Oil power duo

Two standout performers have been from the oil sector. BP (LSE:BP) shares are up 54% in the past year, with Shell (LSE:SHEL) topping the FTSE 100 chart with an impressive 61% gain over the same period.

The main reason for the move higher in both stocks has come from the price of oil. For example, a year ago the price of Brent Crude was around $72 per bbl. It’s now at $90 and spent a good portion of H1 above $100.

This has been great for the oil majors, which can benefit from a higher price for the oil extracted. The risk is that this is a temporary blip, given the disruption of supply caused by the Russia-Ukraine crisis. Yet although I agree on the root cause, I don’t think that the price of oil is going to materially head lower over the next year.

The rebound in demand from the pandemic means that there’s a higher base level now, including everything from airlines to haulage companies. Further, a bear market for stocks and bonds doesn’t necessarily follow through to a commodity like oil. This is because it’s a tangible asset that actually gets used, meaning that the supply is constantly required.

On that basis, I think both oil stocks could outperform over the next year. With free cash, I’d be keen to add both to my portfolio.

Top UK insurance stock

Another company that has outperformed in the past year is Beazley (LSE:BEZ). The FTSE 250 specialist insurer has experienced a jump in its share price of 60%.

The business services a broad range of areas, including marine, aviation and cyber security. As such, the diversification achieved helps to ensure that it has demand from the businesses it services. In the recent half-year results, it achieved the best combined ratio figure since 2015.

The combined ratio is a profitability measure that’s mainly used in the insurance sector. It takes into account underwriting losses, expenses and other factors. Ultimately, if the percentage figure is above 100 it’s a bad thing, with anything below 100 being good. The latest figure for Beazley was 80%.

I think that this UK stock can continue to move higher even during an economic downturn. Insurance is a stable sector, with many businesses needing to take out insurance products as a priority. If companies go bust during a recession then there’s a risk of lower demand and some default risk on the policies taken out. However, I don’t see this as a huge issue overall, so am looking to buy the stock with free cash.

Strong resilience

Beazley (LSE:BEZ) is a firm specialising in non-life insurance. It operates globally and its segments include cyber, political, and marine risk. It currently trades at 480.6p.

In 2021, pre-tax profit was $369.2m. This was a sizeable swing from a pre-tax loss of $50.4m in 2020, during the worst of the pandemic. 

A reason for the increased profitability was higher demand in the cyber segment.

Furthermore, for the three months to 31 March, gross premiums rose 27% to over $1.2bn. This was an increase from $971m year-on-year.

The business also reported an estimate of $50m income from reinsurance relating to the conflict between Russia and Ukraine, which excludes aviation.

However, the company registered a $92m investment loss, down from a gain of $27m for the same period in 2021. I would like to see this improve in the future.

Despite this, earnings-per-share (EPS) has grown from ¢25 to ¢50.9. By my calculations, this is a compound annual EPS growth rate of 15.3%.

A FTSE 250 miner

Centamin (LSE:CEY) is a mineral exploration and development business operating in Australia and Africa. It currently trades at 85.5p.

The company’s 2021 gold production figure was in line with guidance, with a final reported total of 415,000 ounces. This was at the mid-point of previous estimates.

Investment bank Berenberg also recently increased its price target from 104p to 112p, because it believes there could be value in the firm’s Egyptian mining projects.

Despite this, pre-tax profit in 2021 halved to £153.6m from £315m the previous year. Revenue also fell by around 12%. 

Some of this financial decline is explained by a $35.2m impairment relating to exploration activities in Burkina Faso. 

The business is also at risk from inflation, as wages and cost of operations rise. There’s a possibility that this may eat into future profit margins.

However, Centamin is currently benefiting from historically high gold prices. It’s currently trading at $1,860 per ounce. Given the company’s rate of gold production, these conditions could be good news for revenue going forward.  

Overall, these two firms have the potential to produce good results in the future. Beazley has shown strong resilience following the pandemic, while Centamin could continue to benefit from high metal prices. While there are risks involved with investment in either business, I think the potential rewards could be great. I will be splitting my £1,000 equally and buying shares in both companies soon. 

