From Persimmon to Synthomer: 5 stocks one may buy for retirement

Highlights

• The Department for Work and Pensions (DWP) has recently confirmed that state pension payments are set to rise in April by 3.1% in line with the Consumer Price Index (CPI), a lower increase than expected.
• The Bank of England has predicted the inflation could increase to over 7% next month, while the state pension is set to rise by less than half the predicted inflation rate.

The UK is facing its worst cost-of-living crisis in 60 years as many Britons are currently struggling financially and the pressure is expected to further increase in the coming months as inflation in February has increased unexpectedly rose to 6.2% and experts expect further rise this year.

The Department for Work and Pensions (DWP) has recently confirmed that the state pension payments are set to rise in April by 3.1% in line with the Consumer Price Index (CPI), a lower increase than expected. Although the amount of pension a person receives depends on their National Insurance Contribution, the rise means that the full basic state pension will go up from £137.60 to £141.85 per week and the full rate of the new state pension will jump to £185.15 from £179.60 per week.

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Last year, the UK government temporarily suspended the Triple Lock system for the next fiscal 2022/23 due to a perceived lack of affordability caused by rising inflation and growth in earnings. The Triple Lock System ensures that the state pension increases in line with the average earning, annual inflation rate, or 2.5%, whichever is higher, every year.

Earlier, the Bank of England has predicted inflation could increase to over 7% next month, as energy caps are set to increase by 54% to £1,971 from £1,277 annually, while state pension is set to rise by less than half the predicted inflation rate. Also, the rise in state pension will exclude thousands of people living outside the UK, European Economic Area (EEA), Switzerland, Gibraltar, and countries with a Social Security Agreement, excluding New Zealand or Canada.

With the sharply rising inflation, the state pension is looking even more inadequate as it will fall by £387 a year in real term. So, people may choose to diversify their investment in shares for passive income and capital growth.

Let us look at five FTSE-listed stocks, including Ferrexpo Plc, Persimmon Plc, Diversified Energy Company Plc, Synthomer Plc and British American Tobacco Plc, that you may consider for investors’ pension fund.  

Ferrexpo Plc (LON: FXPO)

Ferrexpo Plc is the world’s third-largest exporter of iron ore pellets that specializes in commodity trading and mining. The company has recently announced that the deadline to publish full-year results for 2021 has been extended to 30 June 2022, due to ongoing uncertainty caused by the war between Russia and Ukraine.

With a market cap of £976.53 million, the miner’s average dividend per share stands at 20.2% and its five-year average dividend yield stands at 4.9% as of 28 March 2022.  The FTSE 250-listed company’s share value has depreciated by -54.85% over the last one year, while its year-to-date return stands at -43.45% as of 28 March 2022. 

Ferrexpo Plc’s shares were trading at GBX169.90, up by 2.41%, at 11: 00 AM (GMT), on 28 March 2022.

Also Read: Tesco, M&S, Next: Retail stocks you may consider despite fall in sales

Persimmon Plc (LON: PSN)

The housebuilding company has recently reported an increase in pre-tax profit by 23% to £966.8 million for the FY2021 as it racked in a £66,000 profit per house.  

With a market cap of £6,690.93 million, the housebuilder’s average dividend per share stands at 11.2% and its five-year average dividend yield stands at 8.2% as of 28 March 2022.  The FTSE 100-listed company’s share value has depreciated by -30.43% over the last one year, while its year-to-date return stands at -26.44% as of 28 March 2022. 

Persimmon Plc’s shares were trading at GBX2,103.00, up by 0.33%, at 11: 00 AM (GMT), on 28 March 2022.

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Diversified Energy Company Plc (LON: DEC)

Diversified Energy Company Plc has recently reported increase in total revenue by 147% to US$1 billion in FY2021, from US$409 million in FY2020. However, the company’s net loss increased to US$325 million, from US$23 million, inclusive of tax-effected, non-cash unsettled derivative fair value adjusted. In the year 2021, its production was up by 19%.

With a market cap of £1,009.86 million, the energy company’s average dividend per share stands at 10.5% and its five-year average dividend yield stands at 7.9% as of 28 March 2022.  The FTSE 250-listed company’s share value has appreciated by 6.05% over the last one year, while its year-to-date return stands at 14.18% as of 28 March 2022. 

Diversified Energy Company Plc’s shares were trading at GBX119.20, up by 0.34%, at 11: 00 AM (GMT), on 28 March 2022.

RELATED READ: BATS, BP, Segro: Are these stocks good bets amid rising inflation?

Synthomer Plc (LON: SYNT)

UK-based chemical company and world’s leading supplier of sustainable water-based polymer solutions Synthomer Plc has recently reported increase in revenue to £2.3 billion in FY2021, from £1.6 billion in FY2020. Its underlying profit before tax stood at £522.2 million in FY2021, up from £259.4 million in FY2020.

With a market cap of £1,398.27 million, the chemical company’s average dividend per share stands at 10.0% and its five-year average dividend yield stands at 2.8% as of 28 March 2022.  The FTSE 250-listed company’s share value has depreciated by -35.01% over the last one year, while its year-to-date return stands at -24.70% as of 28 March 2022. 

Synthomer Plc’s shares were trading at GBX300.20, up by 0.33%, at 11: 00 AM (GMT), on 28 March 2022.

Also Read: MARS, YNGA, MAB: 3 pubs & bars stocks to watch amid rising beer prices

British American Tobacco Plc (LON: BAT)

The cigarette and tobacco manufacturing company has suspended its operations in Russia and has cut its revenue growth outlook for 2022 from 3%-5% to 2%-4%.

With the market cap of £75,395.16 million, the company’s average dividend per share stands at 9.9% and its five-year average dividend yield stands at 6.2% as of 28 March 2022.  The FTSE 100-listed company’s share value has depreciated by -19.20% over the last one year, while its year-to-date return stands at 21.04% as of 28 March 2022. 

British American Tobacco Plc’s shares were trading at GBX3,308.50, up by 0.26%, at 11: 00 AM (GMT), on 28 March 2022.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.