S Portfolio Highlights: Movers And Shakers - December 2021

During the past three months, the S&P 500 index continued its steady march higher with a 4.2% gain thanks to the strong economic recovery from the pandemic. All the following high-quality stocks generated strong double-digit gains during the same time period.

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Tractor Supply Plowing Up Strong Growth

Tractor Supply (TSCO) reported third quarter sales increased 15.8% to $3.02 billion with net income plowing ahead 17.7% to $224.4 million and EPS increasing 20.4% to $1.95. Year-to-date, Tractor Supply returned $777.8 million to shareholders through dividends and share repurchases. Despite unprecedented pressures across the company’s supply chain, management raised their fiscal 2021 outlook. The company now expects net sales of $12.6 billion, 16% comparable store sales growth, net income in the range of $972 to $985 million and EPS in the range of $8.40 to $8.50. In addition, the company expects to repurchase $750 to $800 million of its common stock. In the last four years, Tractor Supply has plowed up strong growth with a 254% total return. Hold.

Gentex Cash-rich And Debt-free

Gentex (GNTX) reported third quarter net sales dropped 19% to $399.6 million with EPS decreasing 50% to $.32. Despite the incredibly turbulent past 18 months in the auto industry and continued challenging supply chain constraints, Gentex’s long-term growth prospects remain very strong. The company maintains a sturdy balance sheet with more than $482 million in cash and investments and no long-term debt. Over the last six years, Gentex has driven up a shiny 140% total return. Hold.

Canadian National New C$5 Billion Buyback

Canadian National Railway (CNI) reported third quarter revenues chugged ahead 5% to C$3.6 billion with net income roaring more than 70% higher to C$1.69 billion. The earnings included a C$886 million payment by Kansas City Southern to CNI after they terminated their merger. Adjusted EPS increased 10% to C$1.52. Canadian National resumed its share repurchase program with plans to repurchase C$5 billion in 2022. Over the last six years, CNI’s stock has rolled 123% higher. Hold.

F5 Networks $500 Million Buyback

F5 Networks (FFIV) reported fiscal 2021 revenues increased 11% to $2.35 billion with net income increasing 8% to $331.2 million. In fiscal 2022, F5 expects to deliver revenue growth of 8% to 9%, including software revenue growth of 35% to 40%. During fiscal 2022, F5 expects to repurchase $500 million of its shares. Beginning in fiscal 2023, F5 intends to return 50% of free cash flow to shareholders through share repurchases. F5’s stock whirled up a 90% gain during the past six years. Hold.

ADP Increased Dividend 12%

ADP reported fiscal first quarter sales increased 10% to $3.8 billion with EPS up 18% to $1.65, reflecting improving demand across all business segments. The company increased its dividend a hefty 12%, marking the 47th consecutive year of dividend increases. In the last five years, Automatic Data Processing’s (ADP) stock has processed a 178% gain. Hold.

FactSet 41 Years Of Record Sales

FactSet (FDS) reported fiscal 2021 revenues rose 6.5% to nearly $1.6 billion with net income and EPS each up 7% to $399.6 million and $10.36, respectively. FactSet has reported 41 consecutive years of record revenues. Return on shareholders’ equity for fiscal 2021 was a superb 39%. For fiscal 2022, EPS is expected in the range of $11.60- $11.90, representing 11% to 15% growth. It is a fact that FactSet’s stock has been a winner with a 359% total return over the last seven years. Hold.

Microsoft New $60 Billion Buyback

Microsoft (MSFT) reported first quarter revenue increased 22% to $45.3 billion with net income jumping 48% to $20.5 billion. Microsoft announced an 11% increase in its dividend, marking the 12th consecutive year of dividend increases. Microsoft also approved a new share repurchase program authorizing up to $60 billion in share repurchases. Microsoft’s stock is up more than twelvefold in the last 11 years. Hold.

Accenture Strong Free Cash Flow

Accenture (ACN) reported fiscal 2021 revenues rose 14% to a record $50.5 billion with net income increasing 15% to $5.99 billion. Free cash flow increased 11% during the year to $8.4 billion. For fiscal 2022, Accenture expects continued double-digit growth in sales and earnings per share. With expected free cash flow in the range of $7.5 billion to $8.0 billion, Accenture plans to return at least $6.3 billion to investors through dividends and share buybacks. Over the last nine years, Accenture has booked a terrific 557% total return. Hold.

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