A simple rule-of-thumb to picking great stocks is to buy the right company, at the right price, at the right time. It’s the alignment of these factors that can turn a company into a winner. This also means that as you get older the companies you seek to invest in will change.
As a 30-something you want to find companies which, like you, are well established but still growing at a decent pace. There are three companies I think are currently great examples:
1. FlexiGroup Limited (ASX: FXL)
FlexiGroup offers finance options to help consumers and businesses buy the goods they need. The company has several different product lines, including credit cards, interest free finance and leasing from which it profits by charging fees.
Shares in FlexiGroup have bounced back from near 52-week lows, but still look attractive given its current dividend yield (4.1%) and prospective long-term growth.
In May the company reaffirmed its full-year 2014 guidance of $84-86 million NPAT which will be an increase of up to 19% over FY13.
2. ResMed Inc. (CHESS) (ASX: RMD)
Demand for healthcare is set to explode around the developed world over the next decade and ResMed Inc. (CHESS) (ASX: RMD) should continue to profit as the growth for its breathing products pushes up volumes and margins.
ResMed announces its fourth quarter result on 31 July, but for the nine months to 31 March the company grew diluted earnings per share by a very respectable 11%. In 2013 the company increased its dividend by 45% and is an ideal candidate to buy for your children.
3. IOOF Holdings Limited (ASX: IFL)
IOOF Holdings is well established and also growing at a steady pace.
Underlying Net Profit After Tax (NPAT) for the most recent half year period (to 31 December 2013) jumped 14% on the previous year, while funds under management grew by 10%.
With a plump 5.4% fully franked dividend IOOF is a company to buy and hold for your own retirement.