It's nice to find stocks from the more 'conservative' sectors of the market that behave like growth stocks, offering double digit returns while at the same time rewarding shareholders with solid yields. The latest pullback has brought a number of such stocks into sharp focus. Below we present them with their fundamental criteria.
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Master Infrastructure Investors
Brookfield Infrastructure Partners L.P. (NYSE:BIP) is a Master Limited Partnership that sports a dividend yield of 6.6% and trades with a P/E of just 10.65. In the last year, the stock tacked on nearly 40%, largely pushed by the growth of government infrastructure spending globally. That beat the S&P 500, as represented by the SPDR S&P 500 ETF (NYSE:SPY), which returned 21% over that period. BIP slightly underperformed the JPMorgan Alerian MLP Index ETN (NYSE:AMJ), which gained 43%.
Brookfield is an owner/operator of a wide range of international infrastructure properties. Most recently the company jumped into the Australian and U.K. markets, taking over port, pipeline and railway assets in those two nations. Brookfield's shares currently trade at less than breakup value, with a price to book ratio of 0.94. (Are all the ratios making you see red? Check out Investopedia Video for easy-to-understand explanations of P/E Ratio, CAGR and much more)
Profits, Western (and Eastern) Style
Black Hills Corporation (NYSE:BKH) is a garden variety energy utility serving customers in Iowa, Nebraska, Colorado and Kansas. Where it departs from the norm is in the gains it has accrued in the last year. BKH stock is up 28.5% in the last twelve months and still pays a 4.8% dividend. The shares change hands at a multiple of 13.7 times last year's earnings and 1.03 times book value.
Consolidated Edison, Inc. (NYSE:ED) is one of the country's oldest gas and electricity marketers, serving 3.3 million customers in the Greater New York area. The company's stock pays a nice 5.2% annual dividend and trades with a P/E of 13.71. In the last year the shares have gained more than 21%.
Price to book on the shares is 1.12 and price to sales a competitive 0.97. The company's latest earnings report produced 80 cents a share profit, beating last year's 66 cents for the same period.
Surprisingly, some of the best market performers over both the last few months and the last year have hailed from the most conservative quarters of the market. That's likely a comment both on the strength of the companies mentioned and on the prevailing mood of the investing public. By and large, they're avoiding risk. (Rather than following the hot stocks, build a dividend-rich portfolio. For further reading, see Monster Dividends.)
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