The Best Growth Stocks For Dividend Investors: Apple, NVIDIA, Nike, Walt Disney

Last week I discussed the T.I.N.A. market environment that we’re all operating it at the moment.  I highlighted the fact that many of the Dividend Aristocrats that DGI investors know and love are irrationally overvalued at the moment because income-oriented investors across the world have few viable options for reliable yields. That piece was meant to serve as a bridge of sorts for readers of my first couple of articles here at Sure Dividend which didn’t really focus on dividends at all, but instead growth stocks and why I’ve been more attracted to them over the last 18-24 months than my beloved dividend growth names.

I’m sure that hardcore DGIers don’t like hearing that the aristocrats that they’re building their financial futures upon are irrationally overvalued, but I think it’s important that someone highlights this important issue because buying expensive stocks can be a perilous habit to develop.  I’m also sure that most of the readers who come to Sure Dividend aren’t coming here to read about F.A.N.G. names.  So, in this piece, I will get back to my income-oriented roots, re-focusing on DGI names…but with a twist.

I just turned 28 years old, which means my investing strategy is different than many DGI investors, who’re typically older. Because of my long time horizon, I prioritize growth over yield when it comes to the companies I own.  This week I’ll be shedding a spotlight on my favorite high growth DGI names for investors who don’t need income in the present, but instead, hope to lay down the building blocks of a strong passive income stream far into the future.

As I said in my last piece:

“When companies that are posting low-mid single digit EPS CAGRs are trading with the same multiple as companies posting strong, double digit EPS CAGRs, why in the world would an investor choose to buy the former?”

But, this statement doesn’t imply that investors are stuck buying highly speculative names that don’t contribute to their income streams.  There are plenty of high growth names that offer dividend yields.  What’s more, the management of many of these names have adopted a generous, dividend growth mindset.  As a younger investor, I like the peace of mind that comes along with owning dividend aristocrats today.  However, I also like the potential, in terms of long-term dividend growth as well as capital appreciation, that comes with owning names that I believe could become the dividend aristocrats of tomorrow.

I’ve divided this list into two parts: my top 3 favorite up and coming DGI names and a list of companies that were closely considered for (but didn’t quite make) the list.

Growth Dividend Stock #1: Apple (AAPL)

This pick might seem like a cop-out to some.

I can hear you now, “Sure, go ahead…pick the company with the world’s largest market cap for your list, there’s certainly no originality there…”

Well, I’ve oftentimes found that investors don’t need to re-invent the wheel to make money in the markets.  The same thing goes for identifying companies with the potential to reliably reward shareholders with increasing dividends.

Apple has everything that I want to see in a DGI company.  Apple is highly profitable, with strong margins, and an attractive balance sheet.  This company is one of, if not the world’s most recognizable brands.  The company maintains pricing power relative to its peers because of the very high-quality products that it produces.  Apple has also successfully integrated services into their ecosystem, increasing the productivity and profitability of each device sold over the long-term.

People like to hate on Apple because it operates in the hardware space (where companies typically receive low multiples because of commoditization concerns).  They take it a step further, calling Apple a “one trick pony” because the iPhone makes up such a large majority of its sales.  What’s worse than selling hardware?  Only selling one notable piece of it.

I don’t deny either of these complaints (though I would like to acknowledge that CPUs, laptops, tablets, and watches all generate billions in sales for Apple each and every quarter) as I put Apple amongst my top 3 up and coming/growth based DGI picks.  Instead, I embrace the fact that Apples products, and namely the iPhone, have become the Coca-Colas (KO) of the digital age.

What I mean is this: there was a time when you would have been hard-pressed to go anywhere and not spot a bottle/can of soda in random consumers’ hands.  Cola was everywhere.  The drinks were addictively good and there wasn’t the public backlash that we see today against sugary drinks.  Well, with sodas falling out of favor in recent years, smartphones have taken their place.  Apple is at the forefront of this trend, especially amongst younger Americans, which is an important market to me when looking at the long-term strength of this brand.

