Remember the joy of unloading a massive haul of treats from your Halloween bag at the end of a long night of Trick or Treating?
You know what’s even better today?
Stocks—really good stocks to buy for your grown-up pursuits.
Here are three fantastic stocks for your bag (a.k.a. portfolio), ready to enjoy…
Dover Corp (NYSE:DOV)
Every Halloween bag contained at least one “surprise” treat, and this one contains Dover.
Dover’s a surprise because it’s pretty small at a market cap of under $10 billion, its revenues just crossed over the $7.7 billion mark, and it makes a slew of products you might not even think about.
Indeed, Dover is a manufacturer of components and specialty systems that include gas nozzles through its OPW brand, refrigeration glass through its Hillphoenix brand, and high-performance pumps, sensors and monitoring solutions for the energy field.
Here’s something else you may not know about Dover: it’s a member of dividend royalty.
Dover’s first dividend increase was in 1956, which makes its most recent increase to 42 cents per share (up from 40 cents per share), the 59th consecutive annual raise.
Based on Dover’s most recent quarterly earnings release for the period ending September 30, Morningstar analysts treated Dover to an “A” credit, and 4-star rating, citing Dover as a low default risk.
Dover’s future is looking bright too, as it raised earnings guidance on full year 2015 to $3.73-$3.80 per share, ahead of Thompson Reuters’ consensus estimate of $3.73.
Dover’s one of those treats that manages to stay under the radar for the long term, until the day you open it and realize it’s provided you with a nice return for very little risk.
Enjoy Dover for the long term…
Illinois Tool Works (NYSE:ITW)
If product diversity in some pretty unstable times means anything to an investor, then Illinois Tool Works stock is a treat to enjoy.
From arc-welding equipment to plastic and metal components found in transportation equipment and components and fasteners for the automotive industry, ITW’s seven business segments keep the company plugging along.
ITW is another Dividend Aristocrat, with over 50 years of annual dividend increases, the last of which brought its payout to shareholders a 12% bump up to 55 cents per share, today yielding a very sweet 2.57% dividend yield.
As a multi-national industrial engineering and manufacturing company, ITW is under a bit of stress right now.
Indeed, it will be buffeted by currency headwinds for the time being, along with slowness in global machinery orders and continued softness in the commodities sectors.
OK, that’s the bad news.
It’s that diversity that will make the difference over the long haul, along with what Zacks characterizes as “sound capital allocation policies” that allowed for both the dividend increase and a commitment to spend $2 billion on stock buybacks.
With just under $2.9 billion in cash on the balance sheet and trailing 12 months cash flow of $1.62 billion, ITW is positioned for the long run for investors willing to pay for a forward p/e ratio of just over 15x estimated earnings.
Your treat bag will be well served for the long term with ITW.
Qualcomm (NASDAQ: QCOM)
It’s dog eat dog in the semiconductor/chip manufacturing market, but if anyone outside of Intel (NASDAQ:INTC) has a leg up, it could be Qualcomm.
Qualcomm’s reach and background in manufacturing chips powering up the mobile world of smart phones and Wi-Fi networks is headed up by its relationship with Apple (NASDAQ:AAPL), and bolstered even further with its working relationship with vendors with Google’s (NASDAQ:GOOG) android offerings.
You can argue about how well Apple’s iPhone sales are going (but Apple will tell you that selling 13 million new iPhone 6s and 6s Plus models within three days of their launch is pretty darn good) and how that will impact Qualcomm into the future, but for now Qualcomm’s position is secure, and you can bet it will continue to work its chip production and innovations to keep that position.
What that means today, however, are tighter margins. But as Motley Fool points out, Qualcomm management is addressing the issue, indicating that it expects those margins to climb to 16% by 2016’s fourth quarter, well ahead of 2015’s 2-4% range.
To help cement its future, Qualcomm purchased software solutions provider CSR plc to boost it into the world of the Internet of Everything.
Qualcomm management expects the CSR purchase to “complement Qualcomm Technologies’ current offerings by adding a compelling portfolio of new products, sales channels and a large number of customer in the area of IoE and automotive—both key growth priorities for Qualcomm Technologies. “
Here’s the best part of the QCOM treat…
Trading at just 16x earnings, QCOM feels like a bit of a steal, particularly with its 3.26% dividend yield on a quarterly payout of 48 cents per share.
Qualcomm’s been paying an increasing dividend for over 10 years now, and with a $21 billion cash hoard on the balance sheet and operating cash flow over the past 12 months of over $5 billion, those dividends should continue to not only roll in, but get increased for a very long time every year.
Qualcomm will be around long enough for your children’s children to enjoy Halloween just as much as you did at their age.
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