Seeking Alpha
Newsletter provider, fund holdings, insider ownership
Profile| Send Message|
( followers)  

Companies with modest growth may not be the first thing you look for when building a portfolio, unless you are looking at hedging opportunities, but if you are excluding low growth stocks from your investments, you could be missing out. Modest growth companies may not double in price, but their consistency can be a real boon to risk-averse investors looking for a stable investment or who want to use a stock for income. As an added bonus, many of these modest growth companies also pay dividends, further adding to the upside.

Using the stock screener at finviz.com, we developed a list of modest growth stocks worth a closer look. The companies on our list are US companies, priced under $50 per share, with market caps over $10 billion and positive estimated EPS Growth next 5 years. Each company also pays a dividend of 5% or more.

Exelon Corp. (NYSE:EXC) is a diversified utilities company with a $26.24 billion market cap. It is currently priced at 13.11 times its forward earnings. EXC pays a 5.31% dividend yield on a 57.69% payout ratio. Its EPS is expected to grow 1.65% per annum over the next five years. Analysts give the company a 2.5 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." EXC recently traded at $39.58 a share. Jim Simons' Renaissance Technologies is a fan of EXC.

First Energy Corp. (NYSE:FE) is an electric utilities company with a $17.55 billion market cap. It is currently priced at 12.68 times its forward earnings. FE pays a 5.24% dividend yield on a 92.33% payout ratio. Its EPS is expected to grow 2.88% per annum over the next five years. Analysts give the company a 2.3 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." FE recently traded at $41.97 a share. FE is a top pick for Jean-Marie Eveillard's First Eagle Investment Management.

Altria Group, Inc. (NYSE:MO) is a cigarette company with a $59.55 billion market cap. It is currently priced at 13.22 times its forward earnings. MO has a 5.66% dividend yield on a 93.12% payout ratio. Its EPS is expected to grow 7.78% per annum over the next five years. Analysts give the company a 2.6 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." MO recently traded at $28.96 a share. Tom Russo's Gardner Russo & Gardner likes MO.

Annaly Capital Management, Inc. (NYSE:NLY) is a diversified real-estate investment trust (REIT) company with a $15.77 billion market cap. It is currently priced at 7.10 times its forward earnings. NLY pays a 14.02% dividend yield on a 147.29% payout ratio. Its EPS is expected to grow 0.75% per annum over the next five years. Analysts give the company a 2.4 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." EXC recently traded at $16.26 a share. Bill Miller's Legg Mason Capital Management is a fan of LLY.

PPL Corp. (NYSE:PPL) is an electric utilities company with a $16.24 billion market cap. It is currently priced at 11.51 times its forward earnings. PPL pays a 4.98% dividend yield on a 54.40% payout ratio. Its EPS is expected to grow 5.20% per annum over the next five years. Analysts give the company a 2.3 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." PPL recently traded at $28.09 a share. Steve Cohen's SAC Capital Advisors likes PPL.

Reynolds American, Inc. (NYSE:RAI) is a cigarette company with a $24.02 billion market cap. It is currently priced at 13.83 times its forward earnings. RAI pays a 5.44% dividend yield on a 90.96% payout ratio. Its EPS is expected to grow 6.00% per annum over the next five years. Analysts give the company a 2.6 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." RAI recently traded at $41.20 a share. RAI is a top pick for David Winters' Wintergreen Advisors.

AT&T, Inc. (NYSE:T) is a domestic telecom services company with a $179.74 billion market cap. It is currently priced at 12.38 times its forward earnings. T pays a 5.80% dividend yield on a 87.00% payout ratio. Its EPS is expected to grow 4.05% per annum over the next five years. Analysts give the company a 2.5 on a scale from 1.0, meaning "Strong Buy," to 5.0, meaning "Sell." T recently traded at $30.33 a share. T is a favorite of Phill Gross and Robert Atchinson's Adage Capital Management.

Source: 7 High Dividend Stocks With Stable Growth Rates