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In a recent Portfolio Manager Action Alert note, Goldman Sachs’ Robert Boroujerdi makes his case for earnings stocks.

He calls his certain approach the ‘social agreement’ i.e. business that must offer returns of a minimum of 5 percent in 2013 with dividends and accretive buybacks.

Boroujerdi like these stocks due to the fact that companies have the ability to pay, investors demand them, and they look more attractive than bonds.

Goldman recognized 23 buy-rated stocks from different sectors.

NOTE: Earnings per share accretion occurs since buybacks lower share counts and for that reason boost EPS. All EPS accretion due to share share count change stands for a 2013 estimate.

Assurant Inc.

Ticker: AIZ

Price Target
$45.00

Dividend Yield
2.6 percent

EPS Accretion Due To Share Count Change
13.8 percent

Accretion + Yield
16.4 percent

Description: Assurant is an insurance business.

Source: Goldman Sachs

Domtar Corp.

Ticker: UFS

Price Target
$89.00

Dividend Yield
2.1 percent

EPS Accretion Due To Share Count Change
13.5 percent

Accretion + Yield
15.6 percent

Description: Domtar Corp provides paper, product packaging, and environmental services.

Source: Goldman Sachs

Validus Holdings

Ticker: VR

Price Target
$44.00

Dividend Yield
3.3 percent

EPS Accretion Due To Share Count Change
10.6 percent

Accretion + Yield
13.9 percent

Description: Validus is an insurance company. It bought reinsurance competitor Flagstone Re last year for $623 million.

Source: Goldman Sachs