The market has been tough on some of the hottest technical stocks last year, and investors have entered stock-packed stocks. What if I told you that there are still plenty of full-fledged stocks with strong foundations that have also sold despite a flight to safety and quality?
B&G Food (NYSE: BGS), UWM Holdings (NYSE: UWMC), and PetMed Express (NASDAQ: PETS) there are three stocks that appear to offer growth and income. All three posted at least double-digit revenue growth last year, all of which are currently yielding 3% or better. They also happen to be trading 30% below their 52-week highs. Let’s take a closer look at the three possible package game changers.
1. B&G Food: down 30%
If your pantry is full of Ortega taco shells, Crisco shorts, or Green Giant canned veggies, you’re a B&G Foods customer. B&G Foods has more than 50 brands in its portfolio, but it is small in this game, with just $ 2 billion in annual sales.
Investors tend to see packaged food companies as slow-growing, but that’s not true here. B&G Foods has posted double-digit growth in seven of the last nine years, including a 19% increase on last year’s high. Some of its growth in that area has come from acquiring ownership, but that’s just part of the model’s attractiveness, as it can have small or dropped brands and build them up with its own resources. .
B&G Foods’ stock closed the week 30% lower than the high it hit at the end of January. The yield has accumulated to 5.8% in the process. B&G Foods did not raise their quarterly rate in three years, but also did not cut emissions when it hit baseline funk in 2019. The pay ratio is a difficult 92%, but with earnings each portion going higher again, it is still somewhat secure.
2. UWM Holdings: down 45%
Short for United Wholesale Mortgages, UWM has been riding high in the hot real estate market driven by low interest rates. People are buying homes. Homeowners are refinancing. As a mortgage banker, UWM Holdings has been thriving in this climate with their network of brokers keeping up with strong demand. He says its proprietary technology platform allows it to deliver a faster, easier and cheaper mortgage process.
The future may not be so rosy, with levels climbing, but UWM will not be moving backwards. It entered a record high of $ 54.7 billion in initial loans in its most recent quarter, a 71% year-over-year increase and a 69% increase for 2020. UWM expects closed loan size to decline to an still impressive pace of 23% growth to 34% for this quarter.
Investors fear the inevitable slowdown, but with the stock trading 45% from reaching three months ago, there is a lot of value as well. UWM Holdings hit the public last year through a special purpose construction company, and UWM embarked on a $ 0.10 quarterly dividend policy last month. That translates to a 5% yield. Patient investors will be rewarded.
3. PetMed Express: down 41%
PetMed Express’s relative move in the fiscal year that ends in a few days has been phenomenal. The direct retailer of pet medicines and nonprescription through its phone line and website 1-800-PetMeds net sales saw 13% through the first nine months of fiscal 2021. If the times good to keep going – and that’s it no Granted – this is the first time since fiscal 2009 that PetMed Express has come through with high-end dual-digit growth.
Of course last year was not a dog for pet stocks. Dog and cat adoption has been uprooted through the pandemic, and PetMed Express has halted double-digit growth in three of the last four quarters. The current quarter will be more challenging, which may explain why the stock has fallen by 41% since rising two months ago. Year-over-year comparisons will become more difficult in the current quarter, with analysts seeing moderate earnings growth on flat sales for the upcoming report.
PetMed Express orders the lowest yield on this list – just 3.4% – but it has been paid nine times since it started a circulation policy 12 years ago.
B&G Foods, UWM Holdings, and PetMed Express have come through with double-digit growth over the 12 months, keeping track of strong share yields, but trading 30% to 41% off the their recent high levels. These are dinner bells with seasonal appetizer reviews in the mail.
This article represents the opinion of the writer, who may not agree with the “official” recommendation position of the Motley Fool chief consulting service. We are motley! Questioning an investment dissertation – even one of our own – helps us to think critically about investing and make decisions that will help us become softer, happier and richer.