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Building wealth in the long run is the goal of many. Building a negative income of profit shares is a dream. Personally, I was always attracted to investment of profits, so it is normal for companies to come to the minds of aristocrats and the lists of kings often, because they have a long history of increasing profits.
However, profits alone are not enough to support long -term growth for the investment portfolio. It is important to look at other factors such as cash flow and the growth of pure income, then we strengthen it with what analysts say before it drowns. I would also like to look at the price goals for an idea about where the stock may go in one year. Of course, we do not want high purchase, only until the arrow decreases.
Determination of potential profits for purchase is not only related to choosing the highest return. It comes to finding high -quality names with a date to increase their profits, while not outperforming themselves.
As I do often, I started using the free Screen tool from Barchart to assemble my list.
Annual profit returnI left this empty, so I rearrange the results from top to the lowest.
Classification of the current analyst: 4 (moderate purchase) to 5 (strong purchase) for positive consensus.
Cash flow growth last year: 10 % or more. The high cash flow means a better head space to increase possible profits.
Revenue growth for 5 years: 30 % or more. The best companies that have increased the higher lines numbers over the past five years.
Net income growth last year: 30 % or more. Mastercrow companies often appear relatively low income; However, we aim to grow 30 % or more to support increased profits.
Monitoring lists: Aristocrats and kings. These companies have increased profit payments for 25 and 50 years, respectively, and have succeeded in declining the various market.
After placing the filters, I opened the interpretation, and seven companies came, and sorted them from the highest levels of profits to the lowest return.
I will skip Middlesex Water Company to this list, as the share price has decreased over the past five years.
So this will make the three best profit distributions: California water service group, air products and chemicals, and Abbott laboratories.
California Water Service is a public utility company that has been around for nearly a century. Today, customers serve California, Washington, New Mexico and Hawaii. What you do is clear and direct – water sources, treat them to be safe to drink, and distribute them to the consumer.
Recently, California Water Service has agreed to obtain two smaller water systems: Casa Loma Water Company and Palm Mutual Water Company, which serves a total of 300 homes, respectively. Although it is still awaiting organizational approval, this means another expansion of water service in California.
The company has increased its profits for 56 consecutive years, which enhances its position as a profit king. Front payment is $ 1.20 per share ($ 0.30 per quarter), which translates into a front return of 2.57 %. Their profit payment rate works to about 52 %, and is still within an acceptable range.
Consensus between analysts CWT shares “Strong purchase” (perfect 5 out of 5). The highest goal of the share is $ 60 per share, which translates into about 28 % of the upward potential of its current levels.
Next in the stock arrows list are air products and chemicals. He is one of the main suppliers of industrial gases such as oxygen and nitrogen. The company has been operating since the 1940s and serves many industries today, including oil, electronics, steel and health care refineries. Today, the company also focuses on clean energy, especially hydrogen fuel. In terms of profits, weather products pay $ 7.16 a year (or $ 1.79 per quarter), which translates into a front return of 2.46 %. The payment ratio is about 43 % of its profits, which is also within an acceptable range. Moreover, the company has increased its profits for 43 years in a row and is a member of the aristocrats.
Despite the financial setbacks, Wall Street is still positive for weather products – with a consensus between 23 analysts classifying APD “moderate purchase”. The high goal for APD is $ 375 per share, indicating up to 29 % of the rise to investors who own shares at today’s prices.
Next is Abbott Laboratories, one of the most diverse healthcare companies in the world, dating back to 1888. You may have faced their products without realizing them – it produces everything from medical products to daily basics, called what you want. Abbott has about 115,000 employees worldwide and generates about $ 40 billion in annual revenue.
Abbot’s profit distribution file is worth praise. The company has increased its profits for 53 years in a row, making it both the king’s and aristocratic distributor. Today, the company pays $ 2.36 per share annually in stock profits ($ 0.59 per quarter), which reflects the revenue of futures profits by 1.79 %. The payment ratio is about 46 % of its profits, which are also very acceptable.
It is not surprising that the Wall Street Reem Abbott average “strong purchase” with a score of 4.46 out of 5, was the same recommendation during the past three months. The highest price for ABT shares is $ 159, which may mean up to 20 % of today’s prices.
These three companies were present for a period longer than me, and I was paying and increasing their profits for years, regardless of market conditions. However, anything can happen even for the most firm names, so it is always better to keep his knowledge as a shareholder. All things are equal, I think investors are likely to be very happy to carry any of these shares for the next 5 to 10 years.
On the date of publication, Rick Orford did not have positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are only for media purposes. This article was originally published on Barchart.com
