Although it isn’t a cheap stock, InterContinental Hotels’ sustainable and profitable business model could make it a good retirement share, especially if you manage to buy it on any temporary weakness.
Intertek Group
Intertek is one of those FTSE 100 companies you probably don’t know much about. It’s a global business that specializes in providing all sorts of testing and certification services to industry and commerce. This is a profitable business, as Intertek’s 2012 results — which were published earlier this week — showed. The firm’s revenue rose by 17% and its operating profits rose by 19% during 2012, lifting Intertek’s adjusted operating margin by 0.2% to 16.3%.
Intertek’s share price has risen by 899% over the last 10 years, leaving the company’s shares trading on a P/E of 26. Although shareholders were rewarded with a 22% dividend increase this year, this payout still only provides a dividend yield of 1.2%. Whether this is enough for Intertek to earn a place in your retirement portfolio is an individual decision — for me, it’s not.
Aberdeen Asset Management
Aberdeen Asset Management plc (LON:ADN)comes top in this review, with one of the highest scores I’ve ever awarded — 22/25. The reason for this is simply that Aberdeen has performed extremely well since its foundation in 1983. The company’s only real weakness is its short history, especially when compared to peers such as Standard Life and Old Mutual, which has been in business for nearly 200 years.
Since 2007, Aberdeen Asset Management plc (LON:ADN) has delivered average annual operating profit growth of 56%, revenue growth of 20% and dividend growth of 15.9%. Despite this, the current negative sentiment toward financial shares means that Aberdeen currently trades on a forward P/E of just 14.7 — well below the FTSE 100 average, despite expectations for another strong year of growth.
Aberdeen Asset Management plc (LON:ADN) Asset Management shares have a prospective dividend yield of 3.4% and look to me like a very reasonably priced alternative to bank shares.
2013’s top income stock?
The utility sector is known for its reliable, above-average dividends, but The Motley Fool’s team of analysts has identified one FTSE 100 utility share that they believe offers a particularly high-quality income opportunity.
The company in question offers a 5.7% dividend yield and the Fool’s analysts believe that it could be worth up to 850 pence per share — offering new investors a potential 20% gain on the current share price of around 700 pence.
The article Are These the Ultimate Retirement Shares? originally appeared on Fool.com and is written by Roland Head.
Roland Head owns shares in Rio Tinto but does not own shares of any of the other companies mentioned in this article. The Motley Fool has no position in any of the stocks mentioned.
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