It’s an unspoken rule that serious long-term investors should only seek out stocks that they feel comfortable to hold for a minimum period of between five and 10 years.
The couple of businesses I’ve picked out in this article — Primary Health Properties (LSE: PHP) and Centamin (LSE: CEY) — are ones that I believe could provide stunning shareholder rewards over the next decade. And quite possibly well into the 2030s too.
Gold is glistening again
Let’s look at the gold digger first. If the past few weeks have taught us anything, it is that having exposure to precious metals in an investment portfolio, whether by directly holding the commodity itself or through buying shares of a dedicated gold or silver miner, is a good insurance policy to have.
If you somehow missed it, global stock markets washed out last week on a blend of fears concerning the growing trade wars between the US and China and concerns that rising central bank interest rates would dampen economic growth.
Gold fulfilled its role as a classic safe-haven asset against this backcloth and prices sprang back above $1,230 per ounce to three-month highs, carrying Centamin’s share price back above the critical 100p per share barrier as well. And there’s plenty more macroeconomic and geopolitical trouble out there that could blast bullion values even higher in the months and years ahead, from Brexit and the creation of a new Cold War to the escalation of those trade wars.
In rude health
A key benefit of investing in gold stocks rather than the yellow metal itself is the usual distribution of dividends. And heck, Centamin is quite a doozy in this regard.
The FTSE 250 company is expected by City analysts to pay a total dividend of 5.6 US cents per share in 2018, a figure that creates a mammoth 4.2% yield. The dial leaps to 5.6% for next year on account of the projected 7.5 cent reward.
Centamin’s programme of ramping up gold production certainly bodes well for future profits and thus dividend growth. And Primary Health Properties is another splendid all-rounder that is taking proactive steps to deliver exceptional earnings growth in the years ahead.
The real estate investment trust lets out primary healthcare facilities across the UK and Ireland and remains busy on an acquisition hunt across the British Isles. Over the past six weeks alone, it’s bought an accommodation complex for healthcare workers in Northumberland, as well as three primary care centres in and around Dublin, and it has the financial strength to keep on expanding following recent equity raising.
And why wouldn’t Primary Health Properties undertake ambitious expansion in the current climate? Rental growth continues to impress in the primary healthcare sector, the FTSE 250 business itself commenting that net rental income leapt 7.5% during January-October to £37.4m.
The business has raised dividends for 22 years on the spin and City brokers are forecasting further impressive hikes in the near term at least. At the moment, payments of 5.4p and 5.6p per share are predicted for 2018 and 2019 respectively, predictions that yield a stunning 4.9% and 5.1%. I fully expect Primary Health Properties to keep on delivering brilliant dividend growth a long time into the future too.