These low-key companies excite investors looking to profit.
If boredom, like its sibling state of beauty, lies in the eye of the beholder, then it definitely lies down and puts people to sleep. And it's no different for some investors who go deeper and respond to boring stocks with snoring. But what if some low-tech outfit representing the industrial synthetic solvents sector quietly turns profits to put the Silicon Valley hotshots to shame? What's so dull about delightful profits and delicious dividends? Here are eight investments that won't score you any points for sexy conversation fodder, but are definitely worth talking about for their status as exciting investment opportunities.
Hanesbrands (NYSE: HBI)
Underwear, Bali bras, Champion sweatsuits: Armani this isn't. But Hanesbrands champions can afford all the Armani or Versace they want. "The U.S. basic apparel business is mature but fragmented and HBI is a very efficient manufacturer that generates high returns on invested capital and free cash flow," says Benjamin C. Halliburton, chief investment officer at Tradition Capital Management in Summit, New Jersey. Though down a third since mid-2015, HBI is up 250 percent since October 2011, trading at $23 per share.
Genuine Parts Co. (GPC)
GPC distributes ... yawn ... automotive and industrial replacement parts. "It's in an incredibly boring business," says Bob Johnson, president and CEO of the American College of Financial Services in Bryn Mawr, Pennsylvania. Nor has the stock been a blockbuster of recent. But its dividend machine needs no mechanic: It's had 60 consecutive years of dividend growth. And over the last 10 years, GPC has delivered a 9.21 percent annual compounded return, compared to 7.52 percent for the Standard & Poor's 500 index.
W.P. Carey (WPC)
Who needs a dream home when you can invest in a non-household name in real estate? Carey's global portfolio includes 903 properties leased to 217 different tenants in 19 countries. "The U.S. real estate is improving while this holding provides for global access to real estate markets," says John Essigman, a wealth advisor based in Cleveland, Georgia. It currently trades at $69, but Essigman anticipates it could hit the $80 to $120 range in the next four to five years.
Service Corporation International (SCI)
SCI is the largest provider of death care products and services in the U.S., says Christopher Ma, director of the George Investments Institute at Stetson University in DeLand, Florida. That includes everything from hearse rentals to crematoria to professional body preparation services: always in demand and strong in the face of e-commerce. Plus, here's proof of life after death: "SCI has outperformed the S&P 500 by 200 percent over the last five years," Ma says.
As a maker of body sculpting lasers and cellulite treatment machines, Hologic will never be confused with Tesla (TSLA). But with 37 patents and recently won military contracts worth $720 million, HOLX is built for speed. "Hologic profits largely from selling its products to hospitals and clinics for the treatment of women's health conditions, including breast cancer," Ma says. That exclusive focus has meant exquisite returns: Hologic has beaten the S&P by 20 percent over the last three years.
Casey's General Stores (CASY)
Casey's operates 2,000 gas station convenience stores in the Midwest. "If you live in Iowa, Missouri or rural Illinois, you've likely been to Casey's and if you live anywhere else, probably not," says Robert Drach, managing director of Drach Advisors in Tallahassee, Florida. While CASY has remained flat in 2017, Drach sees it as an under-the-radar play. "CASY owns most of their assets and has a strong balance sheet, and their small-town, convenience-centered business reduces the risk of 'Amazon-ification.'"
You are getting sleepy. (They're based in Norway.) You are getting very sleepy. (They're crude oil shippers.) Now wake up: FRO is riding out the energy stock rut by rehabbing its fleet while its competitors' ships rust. "This will help Frontline to bounce back as the largest shipper in the world," says Ryan Peckham, who runs Rydar Equities in Midland, Texas, and is a business professor at Midland College. "They expect this to start to happen mid-2018."
Lamar Advertising Co. (LAMR)
Mind-numbing highway ad signage, anyone? Lamar owns more than 144,000 billboards in the U.S., Canada and Puerto Rico. "It also sells ad space on close to 41,000 signs on buses and at bus stops," says Matthew Fox, trader and analyst at Tompkins Financial Advisors in Ithaca, New York. And with America's driving miles rising for five consecutive years, "that means more eyeballs on billboards, which in turn increases the value for Lamar's advertising properties -- and should provide the company a long-term tailwind."
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