If you're diligently saving and investing for your own retirement, then you should consider an investment time frame that extends beyond 3-5 years. The reason for this, in my opinion, is that well-placed companies in good sectors are given time to demonstrate their profitability and growth credentials.
Below, I've come up with three stock ideas for your portfolio that all pay yields of more than 3% and show promise for increased earnings and dividends in the years ahead.
Carsales.Com Ltd (ASX: CAR)
If you're looking to buy or sell a car, then it's hard to go past the carsales.com.au website. The more cars for sale on the site, the more buyers. The more buyers, the more sellers — such are the benefits of network effects.
The company has a dominant position in the Australian motor classifieds market, and is expanding internationally which gives investors a nice growth option if it can make a success of itself overseas.
The company's stock gives investors at current prices a fully-franked dividend yield of 3.3% and is forecast to grow its revenue over the next couple of years in the high single-digits.
BT Investment Management Ltd (ASX: BTT)
Managing other people's money is the core business of BT and it's been pretty successful to date, growing its funds-under-management (FUM) to $87 billion — both here in Australia and overseas.
Given the need for ordinary people to have more money saved for retirement — or other important future goals such as education costs for children — then it's a safe bet that BT's FUM in the next 5+ years will be higher than it is today.
BT has proven itself to be a steady performer in growing its revenues and it currently pays a partially-franked dividend yield of 3.6%.
Melbourne IT Limited (ASX: MLB)
What Melbourne IT does is helps its clients to operate their business online via the provision of internet domain name services, video content delivery, cloud and online security services, and web hosting. In short, the company is well placed to benefit from the increasing trajectory of business and consumers conducting more and more of their affairs online.
With a steady growth in earning-per-share and dividends expected through to 2019, this could be a useful stock selection as a part of a diversified portfolio.
The current yield is a fully-franked 3.2%.
Foolish takeaway
My maths teacher at school used to tell me 'there's more than one way to skin a cat' [when it came to mathematical problem solving]. And so it is in the world of investing in attempts to solve the dilemma of knowing which stocks to buy, at what price, and for how long.
Each of the companies above are situated in industries which have economic tailwinds behind them and show promise for sustained growth over the long run — hence giving you every chance to afford a dignified retirement.
If you're needing greater income from your investments than what's presented above, then I can also recommend our stock idea which you can obtain simply by clicking on the link below.
