Identifying top stocks to hold on to is no easy task. These stocks should at least be going well on a long-term basis. We screened companies that take a balanced approach to dividends and buybacks and possess a good growth story as well. The stocks identified should be held onto three to five years from now based on their positive earnings momentum.
The first stock is Paccar (PCAR, Financial), which makes commercial trucks under the nameplates of Kenworth and Peterbilt in North America. The company’s earnings per share (EPS) are expected to record $4.36 this year, which is up 14% compared to 16% growth last year. Besides that the company can give a potential dividend of 88 cents and even considering that investor’s got a special dividend of $1 in January. In addition, the company possesses $2.9 billion, which is rare to the industry it belongs.
Lam Research (LRCX, Financial) is the second stock to look at too, which makes ETCH and deposition machines. They are very important to manufacturing memory and other chips. In addition, a year ago the company initiated a small dividend and authorized $850 million for buybacks over two years. Analysts are hoping to see more buybacks. Moreover, a return on invested capital over 12% suggests the company’s spending on itself would be more lucrative.
The third stock to be looked at is Kroger (KR, Financial), which is a supermarket and is known as big capital spender. The company put $2.8 billion to work last year while spending $1.6 billion on dividend and buybacks. The company is adding more private label products, which would bring in more than one-quarter of sales at above average margins. Moreover, stores are being remodeled with new fresh food sections as the company continues to develop its website and food ordering. Furthermore, invested capital stock with a return of over 12% has plenty of growths ahead.
Autoliv (ALV, Financial) is the fourth stock, which makes safety equipment for cars. The business is dominated by so-called passive devices such as airbags and safety seatbelts. Growth is constrained as overall consumer demand increases for more cars, which has rebounded to healthy levels in the US but not in Europe yet. Still, market share gains and outlook are promising. Company sales expectation is expecting fall within the 6.5% range this year. The company pays a powerful 1.8% dividend. Moreover, analysts are touting that EPS may increase by 9% to $6.47 this year.
The fifth stock to be looked at is Archer Daniels Midland (ADM, Financial), which is a grain processor. It has tripled its dividend in the past 10 years. This year, the company plans to return $2.2 billion to $2.9 billion to shareholders in dividends and intends to carry out repurchases amounting from 7.2% to 9.5% of its stock market value. Moreover, the company also plans to devote $1.1bn to $1.3bn into capital investments.
Dollar General (DG, Financial) is the sixth stock to look at, which lost out to Dollar Tree in the bidding of Family Dollar stores early this year. Dollar General has a payback period of just a year and a half, when it opens new stores. Wall Street expects the store base to grow 6% to 7% a year over the next three years.
The seventh stock to be looked at is Tesla Motors (TSLA, Financial). This company reiterated with an outperformance rating. The outcome was very positive around the storage pricing bringing a compelling takeaway. The consensus does not expect revenue or earnings to see material changes near term but the consensus there sees the value of Tesla has accomplished over the past six months being underappreciated.
Knowing which stocks to hold on to is vital if one is to make money as an investor on the stock exchange. Without knowledge of how the stocks are doing, one cannot make a sensible decision on which stocks to invest in.
