Our 100 American all-star stocks mostly generate growing earnings, cash flow and revenue over time. This gives most of them the means to raise the dividends they pay you. Rising dividends make it likely that the share prices of our American all-star stocks will climb more than most, or fall less than most. At least in the long run.
Add exposure to these American all-star stocks
You can cross-border shop for American stocks from the comfort of your own home. You also need not answer questions of a border guard, or have your car taken apart if they’re suspicious of you.
One mistake that many investors make is what’s known as “home biased”. That means that they buy mostly local stocks and far fewer international stocks. Canada represents only a small slice of the world’s stock market capitalization. Also the Canadian market misses some industries.
The U.S. market has plenty of top-notch consumer stocks, such as key stock McDonald’s Corp. (NYSE—MCD) and manufacturers, such as Key stock 3M Co. (NYSE—MMM). The Canadian market has relatively few world-class stocks in these two economic sectors.
Continue to buy shares gradually. Buying gradually will also leave you with some cash. This will let you take advantage of a stock market setback.
This time we’ve removed sell-rated Dirtt Environmental Solutions Ltd. (TSX—DRT) from the list of stocks on our Back Page. We replace it with buy-rated non-Key stock Lowe’s Companies Inc (NYSE—LOW).
Lowe’s Companies is expected to earn more this year and next. This ‘Very Conservative’ stock is a buy for long-term share price gains and attractive, growing dividends.
We’re also replacing fashion retailer Gap Inc. (NYSE—GAP) with Adobe Inc. (NASDAQ—ADBE). The Gap experienced many difficulties in the first half of the year. Sales fell by 13 per cent. What’s more, same-store sales plunged by 14 per cent. This is a critical statistic for retailers. Sell Gap.
Adobe “develops various computer software products that enable users to create, transfer and print electronic documents for digital media and digital experience.”
Adobe’s results are favourable. Its sales and earnings per share continue too grow quickly. The company recently had cash of US$2.7 billion. It reinvests its cash to improve its product lines. This reinvestment means that it pays no dividends.
Analyst Adam Posner writes, “this issue offers good appreciation potential for the next three to five years”. We agree. Buy Adobe Inc. for long-term share price gains, provided that you need no dividends.
This is an edited version of an article that was originally published for subscribers in the August 26, 2022 issue of The Investment Reporter. You can profit from the award-winning advice subscribers receive regularly in The Investment Reporter.
The Investment Reporter, MPL Communications Inc.
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The Investment Reporter •9/29/22 •