.

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Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has recommended Hikma Pharmaceuticals. 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.

And according to an update from the firm today ahead of its AGM, it looks as if Dairy Crest is on track to meet City expectations for growth this year. Indeed, according to today’s update, the company notes that combined sales of its four key brands — Cathedral City, Clover, Frylight and Country Life — are 7% ahead of the same period last year. The leading Cathedral City brand has put in the strongest performance with volumes up 15% year-on-year.

That said, while volumes are growing, like a number of other UK businesses, Dairy Crest is struggling with inflationary pressures. Today’s update notes that cream prices have increased substantially during the first quarter putting pressure on margins. To mitigate the margin squeeze, management has reduced promotional activity, which is “adversely impacting volumes but mitigates some of the margin pressure.”

Even though Dairy Crest is facing some near-term pressure from high ingredients costs, from a long-term perspective, it remains attractive. 

Defensive play 

As a consumer goods business, Dairy Crest is a defensive investment and no matter what the economic environment, demand for its products should remain robust. With this being the case the company’s valuation of 16.7 times forward earnings does not seem overly demanding and a dividend yield of 3.8%, which is covered 1.4 times by earnings per share, looks attractive. According to City forecasts, earnings per share are expected to expand at a rate of between 3% and 5% per annum for the next few years.

Rapid recovery 

Shares in Dairy Crest offer an attractive blend of income and growth and so do shares in RSA Insurance (LSE: RSA). After a restructuring programme that began in 2014, over the past two years, its recovery has quickly gained traction and over the previous 12 months, shares in the group have returned more than 30% excluding dividends.

It now looks as if the group’s recovery is nearly complete. City analysts have pencilled in earnings per share growth of 10% for this year and 19% for 2018, taking earnings to 52p per share off the back of a pre-tax profit of £705m. Based on these figures, shares in the company are trading at a 2018 P/E of 11.7, which is highly attractive considering the projected earnings growth. Analysts have also pencilled in a dividend yield of 4.7% for 2018 with a dividend cover of 1.8. So, even though RSA has had some problems in the past, it looks as if these issues are now well and truly behind the group and it now looks to be a quite attractive investment opportunity.

The post 2 dividend growth stocks you should consider appeared first on The Twelfth Magpie.

More reading

• The £15bn defence splurge that could send UK shares soaring in July
• Up 446% in 12 months! What’s next for the Ceres Power share price?
• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• Up 132% and surging, how is this FTSE 250 share STILL so cheap?

Rupert Hargreaves has no position in any 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.