There are thousands of companies out there, but it’s improbable that most of them will still be around when you retire.

However, some companies are built for the long term and today, I’m looking at just one of these businesses that I think could help you retire with a million.

Built for the long term

HICL Infrastructure Company Ltd (LSE: HICL) describes itself as a long-term investor in public infrastructure. Its current portfolio includes projects such as roads, hospitals and utility businesses.

There are two main reasons why I think these assets deserve a place in your retirement portfolio. First of all, they’re set up to deliver reliable, long term cash flows. And secondly, cash flows tend to rise with inflation, which means your wealth will be protected over the next few decades. 

Indeed, since 2013, HICL’s dividends have risen by an average of 2.4% per annum and investors buying the stock today can look forward to a 4.9% dividend yield. Meanwhile, shares in this infrastructure investment giant are currently trading at just above book value.

Slow and steady 

This is a slow and steady income play. It’s unlikely this company will ever feature on the leaderboards of the best-performing stocks.

However, when it comes to investing for retirement, long-term stability is more important than short-term capital gains, and as long as you stick with HICL and don’t overtrade, my figures suggest that you can make a million with this investment trust.

According to my research, HICL has produced a total return for investors of 9.4% per annum over the past decade, that’s including both income and capital growth. In comparison, the FTSE 100 has produced an average annual total return of between 7% and 8% over the same timeframe.

At this rate of return, if you’d invested £1,000 in HICL 10 years ago, today that investment would be worth £2,500. To put it another way, investors in HICL have more than doubled their money since the beginning of 2009. 

Buy and hold

Due to the nature of the assets HICL owns, I think the group can continue to churn out a high single-digit annual return for investors for the foreseeable future. If the company can continue to produce an annual return 9.4% for investors for the next four decades, according to my calculations, an investment of £200 a month in the business would grow to be worth more than £1m by 2059. 

So HICL might not appear to be the market’s most exciting investment, but, as my figures above show, the investment trust’s slow and steady returns from its long-term infrastructure assets could indeed help you retire a millionaire. 

The post Want to retire with a million? I think this company will help you get there 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.

These three shares offer an average dividend yield of about 5.5% and have a track record of dividend growth. So they could be a good starting point for a retirement portfolio.

Long-term focus

Major infrastructure projects like motorways and power stations are designed to provide reliable service for many decades. This usually means that they provide a regular stream of income for their owners.

As private investors, we can’t invest directly in such projects. But there are a number of London-listed firms which specialise in infrastructure investment. One of my favourites is HICL Infrastructure Company (LSE: HICL).

This £2.8bn investment trust owns stakes in 118 projects as varied as roads, government buildings, schools and water treatment plants. Most are in the UK, but HICL is also active in countries including Australia, Canada and the USA.

The firm’s dividend has risen by an average of 2.3% per year since 2011, keeping pace with inflation. That may not seem much, but shareholders who bought the stock seven years ago are now enjoying a 7% annual yield on the original cost of their shares.

One risk is that as interest rates rise, asset prices will fall due to higher finance costs. A second risk is that political policies governing the private ownership of public infrastructure will change. But in my view, HICL’s diverse portfolio should minimise these risks. I’d be happy to buy these shares for their 5% dividend yield.

An overlooked cash cow

Another high-yield stock I’m keen on is Phoenix Group Holdings (LSE: PHNX). This insurance firm doesn’t sell new policies. Instead, it buys up so-called closed books of life insurance policies from other insurers and runs them off.

The group’s large size and specialist focus means it enjoys attractive economies of scale. Careful management has seen Phoenix become an impressive cash cow. The group generated £653m of cash last year, up from £486m in 2016.

Management expects to generate £2.5bn of cash between 2018 and 2022, equating to around £4.33 per share. That’s about 60% of the current market cap. Although not all of this cash will be returned to shareholders, this guidance suggests to me that the group’s forecast yield of 6.5% should be fairly safe.

A high-yield growth opportunity?

Phoenix and HICL both offer high dividend yields. But I don’t expect them to deliver big share price gains. If you’re looking for an opportunity with income and growth potential, then it might be worth considering home and motor insurance firm Hastings Group (LSE: HSTG).

Hastings’ share price has fallen by about 13% so far this year, in line with the wider drop in this sector. But although expectations have slipped, this fast-growing group is still expected to deliver an earnings per share rise of 10% in 2019.

Performance so far this year looks encouraging to me. Operating profit rose by 22% to £105m and the number of live customer policies rose by 6% to 2.7m. Hastings now has a 7.5% share of the UK private car insurance market, up from 7% one year ago.

Management says that full-year results should be in line with expectations, putting the stock on a forecast P/E of 12 with a 5% dividend yield. At this level, I’d be happy to buy.

The post 3 FTSE 250 stocks I’d buy with 5%+ dividend yields appeared first on The Twelfth Magpie.

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Roland Head 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.

