If a company is successful in being a leader in an expanding industry, it can perform even if it reinvests more of its profits rather than paying you a bigger dividend.
But just because a company is successful at reinvesting to provide growth in further business assets and revenues doesn’t guarantee the market will pay attention. Countless companies around the world are solid and improving their business values, but their stock doesn’t perform in line with their improved fortunes.
Therefore, it really doesn’t matter if management is great and the company is a global leader if the stock market doesn’t deliver the returns to justify buying it without a bigger dividend.
This is why this collection of “Long Haulers” is very short and selective — the stock markets of the globe have little patience for even the best of businesses.
And with the recent series of gut-wrenching plunges and bounces in stock markets, investing for the long haul can be downright hazardous right now for your retirement.
Despite some of the recent price gyrations, the Long Haulers have been proving their mission by delivering not just positive performance, but solid gains that work with dividend stocks to offset inflationary threats and other pricing challenges for your own retirement expenses now and for the years to come.
Agricultural technology company Monsanto (NYSE:MON) has more than delivered during the past year as the market has begun to catch up with its new mission to focus on seed technologies and higher-value-added chemicals.
The result is that — with soaring demand for more food and other crops, and limited acreage — Monsanto continues to build up sales and build up its business value.
And the stock market is recognizing it. During the past year — including the recent market mayhem — Monsanto has delivered a return in excess of 24%. And you can expect a lot more from this company in the year to come.
Other companies have had some setbacks in the near term with the massive market moves of recent weeks. But there still is the long-term proven track record of matching rising sales to the near lockstep performance of the stock.
Samsung (PINK:SSNLF) is such a stock. With concerns about consumer and industrial demands in the U.S. and Europe, the stock has taken some hits recently.
But given that Samsung’s markets are much broader than that of just the U.S. or Europe — even if we do see anemic expansion in general terms — the company still should continue to provide offsetting sales gains in Latin America, Africa, and — most importantly — Asia.
So, for now, look at the recent price action as an opportunity to reinvest some of the cash into this long-term success company.
Siemens (NYSE:SI), the German industrial giant, is in a similar situation with Samsung as concerns about U.S. and European economic slowdowns have taken the stock down over the recent series of volatile trading.
But for the trailing year, the company’s stock has delivered a 12%-plus return, largely on the back of its solid customer bases in the still very-high-growth markets beyond the so-called first-tier economies of the U.S. and Europe.
Keep buying Siemens — particularly in the current market price conditions.
China still is the fastest-expanding economy in the world and continues to see a ramp up in income and spending — not just in the higher end of their wealthy population, but more importantly in their middle to lower classes.
This is why China Mobile (NYSE:CHL) — the workhorse phone company of the market — continues to get both broad business demand for its services and growth in the consumer markets. It’s a broad, nationwide base of continuing and renewing customers.
The share price has taken some hits. But for now, the proof for me is that the market always has caught up with the rising business values and revenue growth, resulting in higher stock prices.
Last among what’s working is a new member of the Long Haulers that comes up from the farm team of the Nibblers.
The key for ExpressScripts (NASDAQ:ESRX) is it is right in the sweet spot of what the private sector and the government want– lower medical costs. The pharmacy manager continues to chomp down on costs, and in turn garners more and more of the market — resulting in massive sales gains.
And it’s plugged in to the government as well as business leaders, enabling it to expand not just on its own, but by buying out its lesser rivals. This, in turn, gives it the opportunity to expand in size and gives it greater efficiency.
Having proven itself, it should be bought in larger amounts over the coming months.