Growing Yields, Steady Assets: Starbucks, Texas Instruments

Stocks with a history of strong returns that support high yield

Author's Avatar
Oct 24, 2016
Article's Main Image

Thanks to GuruFocus’ All-In-One Screener, we highlight stocks that have a five-year growing dividend yield with strong profitability and a long-term track record of solid returns and growing asset values.

Tractor Supply Co. (TSCO) has a dividend yield that during the last five years has grown by 40.50%. The yield is now 1.36% with a payout ratio of 27%. The company has a 10-years’ asset growth rate of 10%, supported by a current ROA of 16.89% that during the last 10 years has had an average value of 13.42%.

GuruFocus’ profitability rating of 8/10 is confirmed by a return on equity of 30.16% that has been steady for 10 years with an average ratio of 21.28%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 92% of the company’s competitors. Financial strength has a rating of 7/10 with a cash-debt ratio of 0.17 that is underperforming 79% of its competitors and an equity-asset ratio of 0.56 that is 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.

The company's main investors among the gurus are Ron Baron (Trades, Portfolio) who holds 0.34% of outstanding shares followed by Jim Simons (Trades, Portfolio) with 0.21%, Steven Cohen (Trades, Portfolio) 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 1.49% with a payout ratio of 43%. The company has a 10-years’ 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%.

GuruFocus’ profitability rating of 7/10 is confirmed by a return on equity of 46.88% that confirms the average ratio of the last 10 years that has been 28.65%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 96% of its competitors. Financial strength has a rating of 7/10, and it shows a cash-debt ratio of 0.64 that is outperforming 52% of its competitors and an equity-asset ratio of 0.41 that is a few below the industry median of 0.50.

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

Spiros Segalas (Trades, Portfolio) who holds 0.54% of outstanding shares is the main investor among the gurus followed by Pioneer Investments (Trades, Portfolio) with 0.31%, Cohen with 0.05%, Paul Tudor Jones (Trades, Portfolio) with 0.01%, John Hussman (Trades, Portfolio) with 0.01%, Baron with 0.01% and RS Investment Management (Trades, Portfolio) with 0.01%.

Lindsay Corp. (LNN) has a dividend yield that during the last five years has grown by 32%. The yield is now 1.44% with a payout ratio of 61%. The company has a 10-years’ asset growth rate of 10%, supported by a current ROA of 3.97% that during the last 10 years has had an average value of 8.89%.

GuruFocus’ profitability rating of 7/10 is confirmed by a return on equity of 7.69% that confirms the average ratio of the last 10 years that has been 12.72%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 69% of its competitors. Financial strength has a rating of 7/10, and it shows a cash-debt ratio of 0.86 that is outperforming 60% of its competitors and an equity-asset ratio of 0.50 that is below the industry median of 0.51.

Lindsay designs, manufactures and sells irrigation systems used in the agricultural industry to increase or stabilize crop production while conserving water, energy and labor. It also manufactures infrastructure products and services.

The company's main investors among the gurus are Chuck Royce (Trades, Portfolio) who holds 8.94% of outstanding shares followed by Simons with 2.57% and Mario Gabelli (Trades, Portfolio) with 0.56%.

Church & Dwight Co. Inc. (CHD) has a dividend yield that during the last five years has grown by 31.80%. The yield is now 1.47% with a payout ratio of 40%. The company has a 10-years’ asset growth rate of 8%, supported by a current ROA of 10.66% that during the last 10 years has had an average value of 9.19%.

GuruFocus’ profitability rating of 9/10 is confirmed by a return on equity of 22.76% that confirms the average ratio of the last 10 years that has been 17.23%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 84% of its competitors. Financial strength has a rating of 6/10 with a cash-debt ratio of 0.20 that is underperforming 71% of its competitors and an equity-asset ratio of 0.47 that is below the industry median of 0.52.

Church & Dwight develops, manufactures and markets household, personal care and specialty products. The company has eight power brands, Arm & Hammer, Trojan, Oxiclean, Spinbrush, First Response, Nair, Orajel and Xtra.

