Privates schools fees are becoming almost out of reach for many families, but with some planning ahead you can set up a way to fund your children or grandchildren's education down the track.
Longevity themes to focus on include clean energy, food, cloud computing, ageing and banking.
Five shares I'd look to buy now and hold include:
Origin Energy Ltd (ASX: ORG) is in an excellent position to meet China's increasing demand for LNG with China being the second-largest importer of LNG after Japan. The Chinese government continues to push for clean energy, which has seen millions of people moving away from using coal for household heating to natural gas. With the weight of the population, China is expected to see growing demand for LNG after the next three to four years. The share price is up 34% for the year to $9.62 at the time of writing and is trading on a forward PER 16.4x. The dividend has been suspended for 1H18 as the company focuses on reducing its debt.
Woolworth Group Ltd (ASX: WOW) is winning the grocery price war with Aldi and Coles. The share price has been boosted by positive reports by analysts that predict Woolworths will do well over the next 24 months or so. By investing in customer service and lowering prices, as well as focusing on a long-term growth strategy, the company has seen stronger sales. Aldi continues to concentrate on the store experience with no plans for an online website, home delivery or click and pay. Woolworths shares are up 3% for the year and are up 6% in a month to $27.74. The shares are trading on a forward PER of 22.4x compared to the median PER for the Food & Staples Retailing industry of 17.6x. The current annual dividend yield is 3%.
Challenger Ltd (ASX: CGF) is the leading provider of annuities in Australia, which is supported by an ageing population and the lack of retirement products available. The share price is down 18% for the year to $10.84. It is trading on a forward PER of 16x and an annual dividend yield of 3%. A weak recent quarterly update has not helped the share price, although management has reassured that Challenger is on target to meet profit guidance. The outlook for earnings growth remains subdued, but it is a solid company that is likely to continue to deliver.
National Australia Bank Ltd (ASX: NAB), of the four major banks, is the bank I like despite the royal commission revealing false witnessing of customers' signatures. Although that was the wrong thing to do, it seems to be the lesser evil of the practices of the other banks. The share price has fallen like all the other banks but to a lesser extent. The outcomes from the royal commission will hopefully change the culture of the banks, and NAB will return to focusing on what the company does best, which is banking. NAB is paying an annual dividend yield of 7%, trading on a forward PER of 12x.
Nextdc Ltd (ASX: NXT) is not a value stock trading on a high PER, but the company is in the best position to be a market leader in cloud computing in Australia. Recently Microsoft's surging cloud business provided a substantial boost to Microsoft's profit. Morgan Stanley and Citi both recently increased their price targets to $9.20 and $8.40, respectively, while the current price of Nextdc is $6.96.