In Piper Jaffray’s Fall “Taking Stock with Teens” survey, 82% of teens said that they expect their next phone to be an iPhone.  This was up from 81% in the Spring survey.  Piper Jaffray noted that the 82% polling number was the highest they’ve ever seen in the teen survey.

Oftentimes I hear about how Samsung/Android is crushing Apple in terms of technology/innovation, but apparently, this message isn’t making its way down to the U.S. teens.  When you capture a generation’s attention, oftentimes you capture it for life.  Current dividend aristocrats like Procter and Gamble, Clorox, and Colgate Palmolive can attest to this.

While Apple is a technology company and should certainly be judged on its innovation advancements, I think this survey goes to show that the company has become much more than that.  Apple is a luxury goods company.  Its products represent status, popularity, and even power.

In the company’s most recent quarter, Apple “missed” the market’s expectation for iPhone sales.  With that said, the company still sold ~77m phones.  Think about that: 77 million…combine that with the ~13m iPads and ~5m Macs that the company sold and we’re talking about 100m devices in a single quarter.  You won’t hear me complaining about that.

What’s more important than that is the fact that Apple’s average selling price amongst these phones was higher than expectations, coming in at $796 as opposed to $755.  The market fears commoditization in the smartphone space but we’re not seeing that with Apple, yet anyways.

During the conference call, Apple CEO Tim Cook shed some very interesting light on the company’s service segment.  He noted that Apple now has 1.3b active hardware users.  This figure includes devices across the board, from phones to watches to tablets, etc, and is up ~30% over the last two years.

This active user base is key to Apple’s success in the services segment, which as ~65% gross margins (the company’s overall gross margins were 38%).  Apple experienced 58% growth in paid subs in the service segment.  This growth is vastly outpacing broader services growth amongst competitors/peers, likely pointing to the fact that this services growth has a long runway ahead of it.

These higher margins in the service segment should help to combat the bearish commoditization argument against Apple.  A ramp in gross margins should result in multiple expansion as the market’s sentiment changes regarding Apple as a strictly hardware-focused company and begins to view them in a services/software light.

When looking over Apple’s quarterly results, probably the most important figure that I came across was the company’s astounding ~$270b in cash.  This total is mind-boggling.  The potential for this cash to grow the company’s top and/or bottom line, via R&D, M&A, or simply stock buybacks, is amazing.

In Apple’s Q1 conference call, management highlighted the fact that it plans to reduce its net cash position to “approximately zero.”  I don’t know what Tim Cook & Co. in management suite will decide to do with these billions once they’re repatriated, but I think it’s safe to assume that it will be a boon for the company and its share price.

Apple has embarked upon a highly successful buyback program in recent years as well as rewarding investors with dividend increases in the 10% range every year since 2012.  The company could easily increase the dividend more, but either way, I suspect that these double-digit increases will continue for the foreseeable future.  I know some complain that 10% isn’t enough for a company with so much money, but I’m quite happy with my income stream compounding at a double-digit rate.

All of this is why I don’t worry when I see reports of fewer iPhone orders/sales like we’re seeing today that has sparked a small correction.  I’ve seen this happen in the past and I’m sure it will happen in the future.  This sell-off represents weak hands selling the stock.  It’s healthy and sets the stage for another run-up as buyers demand (including the company buying backs its own shares) will outweigh sellers on the next bit of good news.  Apples previous quarter was amazing; how quickly the market forgets.

Long-term, I suspect Apple will continue being Apple.  It likely won’t be a first mover in the fast-moving tech space, but it will create very high-quality products in proven areas of high consumer demand.  It will manage its cash pile conservatively and efficiently.  It will continue to pay shareholders a rising dividend and the float will continue to shrink via buybacks.  I fully expect this company to become a dividend aristocrat in 2037.  Until then, I’m happy to hold my shares and see what the future holds.

