Companies that grow each year are attractive because their successful business models can become steady, predictable investments. Like a bond with a growing yield rate, a good investment is a combination of a stable dividend and a rising share price.
However, if the returns aren’t consistently rising or even go negative, you can’t be sure of what you will end up with in the future. You wouldn’t want to gamble with your future wealth.
Here are three companies that have steadily grown in the past five years. They have good track records and may help you reach your long-term investment goals.
JB Hi-Fi Limited (ASX: JBH), the electronics goods retailer, has carved out a niche in a competitive retail space, growing a network of 184 stores. In 2008, the total was 105. Its target is 214, so it still has room for expansion.
It is changing some of its stores to the new JB Hi-Fi HOME format that offers electronics and household appliances. It expects to have 22 HOME stores by the end of FY2014 and sees a potential for about 50 by the end of FY2016.
Revenues have increased annually in the past five years and net profits followed an upward trend from $65.1 million to $116.1 million in FY2013.
Amcor Limited (ASX: AMC) has grown its revenues and earnings steadily over the past five years. The share price of this packaging manufacturer has risen right along the way, from about $4 in 2009 to $10.41 currently.
In FY2013, it made several acquisitions of packaging companies, including two overseas. It operates in over 43 countries at more than 300 sites.
Its annual dividend has followed an upward trend over the past five years, from 34 cents per share to 40 cps in FY2013.
ResMed Inc. (ASX: RMD) develops and produces medical equipment for the treatment of sleep related breathing disorders and other respiratory disorders. Revenues and earnings have gone up uninterrupted since 2009, with FY2013 net profit totaling US$307 million.
Over the last two years, its share price has climbed from about $3 to $4.90. In 2012, the company began paying a dividend after many years of retaining all profits for business growth.
We all want to find some stock that will shoot up in share price for a quick, easy gain. They are out there, but intelligent investors will concentrate on companies that produce the best returns over the long run.
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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.