Published: September 17, 2009
The
correct answer is
(A.) Otter Tail
Otter Tail provides electricity to
about 130,000 commercial,
industrial, and residential utility
customers in the Midwest. The firm
is also an active player in the
wholesale power market. Otter Tail's
portfolio also includes food
processing, plastics packaging and
diagnostic medical equipment.
Management points to the company's
diverse mix of utility,
manufacturing, healthcare, and
construction lines as key to
minimizing the impact of a downturn
in any one sector and generating
consistent earnings. And it's hard
to argue with the results: The
company has paid out increased
dividend distributions every year
since 1975. Sales have tripled
during the past 10 years, with much
of the credit going to a nine-fold
increase in manufacturing-related
revenues.
A homerun stock like Otter Tail can
generate more profits than an
average investor might make in a
lifetime--one of those rare
multi-baggers that appreciates, say,
+3,000% during a 10 year stretch.
But don't assume such jaw-dropping
gains must always involve risky
ventures that happen to pay off.
Some could be everyday businesses in
your own backyard.
That's why StreetAuthority editor
Nathan Slaughter screened the stock
universe and found over 1,000
small-cap stocks offering dividend
yields that beat average yield of
the S&P 500. After all, promising
small-cap firms are like tiny acorns
that will one day become towering
oaks. But as they say, trees don't
grow all the way to the sky.
Eventually growth will trail off, at
which point they shower everything
around them with a bountiful harvest
each season. Nathan found five
stocks that are doing just that--and
making their shareholders a bundle:
all of them have posted 10-year
cumulative returns of at least
4,000%!
Not surprisingly, most
income-seeking investors spend
little time hunting for acorns and
prefer their stocks to be
full-grown, but automatically
overlooking smaller companies can be
costly.
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