Each day in the financial section of your newspaper there is a list of the day's top performing stocks. These stocks often have double digit (or more) gains. Problem is if you didn't buy them yesterday, you probably will not be able to reap the benefits. Like the fireworks, many of the stocks will quickly fizzle and fall back to earth.
Looking through my portfolio, I found several stocks that have performed well over many years, and I expect them to continue to do so. Below is a list of stocks that have provided me with an annualized 20%+ return since I first bought them through the end of September 2012:
Abbott Laboratories (ABT) is a diversified life science company that is planning to split into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals. I first purchased ABT in April 2009 at $44.36. It has increased its dividend each year and is currently yielding 3.0%. Since that first purchase I have added to my position 3 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 20.5%.
Genuine Parts Co. (GPC) is a leading wholesale distributor of automotive replacement parts, industrial parts and supplies, and office products. I first purchased GPC in May 2009 at $32.50. It has increased its dividend each year and is currently yielding 3.2%. Since that first purchase I have added to my position 6 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 22.4%.
The Coca-Cola Company (KO) is the world's largest soft drink company and also has a sizable fruit juice business. I first purchased KO in July 2007 at $26.42 (split adjusted). It has increased its dividend each year and is currently yielding 2.7%. Since that first purchase I have added to my position 3 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 22.5%.
Automatic Data Processing Inc. (ADP) is one of the world's largest independent computing services companies and provides a broad range of data processing services. I first purchased ADP in August 2009 at $37.77. It has increased its dividend each year and is currently yielding 2.7%. Since that first purchase I have added to my position 2 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 22.5%.
AT&T Inc. (T) provides telephone and broadband service and holds full ownership of AT&T Mobility (formerly Cingular Wireless). I first purchased T in February 2010 at $25.58. It has increased its dividend each year and is currently yielding 4.7%. Since that first purchase I have added to my position 2 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 23.0%.
Chevron Corporation (CVX) is a global integrated oil company (formerly ChevronTexaco) with interests in exploration, production, refining and marketing, and petrochemicals. I first purchased CVX in December 2008 at $70.98. It has increased its dividend each year and is currently yielding 3.1%. Since that first purchase I have added to my position 4 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 23.0%.
Cincinnati Financial Corp. (CINF) is an insurance holding company that primarily markets property and casualty coverage. It also conducts life insurance and asset management operations. I first purchased CINF in July 2010 at $27.12. It has increased its dividend each year and is currently yielding 4.2%. Since that first purchase I have added to my position 4 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 23.8%.
Illinois Tool Works Inc. (ITW) is a diversified manufacturer operates a portfolio of 60 business units that serve industrial and consumer markets globally. I first purchased ITW in October 2008 at $42.39. It has increased its dividend each year and is currently yielding 2.5%. Since that first purchase I have added to my position 3 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 24.6%.
Universal Health Realty Income Trust (UHT) is a real estate investment trust (REIT) that invests in healthcare and human service related facilities. I first purchased UHT in September 2010 at $42.81. It has increased its dividend each year and is currently yielding 5.4%. Since that first purchase I have added to my position 3 times as the stock price continued to increase. Over the period I held the stock, my annualized return is 25.8%.
3M Company (MMM) is a diversified global company that provides enhanced product functionality in electronics, health care, industrial, consumer, office, telecommunications, safety & security and other markets via coatings, sealants, adhesives, and other chemical additives. I first purchased MMM in March 2009 at $47.88. It has increased its dividend each year and is currently yielding 2.6%. Over the period I held the stock, my annualized return is 33.8%.
Whenever I present a list of top performers I also like to include one or more stocks at the bottom, so you can judge the range that I am working in. To that end, below is the stock with the lowest annualized return that I have held for at least one year:
Intel Corporation (INTC) is the world's largest manufacturer of microprocessors, the central processing units of PCs, and also produces other semiconductor products. I first purchased INTC in October 2008 at $16.81. It has increased its dividend each year and is currently yielding 4.0%. Since that first purchase I have added to my position 6 times as the stock price continued to increase (more recent purchases at higher prices is what drove the return down). Over the period I held the stock, my annualized return is 0.8%.
We all know that a portfolio of dividend growth stocks can provide you with a dependable and increasing income. As the data above shows, I have also come to expect significant price appreciation over time.
Full Disclosure: Long ABT, GPC, KO, ADP, T, CVX, CINF, ITW, UHT, MMM, INTC. See a list of all my dividend growth holdings here.
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