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The 3 Stocks on the MFM Team's Radar

By Motley Fool Staff – May 22, 2019 at 11:16AM

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Each one plays a big role in helping Americans deal with certain pesky tasks.

At The Motley Fool, we're buy-and-hold investors, but before we can hold a stock, we have to pick the stock. So our analysts are always on the hunt for strong new investment ideas. And every week, some businesses stand out from the crowd, which is why every Motley Fool Money episode includes host Chris Hill asking his guests -- this time, senior analysts Andy Cross, Ron Gross, and Jason Moser -- which companies they have their eyes on, and why.

Their picks for this episode: pest control giant Rollins (ROL 0.69%), home improvement leader Home Depot (HD -1.37%), and financial software maker Intuit (INTU -3.05%).

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.

This video was recorded on May 17, 2019.

Chris Hill: Let's get the stocks on our radar. Our man behind the glass, Steve Broido, is going to hit you with a question. Ron Gross, you're up first, what are you looking at this week?

Ron Gross: I'm going back to Rollins, ROL. Provides pest and termite control services across the U.S. Really steady performer. Twenty-one consecutive years of increased earnings. Seventeen consecutive years of dividend increases. Eighty percent of sales are recurring. Somewhat recession-proof as well. Continues to make acquisitions in a fragmented industry. But they missed expectations last couple of quarters, so the stock has been weak. So maybe a good opportunity to jump in.

Hill: Steve, question about Rollins?

Steve Broido: Do you think when folks get the bill from a pest company, they're excited? Or is it a bummer? Is it like, "Ugh, this is another thing I have to pay for. I don't really want to hire these guys. I don't want bugs."

Gross: I have an annual contract, so I only have to think about that once a year.

Hill: Jason Moser, what are you looking at?

Jason Moser: Recently I was asked on Twitter what is my favorite dividend stock other than McCormick. See, I worked McCormick in there --

Gross: [laughs] Yes, we saw that.

Moser: Fair question. I said, I have to go with Home Depot, HD. Earnings are actually out next Tuesday. I was finishing up a front porch renovation on our house. Home Depot was the exclusive supply provider for that project. I asked myself the rhetorical question, again, why do I not own shares of this business? They're closing in on a 3% yield there. It's just as reliable as the sun coming up. They made a good point there in the recent call, home equity has more than doubled since 2011. Fifty-two percent of the homes in the U.S. are greater than 40 years old. That just means that people have to go to Home Depot a lot.

Hill: Steve Broido, question about Home Depot?

Broido: Yeah, what's going on with the parking lots at Home Depot?

Gross: That's a good question!

Broido: Everything in the world is stored in their parking lot.

Moser: I'm going to tell you what. The Home Depot I go to is right next to a Costco. It's like you're driving to two airports at the same time.

Hill: Andy Cross, what are you looking at?

Andy Cross: Intuit, the provider Turbotax and QuickBooks, Mint, other personal finance apps. Steve, I'm assuming that you filed your taxes this year because it was a good tax season for Turbotax and Intuit. Their filings were up 7%. The stock is up 2.5 times in value over three years. It's been a really nice performer. Revenue expectation for the coming quarter up 11%, earnings per share up 12%. It's really about the ecosystem they're building. Look to continue to grow the ecosystem revenues at more than 30% year over year.

Hill: Steve?

Broido: It seems like there's a lot of momentum with companies like Intuit around tax season. How can they harness that momentum to grow after April 15th?

Cross: It's all about QuickBooks and the subscriber counts for the businesses because that continues to be a need for lots of small businesses out there, Steve-O.

Hill: What do you want to add to your watchlist, Steve?

Broido: I think I will go with Intuit.

Andy Cross owns shares of Home Depot. Chris Hill has no position in any of the stocks mentioned. Jason Moser owns shares of MKC and TWTR. Ron Gross owns shares of COST. Steve Broido owns shares of COST and TWTR. The Motley Fool owns shares of and recommends Intuit, Rollins, and TWTR. The Motley Fool recommends COST, Home Depot, and MKC. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Home Depot, Inc. Stock Quote
The Home Depot, Inc.
$278.33 (-1.37%) $-3.86
Intuit Inc. Stock Quote
Intuit Inc.
$396.81 (-3.05%) $-12.48
Rollins, Inc. Stock Quote
Rollins, Inc.
$35.14 (0.69%) $0.24

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