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5 Stocks with Impressive Growth Prospects and Yields
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It is no news that the Brexit vote has sent shock waves throughout the global financial markets.
However, the U.S. equity market has emerged strong from the aftermath. Though the news led to over 5% drop in the benchmark S&P 500 index in just two trading sessions, the market has staged an incredible turnaround thereafter.
Moreover, the recent job data has painted a rosy picture of the labor market, dispelling fears over the health of the U.S. economy. Positive economic data showing a rapid improvement in the U.S. manufacturing activity in June on the back of new orders and increased output and exports also lifted spirits.
Thus, as the dust settles on the Brexit chapter, we can hope for a marked improvement in broader market conditions in the near term. Thereby, making it ideal for investors to put their money into growth stocks for handsome returns.
Should You Bank on Only Growth?
However, it might not be very wise to invest in stocks based only on the growth factor in markets as capricious as these where investment outlooks change every minute.
Thus, to rule out risks pertaining to this, we advice investors to balance their portfolios by investing in high-yielding stocks with bright prospects. Notably, dividend stocks provide much downside protection through sizable yields and also act as a hedge against equity market risks, thereby shielding the portfolio from economic upheavals.
However, the trade-off between growth and dividends makes it a little tricky to zero-in on stocks with a high payout ratio and solid prospects. Nonetheless, though rare, there are companies with efficient capital allocation policies in place that allow them to make high dividend payments and also invest in growth projects. Although it is like trying to find a needle in a haystack for the average investors, we have eased the process.
Zacks to the Rescue
With the help of the Zacks Stock Screener, we have zeroed-in on five stocks with solid growth prospects and a Zacks Rank #1 (Strong Buy) or 2 (Buy) along with a dividend yield of above 3%.
To ensure that our stocks stick to the growth track, we took the assistance of our new style score system and refined our screen further by adding a good Growth Style Score criteria.
Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ when combined a Zacks Rank #1 or #2 offer the best investment opportunities in the growth investing space.
5 Solid Picks
Here are the five stocks that follow the ‘holy grail’ of dividend-growth investing and offer tremendous growth potential, high-dividend yield and consistent and safe operations.
Further, most of these picks have been seeing impressive earnings estimate revision activity of late, which suggests that analysts are getting increasingly bullish on the stocks.
Headquartered at Richmond, VA, Altria Group, Inc. (MO - Free Report) is the parent company of Philip Morris USA, Inc. (PM USA), UST LLC (UST), John Middleton Inc. and Philip Morris Capital Corporation (PMCC). The extended agreement with Philip Morris International, Inc. (PM - Free Report) regarding technology sharing and distribution of e-vapor products is commendable. Moreover, overall, the company’s strong portfolio of tobacco brands and pricing power are encouraging.
The company carries a Zacks Rank #2 and yields dividend of 3.2%. Furthermore, a Growth Style Score of ‘A’ coupled with projected sales and EPS growth of 11.3% and 8.9%, respectively, for 2016, lends more potential to the stock.
Based in Santa Clara, CA, Intel Corporation (INTC - Free Report) is one of the world’s leading producers of semiconductor components and digital platforms. Data center is currently the most promising area, where macro factors are impacting the enterprise side (cloud remains strong). Meanwhile, Intel’s investments in IoT, security and memory, greater integration in products, process technology lead and Chinese collaborations bode well.
This Zacks Rank #2 company has a dividend yield of 3.1% and a Growth Style Score of ‘A’. Upward estimate revisions for 2016 and 2017 earnings add to the optimism. Additionally, for full-year 2016, sales growth is pegged at 3.1% while EPS is likely to grow 4.2%.
Based in Hamilton, Bermuda, Frontline Ltd (FRO - Free Report) is a shipping company that is engaged in the seaborne transportation of crude oil and oil products worldwide. The company carries a Zacks Rank #2, a Growth Style Score of ‘A’ and has a dividend yield of 21.3%.
Also, upward estimate revisions reinstate hope on the stock’s prospects. The Zacks Consensus Estimate for 2016 and 2017 has climbed 40.6% and 36.4%, respectively, over the last 60 days. Further, for full-year 2016, sales growth is pegged at a healthy 33.4%.
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB - Free Report) operates and manages 13 international airports in the north and central regions of Mexico. The company’s airports serve Monterrey, Mexico's third largest metropolitan area, the tourist destinations of Acapulco, Mazatlan, and Zihuatanejo, and nine other regional centers and border cities. This Zacks Rank #2 company has a dividend yield of 3.1%.
Moreover, the company has been seeing an upward trend in earnings estimate revision. Over the past 60 days, the Zacks Consensus Estimate for 2016 and 2017 earnings have increased 5.9% and 5.3%, respectively. Additionally, a Growth Style Score of ‘A’ and full-year 2016 sales and EPS growth projection of 4.7% and 36.2%, respectively, bode well.
Headquartered in Calgary, Canada, Enbridge Inc. (ENB - Free Report) is a leader in energy transportation and distribution in North America and internationally. This Zacks Rank #2 company has a dividend yield of 4.1%.
A Growth Style Score of ‘A’ and upward estimate revisions for 2016 and 2017 suggest further bullishness ahead. What’s more, for full-year 2016, sales growth is pegged at 10.3% while EPS is likely to grow a healthy 8.7%.
High-Yielding Growth Stocks: A Fairly Safe Haven
Growth stocks could be big winners at this point with the markets looking up. However, betting on stocks just based on potential growth would be foolhardy. Thus, when the filter of fundamentals and high yield is added, the risk level is somewhat taken care of.