Growth Dividend Stock #2: NVIDIA

When you’re discussing the future, especially when you’re talking about technology, it’s difficult to avoid the subjects of artificial intelligence and automation.  There are two mega-trends that will continue to be impactful in the days and ways of mankind for the foreseeable future.

Both of these trends are already changing the way that we live our lives.  They’re changing the workplace.  They’re changing the home.  They’re changing habits, expectations, and traditions.  Admittedly, some of this change can be scary.  I’ve read the apocalyptic rhetoric surrounding AI and some of the concerns that certain critics bring up seem plausible.   I’d be lying if I said I hadn’t lost sleep as I spiral down these seemingly science fiction wormholes, but at the end of the day, as an investor interested in long-term growth, it’s impossible to ignore this industry.

Singularity scares me.  I hope that humans don’t have to become cyborgs to compete with machines of an evolutionary level (this is basically the most extreme scenario that I’ve come across reading AI/human integration/competition).  However, societal/moral issues aside, the way I see it, the artificial intelligence ball is already moving and its momentum is too powerful to stop at this point.

If you can’t beat them, join them…right?  I own NVIDIA because this company appears to be the world leader in artificial intelligence, from a semiconductor as well as a software platform (with its CUDA network) standpoint.

When it comes to companies with massive disruptive potential, you’re likely going to have to pay up for exposure.  The market loves growth and NVIDIA has been the very definition of growth in the semiconductor space over the last couple of years.  NVIDIA was trading for $32.96 on December 31^st, 2015 when the market closed for the year.  Since then, the stock’s price has shot up to over $240 in a little more than 2 years.  This is fantastic performance for any stock, especially one that pays an increasing dividend (typically companies don’t institute a dividend policy until they’re later in their maturation process).

NVIDIA’s fiscal year is nearly a full year ahead of the normal calendar, meaning that the company is about to report its Q4, 2018 earnings.  I preface my upcoming statements with this so that they don’t seem confusing.

In FY 2017, NVIDIA posted EPS growth of well over 100% as earnings increased from $1.08 to $2.57.  NVIDIA has generated $3.04 through the first 3 quarters of its FY 2018 and analysts expect another ~$1.30 in the upcoming fourth quarter, meaning full-year expectations of $4.49, or ~75% EPS gains again last year.

In FY 2016, NVIDIA’s top line came in at approximately $5b.  In FY 2018, the company is expected to be generating roughly twice that much revenue.  Any way you look at it, NVIDIA is growing like a weed.

Investors are paying ~50x forward earnings for NVIDIA shares at the moment.  That’s not cheap, by any means.  Even when you factor in growth, that’s still not a cheap valuation.  However, that’s the sort of price I expect to pay for a company with this sort of explosive top and bottom line growth.

Admittedly, this valuation is speculative.  This company’s growth narrative, to a certain extent, is speculative.  I don’t know to what extent driverless cars will penetrate the market.  I don’t know how much more AI NVIDIA’s graphics chips will power.  Speaking of graphics chips, I don’t know if videogames will continue to grow at the same strong rate we’ve seen in recent years (though I expect them to).  There are so many things about the future that I can’t hope to know and NVIDIA is a company trading based upon future expectations.

However, with all of this speculation in play, I’ll give you one last argument for owning NVIDIA shares: as a hedge against market disruption.   I own Amazon in part because I’m a believer in Jeff Bezos’ plan for growth, but also because Amazon poses a threat to many of the companies that I own/formerly owned.  Well, the same thing goes for NVIDIA.  Whether you’re talking about the old school chip companies like Intel (INTC), or even the energy names like Exxon or Chevron, NVIDIA is a potential threat.

I’m not saying that investors shouldn’t own stock in wonderful companies like those, but I am saying, why not give yourself some (admittedly expensive) exposure to the quickly growing NVIDIA to protect yourself from lost market share?  NVIDIA’s quarterly dividend of $0.15/share is nearly twice as high at the company’s annual payment of $0.08/share 2013.  With earnings growing at such a high clip, I expect that NVIDIA will continue to reward investors with strong, double-digit increases.

