One of the truisms about investing is that holding shares of companies with steady, but low growth over time can lead to good results. While it may lack the excitement of getting into a top tech trend, having a few stocks of boring companies can round out a portfolio.
These companies can include any good or service, but typically the most boring companies offering great returns will provide a service to businesses rather than having a consumer-facing operation.
For instance, most consumers have some form of insurance. But for the industry, insurance brokering is a necessary back-end service that most haven’t heard about. That’s worked out well for companies like Arthur J. Gallagher (AJG).
Since going public, the insurance broker has beaten the market. And year-to-date it’s beaten the market as well. Yet it’s a fairly steady business, with revenues and earnings growing at about 10 percent annually.
Action to take: Investors may like shares here, or on any dip as a long-term buy in mind. AJG is a dividend payer, with a 1 percent yield right now, but it’s also increased that dividend steadily over time.
For traders, the October $220 calls are an at-the-money play. Last going for about $8.30, they could see mid-double-digit returns from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.