This month's reporting season has revealed a number of great companies that raised earnings even in an economy still not firing on all cylinders.
Two of those companies need to get special recognition because they are solid performers that keep pushing to improve business and raise earnings. As income stocks in your portfolio, they could work to help create future wealth.
Ansell Limited (ASX: ANN) is a market leader for protective wear, such as plastic and fabric gloves found in many hospitals and warehouses, as well as condoms in your local supermarkets and pharmacies.
Both earnings and book value per share have doubled in the past ten years. In FY 2014, underlying net profit gained 13% on a 16% rise in revenue. It has a 2.0% dividend yield unfranked. Analyst consensus forecasts are for earnings to rise an average 10% per year over the next two years.
Just like Gillette razors, each product may not be very expensive, but the sheer amounts that are used on a daily basis make it a very attractive kind of business for long-term investors.
CSL Limited (ASX: CSL), the largest biopharmaceutical company listed on the S&P/ASX 200 Index (ASX: XJO) (Index: ^XJO), produces vital medical products for viral and bacterial diseases as well as blood disorders. The company benefits from high demand for its specialised products and can charge a premium for them.
In its recent FY 2014 full year results, net profit was up 8%. Just as important, the final dividend was raised 15% to US 60 cents per share for a full year dividend of US$1.13 cps. Currently, its yield is 1.7% unfranked.
Over the past 10 years, dividends have risen about six times, which should have made its shareholders very happy and a little richer. Going forward, a strong healthcare stock like CSL in your portfolio could give you the dividend income you are looking for in the long term.
