For some investors the mid cap dividend space is a great place to find a mix of income and capital appreciation. These investments can be an even more appealing way to go if the company has a history of increasing its dividend payments.
Here we take a look at a few of these so-called mid cap dividend aristocrats. Not only do they have a history of raising their dividend but are trading at inexpensive valuations relative to their expected earnings.
What Does Silgan Do?
Silgan (NASDAQ:SLGN) is a lesser known defensive stock that has managed to fly under the radar for the better part of its nearly 25-year trading history. Four two-for-one stock splits later the supplier of consumer goods packaging remains one of the best mid cap dividend stocks out there.
As North America's largest supplier of metal containers to food companies, Silgan derives more than half its revenue from the sale of aluminum and steel containers. Both human and pet food processors and packagers rely on Silgan to keep their canned vegetables, fruits, soups, meats and even pet food fresh.
The company controls roughly half of the U.S. metal food container market and has complimentary businesses in food and beverage seals and caps as well as a plastic container business for personal care and household cleaning products.
Silgan's diverse revenue model and defensive nature make it a steady addition to a balanced portfolio. Elevated demand for groceries, hygiene items, and cleaning supplies during the pandemic is driving some abnormally strong growth.
But even as the stay-at-home economy changes, investors can expect Silgan to deliver some modest but reliable growth. The stock can be had for 12x forward earnings—and given the dominant market share, this is one company that should be contained in a long-term portfolio.
Is Nu Skin Stock on a Path to $100?
Cosmetics maker Nu Skin Enterprises (NYSE:NUS) is also trading at an attractive multiple of its forward earnings at around 16x. After a solid 2020 in which sales and profits returned to growth, the company is expected to have a similarly strong performance in 2021. Analysts are forecasting the company's top and bottom lines to grow by around 9%.
Online sales of Nu Skin's beauty and personal care products have been impressive in recent quarters as digitally focused consumers have embraced its expanded product lineup during the pandemic. Demand for its flagship skin care treatments has been particularly strong—perhaps the stressors of the pandemic is spurring more interest in anti-aging creams.
In addition, the Pharmanex division which offers a range of nutritional supplements and weight management products is also performing well.
Nu Skin's direct to consumer marketing approach has shades of Mary Kay and pink Cadillacs, a model that some investors find tough to like. But Nu Skin's worldwide army of direct sellers has been doing well of late.
Despite having limited in-person interactions, improved technological capabilities along with new product launches have led to a surge in customers. In the most recent quarter, Nu Skin's customer base grew 28% to more than 1.5 million.
As a new socially enabled business that offers things like online promotional seminars, Nu Skin has been quick to adapt to the current environment. It will likely continue to benefit from this model given the affinity of younger consumers to directly engage with sellers through online channels. Poshmark, which recently launched its IPO, may come to mind as a company that is also benefiting from this trend.
So, new products and favorable demand trends should make for some good 2021 quarterly results at Nu Skin. This will likely drive the stock's P/E ratio back towards its five-year average of 20x—and is why Nu Skin would be a nice new addition to an aging portfolio.
What Makes Casey's General Stores a Defensive Recovery Play?
Casey's General Stores (NASDAQ:CASY) is a convenience store operator which boosted its quarterly dividend on the strength of its 2020 performance. And while the dividend yield remains below 1%, the stock is nevertheless a good deal for growth and income investors.
Casey's footprint is mostly centered in the Midwest where its 2,000-plus stores cater to consumers' needs for groceries, prepared foods, and other merchandise. But Casey's shouldn't be mistaken for a small-town grocery store stock that is simply getting a boost from the pandemic munchies.
In fact, most of Casey's revenue comes from its gas pumps. Three-fifths of revenue came from fuel sales in fiscal 2020. This makes the stock a unique way to play a potential recovery in fuel demand.
As people return to offices and their favorite entertainment venues, more cars buzzing around the streets of Iowa, Illinois, and Missouri should drive stronger fuel sales at Casey's. And depending on how global oil supply evolves this year, both traffic volume and gas prices could be up.
Of course, there are more direct ways to invest in an oil rebound be it through an oil and gas major or an energy ETF. But an investment in Casey's comes with a side of pizza and a fountain drink, i.e., its defensive grocery business. This makes it an undervalued, diversified recovery play that investors should stop in and check out.
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15 Energy Stocks Analysts Love the Most
There are more than 450 energy companies traded on public markets. Given the sheer number of pipeline companies, power plant operators, oil and gas production companies, and other energy stocks, it can be hard to identify which energy companies will outperform the market.
Fortunately, Wall Street's brightest minds have already done this for us. Every year, analysts issue approximately 8,000 distinct recommendations for energy companies. Analysts don't always get their "buy" ratings right, but it's worth taking a hard look when several analysts from different brokerages and research firms are giving "strong-buy" and "buy" ratings to the same energy stock.
This slide show lists the 15 energy companies with the highest average analyst recommendations from Wall Street's equities research analysts over the last 12 months.
View the "15 Energy Stocks Analysts Love the Most".