The most reliable earner on the ASX

PUBLISHED : | UPDATED:

Rely on these stocks to guide you through the mines.

If you don’t want a nasty surprise come reporting season invest in online real estate portal REA Group. Or Macquarie Telecom, or respiratory device maker Resmed, or any one of the stocks we’ve identified as the most reliable earners on the ASX (see table below).

It’s an update of analysis conducted by Financial Review Smart Investor around the middle of 2012, and for more details on the methodology have a look at the article “Rock Solid Stocks” on our website (sorry, subscribers only).

Briefly, we pull out of Bloomberg statistics on the stability of earnings, revenue, and dividends over the past five yeas for all the companies in the All Ordinaries Index. We then rank them by how steady their earnings per share profile was and, after plucking out a few bad apples, we find 30 companies which score 0.8 or higher.

THE MOST RELIABLE EARNERS ON THE ASX
Company ASX code Industry Earnings stability (EPS) Revenue stability Dividend stability 5-yr compound EPS growth (%) Est ROE (%) Est EPS this FY ($) Est EPS next FY ($) Net dividend yield (%)
REA GROUP  REA Real estate services 1.00 0.99 0.99 41.2 35.8 0.756 0.876 1.82
MACQUARIE TELECOM MAQ Telecom services 0.98 0.97 0.83 N/a 14.8 0.690 0.783 2.46
RESMED RMD Respiratory products 0.97 0.99 N/a 32.4 16.8 0.218 0.25 1.65
AUSTBROKERS HLDS AUB Insurance brokers 0.97 0.99 0.96 13.0 18.9 0.542 0.593 3.98
SUPER RETAIL GROUP SUL Retail 0.96 0.85 0.99 18.4 16.8 0.617 0.702 3.60
WOOLWORTHS  WOW Supermarkets 0.96 0.98 0.96 6.4 27.2 1.890 1.988 4.28
MERMAID MARINE MRM Marine services 0.95 0.90 0.94 21.3 17.1 0.263 0.287 3.38
M2 TELCO MTU Telecom services 0.95 0.77 0.95 46.3 24.9 0.330 0.377 4.76
RECKON  RKN Applications software 0.95 0.85 0.05 14.3 37.8 0.145 0.165 3.51
THORN GROUP  TGA Rental auto/equipment 0.95 0.39 0.97 10.6 19.0 0.193 0.21 5.07
DOMINO'S PIZZA DMP Restaurants 0.95 0.17 0.92 21.3 27.7 0.444 0.515 2.58
ARB CORP  ARP Auto/truck parts & equipment 0.95 0.98 0.98 17.5 27.0 0.613 0.694 2.34
BLACKMORES  BKL Vitamins & nutritional products 0.94 0.99 0.96 9.7 33.7 1.815 2.063 4.18
STEAMSHIPS TRADING SST Diversified operations 0.91 0.90 0.16 30.5 N/a N/a N/a 4.59
OROTONGROUP  ORL Retail 0.90 0.98 0.84 21.5 66.7 0.648 0.482 7.61
NEWCREST MINING NCM Gold mining 0.89 0.90 0.98 52.2 7.1 1.414 2.15 1.37
RAMSAY HEAH RHC Medical hospitals 0.89 0.96 0.99 16.5 18.6 1.341 1.514 2.27
MINERAL RESOURCE MIN Mining services 0.88 0.85 0.80 50.9 18.8 0.978 1.15 5.48
WOTIF.COM WTF Online travel retail 0.88 0.81 0.96 16.1 59.6 0.287 0.319 5.19
NAVITAS  NVT Education 0.87 0.97 0.82 16.0 34.5 0.219 0.264 4.50
DATA#3  DTL Computer services 0.87 0.98 0.80 14.0 41.8 0.092 0.099 6.17
TPG TELECOM  TPM Telecom services 0.87 0.94 0.89 0.7 21.1 0.168 0.186 2.40
FLEETWOOD CORP FWD Mobile homes 0.85 0.32 0.88 10.8 18.7 0.726 0.928 8.51
SAI GLOBAL  SAI Standards publisher 0.83 0.94 0.97 10.1 14.0 0.267 0.307 3.54
TECHNOLOGY ONE TNE Applications software 0.83 0.99 0.41 9.2 33.6 0.084 0.093 3.32
MCMILLAN SHAKESPEARE MMS Commercial services 0.83 0.91 0.93 31.1 34.2 0.818 0.925 3.64
MONADELPHOUS GRP MND Engineering/R&D services 0.81 0.93 0.86 16.1 59.5 1.697 1.796 5.74
CASH CONVERTERS CCV Retail 0.80 0.97 0.75 7.9 17.3 0.099 0.096 3.64
K&S CORP  KSC Transport services 0.80 0.71 0.60 -5.5 8.5 0.220 0.23 6.08
CARDNO  CDD Engineering/R&D services 0.80 0.87 0.90 11.7 15.4 0.626 0.665 5.93
Source: Financial Review Smart Investor using Bloomberg data as at November 30, 2012.

PATRICK COMMINS Smart Investor

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