The U.S. All Star team is composed of the 23 stocks that got at least one A and one B on our value and growth tests this year. We think all of them are worthy of your consideration.
The Double-A Captain
Unum Group (UNM) picked up the top honour roll prize both this year and last by earning an A for value and an A for growth. The firm manages employee benefits for customers in the U.S. and the U.K. from its headquarters in Chattanooga, Tenn. Its stock trades at 1.3 times book value after posting a total return of 46% over the last 12 months.
The All-Star Roster
The value side of the All Star roster all sport As for value and Bs for growth. The list of 13 stocks that fit the bill starts with Kelly Services (KELYA), which was a top value contender last year. The new value players are the Bank of New York Mellon (BK), CalAtlantic Group (CAA), CNA Financial (CNA), Fifth Third Bancorp (FITB), Foot Locker (FL), General Motors (GM), Goldman Sachs (GS), Group 1 Automotive (GPI), KeyCorp (KEY), Morgan Stanley (MS), Newell Brands (NWL) and PNC Financial Services (PNC).
Scroll down to see the full U.S. All-Star list
Kelly Services is a staffing firm and is the smallest member of the value side by both revenues and market capitalization. It sports the highest average three-year earnings-per-share growth rate at 77% and has a modest book value multiple of 0.9. Car marker General Motors is the largest of the bunch by revenue and it trades at 8 times trailing and forward earnings. Other All Star standouts include:
- Auto retailer Group 1 Automotive provides the best bargain in relation to sales because it trades at a sales multiple of just 0.13.
- Shoe retailer Foot Locker has the lowest earnings multiple at 7 and pays the highest dividend yield at 4.0%.
- Home product company Newell Brands sports the highest three-year sales-per-share growth rate on the value side at 16%.
- Home builder CalAtlantic provides a nice storage solution for humans while trading for less than 10 times trailing and forward earnings.
- Insurance can be obtained from CNA Financial whose stock shot up by 51% over the last year.
- Morgan Stanley was the best performer over the last 12 months with a gain of 54%.
- Goldman Sachs posted good returns and happens to be the largest value firm based on its market capitalization.
The value side is rounded out by four smaller banks, which all posted returns north of 30% over the last year and trade at book value multiples of 1.5 or less. They are KeyCorp, Fifth Third Bancorp, PNC Financial, and the Bank of New York Mellon. The growth side of the All Star list contains nine names that earned As for growth and Bs for value this year. Its three returning members are Arthur J Gallagher (AJG), Dollar General (DG), and Owens Corning (OC). The new stocks are Anthem (ANTM), Delta Air Lines (DAL), Humana (HUM), Lincoln National (LNC), Reinsurance Group of America (RGA), and Toll Brothers (TOL).
By the numbers
The largest growth All Star by revenue and market capitalization is healthcare firm Anthem. It also has the best 12-month return at 59%. Humana didn’t fare quite as well but it still posted a return of 41%. Delta Air Lines generated the largest three-year earnings-per-share annual growth rate at 87% while offering a low trailing earnings multiple of 11 and a forward earnings multiple of 10.
Home builder Toll Brothers is the smallest firm on the growth list by revenue and market capitalization. It also sports the highest three-year sales-per-share annual growth rate at 16%. Building materials firm Owens Corning wasn’t as good on this score but it has better momentum and can boast about its 55% return over the last 12 months. Insurance broker Arthur J Gallagher offers the highest dividend yield of the growth All Stars at 2.5%. Insurance firm Lincoln National trades at book value and is the best bargain on this measure. Reinsurance Group of America is a touch more expensive with a book value of 1.2. Dollar General rounds out the growth group and offers double-digit sales and earnings growth.
Before rushing to buy any stock it is important to understand the risks that stock ownership entails. While we believe our top stocks have the ingredients necessary for success, the future is far from certain and some stocks will inevitably flounder. There will also be periods – like the crash of 2008 – when stocks generally do poorly. Simply put, there are no guarantees when it comes to the stock market.
That’s why you should make sure that a company’s situation hasn’t changed in some important way before investing. Read the latest press releases and regulatory filings. Scan media stories and get up to speed on all of the most recent developments. Take particular care when when buying or selling stocks that trade infrequently.) As always, we try to put you on a profitable course, but head out only after you’re fully prepared.
