LONDON — The last five years have been tough for those in retirement. Portfolio valuations have been hammered and annuity rates have plunged. There’s no sign of things improving anytime soon, either, as the eurozone and the U.K. economy look set to muddle through at best for some years to come.

A great way of protecting yourself from the downturn, however, is by building your retirement fund with shares of large, well-run companies that should grow their earnings steadily over the coming decades. Over time, such investments ought to result in rising dividends and inflation-beating capital growth.

In this series, I’m tracking down the U.K. large-caps that have the potential to beat the FTSE 100 over the long term and support a lower-risk income-generating retirement fund (you can see the companies I’ve covered so far on this page).

Today, I’m going to take a look at Croda International  , the chemical business that makes everything from industrial lubricants to skincare products.

Croda International vs. FTSE 100
Let’s start with a look at how Croda has performed against the FTSE 100 over the last 10 years:

Source: Morningstar. Total return includes both changes to the share price and reinvested dividends. These two ingredients combined are what make it possible for equity portfolios to regularly outperform cash and bonds over the long term.

Croda’s strong growth over the last five years has seen it outperform the FTSE 100 by a factor of three. The speciality chemicals firm was promoted into the FTSE 100 in March 2012, highlighting the substantial growth opportunities that can be available among FTSE 250 companies. FTSE 100 membership means that Croda is now widely owned by pension funds and index trackers — so will it make a good retirement share?

What’s the score?
To help me pinpoint suitable investments, I like to score companies on key financial metrics that highlight the characteristics I look for in a retirement share. Let’s see how Croda shapes up:

Here’s how I’ve scored Croda International on each of these criteria:

Croda International has provided investors with a textbook example of successful growth over the last five years, thanks to a combination of organic growth and well-judged acquisitions. These impressive levels of growth are likely to tail off as the company gets bigger, but it remains well positioned for further expansion, thanks mainly to rising demand for its proprietary skin care products, which are widely used in cosmetics.

Croda’s consumer care division accounted for 56% of sales last year and around 73% of operating profit. The firm is accelerating its investment in Latin American markets, and CEO …read more

Source: FULL ARTICLE at DailyFinance