Investors can stack the deck in their favor in a few ways. First, look for companies that have strong competitive advantages, or economic moats. These solid firms will be able to keep compounding their earnings for years to come and often produce more predictable cash flows throughout the economic cycle. Second, look for a reasonable dividend-payout ratio and for signs that the dividend could grow. If returns are going to be limited by current valuations, getting more of your total return from dividends is a strategy that makes sense. Finally, pay attention to valuation to make sure you are paying a fair price. Just because there aren't a ton of values doesn't mean you should wildly overpay for a security. That's unlikely to be a winning strategy.
We identified a few stocks that meet the above criteria using the Morningstar Premium Stock Screener. You can run the screen yourself here. Below are three names that passed. Unilever (UL) wide moat stems from its expansive global distribution platform and its portfolio of essential products. Southern (SO) total-return proposition remains appealing for patient investors in a world of few decent income alternatives. Chevron (CVX) concentrated its exploration efforts on a few key areas that have yielded a high level of exploration success.
Source: Morningstar
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I own SO - and now I am reassured that my decision was right
UL and CVX are not in my portfolio, but in the next 6-12 month, I will purchase both companies! :-)
best regards!
D-S