Crafting a retirement portfolio isn't just about yield. Depending on your age, you may also be interested in adding companies with strong prospects for capital appreciation, too. We have identified five safe stocks we think are appropriate investments for the ultimate retirement portfolio, and compare them to peers. They offer strong growth prospects, and in some cases solid yields, without sacrificing safety relative to their compeittors. When constructing your retirement portfolio, use due diligence while considering these analyses:
Syngenta AG (NYSE:SYT) is a Swiss agribusiness company founded in 1999 in Basel. At $28.92 billion, its market capitalization is slightly less than Monsanto's (NYSE:MON), and its dividend yield of 2.5 percent is higher. Price-to-earnings ratio is 18.52, and earnings per share is $3.39. SYT is profitable with a gross margin of 49.35 percent, which is quite comparable to MON. SYT’s return on equity is 20.53 percent, and its debt-to-equity ratio is 46.07
Recent headlines have focused on MON’s trouble with its genetically altered corn seed that was designed to resist the very insect discovered to have become resistant to it. Cargill (CARG.UL) decided to await accepting SYT’s genetically altered corn at its wet milling plants until the product receives European Union regulatory approval. Then another U.S. agricultural processor followed suit. BASF SE (BASF.PK) is the main competitor of both SYT and MON. It does not pay a dividend.
Lorillard, Inc. (NYSE:LO) – This cigarette maker boasts a market capitalization of $14.92 billion. Its dividend yield is an attractive 4.7 percent. Its price-to-earnings ratio of 14.74 is less than the industry average of 16.28, indicating a value relative to the company’s net income. Earnings per share is $7.31. LO’s gross margin is 52.14 percent. This Motley Fool article outlines the benefits LO brings to the table for conservative investors, like its solid dividends. This Seeking Alpha article considers some valid key points about LO’s dividend.
We have suggested investors look at LO’s competitor Altria Group Inc. (NYSE:MO) too. MO boasts a larger market capitalization of $55.14 billion. MO’s dividend yield is higher at 6.1 percent. Its price-to-earning ratio is a little higher at 16.28, and earnings per share are only $1.64. Reynolds American Inc. (NYSE:RAI) also looks good with its 5.7 percent yield. Like MO, RAI is a little more expensive in terms of its price-to-earnings ratio of 16.2. Earnings per share is $2.30. If long-term investors can stomach the regulatory risk inherent in a cigarette company, LO offers a consistent dividend and stability.
Royal Dutch Shell PLC (NYSE:RDS.A) – This mega-cap international oil and gas company was also trading down as of Tuesday morning, in step with the industry as a whole. We were not the only ones to notice. Headquartered in The Hague, Netherlands, its market capitalization of $204.95 billion approaches twice that of BP PLC (NYSE:BP). Exxon Mobil Corporation’s (NYSE:XOM) market capitalization is $342.15 billion. RDS-A offers a dividend yield of 5.10 percent, a price-to-earnings ratio of 7.32, and earnings per share of $8.97. Its return on equity is 18.34 percent. Its quarterly revenue growth is 33.9 percent. Its debt-to-equity ratio is 25.40.
Some recent headlines have focused on peer ExxonMobil’s deal with the Russian OAO Rosneft to develop promising oil fields in the Arctic Sea. Tuesday’s headlines noted declines in energy stocks and in equities markets, thanks to turmoil in European markets, as well as RDS.A’s declining share price. RDS.A generates a nice dividend yield, and it is a large, relatively stable international company with a steady outlook.
Kinder Morgan Energy Partners LP (NYSE:KMP) – This North American owner and manager of energy transportation and storage assets also saw declines in share price on Tuesday, and was trading near its 52-week low.
Founded in 1992 and based in Houston, KMP has a market capitalization of $22.45 billion. We like its 6.6 percent dividend yield. KMP’s price to earnings ratio of 118.19 is very high. Earnings per share is $0.58. Its gross margin of 39.07 percent exceeds the industry average of 27.49 percent. Return on equity is 17.66 percent. Its debt to equity ratio is high at 157.48. This Motley Fool article considers what may seem excessive goodwill and other intangible assets on KMP’s balance sheet.
KMP’s main competitor is Enterprise Products Partners LP (NYSE:EPD). It has a larger market capitalization of $34.36 billion, quarterly revenue growth of 48.7 percent (compared to KMP’s 2.9 percent), and a much lower price-to-earnings ratio of 23.24. Earnings per share are higher at $1.75. EPD’s return on equity is 13.39 percent, which is a little less than KMP's. Its debt-to-equity ratio is also high at 122.27.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.