A strong retirement account requires not only solid dividends but also high growth. Therefore, we investigated high-growth and high-dividend ideas from various sectors. The solidness of these stocks and funds has been confirmed in the form of a strong recovery after the global crisis. As the V-shaped recovery gains further momentum, these stocks are expected to appreciate even higher, thanks to strong economic growth.
We compiled a list of seven high-growth diversified retirement ideas that pay regular dividends. In the last five years, they all experienced sustainable earnings growth rates and stable profit margins. All stocks and closed-end funds have a minimum dividend yield of 6%:
- A.F.P Provida SA (PVD): AFP Provida is a private pension fund administrator in Chile that operates in several segments. P/E ratio of 8.34 is well-below the industry average. AFP is one of the foreign stocks with tremendous returns. Current yield is 6.91%. Over the last five years, the stock gained 200% and had an average dividend yield of 6%. Five-year EPS growth rate of is 16.62% with a net profit margin of 53.04%. Currently, the stock price is 22.53% below the 52-week high which offers a good opportunity for contrarian investors. A relatively lower beta of 1.12 suggests that PVD is a safe and stable company.
- Anworth Mortgage Asset Corporation (ANH): Anworth Mortgage invests primarily in United States agency mortgage-backed securities. P/E ratio of 8.10 and beta of 0.27 suggests that the stock price is not volatile as expected, given its risky business area. Thanks to its high growth, the company pays fat dividend checks regularly. Current yield of 12.57%, and five-year EPS growth rate of 17.50% is particularly promising. Net profit margin is 50.27%.
- Apollo Investment Corporation (AINV): AINV is a closed-end investment company with a diversified portfolio. The company aims to generate both current income and capital appreciation. Last year's dividend yield was 9.29%. Five-year EPS growth rate of 18.37% and net income growth rate of 42.93% reflect the strong growth strategy of the company. Net profit margin stands at 26.52% and the company sports a beta of 1.83. While trailing P/E ratio is 40.07, its forward P/E ratio of 10.44 suggests a huge increase in profits this year.
- Ares Capital Corporation (ARCC): Ares Capital Corporation is a closed-end, specialty finance company. Trailing P/E ratio was 3.99 and forward P/E ratio is 9.93. Ares pays regular quarterly dividend checks, and current dividend yield is 8.71%. While the company is highly profitable, it has a high beta of 1.92. After completing the merger with Allied Capital Corporation in April 2010, the stock gained 17.14%. Five-year EPS growth rate is 17.05%.
- Eaton Vance Limited Duration Income Fund (EVV): EVV is another closed-ended fixed-income mutual fund that pays regular dividend checks. Current dividend yield is 8.80%. Price-to-book ratio of 0.95 is below the industry average. Five-year EPS growth rate of 38.02 is among the highest in the industry. Current P/E ratio of 6.71 in this volatile environment shows the success of Eaton Fund managers.
- Companhia de Saneamento Basico (SBS): SBS is a water and sewage services provider in the State of Sao Paulo, Brazil. The trailing P/E ratio of 6.45 and a forward P/E of 6.94 is one of the lowest among the foreign ADRs. The current dividend yield is 8.17%. Five-year EPS growth rate of 27.21% is one of the best in the industry. Profit and operating margins stand at 17.57% and 24.21% respectively.
- Navios Maritime Partners (NMM): Navios Maritime operates as an international owner and operator of dry-bulk carriers. The company is among the top-performing carriers: The stock price increased by almost fourfold in recent years. Trailing P/E ratio is 12.10. Current dividend yield of 9.11% and Five-year EPS growth rate of 24.02% suggest that NMM is a rock-solid dividend stocks.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.