6 Stocks to Watch

Strong returns, growing yields and a focus on assets

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Oct 04, 2016
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GuruFocus’ All-In-One Screener has identified stocks that have five-year growing dividend yields with strong profitability and long-term track records of solid returns and growing asset values.

Westlake Chemical Corp.Ă‚ (WLK) has a dividend yield that during the last five years has grown by 47.20%. The yield is now 1.37% with a payout ratio of 18%. The company has a 10-year asset growth rate of 9%, supported by ROA of 9.39% that during the last 10 years has had an average value of 9.14%.

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GuruFocus’ profitability rating of 7/10 is confirmed by a return on equity of 15.98% that has been strong over the last 10 years since it has an average ratio of 16.92%. ROE and ROA are outperforming the industry median being ranked higher than 74% of competitors. Financial strength has a rating of 7/10, and it shows a cash-debt ratio of 1.48 that is outperforming 59% of its competitors and an equity-asset ratio of 0.58 that is a few above the industry median of 0.54.

Westlake Chemical is a manufacturer and marketer of basic chemicals, vinyls, polymers and fabricated products. The company operates in two principal business segments, Olefins and Vinyls.

The company's main investors among the gurus are Chuck Royce (Trades, Portfolio), who holds 0.68% of outstanding shares, followed by Louis Moore Bacon (Trades, Portfolio) with 0.34%, Michael Price (Trades, Portfolio) with 0.18% and Steven Cohen (Trades, Portfolio) with 0.17%.

Tractor Supply Co. (TSCO) has a dividend yield that during the last five years has grown by 40.50%. The yield is 1.31% with a payout ratio of 27%. The company has a 10-year asset growth rate of 10%, supported by a current ROA of 17.30% that during the last 10 years has had an average value of 13.42%.

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GuruFocus’ profitability rating of 8/10 is even confirmed by a return on equity of 30.36% that has been steady for the last 10 years with an average ratio of 21.28%. ROE and ROA are outperforming the industry median being ranked higher than 92% of the company’s competitors. Financial strength has a rating of 7/10, and it shows a cash-debt ratio of 0.69 that is underperforming 55% of its competitors and an equity-asset ratio of 0.58 that is a few above the industry median of 0.48.

Tractor Supply is an operator of retail farm and ranch stores in the U.S. and supplies recreational farmers and ranchers as well as tradesmen and small businesses.

Ron Baron (Trades, Portfolio), who holds 0.34% of outstanding shares, is the main investor among the gurus followed by Jim Simons (Trades, Portfolio) with 0.21%, Cohen with 0.15% and Pioneer Investments (Trades, Portfolio) with 0.11%.

Starbucks Corp. (SBUX) has a dividend yield that during the last five years has grown by 36.40%. The yield is now 1.48% with a payout ratio of 43%. The company has a 10-year asset growth rate of 11%, supported by a current ROA of 20.66% that during the last 10 years has had an average value of 15.01%.

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GuruFocus’ profitability rating of 8/10 is even confirmed by a return on equity of 46.88% that has been steady in the last 10 years with an average ratio of 28.65%. ROE and ROA are outperforming the industry median being ranked higher than 96% of competitors. Financial strength has a rating of 7/10, and it shows a cash-debt ratio of 0.64 that is outperforming 53% of its competitors and an equity-asset ratio of 0.41 that is below the industry median of 0.50.

Starbucks is a roaster, marketer and retailer of specialty coffee, operating in 65 countries. It sells a variety of coffee and tea products. Goods and services are sold under the Teavana, Tazo and Seattle's Best Coffee brands.

The company's main investors among the gurus are Spiros Segalas (Trades, Portfolio), who holds 0.58% of outstanding shares, followed by Pioneer Investments (Trades, Portfolio) with 0.31% and Cohen with 0.05%.

Walt Disney Co. (DIS) has a dividend yield that during the last five years has grown by 35.90%. The yield is now 1.53% with a payout ratio of 25%. The company has a 10-year asset growth rate of 5%, supported by a current ROA of 10.33% that during the last 10 years has had an average value of 7.45%.

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GuruFocus’ profitability rating of 8/10 is even confirmed by a return on equity of 620.66% that has been steady in the last 10 years with an average ratio of 14.23%. ROE and ROA are outperforming the industry median being ranked higher than 84% of competitors. Financial strength has a rating of 6/10, and it shows a cash-debt ratio of 0.26 that is underperforming 70% of its competitors and an equity-asset ratio of 0.26 that is below the industry median of 0.52.

Walt Disney together with its subsidiaries is a diversified entertainment company with operations in five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive.

Ken Fisher (Trades, Portfolio), who holds 0.54% of outstanding shares, is the main investor among the gurus followed by PRIMECAP Management (Trades, Portfolio) with 0.41%, Segalas with 0.29% and Pioneer Investments (Trades, Portfolio) with 0.25%.

Visa Inc. Class AĂ‚ (V) has a dividend yield that during the last five years has grown by 33.40%. The yield is now 0.68% with a payout ratio of 23%. The company has a 10-year asset growth rate of 32%, supported by ROA of 11.02% that during the last 10 years has had an average value of 9.87%.

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GuruFocus’ profitability rating of 9/10 is confirmed by a return on equity of 18.59% that has been steady in the last 10 years with an average ratio of 13.25%. ROE and ROA are outperforming the industry median being ranked higher than 82% of competitors. Financial strength has a rating of 6/10, and it shows a cash-debt ratio of 0.55 that is underperforming 65% of its competitors and an equity-asset ratio of 0.51 that is below the industry median of 0.38.

Visa is a payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. The company operates a processing network – VisaNet.

The company's main investors among the gurus are Frank Sands (Trades, Portfolio), who holds 1.58% of outstanding shares, followed by Fisher with 0.63%, Segalas with 0.49%, Warren Buffett (Trades, Portfolio) with 0.43% and Steve Mandel (Trades, Portfolio) with 0.31%.

Quest Diagnostics Inc. (DGX) has a dividend yield that during the last five years has grown by 32.40%. The yield is 1.87% with a payout ratio of 27%. The company has a 10-year asset growth rate of 6%, supported by a current ROA of 8.28% that during the last 10 years has had an average value of 7.00%.

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GuruFocus’ profitability rating of 8/10 is confirmed by a return on equity of 18.17% that has been steady in the last 10 years with an average ratio of 16.28%. ROE and ROA are outperforming the industry median being ranked higher than 83% of competitors. Financial strength has a rating of 5/10, and it shows a cash-debt ratio of 0.07 that is underperforming 93% of its competitors and an equity-asset ratio of 0.45 that is a few below the industry median of 0.58.

Quest Diagnostics is the provider of diagnostic testing, information and services, providing insights that enable patients and physicians to make health care decisions.

Chris Davis (Trades, Portfolio), who holds 2.36% of outstanding shares in the company, is the main investor among the gurus followed by John Rogers (Trades, Portfolio) with 0.33%, Pioneer Investments (Trades, Portfolio) with 0.13%, Joel Greenblatt (Trades, Portfolio) with 0.13% and Charles Brandes (Trades, Portfolio) with 0.11%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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