Wednesday, November 12, 2014

8 Stocks to Beat Warren Buffett's Portfolio Return Easily

Warren Buffett is one of the most trusted investors in the world. When he put money on the table, many institutional investors follow his moves and discover if they could make any money with the stocks he has chosen.

When I look at the recent earnings figures of some of his investments, I saw that many stocks reported results not in-line with investor’s expectations. As a result, they got sold massively out.

IBM, Coca Cola, Tesco, Exxon and now diabetes drug maker Sanofi who lost yesterday nine percent. Are these long-term opportunities or will they run flat in the future? I don't know but what I know is that some of the past results of those companies are not comparable to the current economic environment.

I personally checked some of his new investments and came to the result that Warren is building a new investment company, based on energy and capital intensive stocks. 

I'm a fundamental driven growth investors who love to see that the company is paying a good part of its free cash flow to shareholders.

The market has many great companies to offer which have doubled sales in the past decade and paid 40 percent of the current stock price in dividends over the recent ten years. That's a good number in my view.

Today, when the markets have recovered, I start a new screen of high-quality dividend stocks with attractive fundamentals. I know that it is hard to find cheap companies in highly valuated markets but sometimes we must be creative to calculate the real values.

Below are five ideas with double digit-expected earnings per share growth figures for the next five years. They have also a lower beta than the overall market and acceptable debt-to-equity ratios.

I've compiled many stocks from different sectors and industries in order to create a good diversification. What do you think about my new ideas? Are they good enough to buy or do you still have some of them? Please let me know and thank you for reading and commenting.

These are my results:

#1 Automatic Data Processing (NASDAQ:ADP) has a market capitalization of $36.86 billion. The company employs 61,000 people, generates revenue of $12.206 billion and has a net income of $1.502 billion.

Automatic Data Processing’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.559 billion. The EBITDA margin is 20.97 percent (the operating margin is 18.09 percent and the net profit margin 12.31 percent).

Financials: The total debt represents 6.82 percent of Automatic Data Processing’s assets and the total debt in relation to the equity amounts to 32.75 percent. Due to the financial situation, a return on equity of 23.37 percent was realized by Automatic Data Processing.

Twelve trailing months earnings per share reached a value of $3.11. Last fiscal year, Automatic Data Processing paid $1.83 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.83, the P/S ratio is 3.05 and the P/B ratio is finally 5.56. The dividend yield amounts to 2.49 percent and the beta ratio has a value of 0.85.


Long-Term Stock Price Chart Of Automatic Data Processing (ADP)
Long-Term Dividend Payment History of Automatic Data Processing (ADP)
Long-Term Dividend Yield History of Automatic Data Processing (ADP)

Raytheon (NYSE:RTN) has a market capitalization of $30.64 billion. The company employs 63,000 people, generates revenue of $23,706.00 million and has a net income of $1,949.00 million.

Raytheon’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,383.00 million. The EBITDA margin is 14.27 percent (the operating margin is 12.39 percent and the net profit margin 8.22 percent).

Financials: The total debt represents 18.23 percent of Raytheon’s assets and the total debt in relation to the equity amounts to 42.90 percent. Due to the financial situation, a return on equity of 20.27 percent was realized by Raytheon.

Twelve trailing months earnings per share reached a value of $6.57. Last fiscal year, Raytheon paid $2.70 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.37, the P/S ratio is 1.31 and the P/B ratio is finally 2.89. The dividend yield amounts to 2.39 percent and the beta ratio has a value of 0.69.


Long-Term Stock Price Chart Of Raytheon (RTN)
Long-Term Dividend Payment History of Raytheon (RTN)
Long-Term Dividend Yield History of Raytheon (RTN)

Novo Nordisk (NYSE:NVO) has a market capitalization of $96.14 billion. The company employs 40,226 people, generates revenue of $14,295.59 million and has a net income of $4,307.90 million.

Novo Nordisk’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5,865.89 million. The EBITDA margin is 41.03 percent (the operating margin is 37.68 percent and the net profit margin 30.13 percent).

Financials: The total debt represents 0.31 percent of Novo Nordisk’s assets and the total debt in relation to the equity amounts to 0.51 percent. Due to the financial situation, a return on equity of 60.54 percent was realized by Novo Nordisk.

Twelve trailing months earnings per share reached a value of $1.66. Last fiscal year, Novo Nordisk paid $0.57 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 26.14, the P/S ratio is 6.40 and the P/B ratio is finally 13.25. The dividend yield amounts to 1.91 percent and the beta ratio has a value of 0.96.


Long-Term Stock Price Chart Of Novo Nordisk (NVO)
Long-Term Dividend Payment History of Novo Nordisk (NVO)
Long-Term Dividend Yield History of Novo Nordisk (NVO)

Hormel Foods (NYSE:HRL) has a market capitalization of $13.84 billion. The company employs 20,200 people, generates revenue of $8,751.65 million and has a net income of $530.08 million.

Hormel Foods’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $910.33 million. The EBITDA margin is 10.40 percent (the operating margin is 9.21 percent and the net profit margin 6.06 percent).