Yes, the company’s paltry 0.25% yield is slight at the moment, but that’s due to the amazing capital gains that shares have posted in recent years.  It won’t take as long as you might think for your yield on cost to rise to respectable levels if the company continues to give annual increases in the 15-20% range.  As I said before, this is a speculative play, but one that I feel comfortable owning because of the company’s massive potential (in terms of sales, earnings, and dividend growth).

Growth Dividend Stock #3: Nike

I’ve written about Nike (NKE) being one of my favorite DGI stocks before numerous times.  Like Apple, Nike has just about everything that I’m looking for in a long-term investment.  Admittedly, this stock traditionally trades for a high premium, meaning that it doesn’t offer investors the same value proposition as Apple does, but Nike has the brand name and all of the positives that come alongside it, to match.

Frankly put, I can’t imagine a future where individuals in developed markets ever living their lives in the nude.  I’ll be the first one to admit that standards have loosened with regard to what is acceptable attire in most situations.  I think this de-evolution of style is unfortunate (I love watching older films where men wore a suit and tie on a regular basis and ladies nearly always wore elegant dresses).  However, even though clothing standards have changed over the years, boys, girls, men, and women, have never stopped wearing them.  In other words, I believe human being will always need clothes.

And what it comes to clothes, no one does it better than Nike.  This company has been at the forefront of material science in the apparel space for years now and I don’t think that will end anytime soon.  Nike commands a powerful position in the shoe wear and athletic apparel industry.  Nike’s swoosh is recognized across the world and idealized as a symbol of American success.

I won’t spend as much time talking about Nike as I did on the two technology companies above because to me, it’s a fairly simple investment.  I don’t fear disruption with Nike nearly as much as I do in the tech space.  I only see one noteworthy competitor for Nike in its primary markets (Adidas).  Under Armour has faltered in recent years and while Lululemon makes fantastic products, it’s scope as a business is rather limited for the time being.

Over the years I’ve sold out of my other apparel/retail focused positions: Under Armour, Hanes Brands, Tiffany’s, Coach, and Ralph Lauren because I don’t feel comfortable owning names in this industry.  Generally, the consumer is entirely too fickle and the cyclical nature of sales makes it difficult to evaluate the shares.  However, over the years I’ve held onto Nike through thick and thin because of how this company uniquely combines luxury goods with broad market appeal.

Nike is able to maintain strong margins while taking market share globally because of the quality of its products and the strength of its brand.  This is what has enabled Nike to embark upon a 16-year dividend increase streak.  Nike’s 10-year dividend growth rate is an impressive 13.9%.  The company’s most recent increase was a tad bit below its 5 and 10-year growth rates, but at 11.1%, it was still nothing to scoff at.  Nike is scheduled to be a dividend aristocrat much sooner than Apple and NVIDIA and I wouldn’t be surprised to see the company continue to reward investors with double-digit annual increases along the way.

When thinking about reliable double-digit dividend increase, I think about Nike.  What more could investors ask for?

Near Misses

I believe that every company discussed in this article is a very high quality, wonderful company to own.  I own every single one of them actually, and several on the “near misses” list have higher weightings that those that ended up making the top 3 (this comes down to valuation in the past and capital gains).  I won’t spend as much time on the companies that didn’t make the top 3, but I think they’re worth covering because I’m sure that many readers will have a different set of winners than I chose.

Near Miss #1: Amgen

From a capital gains perspective, it doesn’t get better than Amgen over the recent decades.  Looking backward 20 years, Amgen has provided investors with an annualized rate of return that exceeds 11.5% (this time period includes two major bear markets, mind you).  Without a doubt, this company has been a tremendous long-term hold.

It’s the highest rated healthcare/biotech company on my list because of its very diversified portfolio.  Amgen has 7 drugs that produced at least $1b in sales during FY 17.  Johnson and Johnson (JNJ) is another favorite of mine, but that company is a part of the old guard of DGI companies and trades with a higher multiple than AMGN (with less growth) because of its illustrious history and name recognition amongst income-oriented investors.

