There may be no surer way of measuring a company's strength than checking their ten year revenue and EPS growth rates. One or two quarters - or even a good year or two - can mask what's essentially shoddy management and a stroke of luck. A ten year record is not so easy to fudge.
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But what about companies with solid ten year records that also boast great dividends and trade with low earnings multiples? And what if they also traded at or below book value? Would you be interested in such stocks? Would they make a nice fit in your portfolio? Read on to learn about three such companies that have also been on the move of late.
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Vodafone Group Plc (Nasdaq:VOD) is Britain's mobile communications giant, with equity interests in over 30 countries worldwide. The company's stock is up over 25% in the last three months, a far better showing than the SPDR International Telecommunications ETF (NYSE:IXP), which has tacked on just over 13% in the same period. Vodafone pays a 7.0% dividend and trades with a P/E of 9.82.
But more exciting is the company's long term growth record. In the last decade, management has grow revenues at an 18.9% clip while EPS growth has averaged 21.62% over that same period.
Vodafone also trades at a fraction of the company's breakup value. Price to book on the shares is just 0.94.
Banco Santander, SA (NYSE:STD) is a global banking operation with headquarters located in Madrid. Shares in the company's stock have soared in the last three months, up 40%. That compares favorably compared to the iShares S&P Global Financial Sector ETF (NYSE:XLF), which gained just 2% over the period. Banco Santander shares pay a very healthy 5.6% annual dividend, while the P/E ratio on the shares is just 9.47.
STD has grown revenues and EPS at very impressive rates over the last decade: 10.3% and 9.19% respectively. Much of the company's recent growth can be attributed to acquisitions it has made or is currently in the process of making.
Cincinnati Financial Corp (Nasdaq:CINF) pays a dividend of 5.7% and trades at a multiple of 9 times last year's earnings. Price to book for the stock is 0.97.
Over the last decade CINF has posted 6.25% annual growth in revenues and 6.76% EPS growth.
Ten year growth records that are positive are not an easy thing to come by. But when they're coupled with great yields and respectable P/E and P/B ratios, they become irresistible buys. (Learn not only what compound annual growth rate is but also what its benefits, limitations and dangers are. See CAGR: The Good, The Bad And The Ugly.)
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