Financials: The total debt represents 5.09 percent of Hormel Foods’s assets and the total debt in relation to the equity amounts to 7.55 percent. Due to the financial situation, a return on equity of 17.17 percent was realized by Hormel Foods.

Twelve trailing months earnings per share reached a value of $2.18. Last fiscal year, Hormel Foods paid $0.68 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.33, the P/S ratio is 1.60 and the P/B ratio is finally 4.22. The dividend yield amounts to 1.51 percent and the beta ratio has a value of 0.55.


Long-Term Stock Price Chart Of Hormel Foods (HRL)
Long-Term Dividend Payment History of Hormel Foods (HRL)
Long-Term Dividend Yield History of Hormel Foods (HRL)

CVS Health (NYSE:CVS) has a market capitalization of $98.26 billion. The company employs 130,000 people, generates revenue of $126,761.00 million and has a net income of $4,600.00 million.

CVS Health’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $9,931.00 million. The EBITDA margin is 7.83 percent (the operating margin is 6.34 percent and the net profit margin 3.63 percent).

Financials: The total debt represents 18.74 percent of CVS Health’s assets and the total debt in relation to the equity amounts to 35.33 percent. Due to the financial situation, a return on equity of 12.17 percent was realized by CVS Health.

Twelve trailing months earnings per share reached a value of $4.09. Last fiscal year, CVS Health paid $0.90 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.84, the P/S ratio is 0.78 and the P/B ratio is finally 2.65. The dividend yield amounts to 1.29 percent and the beta ratio has a value of 0.96.


Long-Term Stock Price Chart Of CVS Health (CVS)
Long-Term Dividend Payment History of CVS Health (CVS)
Long-Term Dividend Yield History of CVS Health (CVS)

Costco Wholesale (NASDAQ:COST) has a market capitalization of $57.31 billion. The company employs 112,000 people, generates revenue of $112,640.00 million and has a net income of $2,088.00 million.

Costco Wholesale’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,249.00 million. The EBITDA margin is 3.77 percent (the operating margin is 2.86 percent and the net profit margin 1.85 percent).

Financials: The total debt represents 15.44 percent of Costco Wholesale’s assets and the total debt in relation to the equity amounts to 41.45 percent. Due to the financial situation, a return on equity of 17.79 percent was realized by Costco Wholesale.

Twelve trailing months earnings per share reached a value of $4.65. Last fiscal year, Costco Wholesale paid $1.33 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 28.18, the P/S ratio is 0.51 and the P/B ratio is finally 4.66. The dividend yield amounts to 1.08 percent and the beta ratio has a value of 0.52.


Long-Term Stock Price Chart Of Costco Wholesale (COST)
Long-Term Dividend Payment History of Costco Wholesale (COST)
Long-Term Dividend Yield History of Costco Wholesale (COST)

Nike (NYSE:NKE) has a market capitalization of $78.95 billion. The company employs 56,500 people, generates revenue of $27,799.00 million and has a net income of $2,693.00 million.

Nike’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,312.00 million. The EBITDA margin is 15.51 percent (the operating margin is 13.24 percent and the net profit margin 9.69 percent).

Financials: The total debt represents 7.38 percent of Nike’s assets and the total debt in relation to the equity amounts to 12.68 percent. Due to the financial situation, a return on equity of 24.59 percent was realized by Nike.

Twelve trailing months earnings per share reached a value of $3.21. Last fiscal year, Nike paid $0.93 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 28.82, the P/S ratio is 2.87 and the P/B ratio is finally 7.43. The dividend yield amounts to 1.04 percent and the beta ratio has a value of 0.78.


Long-Term Stock Price Chart Of Nike (NKE)
Long-Term Dividend Payment History of Nike (NKE)
Long-Term Dividend Yield History of Nike (NKE)

Roper Industries (NYSE:ROP) has a market capitalization of $15.10 billion. The company employs 9,913 people, generates revenue of $3,238.13 million and has a net income of $538.29 million.

Roper Industries’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,031.55 million. The EBITDA margin is 31.86 percent (the operating margin is 26.01 percent and the net profit margin 16.62 percent).

Financials: The total debt represents 30.11 percent of Roper Industries’s assets and the total debt in relation to the equity amounts to 58.51 percent. Due to the financial situation, a return on equity of 13.63 percent was realized by Roper Industries.

Twelve trailing months earnings per share reached a value of $6.03. Last fiscal year, Roper Industries paid $0.66 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.59, the P/S ratio is 4.77 and the P/B ratio is finally 3.64. The dividend yield amounts to 0.52 percent and the beta ratio has a value of 0.96.


Long-Term Stock Price Chart Of Roper Industries (ROP)
Long-Term Dividend Payment History of Roper Industries (ROP)
Long-Term Dividend Yield History of Roper Industries (ROP)

13 Low Beta Dividend Growth Stocks, researched by
long-term-investments.blogspot.com (Click to enlarge)


*I am long ADP, RTN, NKE. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

This article was written by Dividend Yield. If you enjoyed this article, please subscribe to his feed [RSS].

1 comment:

  1. I am checking daily ADP and ROP. I think the price now is too much high and really there is the risk of a somehow correction.
    Still in Watching list and thanks for the other tickers. From now on my watching list too ;)

    ReplyDelete

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