Having steady, reliable growth stocks in your portfolio is some of the best insurance against disappointing returns. High growth stocks may be ideal, yet most companies can't keep up strong earnings growth pace for years on end. Regular growers can also offer decent dividend income, so together can deliver a satisfying return overall.
If you are reviewing your portfolio at the start of the new year and want to increase your returns, then you may want to consider the two stocks below. They have solid earnings track records, strong financials and can be picked up at reasonable prices today.
— JB Hi-Fi Limited (ASX: JBH) over the past five years has built up a strong reputation as a leading electronics retailer. Over the last twelve months though, retail trade in general has been weak and investors have let the stock slip down about 28% since November 2014.
Despite that, earnings per share in the 2014 financial year rose 8.4%. The specialty retailer is generating more revenue with its new JB Hi-Fi HOME stores, which also sell white goods and small appliances. The rising housing market has benefited the company as home owners are buying more household items to fill their new homes. You can pick JB Hi-Fi stock up relatively cheaply to hold while the economy recovers. The stock also pays a hefty 5.4% fully franked yield. That's higher than most bank term deposit rates, so income investors would be pleased.
— Automotive Holdings Group Ltd (ASX: AHE) had a solid year of earnings growth in financial year 2014. As the largest automotive retailer in Australia, the record low interest rates are helping bolster auto sales with cheaper financing. The auto retailer has also diversified its business well – operating the country's largest refrigerated food transport and warehousing provider.
Analysts are forecasting earnings growth of about 8% annually over the next few years. In addition, the stock yields a big 5.7% fully franked. Investors could be looking at a solid combined return of close to 16%. That's higher than the ASX's long-term average return.
