Few players—stars such as Willy Mays, Hank Aaron, Mike Trout and Mookie Betts—can make baseball’s 30-30 Club. It’s for players who hit 30 home runs and steal 30 basis in the same season.
I have a 30-30 Club for companies. To make it, a company must post a return on stockholders’ equity of 30% or better, and boast earnings growth averaging 30% or more for the past five years. (It must also have a market value of $2 billion or more.)
Forty-seven companies made the roster this year. Each of them deserves a spotlight and a drum roll. I wouldn’t buy all their stocks, however, since many are highly priced, and a few are highly indebted.
I recommend six 30-30 club members this year.
Nexstar Media Group
Even more of a bargain at eight times earnings is Dick’s Sporting Goods (DKS).
Cheapest of all, at six times earnings, is Mueller Industries
The Honor Roll
Missing in Action
Amazon.com came excruciatingly close, missing the return-on-equity cut-off by less than one percentage point. Apple is spectacularly profitable, but its earnings growth rate for the past five years is about 19%. Meta Platforms, formerly called Facebook, missed both criteria by a whisker. Microsoft just missed the cut with 27% earnings growth. Tesla’s return on equity was 22%, and it hasn’t been profitable long enough for a five-year earnings growth rate to be calculated.
I’ve been compiling the 30-30 Club roster most years since 1999. In the 17 years in which I made recommendations, my picks have averaged a 10.4% return (including dividends). The Standard & Poor’s Total Return Index has averaged 8.4%.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
My selections have been profitable ten times out of 17, and have beaten the S&P ten times.
A year ago, I recommended three stocks. Regeneron Pharmaceuticals posted a 56% return. LGI Homes
In my 30-30 roster this year, but not mentioned above, are 26 other companies, listed below:
Atkore (ATKR), BJ’s Wholesale Club Holdings (BJ), Boot Barn Holdings (BOOT) Builders FirstSource
Also: Generac Holdings (GNRC), Group 1 Automotive
Disclosure: For clients and personally, I own Alphabet, Apple, D.R. Horton, Encore Wire and Lam Research. One or more of my clients owns Adobe, Amazon.com, Bio-Rad, Microsoft, Nvidia, Progressive, Sealed Air and Tesla.
John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at [email protected].
World News || Latest News || U.S. News