Baron who holds 1.42% of outstanding shares is the company's main investor among the gurus followed by Jeremy Grantham (Trades, Portfolio) with 0.36%, Gabelli with 0.16%, Joel Greenblatt (Trades, Portfolio) with 0.1% and Pioneer Investments (Trades, Portfolio) with 0.1%.

Ingredion Inc. (INGR) has a dividend yield that during the last five years has grown by 29.30%. The yield is now 1.42% with a payout ratio of 29%. The company has a 10-years’ asset growth rate of 8%, supported by a current ROA of 8.59% that during the last 10 years has had an average value of 7.06%.

GuruFocus’ profitability rating of 9/10 is confirmed by a return on equity of 20.38% that confirms the average ratio of the last 10 years that has been 15.93%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 78% of its competitors. Financial strength has a rating of 6/10, and it shows a cash-debt ratio of 0.28 that is underperforming 65% of its competitors and an equity-asset ratio of 0.46 that is below the industry median of 0.52.

Ingredion manufactures and sells starches and sweeteners derived from the wet milling and processing of corn and other starch-based materials to a range of industries. Its product includes starches and sweeteners, animal feed products and edible corn oil.

The company's main investors among the gurus are Ken Fisher (Trades, Portfolio) who holds 1.06% of outstanding shares followed by Grantham with 0.97%, Pioneer Investments (Trades, Portfolio) with 0.32% and Gabelli with 0.15%.

Scripps Networks Interactive Inc. Class AÂ (SNI) has a dividend yield that during the last five years has grown by 26%. The yield is now 1.49% with a payout ratio of 16%. The company has a 10-years’ asset growth rate of 11%, supported by a current ROA of 11.85% that during the last 10 years has had an average value of 11.49%.

GuruFocus’ profitability rating of 8/10 is confirmed by a return on equity of 47.11% that has been steady over the last 10 years with an average ratio of 24.80%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 89% of its competitors. Financial strength has a rating of 5/10, and it shows a cash-debt ratio of 0.05 that is underperforming 91% of its competitors and an equity-asset ratio of 0.29 that is above the industry median of 0.53.

Scripps Networks Interactive develops lifestyle-oriented content for television and Internet with television and interactive brands by delivering entertaining and useful content for specifically defined topics of interest.

Mason Hawkins (Trades, Portfolio) who holds 8.25% of outstanding shares is the main investor of the company among the gurus followed by Pioneer Investments (Trades, Portfolio) with 1.14%, Tom Russo (Trades, Portfolio) with 0.91%, Gabelli with 0.79%, Greenblatt with 0.18%, Simons with 0.18% and Robert Olstein (Trades, Portfolio) with 0.07%.

Texas Instruments Inc. (TXN) has a dividend yield that during the last five years has grown by 25.80%. The yield is now 2.17% with a payout ratio of 50%. The company has a 10-years’ asset growth rate of 5%, supported by a current ROA of 18.86 % that during the last 10 years has had an average value of 15.58%.

GuruFocus’ profitability rating of 9/10 is confirmed by a return on equity of 30.46% that confirms the average ratio of the last 10 years that has been 22.91%. ROE and ROA are outperforming the industry median with a ratio that is ranked higher than 97% of its competitors. Financial strength has a rating of 7/10, and it shows a cash-debt ratio of 0.70 that is underperforming 65% of its competitors and an equity-asset ratio of 0.64 that is a few above the industry median of 0.61.

Texas Instruments designs and makes semiconductors that it sells to electronics designers and manufacturers. It has two segments: Analog and Embedded Processing.

The main investors of the company among the gurus are PRIMECAP Management (Trades, Portfolio) who holds 4.96% of outstanding shares followed by Chris Davis (Trades, Portfolio) with 0.9%, Bill Nygren (Trades, Portfolio) with 0.6%, Barrow, Hanley, Mewhinney & Strauss with 0.59%, T Rowe Price Equity Income Fund (Trades, Portfolio) with 0.36%, First Eagle Investment (Trades, Portfolio) with 0.36%.

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

Start a free seven-day trial of Premium Membership to GuruFocus.