• A number of companies with links to Russia and Ukraine fell as much as 33.9% in a single day
• Beazley is a strong insurance firm, with very solid results
• The TUI share price is still low and the business will benefit from relaxed pandemic restrictions

Towards the end of last week, the stock market declined dramatically. Indeed, the FTSE 100 index fell 4% in a single day. This was primarily caused by the Russian invasion of Ukraine. While most firms fell to some degree, some companies with Russian or Ukrainian exposure saw their share prices plummeting. Evraz, the iron ore miner controlled by Russian businessman Roman Abramovich, fell 29.5%. Furthermore, the gold company Polymetal dropped 33.9%. Wizz Air, an airline based in Hungary, crashed 11.3%. Due to their locations, all three of these firms were directly impacted by the military action. The next day, however, they were up 19.5%, 17%, and 12% respectively. That’s why I’m writing about a stock market correction, not a stock market crash. During this dip, I think I’ve found two strong companies to purchase for the long term as market volatility continues. Let’s take a closer look.

An insurance firm for a stock market correction

The first business, Beazley (LSE: BEZ), is a non-life insurance company operating across the globe. Its share price fell 6% last Thursday, to 448p, and rebounded 3.9% the following day. At the time of writing, it’s trading at 454p and is still below where it was this time last week, despite being up 28% year-on-year. Between calendar years 2017 and 2021, its earnings-per-share (EPS) increased from ¢25 ¢50.9. By my calculations, this means that the firm has a compound annual EPS growth rate of 15.3%. This is very strong and consistent.

Furthermore, revenue increased over the same period from $2.3bn to $4.6bn. Needless to say, things are going in the right direction. Investment firm ShoreCap also recently stated that Beazley was “well capitalised”. This is attractive, given the current stock market correction. On the other hand, its forward price-to-earnings (P/E) ratio is slightly higher than major rival, Axis Capital. This may indicate that the company is not necessarily cheap.

A FTSE 250 travel firm

The second company, TUI (LSE: TUI), is a travel business operating flights, hotels, and cruises. It fell 4% during the initial sell-off, to 237p, gaining 6% the next day. At the time of writing, it’s again trading at 237p, down 22% in a year.

In a trading update for the three months to 31 December 2021, the company announced that revenue had risen to €2.4bn. This was an increase from just €0.5bn for the same period in 2020. Furthermore, its losses narrowed from €675.8m to just €273.6m over the same period. These improving figures are exactly what I want to see when responding to a stock market correction. It’s worth noting, however, that progress may be impacted if another Covid variant emerges.

It may also be cheap when compared with easyJet. TUI has a forward P/E ratio of just 21.19, while easyJet’s is 142.86. Although the share price is low on account of the recent market volatility, I’m pleased that the company may also be undervalued. 

The stock market correction has caused panic, but I’m staying calm and sticking to my principle of buying quality growth stocks at bargain prices. I will be purchasing both Beazley and TUI today for my long-term portfolio. 

Many FTSE 250 companies still have expanding businesses. So, a FTSE 250 tracker fund can be a decent way to get some growth potential into a diversified portfolio.

But I reckon there’s even more potential for growth if I select some of the best stocks from within the FTSE 250 and invest directly in those. But, of course, higher potential also comes with higher risk if I concentrate my money into just a few names.

However, I’m prepared to embrace the risks in pursuit of higher returns. And in that spirit, I like the look of Beazley (LSE: BEZ) right now.

Pre-pandemic earnings recovered

The company is a global insurer with offices in Europe, Asia, and North America. In 2021, the business underwrote gross premiums worldwide of just over $4.6bn. And that achievement follows steady growth over more than three decades.

The areas covered by the firm include professional indemnity, cyber liability, property, marine, reinsurance, accident & life, political risks, and others. And in last week’s full-year results report for 2021, the company posted a “robust” pre-tax profit of just over $369m.

