The second-quarter earnings season is well under way. But quarterly results don't tell you the whole story about a company's prospects. What a company does in the long run is far more important to your success as a shareholder.
So rather than looking at this quarter's results or even the results for 2012, I'm going to take a longer-range view. To help get you oriented on how to maximize your returns beyond next week or next month, let's take a closer look at the 30 stocks of the Dow Jones Industrials
The five stocks at the bottom of the list for earnings-per-share growth for their fiscal 2013 years come from every corner of the market. But they each face some common challenges, even though the companies are reacting to those challenges in different ways.
The other company expecting earnings contraction in Chevron
Growing at a crawl
Meanwhile, other Dow stocks are still growing, albeit at a snail's pace. Travelers has analysts expecting 1.5% EPS growth following a big rebound in earnings in 2012 versus last year's miserable loss experience. Although a more normal loss year would go a long way toward returning the insurance company to its former glory, continuing rock-bottom interest rates will put a ceiling on its growth. With few expecting the Federal Reserve to allow rates to rise substantially until mid-2014 at the earliest, Travelers won't see that headwind go away anytime soon.
Meanwhile, Procter & Gamble
Finally, analysts have Cisco Systems
Keep on growing
As I mentioned last week, though, long-term earnings estimates can prove to be woefully inaccurate. That makes relying on a list like this a dicey proposition at best. But even if you completely disagree with analysts and their projections on a stock, it's important for you to know about those projections and the reasoning behind them. Otherwise, stubbornness can get in the way of making a rational investing decision.
In measuring the success of a stock, dividends vie for supremacy with growth. Let us show you some stocks that offer both hefty dividend payouts and potential for growing sales and earnings. Our latest special report on the Dow is absolutely free, so get your copy today.
Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter, @DanCaplinger. The Motley Fool owns shares of Cisco Systems. Motley Fool newsletter services have recommended buying shares of Chevron and Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.