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Get Rich by Yawning

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Some companies make the headlines every day. But the ones that will make you rich often keep a low profile.

For instance, one company has seen its stock has more than double in the past year, with solid earnings growth and healthy profit margins and returns on equity. Insiders hold almost 12% of its shares, a reflection of commitment and confidence in the stock. It even sports a healthy 2% dividend and has a reasonable valuation based on estimates of future earnings. Are you intrigued?

Would you believe that this company is Tupperware (NYSE: TUP  ) ? That's right. I offer it as evidence that seemingly boring companies can deliver rather exciting performances for our portfolios. Tupperware stock has grown by an annual average of 13% over the past decade, during a period when the S&P 500 has posted losses. It held up far better than the broader market during the market meltdown in 2008.

If you're like me, you know that boring companies can deliver great results, but you still look more closely at exciting companies. That's not crazy -- the surgical-robotics company Intuitive Surgical (Nasdaq: ISRG  ) has more than doubled for me in recent months, and other high-growth stocks have similar potential to turn thousands into millions. But it's good to remember that powerful sleepers exist, too.

Here's another one: a company that recently doubled its earnings guidance. Specifically, its management now expects that it will earn around $0.91 per share in its third quarter, instead of the previously expected $0.35 to $0.45. The company is Black & Decker (NYSE: BDK  ) , and the driving forces are unexpectedly strong sales, rising profit margins, and a lower tax rate.

Pros and cons
One advantage of ho-hum humdingers is that others don't rush to them very quickly, so you get a chance to find them. You might, for example, screen for companies with reasonable price-to-earnings ratios and high revenue growth rates, and look for contenders among them.

Company

CAPS Stars (out of 5)

3-Year Revenue Growth Rate

P/E

Business

Flowserve

*****

16%

14

Pumps, motors, and seals

Mosaic (NYSE: MOS  )

****

22%

17

Crop nutrients

Walgreen (NYSE: WAG  )

****

10%

19

Drugstores

Baker Hughes (NYSE: BHI  )

*****

11%

12

Oilfield services

U.S. Steel (NYSE: X  )

****

10%

12

Steel

Data: Motley Fool CAPS.

So hunt away -- but be sure a company isn't so boring to you that you won't want to at least read its annual and quarterly reports. Keeping up with your holdings is another way to enhance your performance. 

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If you're looking to invest your money better, look no further. Nick Kapur can point you toward three stock secrets that will bring you success.

Longtime Fool contributor Selena Maranjian owns shares of Intuitive Surgical, which is a Motley Fool Rule Breakers recommendation. Tupperware Brands is a Motley Fool Income Investor recommendation. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.


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Related Tickers

2/10/2012 4:01 PM
TUP $61.86 Down -1.13 -1.79%
Tupperware Brands… CAPS Rating: *****
WAG $34.54 Up +0.33 +0.96%
Walgreen Company CAPS Rating: ****
X $29.40 Down -1.61 -5.19%
United States Stee… CAPS Rating: ****
MOS $54.42 Down -1.58 -2.82%
The Mosaic Company CAPS Rating: *****
BDK.DL $74.05 Down +0.00 +0.00%
The Black & Decker… CAPS Rating: ***
BHI $47.62 Down -1.42 -2.90%
Baker Hughes, Inc. CAPS Rating: ****
ISRG $490.83 Down -1.58 -0.32%
Intuitive Surgical CAPS Rating: ****

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