That outcome suggests a major recovery is underway in the business after the pre-tax loss of almost $50m in 2020. And chief executive Adrian Cox said first-party pandemic-related claims have “almost entirely been paid and fully accounted for“.

Cox said Beazley experienced growth across all its lines of business. And, looking ahead, he’s “particularly encouraged” by the opportunity in the cyber market where the company is seeing “significant” improvement in rates. 

Robust growth estimates

City analysts have pencilled in double-digit percentage increases for earnings in 2022 and 2023. And the directors reinstated dividends by declaring an interim payment of 12.9p per share for the 2021 trading year. They also declared the company’s intention to operate a progressive dividend policy in the years ahead.

Overall, Beazley strikes me as a business that has recovered from the effects of the pandemic with robust growth opportunities ahead. Meanwhile, with the share price near 502p, the forward-looking earnings multiple for 2023 is just under 10. And the anticipated dividend yield is running around 2.5%, when set against analysts’ expectations.

For a growing business with strong immediate prospects, I find that valuation to be undemanding.

Cyclicality could be a challenge

However, one of the uncertainties involved in an investment in Beazley shares is the inherent cyclicality of the business. Over the long term, the company has so far grown — a lot. But we’ve seen how fast events such as the pandemic can damage the business in the short term. And there’s a significant amount of risk for shareholders in that situation.

It’s also worth me bearing in mind the company goes ex-dividend on 17 February regarding the declared interim payment. So we’ll likely see some share price weakness as the stock adjusts to account for the payment.

Nevertheless, Beazley tempts me. And I’d add the stock to my long-term diversified portfolio with the aim of capturing its potential for ongoing growth.

With that in mind, here are the five mid-cap stocks I would acquire for my portfolio today. 

Shares to buy for 2022

The first enterprise on my list is the iron ore producer Ferrexpo (LSE: FXPO). This company operates in the Ukraine and sells iron ore worldwide, so it is not a play on the domestic economy.

However, it is a play on the global economic recovery as the price of iron ore has been rising over the past 12 months.

Demand for the vital steel ingredient has been increasing as countries around the world unleashed massive infrastructure spending plans to try and stimulate their economies after the pandemic. This is generating substantial profits for Ferrexpo and the company’s international peers.

Indeed, group profit before tax increased 165% year-on-year in the six months to the end of June. 

Management is planning to return a significant amount of this capital to investors. In a recent stock exchange announcement, the group said it will pay out 30% of free cash flow to investors as we advance. The report explains that it could also complement this with special dividends in periods of high profitability. 

This cash return policy and the group’s rising profits are the main reasons why I think this FTSE 250 company is one of the best shares to buy now. 

Challenges it could face include commodity price volatility and rising costs, which could hit profit margins. If profits begin to fall, shareholder returns may also decline. 

Real estate investment

Back here in the UK, I like the look of real estate investment trust Capital & Counties Properties (LSE: CAPC). 

This company owns a portfolio of properties in central London. As most of them are commercial, it has suffered a significant decline in income over the past 24 months. But as the UK economy continues to reopen, I expect property values and rental income to rebound. 

What’s more, as the majority of the company’s portfolio is located in the capital, I think its portfolio should outperform the rest of the country, which may struggle if the economic recovery grinds to a halt. 

Additional coronavirus restrictions are the most considerable risk the corporation faces today. Further restrictions could significantly impact levels of rent collection and weigh on property prices. In this scenario, the FTSE 250 company’s recovery would almost certainly slow. 

FTSE 250 recovery play

Speaking of recovery investments, I am also interested in buying the insurance group Beazley (LSE: BEZ). 

Over the past two years, this company has been entangled in a battle with business interruption insurance policyholders. Policyholders have been fighting the firm to pay out on policies due to the disruption from the pandemic. 

After a lengthy legal battle, the Financial Conduct Authority is forcing the corporation to meet these obligations. The subsequent payouts are having a significant financial impact on the company’s balance sheet. 

