Lately, I’ve been discussing TOTAL RETURN a lot. Many young dividend investors chase high yielding investments without considering TOTAL RETURN. However, your goal is to have a larger and larger number in your account at the end of this game for retirement, so you not only want dividends, you want growth and large price appreciation as well.
Here are my top 3 TOTAL RETURN stocks
- 1)Hyatt Hotels-A total return of over 30% on the one year chart, over 5 years a whopping 57%. When I purchased H, I had no idea it would turn out to be such an incredible performer. There was lots of bad news and bearish sentiment with the stock. However, it whipped out a 34% EPS growth last quarter, even if it’s down -8% EPS on the year. Now H only pays around a 1% dividend, so it’s not a great stock if your only consideration is the dividend. Not to mention, it’s only been paying a dividend for 2 yrs max. Keep in mind though it’s dividend growth annually is over 20% and the payout ratio is less than 15%, so it has a HUGE opportunity to grow its dividend over the next few years.
- 2)Ryman Hospitality-This is a REIT exposed to the hotel and entertainment industry. 1 yr performance of around 17%, on the 5 year mark almost 70%!! One of my favorite holdings because it’s about American as it gets, no international exposure. Funds from Operations increased in a huge way with RHP in 2019, hence the great price appreciation. RHP pays around a 4.3% dividend, so mix those dividends in with the price and you get supercharged TOTAL RETURN. I hold this in my IRA.
- 3)Quest Diagnostics-This outperformed in 2019, 29% TOTAL RETURN, around 58% on the 5 year mark. Quest is a Health Services/Tech company. I bought this because I had used the services and I realized it was a nice hedge during an economic slowdown. People have to use their services regardless of what happens. The EPS growth is not looking great to me only around 2% but they are making acquisitions and growing. Hopefully, we start to see some of this in the next report.
What do ALL of these companies have in common?
They are DIVIDEND GROWERS! If you look at their long-term graphs, you will also notice they are trending upward, they have positive momentum. A lot of recommended dividend stocks are going sideways or worse DOWN. You don’t want this if you are trying to capture TOTAL RETURN. As always, here is the corresponding youtube video I did!