A the start of 2017 I put forward 10 shares that investors should buy due to certain qualities they offered including value, growth, and income. Moreover, 6 of the 10 shares were founder led companies that enjoy excellent management focused on the long-term health of the companies.
Let's take a look to see how the 10 companies named have fared over the past year, versus the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO), which has returned 7.9% including the effects of dividends.
JB Hi-Fi Limited (ASX: JBH) has lost 8% over the past year to sell for $25.03, although when you factor in the 4.7% dividend yield returned the total return is no disaster. JB Hi-Fi's operating performance has been strong, but remember share prices are forward looking and investors seem worried about the potential impacts of Amazon. That's probably fair enough and I'd rate it as hold for now.
Cochlear Limited (ASX: COH) is up 53% over the past year plus dividends as the hearing-aid manufacturer continues to deliver consistent double-digit growth. The stock has also benefited from an earnings multiple re-rating as investors recognise its competitive advantages and long-term growth potential.
Commonwealth Bank of Australia (ASX: CBA) is down 1% over the past year, although after you factor in a 5.3% dividend yield its return is only marginally behind the market in a tough year for the bank that ended with a royal commission after numerous banking scandals. CBA's performance despite the problems shows what a solid investment it remains over the long term.
ARB Corporation Limited (ASX: ARB) is up 9.6% and paid out dividends around 1.8% over the year. It remains an excellent founder led business with a phenomenal track record of profit and dividend growth. Shares are up 71% over the past 5 years.
SEEK Limited (ASX: SEK) is up 26.3% and offered a yield around 2.4% despite paying out a relatively low proportion of profits in dividends and reinvesting heavily for growth. The stock is quite fully priced now, but looks a buy on any significant dips.
MNF Group Ltd (ASX: MNF) is up 34.4% and returned around 1.5% in dividends that could have been reinvested at a discount. This is a founder led software and online communications business that remains a buy at $6.34 in my opinion.
TPG Telecom Ltd (ASX: TPM) is down 11.3% despite a strong end to a year in which it has been buffeted by poor investor sentiment and the margin-crunching effect of the NBN network. Another founder-led company focused on the long term shares look at buy at $6.40.
Magellan Financial Group Ltd (ASX: MFG) is up 14.2% and offered around 3.6% in dividends over the year. This founder led business enjoyed some excellent growth in funds under management and could post another strong 2018.
Reliance Worldwide Corporation Aus (ASX: RWC) is up 22.2% plus dividends around 1.8%. Another founder led business it's growing strongly overseas and may post another strong year ahead.
REA Group Limited (ASX: REA) is up 42% and offered dividends around 1.5%. It's not founder led but does have a forward-thinking management team that appears consistently one-step ahead of the competition. Like online peer SEEK, the stock looks fully valued for now, but remains a buy if it gets much cheaper.
Chart: 10 top shares for 2017, Source: Google Finance
I make that an average return around 18.2%, with the benefits of dividends making for an annual total return around 20%. This shows the benefits of focusing on quality companies alone, such as the one revealed below.
