There continues to be an interesting tension in the markets.
As we saw yesterday, the U.S. economy is slowing — GDP is estimated to be 1.9% in the third quarter. And the Federal Reserve has once again stepped in to help boost spending and borrowing.
But on the other hand, stocks seem unstoppable. They continue to rise, with the major indices teasing new highs. This odd combination is happening everywhere. Germany’s economy is slow yet its stock index is up. It’s the same with China.
There is a sense of optimism as we head into the historically strongest quarter of the year that the consumer will be there to keep the fires lit until business and global trade get back to normal.
However, I still think it’s smart to own and buy the best stocks the market has to offer. And those are the ones that meet my strict criteria for growth investments with the best profit potential.
So, I dug through my Portfolio Grader, and the seven triple-A stocks to buy in November below, represent exactly that.
Triple-A Stocks to Buy: AppFolio (APPF)
AppFolio (NASDAQ:APPF) is a cloud-based software provider that focuses on small- to medium-sized property management and legal businesses.
This is a great market, given the fact that this is where much of the business lies around the U.S. It’s certainly nice to work with enterprise-level businesses, since you don’t need as many clients.
But the world where APPF operates is where the growth is. While big organizations look to stay lean and mean, many professionals can now spin off their own businesses and take clients that are too small for the bigger firms to deal with.
Having APPF software to help manage those businesses is a great competitive advantage.
The company reported earnings a few days ago; they were up 75% over consensus estimates. Last quarter, earnings were up 490% over estimates. There seems to be a trend forming.
The stock is up 66% year-to-date, and there’s still plenty of headroom, even if the economy slows.
First Industrial Realty Trust (FR)
First Industrial Realty Trust (NYSE:FR) is a real estate investment trust that specializes in warehouses and light industrial properties.
This sector of the market is especially strong as e-commerce grows.
Now that more and more things are delivered to our doors, it means having staging areas that are strategically placed for retailers and wholesalers is crucial.
And light industrial is just the kind of location where many small businesses start their operations, whether it’s a brewery, landscaping service or a computer networking shop.
What’s more, low interest rates make it better for FR to finance new places and refinance existing buildings at lower rates.
FR stock is up 46% year-to-date and delivers a solid 2.2% dividend. Given the persistent low-interest-rate environment, high-quality dividend growth stocks are so popular that I’ve nicknamed them the Money Magnets.
PennyMac Financial Services (PFSI)
PennyMac Financial Services (NYSE:PFSI) is in the mortgage banking and servicing business. Basically it buys and trades mortgages as well as services them.
In today’s market, with rates as low as they are and consumers feeling confident, this is a good sector to be in.
This is almost better than being in the REIT sector since PFSI doesn’t hold any properties — just the mortgages. In case there’s a recession or the value of properties tank, PFSI doesn’t have to deal with devaluing those assets.
Its only risk in a downturn would be servicing the loans. And even then, it could sell off riskier loans if it sees trouble coming.
The stock is up 45% year-to-date, since this sector is a big beneficiary of lower interest rates. But it doesn’t offer a dividend like REITs in the sector; it’s growth focused.
Collectors Universe (CLCT)
Collectors Universe (NASDAQ:CLCT) is an interesting — and niche — brand that has earned a foothold in the quickly growing collectibles business.
It is one of the country’s largest verification sources for collectibles like autographs, coins, trading cards and similar items.
For example, say you take your childhood baseball cards into a card or collectibles shop. They find a couple that show promise. They may buy them off you or suggest that you send them to CLCT to be verified for authenticity and value.
Then, if you resell them, you have a certificate that proves their authenticity, which increases their value and makes the sale easier. With online auctions growing in popularity, this service is growing as well. It might sound like a niche market, but it’s a great business model in a growth market, which is one of the proven hallmarks of successful stocks.
The stock is up 150% year-to-date, yet has a trailing price-to-earnings ratio of a mere 25.5 times. Plus CLCT stock delivers a nearly 2.4% dividend.
Carlyle Group (CG)
Carlyle Group (NASDAQ:CG) just released its third-quarter numbers this morning. It beat earnings by a penny and also beat on revenue, although revenue was down slightly from the same quarter last year.
But that’s to be expected, since this private equity firm, or alternative global asset manager, has clients around the world. And big clients at that. Wealthy people like former U.S. presidents, Saudi Arabia’s royal family and other powerful individuals make up a large portion of its clientele.
It has been around a long time and is well positioned to find long-term opportunities around the globe. Right now, the global slowdown depresses its earnings but also makes it a good time to shop for investments.
CG stock is up 74% year-to-date (and still has a trailing P/E of 11.4). The company also delivers an impressive 6.3% dividend. This is a classic long-term total return play.
Rent-A-Center (NASDAQ:RCII) is becoming quite the business.
Not only does it have over 2,000 stores across the U.S. and Puerto Rico, but it also has operations in Canada and Mexico. It also has a $1.4 billion market capitalization at this point.
RCII basically has rent-to-own stores that focus on durable goods, from furniture to computers. And one of its biggest moves recently is opening financing centers in third-party stores.
This is a big deal because financial institutions see this kind of “checkout financing” as one of the big new waves in retail.
Also remember that RCII runs its own financing shop, meaning it is making money off the financing as well as the sales. In a low-rate environment, financing higher-risk customers, the margins start to grow. That’s one of the key factors I use to find top-notch growth investments.
It’s no surprise the stock is up 84% in the 12 months, yet still has a trailing P/E of 12.4.
Crown Crafts (CRWS)
Crown Crafts (NASDAQ:CRWS) is perfect for investors looking for a small stock that is going to be there year in and year out, delivering growth and a solid dividend.
CRWS makes infant, toddler and juvenile clothes and accessories. And it has been doing that since 1957. It’s one of the largest infant product manufacturers in the world.
Its market cap is just $60 million, but it has wholesale and retail relationships with everyone including Disney (NYSE:DIS), Target (NYSE:TGT), Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN), Carter’s (NYSE:CRI), Nautica, and the list goes on. It’s very likely that if you have children, you have wrapped them or clothed them in a CRWS outfit or two.
The stock is up 14% over the last 12 months and it delivers a healthy 5.3% dividend. It also just announced today that it is going to distribute a special dividend that is equivalent to around 16% for shareholders of record on Dec. 13.
Why Dividend Growth Stocks Are So Important Now
These days, the global bond market is just going haywire: We’ve got falling and even negative yields overseas. But as investors retreat to U.S. Treasurys it’s causing bizarre effects here, too. Just look at what happened this summer, when the two-year Treasury actually began to yield MORE than the 10-year Treasury.
And even the 30-year Treasury can’t be relied upon for good yield anymore. In August, its yield dropped below 2% for the first time ever.
So — whether you’re managing big institutional cash, or your own portfolio — you’ll also want to look at the group I sometimes call the Money Magnets.
Not only did these stocks earn an “A” in my Portfolio Grader tool, thanks to strong buying pressure and great fundamentals …
The stocks also earn an “A” in my Dividend Grader tool. These stocks are able to pay great yields — and have the strong business model to back it up.
All in all, I’ve got 28 strong dividend growth stocks for you now, and one more coming, in Growth Investor … almost all of which yield more than the S&P 500. These stocks are poised to do well as we continue to see international capital flow to the U.S. markets. Click here to see how I found these stocks, and how you can get great performance out of YOUR portfolio — come what may.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.