UPDATE: 20 stocks that will help you sleep at -3-
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 0828ETCopyright (c) 2017 Dow Jones & Company, Inc.