However, this challenge should only last for so long. At the same time, the international insurer is benefiting from rising insurance rates around the world. Higher rates should translate into higher profits and, as a result, help the company reinforce its balance sheet after the recent disruption.

Considering this recovery potential, I would like to add the FTSE 250 stock to my portfolio in 2022. 

The most considerable risk facing the enterprise is the risk of a significant loss from catastrophes. This is a general risk of doing business in the insurance sector. It is something all firms have to deal with at some point. Beazley’s survival could be at stake if the losses are too big. 

Commuting returns

Even though the latest set of coronavirus restrictions has brought back a work-from-home directive, over the past couple of months, it has become clear that many firms will require staff to return to officers after the pandemic. 

This suggests the outlook for Trainline (LSE: TRN) is looking up. Not only will the company be able to capitalise on this return to offices, but the number of leisure passengers using trains has also returned to pre-pandemic levels.

According to its latest trading update, group sales for the six months to the end of August increased 151% year-on-year. As revenues have recovered, the company has reduced its outstanding debts and overall losses. 

As the economy continues to rebuild in 2022, I think this trend will likely continue. That is why I would acquire Trainline for my FTSE 250 portfolio as a recovery play for next year. Of course, if the government introduces even more stringent restrictions, I will have to re-evaluate my position. This is by far the biggest risk the company faces right now. 

Another FTSE 250 recovery investment

My final recovery play is Restaurant Group (LSE: RTN). The company, which owns a selection of casual dining brands, including Wagamama, is reporting a rapid rebound in consumer spending at its locations. 

It has upgraded profit forecasts several times already this year. However, it has not yet commented on how recent restrictions will impact growth. Consumer confidence is likely to decline following the new rules. That will almost certainly impact growth in the restaurant sector. 

Still, management believes that the company’s robust trading performance will allow it to make a substantial contribution to reducing debt for the year.

If it can make a material dent in debt levels, Restaurant Group will have more financial flexibility heading into the new year. This could help the company capitalise on the economic recovery by freeing up cash to spend on marketing activities. 

As such, here are my top FTSE 250 shares. I would not hesitate to buy all of these stocks for my portfolio today. 

Top FTSE 250 stocks 

One theme that is attracting a lot of attention right now is recycling. As the world tries to get to grips with climate change, governments around the world are focusing on improving recycling rates. 

This is a dirty, complex business, which means the sector is not easy to penetrate. That is why I would buy FTSE 250 stock Biffa (LSE: BIFF). 

The waste and recycling company is one of the biggest in the UK, and it is expanding overseas too. The group’s sales for the first half of the year are expected to be around 3% higher than 2019. 

Thanks to this growth, the City reckons the stock is trading at a forward price-to-earnings (P/E) ratio of 20.2. I think that looks good value for such a defensive business. Last year, the firm’s sales slumped, but as recent figures show, that was just a blip in Biffa’s growth story. Management is also looking for acquisitions to supplement expansion. 

Risks the firm may face as we advance include rising costs, additional regulations, and competition. All of these challenges could weigh on growth. 

Bounce back 

Insurer Beazley (LSE: BEZ) reported significant losses last year thanks to the pandemic. The firm had to book some big losses on business interruption contracts it had underwritten. This also forced management to ask shareholders for more cash to meet losses. 

The good news is, the firm is now putting this issue behind it. Revenues and profits are set to rise this year, thanks in part, to a buoyant insurance market. Insurance rates are rising due to a string of natural disasters worldwide, which is helping Beazley bounce back from last year’s disaster. 

Gross premiums written increased by 29% in the nine months to 30 September to $3.2bn.

Unfortunately, the company is also having to set aside more cash to cover losses from natural catastrophes, but this is a risk of investing in the insurance sector. There will always be the potential for large losses. 

Still, I think the rising rates should more than offset these losses. That is why I would buy the stock today. 

Growth ahead

One of my favourite FTSE 250 growth stocks is Domino’s Pizza Group (LSE: DOM).

The group is a great operator. Its focus on the delivery market meant that it was primed and ready to glide through the pandemic. And now management is plotting further growth. 

