Three Companies to Consider

The past will never guarantee the future, but when we're trying to predict the future, it's oftentimes the only data we have. So any metric I'd like my investments to meet are the metrics I screen for. And hopefully that screen brings up dozens of candidates for consideration. From that list I continue to zero in for the best of the best of the best. 

Below are three companies that are serious candidates for me to consider accumulating. All three of these have one year estimated price targets at least ten percent higher than their current price. And even though they pay a meager minimum dividend of only 1%, that dividend has a growth rate of at least twenty percent per year. That's a phenomenal growth rate and one that will make any investor rich in just a few years. 
 

Amgen Inc. discovers, develops, manufactures, and delivers human therapeutics worldwide. It focuses for the treatment of illness in the areas of oncology, hematology, inflammation, bone health, nephrology, cardiovascular, and general medicine. The company’s principal products include Neulasta, a pegylated protein to decrease the incidence of infection associated with chemotherapy-induced febrile neutropenia in cancer patients; NEUPOGEN, a recombinant-methionyl human granulocyte colony-stimulating factor for reducing the incidence of infection as manifested by febrile neutropenia for patients with non-myeloid malignancies; and Enbrel to treat rheumatoid arthritis, plaque psoriasis, and psoriatic arthritis in adult patients. Its principal products also comprise EPOGEN for the treatment of dialysis; Aranesp for treating anemia; XGEVA for the prevention of skeletal-related events; Prolia to treat postmenopausal women with osteoporosis; and Sensipar/Mimpara products for use in the treatment of secondary hyperparathyroidism in chronic kidney disease patients on dialysis. The company’s other marketed products include Kyprolis, a proteasome inhibitor to treat patients with multiple myeloma and small-cell lung cancer; Nplate, a thrombopoietic compound; Vectibix, a human monoclonal antibody; and BLINCYTO for the treatment of patients with Philadelphia chromosome-negative relapsed or refractory B-cell precursor acute lymphoblastic leukemia. It also develops various products that are in various clinical trials. The company serves pharmaceutical wholesale distributors; and healthcare providers, including physicians or their clinics, dialysis centers, hospitals, and pharmacies, as well as consumers. It has collaborative agreements with AstraZeneca Plc; Takeda Pharmaceutical Company Limited; UCB; and Bayer HealthCare Pharmaceuticals Inc. The company was founded in 1980 and is headquartered in Thousand Oaks, California.
(Summary) (Company) (Daily Chart)

Price $152.31
1yr Target $179.47
No. of Analysts 17
1yr Cap Gain 17.83%
Dividend $3.16
Yield 2.07%
1yr Tot Return 19.90%
1yr EarnGR 0.90%
3yr EarnGR 18.16%
5yr EarnGR 8.23%
1yr DivGR 29.70%
3yr DivGR 41.25%
5yr DivGR ---
Payout Ratio 42.64%

Market Cap $115.80 Bil
Beta 0.54
EPS (ttm) 7.41$
EPS next yr $10.56
P/E 20.55
PEG 1.84
Forward P/E 14.43
Debt/Equity 1.14
ROA 8.20%
ROE 22.40%
ROI 10.20%
Sales $20.58 Bil
Income $5.71 Bil
Profit Margin 27.74%

Amgen's double digit one year estimated capital gain is always a desirable attribute when evaluating possible investments but as a dividend growth investor I'm particularly interested in companies that pay at least a 2% dividend growing faster than inflation. Amgen's dividend growth is phenomenal despite the fact that the dividend hasn't been paid for very long. I'd prefer to have a company that has a P/E ratio below twenty but based on forward projections, the P/E ratio will fall to 14.43 next year which is well within my thresholds. The last thing I'd like to see is a much lower debt to equity level. 

The Boeing Company designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. The company operates in five segments: Commercial Airplanes, Boeing Military Aircraft, Network & Space Systems, Global Services & Support, and Boeing Capital. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft for various passenger and cargo requirements, as well as provides related support services to the commercial airline industry. This segment also offers aviation services support, aircraft modifications, spares, training, maintenance documents, and technical advice to commercial and government customers. The Boeing Military Aircraft segment is involved in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems for the global strike and vertical lift, and unmanned airborne systems programs, as well as mobility, surveillance, and engagement. The Network & Space Systems segment engages in the research, development, production, and modification of electronics and information solutions; strategic missile and defense systems; space and intelligence systems; and space exploration products. The Global Services and Support segment offers integrated logistics, including supply chain management and engineering support; maintenance, modification, and upgrades for aircraft; and training systems and government services, such as pilot and maintenance training. The Boeing Capital segment facilitates, arranges, structures, and provides financing solutions, such as equipment under operating leases, finance leases, notes and other receivables, assets held for sale or re-lease, and investments for its commercial airplanes customers. The Boeing Company was founded in 1916 and is based in Chicago, Illinois.
(Summary) (Company) (Daily Chart)

