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Our 10 stamina shares

FEATURE: Nick Louth identifies 10 shares with stamina
October 28, 2010

1 Rotork: Specialist aerospace engineer Rotork exemplifies the idea that being the expert in a niche, however specialist, can reap long-term rewards. The company is a world leader in design and assembly of control systems for valves.

It's high margin and high tech. Over 20 years the company is the runaway leader of total return in the FTSE 250, having turned each pound invested into £76. The PE looks rich, but you can't argue with a record like that.

2 Antofagasta: With the new Esperanza mine coming on-stream, Chile's Antofagasta can still dig deep for shareholder rewards even as copper miners elsewhere struggle to keep the ore grade high. This is one resource stock whose own massive bull run is much longer than the current commodity super-cycle. With emerging markets demand continuing to grow, it wouldn't pay to bet against this miner.

3 Greggs: The high-street bakery chain can't claim to have offered the smoothest share price ride, but at least its long-term performance isn't as flaky as one of its signature sausage rolls. Greggs is one of the top 10 FTSE 250 performers in total return over 20 years, and with plans to open 600 stores in the next five years there isn't anything to indicate that its expansion days are over.

4 Provident Financial: Doorstep lender Provident Financial isn't everybody's ethical cup of tea, but lending money at high interest rates to the unbanked is a secure and defensible niche and Provident has a track record going back 20 years. Overseas operations are promising, too. The company also runs the Vanquis credit card brand, which is doing well – and on top of everything else there is a very sizeable dividend yield.

5 PZ Cussons: Investors may quibble with a PE ratio of 25, but you can't fault the long term return to investors in this personal care products firm, which puts it within the top 10 of all UK companies over 20 years. Cussons is a conservatively-run and cash-rich company, whose long-lived brands in soap, detergents and babycare still have a strong hold across Europe, Asia and Africa.

6 Mitie: The comprehensive spending review has been hanging over the price of support services group Mitie, but the long-term trend tells a different story. Although the company's shares haven't grown at quite the clip of sector stars Serco and Capita, the much higher dividend yield has helped narrow the long-term performance difference. Being smaller, its growth may take longer to slow down too.

7 Sage: The power of Sage's historic value-creation record is astonishing – it is second in the overall list of performers from 1990. While almost all tech stocks spiked dramatically in the run-up to the 2000 technology crash, Sage is one of the few that picked itself up and continued creating shareholder value. It doesn't seem particularly cheap – we have it on a 'high enough' rating – but the nature of the group's accounting software gives it a reliable business model with a genuinely defensible niche. One to watch for dips.

8 British American Tobacco: No surprises here. BAT may have marked time in the 1990s, when tech stocks were all the rage, but it has more than made up for it in the past decade. While smoking is practised by a besieged minority in the west, it is the switching from rough local names to BAT's more upmarket brands in emerging markets that is continuing to drive hefty growth and give ethical investors an irritable cough.

9 Diageo: Drinks giant Diageo, which owns Guinness, Smirnoff, Baileys, Johnnie Walker and Jose Cuervo, has taken a temporary hit from the effects of austerity in the developing world. Although it is not among the top performers over 20 years, in the long run it has the strength of its brands to protect it against competition, and a thirsty aspiring middle class in emerging markets to drive future growth. We last classed it as fairly priced but, on a long-term perspective, a PE ratio of 17 and a yield of 3.3 per cent may represent good value.

10 Rathbone Brothers: Investment manager Rathbone has managed the extraordinary trick of producing tremendous shareholder returns while many other financial service firms have fallen off a cliff. A fabulous yield is part of the answer of course, but then many banks had that and none of them figure in this list. It is the consistency of returns, reflected in the share price, and lack of dilutive calls for capital that have done shareholders proud.

Ten shares with stamina

NameTickerPrice (p)PE ratioYieldTotal return 1990 = £1
RotorkROR1,711221.90%£76
Antofagasta ANTO1,277231.20%£123
GreggsGRG45913.12.60%£18
Provident FinancialPFG78711.78.60%£23
PZ CussonsPZC39026.21.50%£27
MitieMTO21311.94%£34
SageSGE272172.75%£136
BAT BATS2,438174.30%£35
DiageoDGE1,167173.30%£5.74
RathboneRAT871186%£22
Prices, PE ratios and yields as of 26 Oct