In an update issued in the middle of October, Domino’s announced that it was planning to create 8,000 jobs as it expanded across its markets. The update also revealed that sales for the 13 weeks to 26 September rose 9.9% to £375.8m, or 8.8% on a like-for-like basis.

As the organisation gears up for the next stage of growth, I would buy the shares today. 

That said, I will be keeping an eye on the company’s competitors to see if they are gaining market share from the pizza delivery group. This could be a sign that it is focusing on growth too much, and not spending enough time meeting the demands of existing customers. 

FTSE 250 construction giant 

Balfour Beatty (LSE: BBY) is one of the best ways to play the upcoming construction boom across the UK in my opinion.

The UK government has outlined plans to spend over £100bn in the next few years on infrastructure across the country. As one of the largest construction contractors in the UK, I feel Balfour is primed to capture a large share of this spending. 

According to its latest trading update, issued in the middle of August, interim pre-tax profit was £35m for the six months to 2 July, compared with a loss of £26m a year ago.

Management is also so optimistic about the business’s growth potential that it lifted the company’s margin targets in its support services business to a range of 6% to 8%, from 3% to 5% previously. 

Based on Balfour’s own growth outlook, City analysts reckon the stock is trading at a forward P/E of just 12. I think that is far too cheap for this infrastructure growth play. As well as this attractive valuation, analysts say the stock will yield more than 3% next year. 

Having said all of the above, I will be keeping in mind the fact that the construction industry is highly volatile. It is usually the first to feel the pain in any economic downturn. As such, this stock might not be suitable for all investors. 

Nevertheless, considering its potential over the next few years, I would buy the shares for my portfolio now. 

Market challenger

The last of my stocks quintet is AJ Bell (LSE: AJB), which was originally launched to take on the big City stockbroking firms and their fat profit margins. In many ways, even though the business is now a £1.7bn company in its own right, it is still a challenger. 

The firm’s low-cost stockbroking service is proving to be very popular with investors, and it just keeps on growing. 

In an update for the year to 30 September, the company said total assets under administration rose 29% to £72.8bn. Customer numbers increased 30% to 382,754, while total net inflows rose 52% to £6.4bn.

Clearly, AJ Bell’s offering still resonates with investors. And considering this growth, even though the stock is a bit more expensive than the businesses I would usually buy, I would still add the shares to my portfolio. 

Some headwinds I will be keeping an eye out going forward include competition from even-lower-cost brokers such as Freetrade, as well as regulations. Additional regulatory costs could hit profit margins and may remove funds from the marketing budget, which would have a knock-on effect on growth. 

6% dividend promise

One stock that’s caught my eye after a solid trading update last week is BT Group (LSE: BT-A). Boss Philip Jansen shocked investors by cancelling the group’s dividend earlier this year, but I think this experienced manager is making the right moves.

Jansen plans to reinstate BT’s dividend during the next tax year, which starts in April. In the meantime, he’s using the extra cash to make much-needed investments in modernising BT and accelerating the group’s network upgrades.

Progress is being made. BT says the rollout of its fibre-to-the-premises (FTTP) network is now passing 42,000 units per week. The end goal is to retire copper telephone lines in many areas and provide fibre-only internet access. This process will open the door to much higher internet speeds.

The 5G mobile rollout is also continuing. BT says its EE network offers coverage in more places than any other operator.

Meanwhile, management’s guidance suggests the shares should offer a 6% dividend yield when the payout restarts later this year. That’s tempting, in my view. But should I buy this UK share?

It’s a tough market

The Covid-19 pandemic has stopped people travelling, hitting income from mobile roaming charges. That should pass, but I can see other more permanent risks.

One problem is that competition is tough. Most network operators offer similar services, so price matters. BT says average revenue per customer fell by around 6% last year, in both mobile and broadband. Returning to growth might not be easy.

However, this popular UK share now trades on just six times forecast earnings, with a potential yield of 6%. At this level, I see BT as a recovery play I’d be happy to consider.

