Let’s face it: Sometimes, boring is beautiful. There’s nothing sweeter than watching well-run companies with steady business models churning out a nice mix of share-price appreciation and dividends as the years roll by.
Many companies that fit that particular mold are powered by products we use every day, every year, even if we don’t think twice about them. So their formula for success isn’t sexy, and it’s certainly long-term in nature — but that’s what retirement portfolios are, too. Sounds like a perfect fit to me!
A number of these seemingly under-the-radar companies haven’t been wholly ignored by the investment community, however. These five stocks now find themselves near or at all-time highs.
More importantly for those still considering them, they have a chance to fly even higher:
Ever hear of Pall Corp. (NYSE:PLL)? Chances are, you haven’t. Pall is a maker of filtration, separation and purification products primarily used in life sciences and food industries. Website product descriptions include items like “Immobilized Canisters for HiPPAGs” for aerospace and defense use and “Biodyne Nylon Transfer Membranes” for testing and monitoring use in labs.
In other words, Pall’s products aren’t sitting on your countertop at home or on your office desk, but they’re working behind the scenes somewhere on your behalf.
The same can be said for the stock, which is at all-time highs around $69 thanks to a seven-year stretch of roughly 20% annual returns. PLL also yields a modest 1.5%, but it has been boosting its dividends annually since 2004, and a 17% payout ratio means there’s plenty of room for improvement. Plus, earnings growth is expected to come in around 12% for the next five years, so you can breathe easy.
Colgate-Palmolive (NYSE:CL) is royalty in the consumer staples world thanks to brands like its namesake Colgate dental products and Palmolive cleaners, Softsoap sanitizers and Speed Stick deodorants — things we sure do need, and things we sure don’t talk about.
CL has racked up 14% annual returns since 2006, and it also offers a decent 2.3% in dividends — a payout it has been consistently increasing for more than 25 years.
A pullback Thursday put Colgate just under new all-time highs above $110 set earlier this week. But unless hygiene goes the way of the rotary telephone, CL should continue to power on with dividend increases and appreciation for the long-term.
Unless you’re a kid, cereal isn’t going to have you jumping out of your chair. But still: Go to this page detailing the laundry list of General Mills (NYSE:GIS) cereals — with Cheerios, Trix and Lucky Charms among them — and tell me you don’t like at least one of them. Of course, in addition to cereals, General Mills also produces other scintillating products such as Gold Medal Flour and Green Giant brand vegetables. Wheee!
But food is good business. Indeed, for GIS, it’s worth roughly $17 billion in revenues, some of which trickle down to funding its healthy 3.15% dividend. That payout is long-lived and growing, too — GIS has been issuing dividends since 1898, and the checks have gotten 50% fatter in just the past four years!
General Mills’ staples aren’t going anywhere, nor is its dividend. GIS’ projected earnings growth of 8% for the next five years isn’t spectacular, but it’s solid enough to keep the ball rolling.
Johnson & Johnson
Johnson & Johnson (NYSE:JNJ) is about as dependable — and boring — a stock as you’ll ever find.
Among its attention-grabbing products: Johnson’s baby powder. Bengay. Listerine. Tucks Hemorrhoidal Ointment. Pepcid heartburn treatment. Band-Aids. Visine eye care. That’s a product lineup that will put you to sleep faster than its Zyrtec allergy medicine.
Of course, all those household necessities have powered JNJ’s dividend for nearly 70 years, with steady year-by-year growth to its current 61-cent payout (good for a 3.3% yield at current prices). That certainly helps make up for admittedly slower, if not steady, returns of roughly 4% annually … though 13% gains in the past year have pushed Johnson & Johnson’s stock into new all-time highs around $74.
JNJ’s diversified line of offerings should keep that needle pointed north.
Tupperware (NYSE:TUP) tries to make up for its boring nature with “parties,” but when your main product belongs in pantries or the back of the refrigerator, you know what kind of business you’re running.
Tupperware, of course, hocks the well-known containers that made it famous. However, it also offers other kitchen implements such as cheese graters, can openers, kitchen shears, stockpots and rice makers — not much sexier, but hey, it’s a little variety.
TUP has been the life of Wall Street’s party, though, gaining a whopping 32% annually in the past seven years (though “just” 15% in 2012). On the income side, it raised its dividend from 22 cents in 1996 — its first year of public trading — to 36 cents in 2012. Then it made a huge splash this week when it goosed that payout by more than 70% to 62 cents per share — good for an attractive 3.3% yield.
Couple that with an extra $800 million toward its buyback program and analyst expectations for 12% earnings growth through 2018, and it’s hard not to gravitate toward this pile of sandwich containers.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long JNJ.