The large retailer Macy’s, Inc. (NYSE:M), surprised just about everyone when it decided to increase its dividend by 25%. The company continues to grow at a rate that exceeds the market and is obviously priced cheap. Over the last year the one complaint has been its conservative return to shareholders, but with a 25% increase it is very possible that Macy’s will see its valuation appreciate in a more deserving manner during the immediate future.
NiSource Inc. (NYSE:NI). (NiSource) is an energy holding company whose subsidiaries provide natural gas, electricity and other products and services to approximately 3.8 million customers. The company trades at a valuation that is roughly equal to the S&P 500 relative to fundamentals, and increased its dividend just 4%. However, with 8% growth and a dividend of 3.48% the stock looks to be highly attractive. Thus I believe that it is a good under-the-radar company worth exploring further.
Conclusion
Currently, the S&P 500 is paying out a yield of 2.03%, therefore it is attractive when you see a company that is trading cheaper, with better growth, and that also pays a greater yield. The companies in this article exhibit this level of appeal, thus I believe that each is worth your due diligence. Because although none will return 100% annual gains, each has a great opportunity to outperform the market over a longer period of time due to being cheap with strong growth. The dividend serves as a bonus, but can return substantial amounts of earnings during the course of a long-term investment.
The article 5 Stocks That Are Better Investment Alternatives to the S&P 500 originally appeared on Fool.com and is written by Brian Nichols.
Brian Nichols has no position in any stocks mentioned. The Motley Fool owns shares of Northrop Grumman. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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