I know that when many people hear biotech, they think speculation and negative cash flows.  Well, this isn’t the case with Amgen.  Amgen generated ~$10.5b FCF in 2017.  The company returned ~$6.5b of those cash flows to shareholders in the form of a cash dividend/share buybacks.  Amgen has provided investors strong double-digit dividend increases each year since initiating its payment 8 years ago (all but one of those increases exceeded 20%).

Even after this amazing dividend growth streak, Amgen has the cash flows to continue to grow.  Simply put, from both capital gains and total return perspectives, it doesn’t get much better than Amgen.  I’d be lying if I said I didn’t closely consider Amgen for my top-3, but at the end of the day, the biotech industry is simply too volatile and although Amgen’s portfolio/pipeline are well diversified, I do worry about the impact of patent cliffs and competition within this space.

Near Misses #2 & #3: Visa & MasterCard

Both of the big credit card companies have given investors tremendous returns over the years.  The capital gains that these companies have produced have dwarfed their dividend yields; however, this isn’t for lack of trying on management’s part.  Both Visa (V) and MasterCard (MA) have made it a habit to give investors strong, double-digit dividend increases.

Visa’s 5-year dividend growth rate is 24.57%.  MasterCard’s 5-year dividend growth rate is 66.16% (MasterCard doubled its dividend in 2012 and then increased it by a whopping 142% in 2013).  With dividend growth in the 15-20% range annually, investors are doubling the income that they receive from their investments every 4 years or so.  Few companies in the market prove the power of compounding better than these two.

Both Visa and MasterCard serve as toll booths of the consumer finance space.  These companies don’t focus on the credit markets; instead, they manage extensive fin-tech infrastructure that allows them to collect fees on a myriad of transactions.  Another way to describe them is financial toll booths.  This is a great business model with a relatively low capital intensive nature which results in impressive markets; however, I fear that this model could potentially be disrupted by more innovative fin-tech, such as the cryptocurrencies that have become so popular as of late.

Granted, I don’t claim to understand bitcoin and the like.  I’ve never spent a lot of time researching them because I think the prices they demand are highly, highly speculative and therefore, I’m not interested in owning them.  Even so, I’m not ignorant of their potential to change the way we live of lives in terms of financial transactions and I think there is a chance, however of a small one, that they pose threats to companies like Visa and MasterCard.

Although I don’t own any cryptocurrencies, I do have significant positions in both Visa and MasterCard.  This, more than anything, should show the confidence that I have in these companies and their management teams when it comes to future disruptions in their space.  However, disruptive risks, alongside expensive valuations (both companies are trading above their normal, historical value at ~35x earnings), was enough for me to leave both companies out of my top 3.

Near Miss #4, #5, #6: Boeing, Comcast, & Walt Disney

Like Amgen in the biotech space, I wasn’t able to put a highly cyclical company, regardless of personal bullishness, on the top-3 list.

When I was trying to whittle down this list from my personal favorite stocks, leaving Disney (DIS) out of the top three was a hard decision.  Disney is my second largest individual position behind Apple, which did make the list.  Alphabet is my third largest and that company doesn’t pay a dividend so it obviously couldn’t have been included.  Disney, on the other hand, does pay a dividend.  What’s more, it has made a habit of giving investors strong dividend increases (Disney’s 5-year DGR is 21.06%).

However, even with this great dividend growth, alongside the company’s brand name, its intellectual property in the content space, the theme parks, cruise ships, and merchandising in mind, Disney’s business is just too cyclical to have been included on this list.  An economic downturn, domestically or globally, will certainly put pressure on Disney’s earnings and potentially its dividend (more likely, its dividend growth; Disney has a history of freezing dividend growth during tough economic times).  I think Disney is a great long-term holding and I have no plans to sell my shares anytime soon; however, this outsized reliance on macroeconomic factors for growth is too concerning for it to make top-3 from a dividend growth perspective.

