It’s reporting season, and just as cream always rises to the top, today’s article sees another collection of great companies trading at 52-week highs.
They’re joined by other big names like Domino’s Pizza Enterprises Ltd. (ASX: DMP), Caltex Australia Limited (ASX: CTX), and Ardent Leisure Group (ASX: AAD).
Most of these companies have been buoyed by recent impressive results that deserve elaboration (you can find articles on these companies and more at fool.com.au), but due to size constraints I’ll be focussing on just three companies today:
Telstra Corporation Ltd (ASX: TLS) – last traded at $5.60, up 8.6% for the year.
Profit after tax rose 14.3% in the latest full-year report, a surprising increase that will leave Telstra owners feeling pretty chuffed about their investment.
However the company told investors it expects flat earnings in FY15, which should present the opportunity to buy in at a better price once the glow of the latest annual report wears off.
Although it doesn’t look cheap at current prices, Telstra enjoys huge free cash-flows and has extensive experience buying and growing new business lines, meaning it’s definitely not a company to bet against for the long term.
Sirtex Medical Limited (ASX: SRX) – last traded at $20.10, up 49.7% for the year.
Although Sirtex hasn’t released its full-year results yet, it did recently reveal that fourth quarter sales doses of its liver cancer therapy rose 27.1% compared to the prior corresponding period. It now has 40 consecutive quarters of sales increases.
Notably, the company expects the trend to continue and will cease reporting quarterly dose increases in favour of focussing on its 2020Vision strategy – a plan to deliver accelerated growth over the medium to long term.
Although it’s not cheap by any means, Sirtex is likely to deliver enough growth over the coming years to compensate for the premium you pay on your investment today.
Goodman Group (ASX: GMG) – last traded at $5.34, up 11.3% for the year.
I wrote an article earlier this year entitled ‘2 blue chip stocks you should own, but probably don’t‘, in which Goodman Group featured prominently.
The company has since paid back my vote of confidence, delivering a 46% increase in revenue and a 10.5% increase in operating profits. Dividends also rose 7.3% for the year.
With a substantial undeveloped land bank in China and a high percentage of foreign income, I think Goodman makes a fair investment for the medium term, even though today’s prices are quite high.
Net Tangible Assets are only roughly 50% of the share price which may spook some investors, although gearing is also quite low at 19.5%.
Although all three of these stocks are likely to grow dividends in the future, only one is a truly great dividend stock – Telstra.
However Telstra’s dividends aren’t growing in size very rapidly, meaning the shrewd investor can often find a better performing company that will pay better dividends than Telstra over the long term.
Our leading analyst has selected one such company as The Motley Fool‘s Top Dividend Stock for 2014-2015.
With a strong track record of growing earnings and dividends, a purchase now could see you earning progressively greater dividends as the company grows over time.
It’s a company I already own, and one I think that you should have a look at too.
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Motley Fool contributor Sean O'Neill doesn't own shares in any company mentioned.
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