Three Steady Stocks to Balance High-Flyers & Boost Your Returns

Solid Portfolio Needs Some Steady Growers Like These Three StocksLots of companies are still reporting their financial results, and there are a lot of unique stories out there that are worth following.

AAON, Inc. (AAON) reports this week. We’ve looked at this enterprise several times before in this publication. Company management has an impressive track record of generating consistent growth.

It will be interesting to see if the company can keep its operational momentum. (See “Why This Company Should Be a Case Study in Business Schools.”) Over the medium- to long-term, it’s proven unwise to bet against this well-managed business.

Last year in these pages, we briefly highlighted a very interesting medical device company called Globus Medical, Inc. (NASDAQ/GMED). Based out of Audubon, Pennsylvania, the company specializes in the treatment of spinal disorders and is building its business in a very consistent and methodical way.

The stock stumbled in the fourth quarter of 2012 but has been moving solidly higher as management delivers modest but consistent growth in revenues and earnings.

The company’s two-year stock chart is featured below:

GMED Globus Medical, Inc. NYSE Chart

Chart courtesy of

Stocks with consistent share price performance are golden, and it comes on the back of consistent operational growth. It doesn’t have to be runaway growth or even double-digit growth; institutional investors love medical device stocks, and they will bid them as long as a company delivers on expectations.

Any stock can break down at any time for a multitude of reasons, but I’ve seen so many consistently returning stocks produce better capital gains (over a longer period of time, of course) than many high-flyers.

It’s not that high-flying trades aren’t worth pursuing; rather, within a portfolio context, a couple of steady growers help with total returns.

Another company that’s been a consistent, steady grower on the stock market is Airgas, Inc. (ARG), which we’ve examined before in this column.

I like a business that has barriers to entry, pays a dividend, and has more than one business line. Airgas offers these characteristics, and while this large-cap is by no means a fast-growing technology stock, it’s consistent revenue and earnings growth has produced excellent stock market returns over the last 10 years. It’s the kind of company that is worth looking at when it’s down.

Of course, all businesses are susceptible to industry-specific economic slowdowns commensurate with general economic risk. Even blue chips can experience long periods of non-performance and without dividends, you get beat by inflation.

Currently, I’m not a fan of doing a lot of buying in this market (if you’re already long), because it’s at a record-high after a super strong year. I also think it’s time for investors to think about doing some rebalancing in their portfolios, specifically regarding speculative positions. The top momentum stocks are pretty long in the tooth.

The current environment is a good time to be making lists of stocks to own if they were better valued. And this goes for stocks of all capitalizations.

While no company can escape the business cycle, there are lots of good businesses out there offering great consistency in business growth.