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5 Stocks with Impressive Growth Prospects and Yields
It is no news that the Brexit vote has sent shock waves throughout the global financial markets.
However, the U.S. equity market has emerged strong from the aftermath. Though the news led to over 5% drop in the benchmark S&P 500 index in just two trading sessions, the market has staged an incredible turnaround thereafter.
Moreover, the recent job data has painted a rosy picture of the labor market, dispelling fears over the health of the U.S. economy. Positive economic data showing a rapid improvement in the U.S. manufacturing activity in June on the back of new orders and increased output and exports also lifted spirits.
Thus, as the dust settles on the Brexit chapter, we can hope for a marked improvement in broader market conditions in the near term. Thereby, making it ideal for investors to put their money into growth stocks for handsome returns.
Should You Bank on Only Growth?
However, it might not be very wise to invest in stocks based only on the growth factor in markets as capricious as these where investment outlooks change every minute.
Thus, to rule out risks pertaining to this, we advice investors to balance their portfolios by investing in high-yielding stocks with bright prospects. Notably, dividend stocks provide much downside protection through sizable yields and also act as a hedge against equity market risks, thereby shielding the portfolio from economic upheavals.
However, the trade-off between growth and dividends makes it a little tricky to zero-in on stocks with a high payout ratio and solid prospects. Nonetheless, though rare, there are companies with efficient capital allocation policies in place that allow them to make high dividend payments and also invest in growth projects. Although it is like trying to find a needle in a haystack for the average investors, we have eased the process.
Zacks to the Rescue
With the help of the Zacks Stock Screener, we have zeroed-in on five stocks with solid growth prospects and a Zacks Rank #1 (Strong Buy) or 2 (Buy) along with a dividend yield of above 3%.
To ensure that our stocks stick to the growth track, we took the assistance of our new style score system and refined our screen further by adding a good Growth Style Score criteria.
Our Growth Style Score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth. Our research shows that stocks with Growth Style Scores of ‘A’ or ‘B’ when combined a Zacks Rank #1 or #2 offer the best investment opportunities in the growth investing space.
5 Solid Picks
Here are the five stocks that follow the ‘holy grail’ of dividend-growth investing and offer tremendous growth potential, high-dividend yield and consistent and safe operations.
Further, most of these picks have been seeing impressive earnings estimate revision activity of late, which suggests that analysts are getting increasingly bullish on the stocks.
Headquartered at Richmond, VA, Altria Group, Inc. (MO - Free Report) is the parent company of Philip Morris USA, Inc. (PM USA), UST LLC (UST), John Middleton Inc. and Philip Morris Capital Corporation (PMCC). The extended agreement with Philip Morris International, Inc. (PM - Free Report) regarding technology sharing and distribution of e-vapor products is commendable. Moreover, overall, the company’s strong portfolio of tobacco brands and pricing power are encouraging.
The company carries a Zacks Rank #2 and yields dividend of 3.2%. Furthermore, a Growth Style Score of ‘A’ coupled with projected sales and EPS growth of 11.3% and 8.9%, respectively, for 2016, lends more potential to the stock.
Based in Santa Clara, CA, Intel Corporation (INTC - Free Report) is one of the world’s leading producers of semiconductor components and digital platforms. Data center is currently the most promising area, where macro factors are impacting the enterprise side (cloud remains strong). Meanwhile, Intel’s investments in IoT, security and memory, greater integration in products, process technology lead and Chinese collaborations bode well.
This Zacks Rank #2 company has a dividend yield of 3.1% and a Growth Style Score of ‘A’. Upward estimate revisions for 2016 and 2017 earnings add to the optimism. Additionally, for full-year 2016, sales growth is pegged at 3.1% while EPS is likely to grow 4.2%.
Based in Hamilton, Bermuda, Frontline Ltd (FRO - Free Report) is a shipping company that is engaged in the seaborne transportation of crude oil and oil products worldwide. The company carries a Zacks Rank #2, a Growth Style Score of ‘A’ and has a dividend yield of 21.3%.
Also, upward estimate revisions reinstate hope on the stock’s prospects. The Zacks Consensus Estimate for 2016 and 2017 has climbed 40.6% and 36.4%, respectively, over the last 60 days. Further, for full-year 2016, sales growth is pegged at a healthy 33.4%.
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (OMAB - Free Report) operates and manages 13 international airports in the north and central regions of Mexico. The company’s airports serve Monterrey, Mexico's third largest metropolitan area, the tourist destinations of Acapulco, Mazatlan, and Zihuatanejo, and nine other regional centers and border cities. This Zacks Rank #2 company has a dividend yield of 3.1%.
Moreover, the company has been seeing an upward trend in earnings estimate revision. Over the past 60 days, the Zacks Consensus Estimate for 2016 and 2017 earnings have increased 5.9% and 5.3%, respectively. Additionally, a Growth Style Score of ‘A’ and full-year 2016 sales and EPS growth projection of 4.7% and 36.2%, respectively, bode well.
Headquartered in Calgary, Canada, Enbridge Inc. (ENB - Free Report) is a leader in energy transportation and distribution in North America and internationally. This Zacks Rank #2 company has a dividend yield of 4.1%.
A Growth Style Score of ‘A’ and upward estimate revisions for 2016 and 2017 suggest further bullishness ahead. What’s more, for full-year 2016, sales growth is pegged at 10.3% while EPS is likely to grow a healthy 8.7%.
High-Yielding Growth Stocks: A Fairly Safe Haven
Growth stocks could be big winners at this point with the markets looking up. However, betting on stocks just based on potential growth would be foolhardy. Thus, when the filter of fundamentals and high yield is added, the risk level is somewhat taken care of.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>