Five stocks that deliver the goods faithfully

MY “Old Faithful” stock screen is one of my favorites. To make the Old Faithful screen, a stock needs a return on stockholders’ equity of 15 percent or better; a price no more than 15 times earnings and 2.0 times revenue and book value; and earnings growth averaging 10 percent or better the past five years.

D.R. Horton

Boasting one of the soundest balance sheets among homebuilding companies, D.R. Horton Inc. (DHI) is also one of the largest homebuilders.

Will millennials buy houses with the fervor their parents did?

I believe millennials will be more similar to their parents than many people suspect.

Walgreens Boots

The largest stock that meets the Old Faithful criteria is Walgreens Boots Alliance (WBA), a chain of roughly 10,000 drugstores in the U.S. and Britain. I have been accumulating the stock this year as its price has fallen.

The company’s history of growth and profitability is solid. Even assuming a Democratic presidential victory, any national health insurance proposal will have to be fought out in Congress.

Philips 66

Phillips 66 (PSX) is one of the largest of the pure refiners. At 13 refineries, it processes more than 2 million barrels a day of oil.

At eight times earnings and 0.4 times revenue, I think Phillips 66 stock is a bargain.

Hawaiian Holdings

I’m not wild about the airline industry any more. I was a few years ago, when falling jet-fuel prices and industry consolidation provided useful tailwinds.

Those blessings are gone, but I still think Hawaiian Holdings Inc. (HA) looks good at the moment. It has grown its revenue at 9 percent a year for the past decade. And the stock is pleasantly cheap, at eight times this year’s estimated earnings.

Miller Industries

The lowest ratio of debt to equity (7 percent) in the group of Old Faithful stocks belongs to Miller Industries (MLR), a maker of tow trucks and car carrier trucks.

Miller is a small company in a mature industry. Yet somehow it has managed to grow its revenue at better than an 11 percent clip over the past 10 years and its earnings faster than that.

Disclosure: I own Walgreens Boots Alliance shares personally and for most clients.