The media has been going on about how the market is down, but do you know how far?
Actually, the S&P/ASX 200 Index (ASX: XJO) (Index: ^XJO) is up about 1.8% over the past 12 months. Not a fantastic amount, I give you, but the sky hasn't fallen in yet.
Like when it rains – you don't stay home. You get an umbrella and carry on. Same way with stocks. Having stable, growing stocks can help protect your returns over the long term. Below are several strongly performing companies that are putting their heads down and staying busy at making more money for tomorrow.
ResMed Inc. (CHESS) (ASX: RMD)
The developer and producer of breathing aids and respiratory devices had a 13.9% earnings gain in FY 2014 and consensus forecasts over the next two years are for solid growth. It pays a 2.23% yield unfranked. I like its long track record of doubling its earnings per share in the four years since 2009. It gets the majority of its revenue from the huge U.S. healthcare market. Healthcare stocks can be good defensive plays in weak markets, so if you don't have one in your portfolio, this may be the one for you.
Crown Resorts Ltd (ASX: CWN)
The casino and integrated resorts operator has been slipping in share price since late August, already down about 7.8%. It now trades on a price-earnings ratio of 15.7 and it's yielding 2.61%. This company, headed by billionaire James Packer, has a full list of resort and casino developments which should carry it into the next five years with steady growth. Analysts are projecting an average 10% rise in earnings annually for the next two years as construction starts for a proposed VIP gaming venue and 6-star hotel near Sydney's Darling Harbour.
SEEK Limited (ASX: SEK)
SEEK is expanding into countries such as Malaysia, Indonesia, China and even Brazil to develop job search websites like its market-leading seek.com.au. As an internet company, it can maintain a healthy level of business growth without having to invest heavily into infrastructure. Its overseas earnings are increasing, but also its SEEK Learning division for training and education is another source of growth. FY 2014 group underlying net profit powered up 27% to $179.7 million. Even full year dividends were up 30%. I would be looking for double-digit earnings growth annually over the next 1- 2 years.
Over time, a stock's share price correlates with company earnings. That's the trick of getting ahead financially with investing – follow growth. Following new, innovative companies can open up new opportunities as well.
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