It’s a tricky business trying to find stocks that can deliver top shareholder returns right up until you or I decide to retire.
Ten years ago, tobacco stock Imperial Brands (LON:IMB), grocery colossus Tesco (LON:TSCO) and energy supplier Centrica (LON:CNA) were at the top of their game and reliable generators of great shareholder value. Yet these firms are now putting out distress signals amid the onset of some serious structural challenges more recently. How quickly things can change.
While nothing’s certain when it comes to investing, clearly, there are still plenty of shares making great progress and looking likely to continue doing so. I believe Assura (LSE: AGR) is one such stock in great shape to thrive in the decades ahead. Britain’s rapidly-ageing population means that demand for quality primary healthcare facilities is becoming stronger and stronger, a point illustrated by the extra £1.8bn cash boost that the government pledged to the NHS just this week.
And Assura’s exploiting this trend to the fullest through aggressive expansion (it now has more than 550 GP surgeries and other healthcare properties on its books).
Investing for success “Our immediate pipeline of developments and acquisitions has never been stronger,” chief executive Jonathan Murphy commented last month, and the FTSE 250 firm certainly has the financial strength to keep adding to its bulging property portfolio. It has undrawn loan facilities of £230m and a healthy cash balance of around £50m.
A blend of terrific share price growth and healthy dividend growth means that Assura has delivered a total shareholder return of 75.6% over the past five years. And on the dividend front, City brokers expect the healthcare giant to keep impressing, with expectations of more hikes for the fiscal years ending March 2020 and 2021 resulting in chunky yields of 4.3% and 4.5% respectively.
6% dividend yields Who would bet against Cineworld Group (LSE: CINE) — which has delivered a shareholder return of 131% during the last five years — from continuing to thrive in the decades ahead?
The magic of the cinema is something that hasn’t faded since the world’s first picture house (the ‘Nickelodeon’ in Pittsburgh, if you’re asking) was opened in 1905. Over the past century, we’ve seen the mass adoption of other forms of media like radio, television and the internet, and yet cinema has stood the test of time. In fact, recent box office data shows that our love of the big screen is stronger than it’s ever been before.
And like Assura, Cineworld is rapidly expanding its physical footprint to capitalise on the growing market, as illustrated by its game-changing move into the US a year ago.
In the meantime, analyst expectations of more dividend increases mean that for 2019 Cineworld boasts a 5.6% dividend yield. a figure which improves to 6% next year. Big dividends are one reason why I own the share, and I fully expect it to remain a brilliant income generator for many years to come.
Royston Wild owns shares of Cineworld Group. The Motley Fool UK has recommended Imperial Brands and Tesco. 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.
Motley Fool UK 2019