This UK share looks too cheap to me

Shares in commercial insurer Beazley (LSE: BEZ) rose by 15% on Friday morning after the company’s 2020 results came in ahead of expectations.

Covid-related claims pushed Beazley to a loss of $50.4m last year. However, this was smaller than the $100m loss forecast by analysts.

Results this year are expected to improve significantly. Beazley’s management says it’s pricing insurance renewals at 15% above last year’s levels. Rate rises are normal after a disaster and should support 2021 profits. But I can still see a couple of potential risks.

The first is that the group still has some “longer tail liability classes” which will see Covid-related claims “from 2021 onwards.” We don’t yet know how big these claims will be.

A second concern is that, like most insurers, Beazley invests its premium cash to try and boost returns. The firm achieved an impressive investment return of 3% last year by profiting from the rapid market recovery.

Market conditions might be tougher in 2021 and investment returns could be lower. That could make a big difference to future profits.

Would I buy Beazley? Yes. The company had a good track record of growth before 2020. And I expect a strong result in 2021. Even after Friday’s gain, this UK share is trading on just 12 times forecast earnings. A dividend is expected in 2021 too.

At 370p per share, Beazley is currently trading at its most expensive since early January. Much fanfare around the specialist insurance provider’s full-year trading statement has prompted the share price to detonate.

Beating City forecasts

At first glance there’s doesn’t seem much to celebrate. Beazley reported a pre-tax loss of $50.4m for 2020, swinging from a profit of $267.7m a year earlier.

However, the market has cheered the fact that losses were less severe than anticipated. City analysts had expected the UK share’s pre-tax losses to be around double that $50.4m figure.

Beazley said that Covid-19 had adversely affected “a number of lines of business” last year. It said that the impact was felt most keenly at its contingency book as major events were postponed or cancelled across the globe.

All in all, Beazley made first-party losses of around $340m due to the pandemic, it said. Unsurprisingly, the insurance giant added that it expects further pain to come. However, it has taken steps to lessen the impact on its longer-tail liability classes where claims are anticipated to rise from this year onwards.

In other news, the company’s combined ratio rose nine percentage points from 2019 levels, to 109%, reflecting that significant increase in Covid-19-related claims.

Meanwhile, it saw gross premiums soar 19% year on year in 2020. This figure clocked in at $3.6bn and was supported by rate increases across Beazley’s divisions.

Beazley to reintroduce dividends soon?

Despite last year’s losses, Beazley chief executive Andrew Horton struck an upbeat tone. He said: “I am very positive about the year ahead. We have the capital strength to support our growth plans and look forward to a continued favourable rate environment and expansion of our specialist products globally.”

Investors have also responded positively to suggestions that dividends could be resumed at the business soon. Beazley said that last year’s heavy loss and uncertainty concerning Covid-19 prompted it to decide against paying a dividend at the end of that year.

However, it added that it is “fully committed to the progressive dividend strategy, and… focused on profitability and returning to paying dividends in 2021.”

City forecasts for Beazley could change in the event of the Covid-19 crisis persisting long into 2021. But today the number crunchers reckon the UK share will bounce back into the black this year and record pre-tax profits of $205m. They reckon the company will pay an 11.9p per share dividend in 2021 too. This creates a 3.2% dividend yield.

Strength-to-strength

One of the most successful insurance group’s trading in London today is Beazley (LSE: BEZ). Over the past decade, this company has gone from strength to strength.

Management has used the group’s experience in the UK market to expand around the world. And this has produced tremendous returns for shareholders. Over the past decade, the stock has yielded a total annual return of 21%. That’s enough to return an initial investment of £1,000 into around £9,000.

What’s more, it doesn’t look as if the business is going to slow anytime soon.

Growth returns

Since 2016, Beazley has been in a holding pattern. Insurance rates collapsed between 2015 and 2017, which made it harder for companies like Beazley to earn a decent return. However, this started to change in 2017 and 2018 when several large catastrophes inflicted heavy losses on the sector.

