UPDATE: 20 stocks that will help you sleep at -3-

02/18/17 08:28 AM EST
Altria Group Inc.                                    50%                    50%                    0%                               21.9                               20.3 
Tractor Supply Co.                                   50%                    50%                    0%                               21.2                               18.9 
Priceline Group Inc.                                 80%                    20%                    0%                               22.4                               19.4 
Mettler-Toledo International Inc.                     7%                    86%                    7%                               27.9                               25.0 
                                                                                                                                                            Source: FactSet 

In comparison, the S&P 500 trades for 17.8 times aggregate 2017 EPS estimates and for 15.9 times the 2018 aggregate, according to FactSet. The only company on the list trading below either of those P/E ratios is AutoZone Inc. (AZO).

Then again, companies that consistently bring home strong returns on invested capital don't come cheap. Buffett had good reason to say: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

The ratings of sell-side analysts are based on 12-month price targets. Maybe people consider a 12-month commitment to be "long-term investing." But it's not. Solid returns can take years to accumulate.

So here you have a list that includes some great companies. Most of the stocks aren't cheap, but they may well pan out over the next several years. This is where your own research in a company's business strategy comes into play.

Do you think the company will remain competitive in its market for the next 10 or 20 years? That's the key question.

-Philip van Doorn; 415-439-6400; AskNewswires@dowjones.com

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02-18-17 0828ET

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