Dividend cover

After shares in the company have lost as much 35% of their value over the past 52 weeks, its dividend yield has shot up from 3.3% a year ago, to 5.4% right now. You may now be thinking that the dividend looks too good to be true, but its dividend cover looks robust for a number of years to come.

Sure, the tough retail environment seems to be holding up Dixons Carphone’s earnings, but the dividend seems secure for two main reasons. First, dividend cover is forecast to remain above 2.2 times over the next three years, despite City expectations of a 26% decline in adjusted earnings for the year to 30 April. And second, the balance sheet is in good shape, with net debt forecast to fall to around £250m by the year end.

Management changes

Moreover, recent changes at the top of its management offer the most compelling upside opportunity for the stock. I reckon chief executive Alex Baldock, who took the helm of the company earlier this month, looks set to shake up the business. He has a strong reputation of transforming struggling retailers, after having previously turned around the fortunes of Shop Direct.

It’s too early to say when, or even if, the company will see a significant turnaround in its earnings outlook, but low valuations present a compelling investment opportunity. With the share price trading at 210p, Dixons Carphone is valued at just 7.9 times its expected earnings this year.

Infrastructure

Looking elsewhere, HICL Infrastructure Company (LSE: HICL) also provides a safe source of income for investors.

The company specialises in investing in infrastructure assets, an alternative asset class that is often a safe haven for investors. Through investments in mainly public-private partnership (PPP) infrastructure projects, HICL earns stable cash flows from essential physical assets, such as hospitals, schools, roads and utility facilities.

The majority of its assets are located in the UK, which accounts for roughly 80% of its portfolio value, with the remainder invested in the EU, Australia and North America.

Inflation protection

Its investments are positioned at the lower end of the risk spectrum, and much of the revenue it earns benefits from inflation protection. As such, returns from the portfolio are positively correlated to inflation, allowing the company to deliver real value to shareholders. What’s more, the company has a very long weighted average asset life of 30.6 years, underscoring the long-term nature of its investments and the longevity of its revenues.

HICL has demonstrated its skill in picking attractive investments, as it has delivered NAV total returns of 9.5% since its IPO in 2006. This has exceeded the company’s long-term total return target of 7%-8% per annum, which had been set at the time of its IPO

With a quarterly dividend of 1.96p per share, the infrastructure company’s shares currently earn prospective investors a yield of 5.5%.

The post 2 FTSE 250 stocks with sustainable 5%+ dividend yields appeared first on The Twelfth Magpie.

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Jack Tang 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.

However, there are other stocks out there that can provide similar returns with much less risk making them the perfect long-term investments. 

HICL Infrastructure (LSE: HICL) is a perfect example. This company specialises in infrastructure investment, a low-risk, high-return asset class where investments are made on a multi-decade time frame and investors can profit from net asset value growth and dividends. 

Over the past five years, NAV growth and income has given a total return of 10.2% per annum, although gains would be in the mid-teens if you include dividend reinvestment. 

This double-digit growth rate looks set to continue. According to the company’s figures for the six months to 30 September, annualised NAV grew by  8.9% for the period including dividend growth. After this expansion, the NAV per share is 151.6p, compared to the 31 March value of 149p. For the year management is targeting aggregate dividends of 7.85p per share, rising to 8.25p for fiscal 2018 giving a dividend yield of 5% for this year and 5.3% for 2018. 

Stability in infrastructure 

As a long-term growth investment, I believe that HICL ticks all the boxes. While growth may not be as fast as the likes of Boohoo.Com, it is highly predictable. For example, this year the company has made investments in regulated utility Affinity Water and High Speed 1 rail assets for a total of £452m, and the overall portfolio has a weighted average life of more than three decades.

These investments should produce steady returns for many years to come giving both investors and management a bright outlook for growth as well as returns. 

Even though the shares trade at a 5% premium to NAV, I believe that this is a premium worth paying for the defensive growth on offer.  

Renewable energy income 

John Laing Environmental (LSE: JLEN) has many similar traits to HICL. The company invests in the environmental infrastructure market, which is expanding rapidly. 

John Laing Environmental invests in many different assets, but renewable energy assets are a large part of the portfolio. Unfortunately, this has held the company back this year, with management noting in today’s half-year results for the period to 30 September 2017 that NAV per ordinary share declined to 99p from 100.1p as previously reported primarily due to the decrease in forecast electricity prices during the period. 

Still, management continues to look for opportunities to invest further and is on target to produce a net annualised return of 7.5% to 8.5% on its IPO price over the long term as well as aiming to pay a dividend that increases in line with inflation. 

A dividend payout of 6.3% is targeted for 2017 giving a dividend yield of 6.1% at the current price. With steady high-single-digit returns expected for the foreseeable future, John Laing Environmental is one stable growth stock I’d be happy to buy and forget for the next decade. 

The post 2 growth stocks I would hold for the next decade appeared first on The Twelfth Magpie.

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Rupert Hargreaves does not own any share mentioned. The Motley Fool UK has recommended boohoo.com. 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.