We can see just how much of an impact these low rates had on Beazley by looking at its combined ratio, which measures an insurance company’s profitability.

A ratio above 100% indicates the business is paying out more in expenses and claims than it receives in income (insurance premiums). A ratio below 100% tells us that the organisation is making a positive return. 

Between 2012 and 2016, Beazley’s combined ratio was below 90%. That’s extremely impressive. But since then, the company has struggled, with the combined ratio exceeding 100% for the past three years.

Nevertheless, with insurance rates increasing, management expects the combined ratio to return to the mid-90s in the near term. To put it another way, 2020 could be the year that Beazley returns to growth.

Income potential

On top of this growth potential, the stock also looks attractive from an income perspective. Management is targeting dividend growth of 5-10% per annum over the long term.

Recent trading updates from the business show it’s on track to meet this forecast in the current year. Current figures imply the shares have a dividend yield of 2.2%, which looks attractive in the current interest rate environment.

Margin of safety

From a valuation perspective, shares in Beazley appear to offer a margin of safety at current levels. The stock is trading at a price-to-earnings (P/E) ratio of 14.3 and a PEG ratio of 0.7, that metric suggests the shares offer growth at a reasonable price.

While insurance can be an unpredictable business, rising rates across the industry suggest Beazley seems to be on track to report impressive growth for 2020. As such, now could be the time for value-seeking investors to snap up a share of this global group, as it capitalises on the growing market after several years of preparation.

The most significant advantage the company has over buy-to-let property, in my opinion, is its global diversification in a growing market.

As the world economy continues to expand overall (despite trade wars) and many consumers become more affluent, insurers like Beazley are seeing their sales rising with more and more customers turning to the group to insure their assets against disaster. 

Growing earnings

Over the past six years, Beazley’s sales have grown at a compound annual rate of 5.3%. That might not seem like much, but because the market is only growing, over the long term, this steady revenue growth adds up. Over the past 30 years, the company has gone from having almost no income at all to sales of $2.6bn. 

I think this trend can continue, which is why I reckon the stock can help you make a million. Over the past decade, shares in Beazley have returned 20.7% per annum, including dividends, as the company has benefited from global growth and expansion in the US and Asia. 

I don’t think it is realistic to expect this 20%+ per annum return trend to continue, of course, but I believe there is a good chance the company can post annual earnings growth in the 5% to 10% range, which would an annual return in the region of 10% over the long term. This rate of return is enough to turn a £100,000 investment into £1m in just 24 years. 

Shares in Beazley are currently dealing at a PEG ratio of 0.5 for 2019, implying the stock offers growth at a reasonable price. On top of this discount valuation, there’s also a dividend yield of 2.1%. 

Copper champion

Alongside Beazley, I think copper miner Kaz Minerals (LSE: KAZ) could be a millionaire-maker stock. Kaz is one of the world’s largest pureplay copper miners.

Demand for this metal is only expected to rise as renewable energy becomes more widespread, and the world becomes more connected. Indeed, the copper market expanded at a compound annual rate of 4.2% in the decade to 2019, and analysts are expecting a similar rate for the next decade.

I expect Kaz to benefit significantly from this growth. The company is targeting 300,000 tonnes of copper production in 2019 and has a handful of big expansion projects in the works. These include its first mine outside of Kazakhstan, the Baimskaya copper project that it acquired earlier this year and is expected to cost $5.5bn to develop. 

Most mining companies would baulk at such a large commitment, but Kaz has a history of successfully developing large mining projects. I think the probability of the company repeating past success here is high.

At this point, it is difficult to tell how much value the Baimskaya copper project will create, but even without this, shares in Kaz look cheap. The stock is currently dealing at a forward P/E of 6.4 and supports a dividend yield of 1.5%.

I think the shares are worth double considering Kaz’s long-term potential, that’s without taking into account the $5.5bn Baimskaya mine, which could increase the group’s value by as much as 200%.

If the company manages to pull this development off, investors could see a four-to-fivefold return on their money, according to my calculations.