Price $141.92
1yr Target $163.00
No. of Analysts 19
1yr Cap Gain 14.85%
Dividend $3.64
Yield 2.56%
1yr Tot Return 17.41%
1yr EarnGR 23.82%
3yr EarnGR 11.26%
5yr EarnGR 31.87%
1yr DivGR 42.20%
3yr DivGR 21.92%
5yr DivGR 13.03%
Payout Ratio 45.55%

Market Cap $98.14 Bil
Beta 0.97
EPS (ttm) $7.99
EPS next yr $9.29
P/E 17.76
PEG 1.43
Forward P/E 15.28
Debt/Equity 1.14
ROA 6.10%
ROE 51.50%
ROI 32.60%
Sales $92.45 Bil
Income $5.81 Bil
Profit Margin 6.28%

There's not much I can find wrong with The Boeing Company. The dividend is very reasonable and the fact that it has been increasing over the last few years without pushing the payout ratio above fifty percent is impressive. I like the P/E ratio and the expected rise in earnings next year which will only drive the P/E ratio lower. If there's a flaw here it's a debt to equity ratio above one. I personally dislike any debt at all but I understand the nature of their business and based upon past earnings increases as well as projected future earnings increases, I believe the debt is something the company can deal with successfully.

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance, and professional service programs to do-it-yourself, do-it-for-me, and professional customers. The company offers installation programs that include flooring, cabinets, countertops, water heaters, and sheds; and professional installation in various categories sold through its in-home sales programs, such as roofing, siding, windows, kitchen and bath refacing, furnaces, and central air systems, as well as act as a contractor to provide installation services to its do-it-for-me customers through third-party installers. It primarily serves professional remodelers, general contractors, repairmen, small business owners, and tradesmen. The company also sells its products through online. As of the February 1, 2015, the company had 2,269 stores located throughout the United States, including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam, Canada, and Mexico. The Home Depot, Inc. was founded in 1978 and is based in Atlanta, Georgia. 
(Summary) (Company) (Daily Chart)

Price $111.00
1yr Target $124.74
No. of Analysts 23
1yr Cap Gain 12.37%
Dividend $2.36
Yield 2.12%
1yr Tot Return 14.49%
1yr EarnGR 25.26%
3yr EarnGR 23.73%
5yr EarnGR 24.57%
1yr DivGR 21.95%
3yr DivGR 22.54%
5yr DivGR 17.05%
Payout Ratio 47.87%

Market Cap $144.19 Bil
Beta 1.05
EPS (ttm) $4.93
EPS next yr $6.03
P/E 22.52
PEG 1.67
Forward P/E 18.40
Debt/Equity 1.83
ROA 15.60%
ROE 65.30%
ROI 25.80%
Sales $84.38 Bil
Income $6.55 Bil
Profit Margin 7.76%

Everything I mentioned above about Boeing can be said about The Home Depot. The major difference looking at the numbers is that HD may be a little more consistent in their delivery (a good thing) but they have a lot  higher debt to equity (a bad thing).  Like Boeing, the dividend is very reasonable and the fact that it has been increasing over the last few years without pushing the payout ratio above fifty percent is impressive. I like the P/E ratio and the expected rise in earnings next year which will only drive the P/E ratio lower. But that high debt to equity ratio may become burdensome. I personally dislike any debt at all but I understand the nature of their business and based upon past earnings increases as well as projected future earnings increases, I believe the debt is something the company can deal with successfully.

My Perspective

I think that all three of these companies have a place in my portfolio. None of them are cheap and having limited funds makes accumulating positions in all three rather difficult. But not impossible. I believe over time I will start small positions in each of these companies and then grow those positions over time. Of the three I believe I will initiate a position in The Boeing Company first, followed by a position in The Home Depot, and then finally a position in Amgen. In the end I believe I'll have three rock solid additions to my account that will continue to grow their dividend for years to come.