Successful investors have a keen eye for companies that can deliver above average share price growth and solid dividend income. It's like buying property – good paying rental income (dividends) keep things going smoothly as the market price rises over the years.
Share prices can rise at faster rates than property, which makes it more exciting, but it's the total shareholder return (both share price appreciation and dividend income) we have to concentrate on.
I have three stocks with good track records which could be attractive portfolio candidates for rewarding long-term returns.
One thing to remember, though: total shareholder return is based on past performance, so stocks that have performed well previously don't automatically repeat that into the future. You need companies that show stable and growing revenue, earnings and dividends for any hope they can replicate it.
— CSL Limited (ASX: CSL)
The $31.9 billion biopharmaceutical is one of the biggest success stories of the ASX. Most of its business is outside of Australia in major healthcare markets like the US and Germany. Both earnings and dividends have steadily risen over the past five years, giving a compound annual average 19.7% total shareholder return during that time.
— Flight Centre Travel Group Ltd (ASX: FLT)
This well known travel agency and holiday booking company has propelled itself onto the international scene, all while strengthening and reshaping its domestic brand and franchise network. It past five-year total shareholder return was an astounding compound 42.1% annual average. Since the GFC, the share price has risen greatly with increased numbers of overseas and domestic travellers. Asia is its next target for business expansion as the region's economies grow.
— Ramsay Health Care Limited (ASX: RHC)
With a number of years of strong growth through acquisitions, the company has risen to be not only the biggest private hospital healthcare provider in Australia, but is now one of the top service providers in France. Over the past five years, its total shareholder return was a terrific 39% compounded annually. It is looking to expand more in Asia, especially in China with its high and steadily aging population. Healthcare is a high demand sector in many countries.
