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3 'Boring' Stocks Crushing the S&P 500 Over the Last Five Years
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During volatile periods in the market, a more conservative approach should be considered. Investors can implement the style in several ways, including targeting companies with an established track record of success throughout decades of operations.
Three Dividend Aristocrats – W.W. Grainger (GWW - Free Report) , Procter & Gamble (PG - Free Report) , and McDonald’s (MCD - Free Report) – are all examples of companies that have stood the test of time.
And while these investments are typically labeled as ‘boring,’ their stability is undeniable. Below is a chart illustrating the total return performance of all three stocks above over the last five years, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Perhaps to the surprise of some, all three have outperformed the S&P 500 in this more extended timeframe, which doesn’t sound very ‘boring’ to me.
Procter & Gamble
Consumer Staples titan Procter & Gamble posted better-than-expected results and provided optimistic guidance in its latest release, helping shares close 3.5% higher post-earnings. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.
As we can see in the chart below, the company’s revenue growth has been steady over the last five years.
Image Source: Zacks Investment Research
PG’s annual dividend currently yields 2.4%, below the Zacks Consumer Staples sector average modestly. In addition, the company’s 6.3% five-year annualized dividend growth rate is undoubtedly a major positive.
Image Source: Zacks Investment Research
Shares are a bit expensive at the moment, with the current 26.7X forward earnings multiple well above the 24.1X five-year median.
PG currently carries a Style Score of “D” for Value.
Image Source: Zacks Investment Research
W.W. Grainger
Analysts have raised their earnings expectations across all timeframes for GWW over the last several months, pushing the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company’s dividend presently yields a respectable 1% annually, with a payout ratio sitting sustainably at 21% of its earnings. As we can see below, the company has shown a commitment to increasingly rewarding its shareholders.
Image Source: Zacks Investment Research
On top of a shareholder-friendly nature, W.W. Grainger’s growth projections are solid, with earnings forecasted to climb 18% in its current fiscal year (FY23) and a further 6% in FY24.
McDonald’s
McDonald’s posted results that came in well above expectations in its latest print, delivering a positive 14% EPS surprise. Currently, the stock sports the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
MCD’s annual dividend currently yields 2.1%, nearly double that of the Zacks Retail and Wholesale sector average. Impressively, the company’s payout has grown by 10% just over the last year.
Image Source: Zacks Investment Research
Bottom Line
For those seeking reliability, all three Dividend Aristocrats above – W.W. Grainger (GWW - Free Report) , Procter & Gamble (PG - Free Report) , and McDonald’s (MCD - Free Report) – could be considered.
All three sport a favorable Zacks Rank, have provided market-beating returns over the last five years, and are fully established with decades of operations.
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3 'Boring' Stocks Crushing the S&P 500 Over the Last Five Years
During volatile periods in the market, a more conservative approach should be considered. Investors can implement the style in several ways, including targeting companies with an established track record of success throughout decades of operations.
Three Dividend Aristocrats – W.W. Grainger (GWW - Free Report) , Procter & Gamble (PG - Free Report) , and McDonald’s (MCD - Free Report) – are all examples of companies that have stood the test of time.
And while these investments are typically labeled as ‘boring,’ their stability is undeniable. Below is a chart illustrating the total return performance of all three stocks above over the last five years, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Perhaps to the surprise of some, all three have outperformed the S&P 500 in this more extended timeframe, which doesn’t sound very ‘boring’ to me.
Procter & Gamble
Consumer Staples titan Procter & Gamble posted better-than-expected results and provided optimistic guidance in its latest release, helping shares close 3.5% higher post-earnings. Earnings improved 3% year-over-year, whereas revenue saw growth of 4%.
As we can see in the chart below, the company’s revenue growth has been steady over the last five years.
Image Source: Zacks Investment Research
PG’s annual dividend currently yields 2.4%, below the Zacks Consumer Staples sector average modestly. In addition, the company’s 6.3% five-year annualized dividend growth rate is undoubtedly a major positive.
Image Source: Zacks Investment Research
Shares are a bit expensive at the moment, with the current 26.7X forward earnings multiple well above the 24.1X five-year median.
PG currently carries a Style Score of “D” for Value.
Image Source: Zacks Investment Research
W.W. Grainger
Analysts have raised their earnings expectations across all timeframes for GWW over the last several months, pushing the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company’s dividend presently yields a respectable 1% annually, with a payout ratio sitting sustainably at 21% of its earnings. As we can see below, the company has shown a commitment to increasingly rewarding its shareholders.
Image Source: Zacks Investment Research
On top of a shareholder-friendly nature, W.W. Grainger’s growth projections are solid, with earnings forecasted to climb 18% in its current fiscal year (FY23) and a further 6% in FY24.
McDonald’s
McDonald’s posted results that came in well above expectations in its latest print, delivering a positive 14% EPS surprise. Currently, the stock sports the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
MCD’s annual dividend currently yields 2.1%, nearly double that of the Zacks Retail and Wholesale sector average. Impressively, the company’s payout has grown by 10% just over the last year.
Image Source: Zacks Investment Research
Bottom Line
For those seeking reliability, all three Dividend Aristocrats above – W.W. Grainger (GWW - Free Report) , Procter & Gamble (PG - Free Report) , and McDonald’s (MCD - Free Report) – could be considered.
All three sport a favorable Zacks Rank, have provided market-beating returns over the last five years, and are fully established with decades of operations.