Investors have many different reasons they invest, but the primary reason for investments through a self-managed super fund (SMSF) is to provide for retirement.
That means aiming for substantial growth in the accumulation phase, and then capital preservation and income in the retirement phase.
But SMSF investors also need to bear in mind that they could live for 30 or 40 years in retirement, and the last thing you'd want to happen is for your desired lifestyle to run out just when you need it most in your latter years, and be forced to rely on the government aged pension.
That means including a certain amount of growth assets in your SMSF even after you retire.
Here are three companies that provide solid growth and decent income, and are also suitable to add to your SMSF at almost any stage.
Burson Limited (ASX: BAP)
The retailer, wholesaler and distributor of car parts and accessories is growing strongly, and recently doubled in size through the acquisition of Metcash Limited's (ASX: MTS) automotive division – and boasts a market cap above $1 billion. Strong organic growth and the ability to squeeze out efficiencies and cost synergies should see Burson continue to grow for many years. While the dividend yield is only 2.1% currently, the company increased its dividend by 25% at its recent half-year. That suggests that the dividend should see significant growth over time.
Retail Food Group Limited (ASX: RFG)
Retail Food Group owns a large number of franchise brands and stores, including Donut King, Michel's Patisserie, Pizza Capers, Crust Pizza and Gloria Jeans. The company also has a large and growing wholesale and commercial operation. Retail Foods currently has 2,509 outlets – including 745 outside Australia delivering 17% of earnings – and plans to open 250 outlets in the 2016 financial year. As a result, Retail Foods is forecasting growth of around 20% in underlying net profit compared to 2015. And the bonus? – investors are also receiving a fully franked dividend yield of above 5%.
Flight Centre Travel Group Ltd (ASX: FLT)
The travel agent recently reported a 15% increase in revenues, after growing total transaction value (TTV) by more than $1 billion dollars in just six months. TTV is the total value of transactions the company books through its agents, for which it takes a small fee or commission. Clearly, the death of travel agents has been greatly exaggerated as Flight Centre not only continues to prosper but also grow strongly. Diversification into related businesses such as online-only travel sites, tour companies, corporate travel and internationally mean the company has plenty of levers to drive growth. Additionally, Flight Centre currently pays a 3.6% fully franked dividend, but the dividend is also growing strongly.
Foolish takeaway
Investors could do worse than add these three companies to their portfolio. I already own two of them, and would like to add the third in the near term.
