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Investors are always looking to beat the market, searching for stocks that deliver consistent long-term gains. And perhaps to the surprise of some, many non-tech stocks have delivered outsized gains over the last decade.
Several factors contribute to long-term outperformance, including consistent sales growth, margin expansion, efficient capital deployment, and innovation.
Three stocks – Caterpillar, Domino’s Pizza and Cintas – have all outperformed the S&P 500 over the last decade, all posting at least a 15% annualized return.
Let’s take a closer look at each.
Caterpillar Keeps Raising Quarterly Dividend
Caterpillar, known for its iconic yellow machines, is the largest global construction and mining equipment manufacturer. The earnings estimate revisions trend has been notably bullish for its current fiscal year, up 17% over the last year to $21.73 per share.
Positive revisions hit the tape following its latest set of quarterly results, with the company’s next release expected in just a few weeks on August 6th.
The stock has long been a favorite among income-focused investors, currently holding the ranks of a Dividend Aristocrat thanks to 25+ years of increased payouts. The company currently sports a 6% five-year annualized dividend growth rate paired with a sustainable payout ratio sitting at 24% of its earnings.
It’s worth noting that Caterpillar recently announced an 8% hike to its quarterly payout on June 12th, bringing the quarterly total to $1.41 per share. Margin expansion has also aided the strong share performance over the last decade, as we can see below.
Domino’s Pizza Delivers Robust Quarterly Results
Domino’s is a top player in the Quick-Service Restaurant Pizza category. The company is actually on the reporting docket for this week, with its results expected to come on July 18 before the market’s open.
Recent quarterly results have been positive, with the company exceeding the Zacks Consensus EPS estimate by an average of nearly 10% across its last four releases.
Analysts have been positive on the upcoming release, with the $3.68 Zacks Consensus EPS estimate up 2% over the previous several months and suggesting Y/Y growth of 20%. Revenue expectations have moved similarly, with DPZ expected to see 8% sales growth.
Consistent sales growth has aided the strong share performance, with the company’s 17.6% five-year annualized dividend growth rate also keeping shareholders happy over the years. Growth is expected to continue in a big way, with consensus expectations for its current fiscal year suggesting 10% earnings growth on 8% higher sales.
Peeking ahead to FY25, consensus expectations suggest an additional 14% of EPS growth paired with a 7% sales climb. The stock sports a Style Score of ‘A’ for Growth.
Cintas Enjoys Profitability Boost
Cintas’ products and services include uniforms, floor care, restroom supplies, first aid, and safety products, taking care of any business needs. The stock currently sports a favorable Zacks Rank #2 (Buy), also expected to deliver quarterly results this week on July 18 before the market opens.
Shares popped post-earnings following its latest set of quarterly results, now trading at all-time highs. Stocks making new highs tend to make even higher highs, particularly when positive earnings estimate revisions are present.
Like CAT, margin expansion has helped aid share performance nicely over the last decade, as we can see illustrated below. A shareholder-friendly nature has also kept investors happy, with Cintas sporting a sizable 22% five-year annualized dividend growth rate.
Bottom Line
All investors look to reap outsized gains, precisely what all three stocks above have done over the last decade, providing annualized returns in excess of 15%.
Several factors have contributed to their long-term outperformance, including consistent sales growth, meaningful margin expansion, efficient capital deployment, and innovation.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Caterpillar, Domino's Pizza and Cintas
For Immediate Release
Chicago, IL – July 17, 2024 – Today, Zacks Investment Ideas feature highlights Caterpillar (CAT - Free Report) , Domino’s Pizza (DPZ - Free Report) and Cintas (CTAS - Free Report) .
These 3 Stocks Are Decade-Long Outperformers
Investors are always looking to beat the market, searching for stocks that deliver consistent long-term gains. And perhaps to the surprise of some, many non-tech stocks have delivered outsized gains over the last decade.
Several factors contribute to long-term outperformance, including consistent sales growth, margin expansion, efficient capital deployment, and innovation.
Three stocks – Caterpillar, Domino’s Pizza and Cintas – have all outperformed the S&P 500 over the last decade, all posting at least a 15% annualized return.
Let’s take a closer look at each.
Caterpillar Keeps Raising Quarterly Dividend
Caterpillar, known for its iconic yellow machines, is the largest global construction and mining equipment manufacturer. The earnings estimate revisions trend has been notably bullish for its current fiscal year, up 17% over the last year to $21.73 per share.
Positive revisions hit the tape following its latest set of quarterly results, with the company’s next release expected in just a few weeks on August 6th.
The stock has long been a favorite among income-focused investors, currently holding the ranks of a Dividend Aristocrat thanks to 25+ years of increased payouts. The company currently sports a 6% five-year annualized dividend growth rate paired with a sustainable payout ratio sitting at 24% of its earnings.
It’s worth noting that Caterpillar recently announced an 8% hike to its quarterly payout on June 12th, bringing the quarterly total to $1.41 per share. Margin expansion has also aided the strong share performance over the last decade, as we can see below.
Domino’s Pizza Delivers Robust Quarterly Results
Domino’s is a top player in the Quick-Service Restaurant Pizza category. The company is actually on the reporting docket for this week, with its results expected to come on July 18 before the market’s open.
Recent quarterly results have been positive, with the company exceeding the Zacks Consensus EPS estimate by an average of nearly 10% across its last four releases.
Analysts have been positive on the upcoming release, with the $3.68 Zacks Consensus EPS estimate up 2% over the previous several months and suggesting Y/Y growth of 20%. Revenue expectations have moved similarly, with DPZ expected to see 8% sales growth.
Consistent sales growth has aided the strong share performance, with the company’s 17.6% five-year annualized dividend growth rate also keeping shareholders happy over the years. Growth is expected to continue in a big way, with consensus expectations for its current fiscal year suggesting 10% earnings growth on 8% higher sales.
Peeking ahead to FY25, consensus expectations suggest an additional 14% of EPS growth paired with a 7% sales climb. The stock sports a Style Score of ‘A’ for Growth.
Cintas Enjoys Profitability Boost
Cintas’ products and services include uniforms, floor care, restroom supplies, first aid, and safety products, taking care of any business needs. The stock currently sports a favorable Zacks Rank #2 (Buy), also expected to deliver quarterly results this week on July 18 before the market opens.
Shares popped post-earnings following its latest set of quarterly results, now trading at all-time highs. Stocks making new highs tend to make even higher highs, particularly when positive earnings estimate revisions are present.
Like CAT, margin expansion has helped aid share performance nicely over the last decade, as we can see illustrated below. A shareholder-friendly nature has also kept investors happy, with Cintas sporting a sizable 22% five-year annualized dividend growth rate.
Bottom Line
All investors look to reap outsized gains, precisely what all three stocks above have done over the last decade, providing annualized returns in excess of 15%.
Several factors have contributed to their long-term outperformance, including consistent sales growth, meaningful margin expansion, efficient capital deployment, and innovation.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.