Are you interested in constructing a portfolio of companies to invest in the good ole U.S.A?
If so, then I have a portfolio for you. It’s a diversified portfolio of American companies stocks that should benefit as the economy recovers. Unlike many companies, these companies have the bulk of their operations in the United States and derive most of their revenue domestically. Here are a few homegrown companies with growth potential:
Things are really looking good for Ford. It’s the only domestic automaker that has not undergone a bankruptcy filing in the last year. Ford is making all of the right moves. The company is currently reducing the number of Lincoln dealerships and has cut unprofitable models from its lineup. Shares of Ford are tremendously cheap. The company’s stock trades for $14 a share which is just over seven times the company’s earnings per share. That’s a pretty low P/E for a company that is expected to grow earnings in the high teens. Now is a good time to buy a Ford!
Whole Foods Market (WFMI)
Aggressive young investors need to add Whole Foods stock to their shopping carts. Grocery stores are known for their low operating margins and low quarterly growth. This is not the case at Whole Foods. The organic grocer has revenue growth in the double figures and operating margins that are twice that of many competitors. The great thing about Whole Foods is that the company is still in the early stages of its growth cycle. The company is much smaller than competitors Kroger and Safeway. Whole Foods is slated for 17% earnings growth over the next 5 years. The stock may trade at a premium to competitors but it is for a good reason. The stock has multibagger potential over the next decade.
Darden Restaurants (DRI)
You may not recognize the Darden name but you have probably visited on of its franchises. Darden Restaurants owns the Red Lobster, Olive Garden, Longhorn Steakhouse, Bahama Breeze, and Capital Grill franchises. The company has been able to continually grow its revenue despite high unemployment. The good news is that things are slowly getting better for the casual dining sector. Darden currently trades at 13 times earnings and is paying investors a 3% dividend yield. The casual dining chain expects earnings to grow earnings in the low teens for the foreseeable future. With a nearly 3% dividend and good growth prospects, investors may find that Darden has the right recipe.
Bank of America (BAC)
Is there any bank that is more associated with America than Bank of America? BofA is selling for just $11.50 per share. That may seem high for the current year’s earnings but its cheap for a franchise the size of Bank of America. Earnings have been on the rise this year and things are expected to get even better. Shares trade at eight times next years earnings and growth is estimated to come in at 10%. While BofA may not be my favorite financial institution to bank at, it is my favorite banking stock in the whole sector.
Not only should the stocks above produce quality returns over the next few years, you can also take pride in the fact that you are helping support U.S. businesses.
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