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Archived articleThis is an archived article from 2011 - please note that any content within the article may be out of date.

Yield Plays? 10 Beefy stocks to chew over

The companies in this month's shortlist are sorted and selected based on their growth, both past and estimated future, as well as their current dividend and earnings yields. They all have steady histories over the past decade and I'd go so far as to describe them as good companies at good prices.

Generally I start at the top of this list and if I find something that fits my criteria I'll buy it, assuming I have any cash to deploy. Otherwise it's still worth reviewing a company or two in greater depth just in case some cash magically appears (I wish!), since most of the leg work will have already been done.

Company Index Industry Rolling PE Dividend(%)
Astrazeneca (LON:AZN) FTSE100 PHARMACEUTICALS 7.2 5.4
JD Sports Fashion (LON:JD.) FTSE250 APPAREL RETAILERS 7.7 2.7
Chemring (LON:CHG)  FTSE250 DEFENCE 11.6 2.7
BAE Systems (LON:BA.) FTSE100 DEFENCE 7.6 5.8
Clarkson (LON:CKN) SMALLCAP TRANSPORTATION SERVICES 10.2 4.0
Reckitt Benckiser (LON:RB.) FTSE100 NONDURABLE HOUSEHOLD PRODUCTS 14.4 3.5
Balfour Beatty (LON:BBY) FTSE250 HEAVY CONSTRUCTION 8.5 4.4
Interserve (LON:IRV) SMALLCAP BUSINESS SUPPORT SERVICES 7.6 6.0
Mitie (LON:MTO)  FTSE250 BUSINESS SUPPORT SERVICES 10.9 3.8
Carillion (LON:CLLN) FTSE250 BUSINESS SUPPORT SERVICES 9.0 4.4

 

I'm pretty sure that out of this list of companies there's something that I'd be happy to put into my pension fund, in fact I already own four of them.  I'm looking for something where I'd be happy to go to sleep for five years and trust that the investment has one hell of a good change of returning a fair profit in that time.  Or in the words of a rather clever chap,

"Only buy something that you'd be perfectly happy to hold if the market shut down for ten years" – Warren Buffett

That might be a bit of a stretch for most people, but it should get you in the right mindset for picking great companies.  Picking great companies is important because by buying any company's shares you are putting your money at risk and just as importantly, you are tying your economic future to their economic future.  How you live when you retire is going to be affected in a massive way by the value of your pension fund.  Pick the wrong companies and the consequences can be huge.  Pick the right companies at the right prices and your retirement might look a whole lot different.

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