In my quest to provide greater benefit to MisterValuation subscribers, I am continuously looking for ways to improve your experience and profit. Therefore, this will be the fisrt in an ongoing series of featured stocks of the week. Currently, I have come up with three categories:
- Dividend Growth: In this category I will be featuring fairly valued dividend growth stocks with the potential to generate above-average future long-term total returns. With this category my emphasis will be on growth of earnings and dividends. Of course, as I will with all categories, my primary focus will always be on fair or attractive valuation.
- Dividend Income: In this category I will be featuring fairly valued dividend paying stocks for above-average current income. With this category my emphasis will be on current yield with the potential for growth yield. This category will primarily feature blue-chip dividend paying stalwarts and select REITs.
- Growth Stocks: In this category I will be featuring fairly valued high-growth stocks. With this category my primary emphasis will be on high expected future earnings growth potential available at valuations aligned with that growth potential. Most of the stocks in this category will lack the dividend component; however, there may be a few growth stock selections that do pay a small dividend.
Since this website was created to serve subscribers, feedback and suggestions are appreciated and welcomed. I can’t promise to institute each and every recommendation, however, I can promise to try my best.
Polaris Industries Inc.
Polaris Industries Inc (PII) is a leading designer, manufacturer and marketer of off-road vehicles. The company has a legacy of launching exciting new product offerings, and as a result, the company has been a strong and above-average grower over time. Over 60% of the company’s sales come from off-road vehicles, 17% from parts, garments and accessories (PG&A), 7% from snowmobiles, 8% from motorcycles and 6% from global adjacent markets. Over 75% of their approximately 4 ½ billion dollars of sales come from the United States, 10% from Canada and 15% internationally.
The company has stated goals to grow sales to over $8 billion by 2020, representing a 12% compound annual growth rate (CAGR). They also have stated an objective to increase net income to a level greater than 10% of sales by 2020, representing a 13% compound annual growth rate. I have a high level of confidence that these lofty goals are attainable. Therefore, considering the recent fall in stock price in 2014 in the face of strong earnings, cash flow and dividend growth, I consider this company currently attractive as a long-term total return dividend growth stock.
The attached analyze-out-loud video on Polaris will illustrate why I believe this fundamentally-sound and attractively-valued dividend growth stock is worth a closer look. I believe the primary attraction of Polaris is for those investors interested in adding above-average growth and dividend growth to their portfolios.