54 Stocks Selected For Growth, Value, And Income

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Includes: AAN, ACN, ACU, ADI, ADP, AMNF, AMZN, AOS, APOG, BBY, BSET, CCF, COLM, CSCO, CVGW, DOX, EGHSF, EXCOF, EXPD, FAST, FL, FLXS, FORR, GIL, GNTX, GRMN, HAS, HCSG, HDIUF, INFY, KAI, LMAT, LSTR, LZB, MA, MAN, MKSI, MLR, NKE, PAYX, RHI, RHUHF, RMD, ROST, SIG, STLJF, THO, TJX, TPL, TR, TROW, TSCO, TXN, WDFC, WSM, ZCLCF
by: Steven Miller

Summary

This article delivers a select list of more than fifty stocks.

The stocks are selected from well-known dividend growth lists, and screened for value and growth.

Several areas for further investigation are suggested.

This article is a follow up I promised in a previous article I wrote about creating a watch list. It also builds on the foundation of the article I wrote introducing the Sound Growth IRA portfolio. To recap, the stocks I look for ideally meet the following criteria:

  • Value: Positive Net Current Asset Value [NCAV].
  • Income: The stock pays a dividend. The stocks in this list has grown dividends for at least five years.
  • Growth. A minimum of 7.5% of growth plus dividends. Double-digits is better, and 15% is better still. Growth must be seen in at least three of the past four years.

I used two lists to hunt for stocks that meet the criteria: David Fish’s U. S. Dividend Champions and the Canadian Dividend All-Star List. I found more than 60 stocks that meet the criteria, and a subset of 54 of them are listed below. Since I am interested in both growth and value [GARP] in addition to dividends, I include in the table the columns: Number of years dividends have grown; the PEG ratio; and the Price to Owner Earnings. The PEG ratio and the Price to Owner Earnings are multiplied together, and the result is used to order the rows of the table. For further details, please see my previous articles.

These are not the only stocks I watch or own, but most of them represent the core set I watch.

Value Stocks

Value stocks tend to float to the top of this list. These stocks remind me of the time I looked into investing in net-net stocks. The numbers look great, but there is a reason why they are so cheap. Similarly, the stocks at the top third of this list typically has something the market finds unsavory about them:

  • Foot Locker’s (FL) price plummeted when Nike (NKE) announced they would be selling shoes online. The company already suffered from the fear in the market that Amazon (AMZN) will wipe out Foot Locker’s market.
  • Signet Jeweler’s (SIG) has faced multiple headwinds. It is another brick-and-mortar facing ecommerce. It has been called a sub-prime lender dressed up as a diamond store. It has had problems with sex scandals, and the COO resigned in June after violating company policy.
  • Gentex’s (GNTX) profit margins have been recently called into question. In addition, it’s primary product, self-dimming mirrors, is facing a changing auto industry that includes mirrorless cars.

While the companies in the top third of the list face issues, and their share prices drop, the companies have nevertheless been increasing earnings and dividend payments for some time. The result often catches the attention of value hunters. For instance, Tractor Supply (TSCO) has seen four Seeking Alpha buy articles in the past week.

Income Stocks

Income stocks tend to be at the bottom third of the list:

  • Tootsie Roll (TR), the lone dividend king to pass the screen, has seen declining revenue growth, and yet has increased its EPS by efficiencies.
  • Health Care Service Group (HCSG) is popular among DGI investors because of its quarterly income increases.
  • Garmin (GRMN) has a lower growth rate than most of the stocks on the list. Nor does it have the long history of a dividend aristocrat, but it is paying about a 4% dividend yield.

Even so, the stocks in the bottom third of the list tend not to be the ordinary or stodgy income stock. In the past week alone, Health Care Services Group gapped up and increased by more than 10%. T. Rowe Price Group (TROW) gapped up as well, and the price has gone from less than $75 to over $80 in a week. MasterCard (MA) has gone up more than 5%, setting still more highs on the way, as the trend has been for years.

The List

Without further ado, here is the list itself. I have bolded PEGs of 1.25 or less, and Price to Owner Earnings of 15 or less:

Name

Ticker

No. Yrs Div Up

PEG

Price to Owner Earnings

PEG * Price to Owner Earnings

Foot Locker

FL

7

0.54

10.76

5.81

Signet Jewelers

SIG

7

0.76

9.27

7.05

Exco Technologies

(OTCPK:EXCOF), XTC.TO

11

0.52

15.89

8.26

Apogee Enterprises

(APOG)

6

0.53

18.48

9.79

Gentex

GNTX

7

0.78

14.92

11.64

Thor Industries

(THO)

7

0.72

17.39

12.52

Flexsteel Industries

(FLXS)

6

1.06

13.16

13.95

Robert Half International

(RHI)

6

0.98

16.06

15.74

La-Z-Boy

(LZB)

5

1.14

14.28

16.28

Williams-Sonoma

(WSM)

12

1.53

10.87

16.63

Gildan Activewear

(GIL)

7

1.19

15.62

18.59

Chase

(CCF)

