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A Self-Invested Personal Pension (SIPP) is an investment vehicle that by its very nature involves taking a long-term view. As someone who believes in investing for the long term, that suits me well.
Here are three stocks that I find unusual that, at the right price, I would be happy to own in my SIPP.
Diageo
Beverage maker Diageo (LSE: DGE) was a share I had been eyeing for a long time. But what I saw as the expensive share price made me stop buying. Last year, however, saw that number drop. It is 15% lower than it was 12 months ago.
That price drop reflects investor anxiety. The company's soft business performance in Latin America recently may be a sign of things to come elsewhere, as weak economic performance and declining alcohol consumption rates among young consumers threaten to feed off high alcohol demand.
However, Diageo has been diversifying into non-alcoholic beverages in recent years. Meanwhile, its portfolio of premium beer and spirits products continues to be a profit engine year after year.
That has helped it build a unique record of increasing its dividend per share annually for more than three decades. That means Diageo is one of the FTSE 100's few Dividend Aristocrats.
Spirax
One of those advantages of serial dividend is Spirax (LSE: SPX). Diageo may not be a household brand (unlike most tipples) – but that's even more true of Spirax.
Selling industrial products such as steam engineering components to business customers, such a lack of widespread product awareness is not surprising. But while it may not be flashy, Spirax is a solid example of a successful business.
It has identified a large, solid market. Its products are critical to the efficiency of a large range of industrial equipment, meaning customers are willing to pay a premium for quality even in a weak economy. That has helped the company grow its dividend year-on-year for much longer than Diageo.
But while Spirax has an excellent business and an exceptional dividend record, it also has the share price to show for it.
Trading at 26 times earnings, Spirax is too expensive to add to my SIPP at the moment. It faces risks including weak demand in China that has already hurt profits. While revenue grew last year, profit after tax fell by 18%.
Scottish Mortgage
Scottish Mortgage Investment Trust (LSE: SMT) may not have increased its dividend per share every year with the same enthusiasm as Spirax but its track record is still unique. The fund last cut its dividend after the stock market crash of 1929.
That doesn't mean it's stuck in the past. Far from it. The investment trust builds a portfolio of growth stocks from countries around the world. Over the past five years, that has seen the price increase by 78% (even after the 44% fall from the 2021 high).
Investing in businesses with unproven business models is risky. Scottish Mortgage has a stake in battery maker Northvolt, for example, and that company is currently facing major challenges including low-cost competition.
Over time, the Scottish Mortgage approach has proven to be very profitable. I think it is a share that investors should consider buying for their SIPP.
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