Crista Huff

Growth & income investors typically look for income stocks that can grow over the long-term.  The income, in the form of dividends, may or may not be important for these investors to live on, but it certainly lowers the overall volatility of the stocks.  Think about it: when the market's falling and people are panicky and selling, they think twice about selling a stock which has been yielding 4% and raising its dividend annually.  That resistance to selling buoys the stock price in volatile markets, thereby easing the stress of stock investing.

"During 2011, high-dividend payers were the top-performing group in the S&P 500, with the top 50 yielders at the start of 2011—all with 4%-plus yields—returning more than 8% (not including dividends), compared with a flat showing for the entire index, according to Birinyi Associates." -- In Search of YieldBarrons.com, Jan. 21, 2012.

Waste Management (WM, $33.96) is the largest waste disposal company in North America.  It's a large-cap stock with a current yield over 4%, and possibly a good addition to a growth & income stock portfolio.

"The Company's four geographic operating groups...provide collection, transfer, disposal and recycling services. Its fifth Group is the Wheelabrator Group, which provides waste-to-energy services, and manages waste-to-energy facilities and independent power production plants (IPPs)." -- Morgan Stanley Research

Earnings per share (EPS) have bounced within the range of $1.98 to $2.23 in each of the last six fiscal years.  However, Wall Street projects EPS to grow 9% to $2.30 per share in 2012, and 12.6% to $2.59 per share in 2013.  "The company projects compound annual growth rates (CAGRs) of 3% to 5% for revenue and 8% to 12% for diluted EPS for the next five years." -- Standard & Poor's Research.  Perhaps the earnings growth will be the catalyst to launch the stock price past heavy resistance at $39.


Crista Huff

Crista Huff is a retired stockbroker from a NYSE member investment firm. She writes about market-timing at Goodfellow LLC and is active politically.
 
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