5

1.05

19.39

20.36

ZCL Composites

(OTCPK:ZCLCF), ZCL.TO

5

1.32

16.55

21.85

Stella-Jones

(OTC:STLJF), SJ.TO

12

0.98

22.57

22.12

Tractor Supply

TSCO

8

1.00

25.22

25.22

Aaron's

(AAN)

14

1.06

23.83

25.26

Best Buy

(BBY)

15

2.32

10.95

25.40

Ross Stores

(ROST)

23

1.34

19.23

25.77

Texas Instruments

(TXN)

13

1.51

18.42

27.81

TJX

(TJX)

21

1.76

16.12

28.37

Columbia Sportswear

(COLM)

11

1.40

21.61

30.25

Cisco

(CSCO)

7

2.09

14.70

30.72

Acme United

(ACU)

13

1.69

18.82

31.81

Enghouse Systems

(OTCPK:EGHSF), ENGH.TO

10

1.40

23.27

32.58

Armanino Foods

(OTCPK:AMNF)

11

1.34

24.44

32.75

Calavo Growers

(CVGW)

5

0.97

34.46

33.43

Hardwoods Distribution

(OTC:HDIUF), HWD.TO

6

0.35

100.70

35.25

A. O. Smith

(AOS)

24

1.46

29.47

43.03

Accenture

(ACN)

12

2.01

23.08

46.39

Nike

NKE

12

1.69

28.92

48.87

Kadant

(KAI)

5

2.80

22.95

64.26

Amdocs

(DOX)

5

2.85

22.66

64.58

Miller Industries

(MLR)

8

2.96

22.14

65.53

Hasbro

(HAS)

14

3.18

20.99

66.75

Landstar System

(LSTR)

12

3.13

22.23

69.58

MKS Instruments

(MKSI)

7

2.43

27.73

67.38

Expeditors International

(EXPD)

22

3.04

24.79

75.36

Richelieu Hardware

(OTC:RHUHF), RCH.TO

7

2.97

26.02

77.28

WD-40

(WDFC)

8

2.97

29.32

87.08

LeMaitre Vascular

(LMAT)

7

1.88

45.05

84.69

MasterCard

MA

6

1.85

47.54

87.95

Fastenal

(FAST)

18

2.96

32.22

95.37

Paychex

(PAYX)

6

3.68

26.73

98.37

Tootsie Roll Industries

TR

51

3.56

28.22

100.46

Texas Pacific Land Trust

(TPL)

14

2.43

43.36

105.36

ResMed

(RMD)

5

3.62

34.75

125.80

Garmin

GRMN

7

9.19

19.48

179.02

Automatic Data Processing

(ADP)

42

7.51

24.50

184.00

Bassett Furniture Industries

(BSET)

6

12.62

18.69

235.87

Health Care Service Group

HCSG

15

4.48

61.08

273.64

T. Rowe Price

TROW

31

1.50

385.06

577.59

Analog Devices

(ADI)

15

34.11

22.07

752.81

Forrester Research

(FORR)

6

184.50

25.81

4761.95

Interesting Areas to Explore

I have recently read in two separate, unrelated call transcripts that business in Canada is good or recovering. The five stocks I pulled from the Canadian All-Stars List are in the top half of my list, indicating that they may well be on sale. Some of share prices have already come up since I logged the figures in the table. I have explored some of Canadian stocks already, bought an initial position in Exco Technologies, and may write up findings soon.

The brick-and-mortar retail sector has been hit by the Amazon blitzkrieg. As mentioned before, Foot Locker and Signet Jewelers have been hit. So has Williams-Sonoma—its price last Friday hit the lowest level since 2013—yet the company receives more than half its income from ecommerce, and it increased dividend payments even through the Great Recession. There have been numerous articles that the time is right to buy retail REITs. It may be time to buy retail common stocks as well.

Rivals Paychex and Automatic Data Processing both made the list. So did Robert Half and Accenture. Manpower (MAN) nearly did, and if the country of India ever gets a list of dividend stars, Infosys (INFY) will most likely be on it. A head-to-head comparison of companies offering staffing solutions would be interesting.

For those worried about the long bull market ending and the coming of a recession, a comparison of the clothiers may make for an interesting study: Gildan Activewear, Ross Stores, Columbia Sportswear, and TJX.

In Summary

These 54 stocks are screened and selected for growth, value, and income. They range from the smallest of the microcaps to the some of the most widely known names in the world, across a variety of sectors. The list can provide a basis for further investigation to GARP, DGI, or value investors, and can provide an effective watch list.

Disclaimer

I have demonstrated in an article that PEG ratios for the same stock on the same day can vary widely between websites. While all reported figures are thought to be generally correct, no guarantee is expressed or implied. Please do your due diligence.

Sources

PEG ratios and Price to Owner Earnings were taken at GuruFocus.com. Stock prices were taken from BigCharts.com.

Disclosure: I am/we are long ACN, EXCOF, FL, MA, MLR, PAYX, TPL, WSM.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.