High margin,
high growth companies usually mean revert due to: (1) new entrants and future competition; (2) new, disruptive business models; and / or (3) new technologies that make a company's product obsolete.
Not exact matches
«The
companies that are more comfortable spending a
higher amount early are
usually rewarded with
higher growth metrics, but you don't necessarily get bonus points for being cash conservative in the early days,» she says.
Balanced funds, which
usually invest in a mix of about 60 percent stock to 40 percent bonds,
growth and income funds, or equity income funds that invest in well - established
companies that pay
high dividends, might be appropriate choices for a mid-term portfolio.
Software
companies usually sell at larger p / e ratios because they have much
higher growth rates and earn
higher returns on equity, while a textile mill, subject to dismal profit margins and low
growth prospects, might trade at a much smaller multiple.
High - yield bonds are
usually issued by firms that have an uncertain financial outlook — either they have fallen into deteriorating credit situations, they are emerging
growth companies, or they are undergoing corporate restructurings.
Companies like AT&T or Realty Income deserve
higher P / E ratios when interest rates are 2 % compared to 8 % as the purpose of the investment is
usually a quasi-bond with a
growth kick compared to something like Visa where the purpose is long - term future
growth.
Companies in the consumer staples sector may not pay a yield as
high as those in the utilities sector but
growth is
usually slightly
higher.
That's much
higher than what I'd expect from a fairly mature
company like this, as I
usually like to see mid-single-digit revenue
growth from a large, multinational business.
So called
high dividend stocks are
usually from
companies that have stable cash flows but relatively little or moderate
growth potential.
The low beta, or relative risk and performance to the market, will show that these stocks tend to either perform better - or at least not as poorly - as cyclical stocks in bad times and will
usually not be most investors» focal points during the boom part of the business cycle when investors are busy chasing technology stocks and
high -
growth companies.
Compared to the S&P 500, S&P 500 Quality has a tilt towards value stocks, lower debt, lower earnings volatility and
higher earnings
growth — which are attributes
usually associated with «good quality»
companies.
Smaller
high -
growth companies tend to outperform their larger peers over the long - term and hugely successful ones are referred to as the five or ten — baggers which is the term used to describe stocks which have increased five to ten times in share price over a length of time,
usually three, five or ten years.
This is not what I expect — the market's
usually far more enthusiastic than I am for a
high growth company!