Companies with similar dividend yields typically had a much lower expected earnings growth rate than Meredith. At 13.5 times next years' earnings, the stock looks to be reasonably priced here, though past performance is no guarantee of future results.Another addition is Kroger Co. (KR), which operates over 2,600 supermarkets in the U.S. Projected identical store growth is 3.5% for the next 2 years and expected net earnings growth is 8% to 11% on per share basis, according to the company's latest quarterly filing with the Securities and Exchange Commission. For the trailing 12 months the company generated around $1 billion in free cash flow. The valuation at around 14 times next year's earnings is fair in my opinion compared to other similarly sized companies in the consumer staples sector. In early June we sold Whirlpool Corp (WHR). While the stock is still undervalued, earnings for each of the past 2 quarters missed consensus analyst earnings estimates. In our process this triggers an automatic sell. DISCLAIMER: The investments discussed are held in client accounts as of May 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.
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