Sit down and think for a second. Are you doing as much as you can to build a big nest egg for retirement? And do you think you could really survive on the meagre £8,546.20 per year which the basic State Pension provides?
I’m not sure about you, but I dream of living the life of riley in my later years, or possibly even throwing my season rail pass in the bin and enjoying an early retirement. It’s abundantly clear that simply relying on the State Pension won’t allow me to achieve these goals.
As recent data shows, leaving it to the last minute to take charge of your post-retirement finances is extremely risky business. There’s no reason to delay things, either. Taking steps to secure your financial future doesn’t have to be like pulling teeth. Let me start you off with a couple of dividend heroes that could help you make a pretty little nest egg.
Fortify your finances
Forterra (LSE: FORT) is a share that’s been a dream for dividend chasers in recent times. Some significant, double-digit earnings increases, allied with some serious cash generation, have allowed it to hike the annual dividend by 81% during the past three years. It’d take a brave man to predict either profits or payouts at the brickbuilder to stop growing at a spectacular rate too, given its strong long-term demand outlook.
Indeed, sales rates of its products to homebuilders are so high, and so low is total production capacity in the UK, that brick imports are soaring right now. As I noted in a recent piece about Ibstock — a share I myself own — Britain needs to build as many as 340,000 new homes per year to solve the country’s chronic homes shortage, making it quite likely this supply/demand imbalance will persist.
Clearly, then, the earnings picture for Forterra et al looks pretty secure for many years ahead. In the meantime the firm is expected to lift last year’s 10.5p per share dividend to 12.1p in 2019, a figure which yields a mighty 4.7%.
Another dividend magician
I also reckon Bloomsbury Group (LSE: BMY) has the tools to make shareholders a fortune for retirement. It’s not all about Harry Potter, although shareholders will be pleased to hear Bloomsbury’s cash cow remained one of the company’s best-selling consumer titles in the four months to June.
The small-cap’s really gone to town on developing its position in the academic and professional publishing arena, thus laying the base for terrific earnings growth in the years ahead. To illustrate the point, like-for-like sales of these titles soared 42% in the fiscal year ending February 2019. This performance makes me particularly excited for the years ahead.
Now Bloomsbury doesn’t offer the biggest dividend yields out there, a predicted 8.4p per share payout for this year yields a decent-if-unspectacular 3.7%. However, the firm’s commitment to raising dividends each and every year still makes it a true income hero in my eyes — it’s raised annual dividends for 24 years on the bounce — and a stock that anyone looking to build a big retirement pot needs to take a close look at.
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Royston Wild owns shares of Ibstock. The Motley Fool UK has recommended Ibstock. 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