U.S. All-Star Stocks
★: 2018 MoneySense All Star Stock
|Name||Ticker||Industry Group||Industry Subgroup||Price (October 19, 2017)||Revenue ($M)||Market Capitalization ($M)||Price/Book||Price/TangibleBook||P/E (Last 12 Months)||Forward P/E||Dividend Yield||Leverage (Assets/Equity)||Value Grade||1Yr Total Return (%)||3 Yr EPS Growth (%)||3 Yr SPS Growth (%)||1 Yr Asset Growth (%)||Return on Equity (%)||Price/Sales||Growth Grade|
|Arthur J Gallagher & Co||AJG||Insurance||Insurance Brokers||$62.64||$5,843||$11,285||2.9||-||25.2||19.1||2.5%||3.2||B||28.8%||5.7%||3.8%||10.4%||12.0%||1.92||A|
|Bank of New York Mellon Corp/T||BK||Banks||Fiduciary Banks||$52.85||$16,373||$54,602||1.5||3.4||15.5||13.8||1.8%||8.6||A||33.0%||8.3%||3.5%||-5.3%||9.8%||3.36||B|
|CalAtlantic Group Inc||CAA||Home Builders||Bldg-Residential/Commer||$38.57||$6,674||$4,261||1.0||1.3||9.3||9.8||0.4%||2.1||A||19.1%||12.7%||12.1%||2.5%||11.6%||0.67||B|
|CNA Financial Corp||CNA||Insurance||Multi-line Insurance||$51.04||$9,519||$13,832||1.2||1.2||12.4||16.2||2.4%||4.7||A||51.3%||15.9%||-1.3%||-1.2%||9.3%||1.45||B|
|Delta Air Lines Inc||DAL||Airlines||Airlines||$52.27||$40,457||$37,267||2.7||-||10.5||9.5||2.3%||3.7||B||30.3%||86.6%||4.9%||1.9%||27.4%||0.94||A|
|Dollar General Corp||DG||Retail||Retail-Discount||$82.91||$22,767||$22,656||4.0||153.1||18.7||17.1||1.3%||2.1||B||22.4%||10.0%||11.2%||4.3%||22.0%||1.01||A|
|Fifth Third Bancorp||FITB||Banks||Super-Regional Banks-US||$28.28||$6,848||$20,835||1.4||1.7||14.2||14.1||2.3%||8.6||A||40.9%||5.8%||5.8%||-1.8%||9.8%||3.08||B|
|Foot Locker Inc||FL||Retail||Retail-Apparel/Shoe||$30.99||$7,701||$3,843||1.4||1.5||7.1||7.7||4.0%||1.4||A||-53.4%||10.2%||7.2%||4.9%||21.1%||0.53||B|
|General Motors Co||GM||Auto Manufacturers||Auto-Cars/Light Trucks||$45.35||$164,927||$66,084||1.5||1.7||7.8||7.7||3.4%||5.3||A||48.5%||50.9%||2.5%||14.2%||19.9%||0.42||B|
|Goldman Sachs Group Inc/The||GS||Banks||Diversified Banking Inst||$239.99||$41,840||$96,692||1.2||1.3||12.3||12.0||1.3%||10.4||A||39.3%||3.6%||5.6%||1.1%||10.7%||2.34||B|
|Group 1 Automotive Inc||GPI||Retail||Retail-Automobile||$69.22||$10,688||$1,444||1.5||-||10.6||9.4||1.4%||4.8||A||11.4%||18.9%||8.9%||3.2%||14.6%||0.13||B|
|Kelly Services Inc||KELYA||Commercial Services||Human Resources||$26.09||$5,176||$989||0.9||1.0||7.6||14.3||1.1%||2.0||A||42.1%||76.9%||-2.8%||9.7%||13.1%||0.19||B|
|Lincoln National Corp||LNC||Insurance||Life/Health Insurance||$75.00||$13,856||$16,615||1.0||1.2||11.3||9.8||1.5%||17.0||B||55.2%||4.5%||7.2%||3.3%||9.4%||1.23||A|
|Morgan Stanley||MS||Banks||Diversified Banking Inst||$49.79||$42,557||$91,443||1.3||1.5||13.5||12.7||2.0%||10.5||A||54.3%||31.4%||6.4%||4.9%||9.2%||2.10||B|
|Newell Brands Inc||NWL||Housewares||Home Decoration Products||$40.59||$15,411||$19,893||1.6||-||16.2||12.4||2.3%||2.8||A||-21.5%||16.4%||16.1%||0.0%||10.3%||1.28||B|
|Owens Corning||OC||Building Materials||Bldg&Construct Prod-Misc||$79.24||$5,976||$8,811||2.2||7.8||22.6||16.2||1.0%||2.2||B||55.0%||14.5%||5.6%||8.9%||10.1%||1.49||A|
|PNC Financial Services Group I||PNC||Banks||Super-Regional Banks-US||$135.30||$17,492||$64,837||1.4||1.8||16.3||14.8||2.2%||8.1||A||50.8%||3.7%||5.5%||1.6%||9.1%||3.74||B|
|Reinsurance Group of America I||RGA||Insurance||Reinsurance||$145.44||$12,108||$9,380||1.2||-||12.2||13.5||1.4%||7.3||B||34.5%||9.2%||6.3%||7.9%||9.9%||0.77||A|
|Toll Brothers Inc||TOL||Home Builders||Bldg-Residential/Commer||$43.96||$5,643||$6,957||1.6||-||15.7||12.4||0.7%||2.2||B||52.8%||13.4%||16.2%||7.7%||10.5%||1.27||A|
|Unum Group||UNM||Insurance||Life/Health Insurance||$52.28||$11,188||$11,799||1.3||1.3||12.6||12.0||1.8%||6.8||A||45.5%||5.8%||6.1%||-0.7%||10.4%||1.08||A|