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Zacks.com Featured Highlights: MKS Instruments, Hasbro, Torchmark, GATX And Anthem

Published 06/12/2017, 09:30 PM
Updated 07/09/2023, 06:31 AM

For Immediate Release

Chicago, IL – June 13, 2017 - Stocks in this week’s article include MKS Instruments, Inc. (NASDAQ: MKSI Free Report ), Hasbro Inc (NASDAQ:HAS). (NASDAQ: HAS Free Report ), Torchmark Corporation (NYSE:TMK) (NYSE: TMK Free Report ), GATX Corporation (NYSE: GATX Free Report ) and Anthem Inc. (NYSE: ANTM Free Report ).

Screen of the Week of Zacks Investment Research:

5 Dividend Growth Stocks to Ensure Safe Returns

Honing in on dividend is a tried-and-true practice during market turbulence. These cash payouts are major sources of consistent income for investors when returns from the equity market are at risk. In particular, stocks that have a strong history of dividend growth as opposed to those that pays high yields form a healthy portfolio with more scope for capital appreciation.

Why is Dividend Growth Better?

Stocks that have a strong history of dividend growth generally act as a hedge against economic or political uncertainty as these belong to mature companies, which are less susceptible to large swings in the market while simultaneously offer downside protection with their consistent increase in payouts.

These stocks pose a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. All these superior fundamentals make dividend growth a promising investment as opposed to their traditional dividend counterparts. Further, a history of strong dividend growth indicates that a future hike is likely. This makes the portfolio healthy and safe.

Furthermore, these have a long history of outperformance over the long term. However, it does not necessarily mean that they have the highest yields.

Here are the screening parameters that could result in a winning dividend growth portfolio:

5-Year Historical Dividend Growth greater than zero: This selects stocks with a solid dividend growth history.

5-Year Historical Sales Growth greater than zero: This represents stocks with a strong record of growing revenue.

5-Year Historical EPS Growth greater than zero: This represents stocks with a solid earnings growth history.

Next 3–5 Year EPS Growth Rate greater than zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments.

Price/Cash Flow less than M-Industry: A ratio less than M-industry indicates that the stock is undervalued in that industry and that an investor needs to pay less for better cash flow generated by the company.

52-Week Price Change greater than S&P 500 (Market Weight): This ensures that the stock appreciated more than the S&P 500 over the past one year.

Top Zacks Rank: Stocks having a Zacks Rank #1 (Strong Buy) and 2 (Buy) generally outperform their peers in all types of market environment.

VGM Style Score of B or better: This is simply a weighted combination of Value, Growth and Momentum. This when combined with a Zacks Rank #1 or #2 offers the best upside potential.

Here are five of the 19 stocks that fit the bill:

MKS Instruments, Inc. (NASDAQ:MKSI Free Report ): This Massachusetts-based company is a leading worldwide developer, manufacturer and supplier of instruments, components and subsystems used to measure, control and analyze gases in semiconductor manufacturing and similar industrial manufacturing processes. The company has seen strong earnings estimate revision of $1.00 over the past 90 days for this year and has an expected earnings growth rate of 63.83%. It has a VGM Style Score of B and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here .

Hasbro Inc. (NASDAQ:HAS Free Report ): This Rhode Island-based company is a worldwide leader in children's and family leisure time and entertainment products and services, including the design, manufacture and marketing of games and toys ranging from traditional to high-tech. It has seen solid earnings estimate revision of 22 cents for this year over the past three months, with an expected earnings growth rate of 9.87%. The stock has a Zacks Rank #2 and a VGM Style Score of A.

Torchmark Corporation (NYSE:TMK Free Report ): This Texas-based financial services holding company specializes in life and supplemental health insurance for middle-income Americans. The company delivered an average positive earnings surprise of 2.01% in the past four quarters and has an earnings growth rate of 3.04% for this year. The stock has a Zacks Rank #2 with a VGM Style Score of B.

GATX Corporation (NYSE:GATX Free Report ): This Illinois-based company is the leading global railcar lessor specializing in railcar and locomotive operating leasing, aircraft operating leasing, information technology leasing, and venture finance for customers in diverse industrial sectors worldwide. It has seen solid earnings estimate revision of a nickel for this year over the past three months, and delivered an average positive earnings surprise of 32.81% in the past four quarters. It has a Zacks Rank #2 and a VGM Style Score of B.

Anthem Inc. (NYSE:ANTM Free Report ): This Indiana-based company operates as a health benefits company in the United States. The stock has seen positive earnings estimate revision of 25 cents over the past 90 days for this year with an expected earnings growth rate of 6.93%. The stock has a Zacks Rank #2 and a VGM Style Score of A.

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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MKS Instruments, Inc. (MKSI): Free Stock Analysis Report

Hasbro, Inc. (HAS): Free Stock Analysis Report

Torchmark Corporation (TMK): Free Stock Analysis Report

GATX Corporation (GATX): Free Stock Analysis Report

Anthem, Inc. (ANTM): Free Stock Analysis Report

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Zacks Investment Research

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