While traders are often looking for a quick trade, many so-called investors are often looking for a stock that can move higher quickly. By focusing instead on companies that can deliver steady, long-term growth, however, they may fare better than getting on the wrong side of a growth story that goes bad.
These long-term plays can often by found by being household names, which may indicate a strong brand. Or they may be dividend payers. Often, they’re both.
One household name that may not be an obvious investment idea is Carrier Global Corporation (CARR). A manufacturer of HVAC systems, they’re a top brand for air conditioners and other heating and cooling systems.
Amid a now-flat market over the past one-year period, Carrier is up about 9 percent. That’s true even after earnings slid over the last year.
Carriers is currently trading for under 15 times earnings, a sizeable discount to the market’s valuation right now.
Action to take: Long-term investors may like shares at current prices or on any drop lower. At the moment, the company pays a 1.8 percent dividend yield. But that payout has grown over time, and the payout ratio is low.
For traders, shares are moving higher after recently hitting a six-month low. The September $45 calls, last going for about $2.00, offer mid-double-digit returns on a further move higher in the months ahead. Traders should look to take quick profits, as shares have gotten hung up around the $45 range over the past year.
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.