High 10 Earnings Progress Stocks with Dividends for 2021
On this article we’ll check out the High 10 Earnings Progress Stocks with Dividends for 2021. Click on to skip forward and see the High 5 Earnings Progress Stocks with Dividends for 2021.
There are many metrics one can use to guage firms and uncover promising funding concepts, a few of which may have roughly relevance relying on the trade or progress stage of an organization. Considered one of our favorites, and one which our subscribers have made large features off, is hedge fund sentiment (see extra beneath).
One other dependable indicator is an organization’s earnings per share, which gives a fast glimpse into an organization’s profitability and is a key driver of share costs. Earnings energy additionally performs a serious position in an organization’s potential to make dividend funds to its shareholders, giving them somewhat slice of the corporate’s income, so the 2 very a lot go hand-in-hand.
With the coronavirus pandemic in full swing, earnings have fallen closely throughout the board and may not recuperate till 2022, making commonplace comparisons and analyses tough. Bank of America tasks the S&P 500’s EPS will flop by 23% this yr and received’t make a full restoration to 2019 ranges subsequent yr both.
To uncover some world-class earnings progress stocks we turned to Rajiv Jain’s GQG Companions, a Florida-based boutique funding agency that was based in 2016 by Mr. Jain following a profitable two-decade run at Vontobel Asset Administration. Throughout his time at Vontobel, the agency raised its belongings beneath administration to $50 billion from simply $400 million, and Mr. Jain has loved comparable explosive progress together with his personal agency, having grown AUM to over $30 billion (by means of March 2020) in lower than 4 years. GQG focuses its investments on firms with sturdy earnings progress and nice long-term prospects.
GQG Companions’ Rising Markets Fairness Fund, which is one in every of its 5 methods, has delivered unstable returns since its 2017 inception, returning 31.60% in its first yr earlier than shedding 17.43% in 2018. The technique was a winner once more in 2019 with returns of 19.65%. After a tough begin to 2020, the technique had a compound annual return of 4.4% by means of April 2020.
There’s an excellent purpose why we pay shut consideration to hedge fund sentiment earlier than making funding choices. Our analysis has proven that hedge funds’ small-cap stock picks managed to beat the market by double digits yearly between 1999 and 2016, although the margin of outperformance has been declining lately. Nonetheless, we have been nonetheless in a position to determine prematurely a choose group of hedge fund holdings that outperformed the S&P 500 ETFs by greater than 66 share points since March 2017 (see the small print right here). We have been additionally in a position to determine prematurely a choose group of hedge fund holdings that underperformed the market by 10 share points yearly between 2006 and 2017. Apparently the margin of underperformance of those stocks has been rising lately. Traders who’re lengthy the market and quick these stocks would have returned greater than 27% yearly between 2015 and 2017. We’ve got been monitoring and sharing the record of those stocks since February 2017 in our quarterly publication. Even when you aren’t comfy with shorting stocks, it is best to at the very least keep away from initiating lengthy positions in stocks which are in our quick portfolio.
Let’s try ten of GQG Companions’ prime stock picks, which could possibly be poised for sturdy and sustainable earnings progress within the coming years, which may likewise trickle all the way down to their dividend payouts.
Progressive Corp (NYSE:PGR) kicks off our record, with GQG Companions opening a brand new stake within the auto insurer throughout Q3, shopping for 3.36 million shares. It’s not stunning that GQG has taken notice of PGR given the corporate’s fast earnings progress over the past three years following a decade of largely flat earnings. Progressive hit $6.75 in EPS in 2019, practically 4x better than its earnings in 2016. Along with its variable annual dividend payout, which amounted to $2.25 in January 2020, Progressive additionally started paying out a quarterly dividend of $0.10 starting final yr.
In its Q2 investor letter, Francois Rochon’s Giverny Capital acknowledged that whereas vehicles ought to develop into safer and accidents are more likely to decline sooner or later with wider adoption of self-driving automobiles, they’re additionally changing into dearer to restore, which ought to maintain insurance coverage charges excessive and permit Progressive to proceed capitalizing on its trade main margins. PGR was Giverny Capital’s 5th-largest 13F holding on September 30.
9. Newmont Corp (NYSE:NEM)
Gold mining firm Newmont Corp (NYSE:NEM), which has grown its EPS over every of the final three years, is up subsequent. GQG Companions owned 5.23 million NEM shares on the finish of Q3, 23% greater than it did in the course of 2020. Newmont’s EPS hit $3.82 in 2019, a better than 6-fold improve from the yr earlier than and its greatest efficiency since 2010 due to the price of gold hovering by means of 2019, a development which has continued in 2020.
First Eagle Funding Administration praised Newmont’s management and powerful stability sheet in its Q2 investor letter and identified that whereas many firms have been slashing their dividend funds this yr, Newmont had as an alternative raised its quarterly payouts by 79% (on the time). Newmont hiked its quarterly dividend by one other 60% in October, giving NEM shares a ahead yield of two.74%.
8. Lockheed Martin Corp (NYSE:LMT)
After a quick earnings blip in 2017, aerospace large Lockheed Martin Corp (NYSE:LMT) returned to huge progress over every of the final two years, hitting a file $22.09 EPS in 2019. GQG Companions owned a $471 million stake in LMT on September 30, rising its place by 44% in Q3 to 1.23 million shares.
Lockheed just lately hiked its quarterly dividend funds by 8% to $2.60, which gives an annual yield of two.78%. The corporate’s payout ratio has returned to comfy ranges after briefly rising above 1.Zero in 2017, and ought to be in no hazard any time quickly given Lockheed’s immense backlog and $6 billion in free cash stream.
Rajiv Jain’s GQG raised its stake in Visa Inc (NYSE:V) by 4% throughout Q3, to three.74 million shares. The 6th hottest stock amongst hedge funds, Visa grew earnings every year between 2017 and 2019 earlier than experiencing a slight dip throughout its fiscal 2020, which led to September. That may actually be ignored given the circumstances, together with huge declines in cross-border volumes and the related charges that accompany them. Visa raised its quarterly dividend funds by 6.66% to $0.32 earlier this yr and maintains a miniscule payout ratio of about 0.25.
6. UnitedHealth Group Inc ((NYSE:UN)H)
Closing out the first-half of our record is UnitedHealth Group Inc ((NYSE:UN)H), which GQG Companions owned 2.65 million shares of on September 30, 25% greater than it did on June 30. The well being insurer and first care supplier has grown its earnings per share for 11 consecutive years, attaining a 6-fold improve throughout that point to $14.55 in 2019.
UNH has in flip been in a position to tremendously improve its dividend funds throughout that point, from a miniscule $0.03 quarterly fee in 2009 to $1.25 this yr after one other 15.7% hike in June. In its Q3 investor letter, Polen Capital famous that it expects UnitedHealth to proceed rising EPS within the low-to-mid-teens vary going ahead.
Click on to proceed studying and see the High 5 Earnings Progress Stocks with Dividends for 2021. Disclosure: None. High 10 Earnings Progress Stocks with Dividends for 2021 is initially revealed at Insider Monkey.