The core thoughts in this blog are value creation by long-term investing. If you put money for a long period of time into a stock, you will see that your investment is growing.
Consider this nifty fact to keep you focused on the long term: $10,000 invested at birth and compounded 10% annually turns into more than $5 million by age 65.
As you can see, a $10,000 investment can easily turn into a fortune if it is left to compound at a reasonable rate of return over the long term. For these calculations, we assumed a 10% average annual rate of return over the long term, which is less than the amount actually achieved by the market as a whole since 1926.
Below are five picks that could help you to boost your portfolio return. To qualify for this list, the company must have a long history of dividend increases. We also took into account the sustainability of those dividends and the amount of yield it was providing.
We kept total return in mind, looking for companies with excellent earnings and dividend growth rates, as well as sustainable business models. Since investment amounts are likely to be small to start, we limited our selections to companies that do not charge fees for investing through the plan. We also sought to diversify the companies in terms of industry. The companies that met these conditions are listed below.
Here are some ideas...
International Paper -- Yield: 4.21%
International Paper (NYSE:IP) employs 58,000 people, generates revenue of $23,617.00 million and has a net income of $749.00 million. The current market capitalization stands at $17.26 billion.International Paper’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,874.00 million. The EBITDA margin is 16.40% (the operating margin is 6.41% and the net profit margin 3.17%).
Financials: The total debt represents 32.68% of International Paper assets and the total debt in relation to the equity amounts to 183.25%. Due to the financial situation, a return on equity of 8.59% was realized by International Paper.
Twelve trailing months earnings per share reached a value of $2.14. Last fiscal year, International Paper paid $1.45 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.42, the P/S ratio is 0.73 and the P/B ratio is finally 3.44. The dividend yield amounts to 4.21%.
Stock Charts:
 |
| Long-Term Stock Price Chart of International Paper (IP) |
 |
| Long-Term Dividend Payment History of International Paper (IP) |
 |
| Long-Term Dividend Yield History of International Paper (IP) |
Exxon Mobil -- Yield: 3.57%
Exxon Mobil (NYSE:XOM) employs 75,300 people, generates revenue of $394,105.00 million and has a net income of $33,615.00 million. The current market capitalization stands at $338.24 billion.Exxon Mobil’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $51,379.00 million. The EBITDA margin is 13.04% (the operating margin is 8.65% and the net profit margin 8.53%).
Financials: The total debt represents 8.33% of Exxon Mobil assets and the total debt in relation to the equity amounts to 16.70%. Due to the financial situation, a return on equity of 18.67% was realized by Exxon Mobil.
Twelve trailing months earnings per share reached a value of $4.73. Last fiscal year, Exxon Mobil paid $2.70 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.17, the P/S ratio is 0.86 and the P/B ratio is finally 1.97. The dividend yield amounts to 3.57%.
Stock Charts:
 |
| Long-Term Stock Price Chart of Exxon Mobil (XOM) |
 |
| Long-Term Dividend Payment History of Exxon Mobil (XOM) |
 |
| Long-Term Dividend Yield History of Exxon Mobil (XOM) |
General Mills -- Yield: 3.04%
General Mills (NYSE:GIS) employs 42,000 people, generates revenue of $17,630.30 million and has a net income of $1,175.10 million. The current market capitalization stands at $34.81 billion.General Mills’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,417.80 million. The EBITDA margin is 19.39% (the operating margin is 11.78% and the net profit margin 6.67%).
Financials: The total debt represents 41.99% of General Mills assets and the total debt in relation to the equity amounts to 184.60%. Due to the financial situation, a return on equity of 21.18% was realized by General Mills.
Twelve trailing months earnings per share reached a value of $2.12. Last fiscal year, General Mills paid $1.67 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.52, the P/S ratio is 1.97 and the P/B ratio is finally 6.95. The dividend yield amounts to 3.04%.
Stock Charts:
 |
| Long-Term Stock Price Chart of General Mills (GIS) |
 |
| Long-Term Dividend Payment History of General Mills (GIS) |
 |
| Long-Term Dividend Yield History of General Mills (GIS) |
Johnson & Johnson -- Yield: 2.94%
Johnson & Johnson (NYSE:JNJ) employs 126,500 people, generates revenue of $74,331.00 million and has a net income of $16,323.00 million. The current market capitalization stands at $282.12 billion.Johnson & Johnson’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $26,305.00 million. The EBITDA margin is 35.39% (the operating margin is 27.66% and the net profit margin 21.96%).
Financials: The total debt represents 14.31% of Johnson & Johnson assets and the total debt in relation to the equity amounts to 26.90%. Due to the financial situation, a return on equity of 22.70% was realized by Johnson & Johnson.
Twelve trailing months earnings per share reached a value of $5.22. Last fiscal year, Johnson & Johnson paid $2.76 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.55, the P/S ratio is 3.80 and the P/B ratio is finally 4.07. The dividend yield amounts to 2.94%.
Stock Charts:
 |
| Long-Term Stock Price Chart of Johnson & Johnson (JNJ) |
 |
| Long-Term Dividend Payment History of Johnson & Johnson (JNJ) |
 |
| Long-Term Dividend Yield History of Johnson & Johnson (JNJ) |
Aqua America -- Yield: 2.45%
Aqua America (NYSE:WTR) employs 1,617 people, generates revenue of $779.90 million and has a net income of $213.88 million. The current market capitalization stands at $5.12 billion.Aqua America’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $440.89 million. The EBITDA margin is 56.53% (the operating margin is 40.31% and the net profit margin 27.42%).
Financials: The total debt represents 30.29% of Aqua America assets and the total debt in relation to the equity amounts to 98.93%. Due to the financial situation, a return on equity of 13.41% was realized by Aqua America.
Twelve trailing months earnings per share reached a value of $1.25. Last fiscal year, Aqua America paid $0.63 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.11, the P/S ratio is 6.57 and the P/B ratio is finally 3.10. The dividend yield amounts to 2.45%.
Stock Charts:
 |
| Long-Term Stock Price Chart of Aqua America (WTR) |
 |
| Long-Term Dividend Payment History of Aqua America (WTR) |
 |
| Long-Term Dividend Yield History of Aqua America (WTR) |
