If you bought shares over a year ago, you might not have noticed the fall of the S&P/ASX200 Index (ASX: XJO) (^AXJO) in the past month (it's down 6.3%). The spectacular rise of the market over the past year has allowed even the 'dog' stocks to do well.
However, despite the rise, shareholders in Leighton Holdings (ASX: LEI), Coca-Cola Amatil (ASX: CCL) and Cash Converters (ASX: CCL) are almost certain to be less than enthusiastic with their performance in 2013. In the past six months they have fallen 3.7%, 6.7% and 27% respectively.
In my opinion investors have overlooked some truly remarkable returns from these three stocks because of reduced earnings guidance or negative press. In the past 10 years the average annual shareholder returns are 7%, 10.9% and 20.9% respectively, not including dividends.
In addition to a very reasonable share price and forecasted earnings per share growth, these companies offer above average income streams. Coca-Cola Amatil – distributor of one of the most well-known brands worldwide – pays a trailing dividend of 4.8% with 75% franking.
Leighton – one of Australia's biggest construction companies – pays a dividend of 5.7% with 50% franking. With forecasted earnings per share growth of 20% in its 2013 financial year the full-year dividend will likely increase to 96 cents.
Cash Converters' recent share price dive has provided a great opportunity for long-term investors willing to overlook reduced earnings growth in the near term. It pays a 5.1% fully franked dividend which will likely remain flat or slightly decrease in 2014. Trading on a P/E ratio of 9.5 and considering its growth potential, Cash Converters definitely deserves a spot on watch lists.
Foolish takeaway
Each of these companies pay great dividends and thanks to a setback in their share prices offer good value for long-term investors. However each face an element of risk and future earnings and dividends could come under pressure if management fail to steer each company in the right direction.
