Ansell Limited and CSL Limited: 2 growth companies for long-term investors

This month’s reporting season has revealed a number of great companies that raised earnings even in an economy still not firing on all cylinders.

Two of those companies need to get special recognition because they are solid performers that keep pushing to improve business and raise earnings. As income stocks in your portfolio, they could work to help create future wealth.

Ansell Limited (ASX: ANN) is a market leader for protective wear, such as plastic and fabric gloves found in many hospitals and warehouses, as well as condoms in your local supermarkets and pharmacies.

Both earnings and book value per share have doubled in the past ten years. In FY 2014, underlying net profit gained 13% on a 16% rise in revenue. It has a 2.0% dividend yield unfranked. Analyst consensus forecasts are for earnings to rise an average 10% per year over the next two years.

Just like Gillette razors, each product may not be very expensive, but the sheer amounts that are used on a daily basis make it a very attractive kind of business for long-term investors.

CSL Limited (ASX: CSL), the largest biopharmaceutical company listed on the S&P/ASX 200 Index (ASX: XJO) (Index: ^XJO), produces vital medical products for viral and bacterial diseases as well as blood disorders. The company benefits from high demand for its specialised products and can charge a premium for them.

In its recent FY 2014 full year results, net profit was up 8%. Just as important, the final dividend was raised 15% to US 60 cents per share for a full year dividend of US$1.13 cps. Currently, its yield is 1.7% unfranked.

Over the past 10 years, dividends have risen about six times, which should have made its shareholders very happy and a little richer. Going forward, a strong healthcare stock like CSL in your portfolio could give you the dividend income you are looking for in the long term.

Just as good a stock, but even cheaper...

For investors who are building portfolios to create wealth over the next several decades, Ansell Limited and CSL Limited could be good sources of dividend income as well as share price growth. I would prefer CSL because of its product specialisation.

However, there is another high quality stock that is very early in its growth days which might do even better in the future...

Here at The Motley Fool we have identified what could be the 'story stock' of 2014! Get The Motley Fool's #1 pick now in our newly updated investment report. It's yours FREE. Simply click here for your copy of "The Motley Fool's Top Stock for 2014." 

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.