The same thing goes for a couple of my other top holdings, Boeing (BA) and Comcast (CMCSA).  I’m very bullish on both of these companies long-term.  I expect for them to continue to deliver double-digit dividend growth to shareholders for the foreseeable future.  Both companies hold strong positions in their given industries and have developed wide competitive moats.  But, like Disney, Boeing and Comcast operate in cyclical industries that will likely be dependent on a healthy economy to thrive.

I admit that Comcast has done a great job diversifying itself away from the media/entertainment space with its content distribution infrastructure.  I love the way that Comcast has expanded its IP portfolio with recent acquisitions such as the $3.8b DreamWorks purchase it made in 2016.   This content (Shrek, Kung Fu Panda, Madagascar, and How To Train Your Dragon, just to name a few) really bolster this company’s family-friendly portfolio which meshes well with its theme park business (Universal Orlando).  It seems to me that Comcast has seen the light with regard to the more diversified revenue stream plan that Disney has pursued over the years which has allowed the later to trade with a higher premium than many of its peers.

If Comcast can continue to expand its media/entertainment offerings and combine this with its distribution (television and more importantly, internet) pipes, then I think we have a real winner on our hands here.  Comcast management must agree; they’ve rewarded shareholders with massive dividend increases in recent years, including a 20% increase I a few weeks back in January.  Since instituting its shareholder dividend back in 2008, Comcast has given investors an income CAGR of nearly 20%.  It doesn’t get much better than this over a 10-year span.

What’s more, unlike Visa and MasterCard discussed above, Comcast offers investors a more respectable yield (1.8%).  I know many like to target companies with dividends in the 3% range, but you simply don’t find this sort of dividend growth at that yield threshold and if you’re patient, it won’t take the income produced by a position in Comcast all that long to surpass 3% yielders growing at 5-7% annually because of its strong growth potential.

I know that people oftentimes associate Comcast with frustration because of bad customer service, but I think investors should think of this company as one of the best dividend growers out there.

Boeing has had a fabulous run over the last couple of years, more than doubling in price since the start of 2017.  Boeing operates in a global duopoly and is building out an ecosystem surrounding repairs/maintenance that is further broadening its moat.  I love this move by the company, but these service sales are still dwarfed by the company’s product sales and while I don’t see demand for airplanes going anywhere but up in the long-term, Boeing does rely on strong economies to drive purchases because of the massive cost of new planes.  Boeing has given investors dividend increases that exceeded 20% for four years in a row now, but I don’t see this sort of performance continuing during bear market periods.  Boeing is my 6^th largest individual holding, so obviously I’m a long-term bull, but I do have concerns surrounding growth/dividend growth during tough economic times as well as the stock’s current valuation, which is hovering near historic highs at ~33x earnings.

Because of this reliance on macroeconomic forces, I couldn’t include any of these three wonderful companies in my top 3, as I said before, I hold large positions in each one and wholeheartedly expect for them to play a large role in my financial freedom (God willing) years down the road.

Near Miss #7: Starbucks

At this point in time, I don’t really consider Starbucks (SBUX) to be all that cyclical.  I know many investors do.  Their footprint has become so large that I view them in a similar light to McDonald’s (MCD).   At the end of its most recent quarter, McDonald’s boasted over 37,000 locations in more than 100 countries.  It’s difficult to travel the world and not come across the golden arches.  McDonald’s have become a symbol of America across the world and continues to grow its footprint in attractive markets.  However, unlike Starbucks, the vast majority (over 90%) of its locations are owned by independent franchisers.  This means that McDonald’s business model isn’t all that capital intensive.

Starbucks has a long way to go to catch up to McDonald’s in terms of size and scale.  There are ~28,000 Starbucks locations across the world in 76 markets.  However, Starbucks is growing much faster than McDonald’s, having opened ~2,300 stores over the past twelve months (I expect somewhat similar expansion in 2018) whereas McDonald’s only has plans to approximately 1000 stores in the upcoming year.

But, unlike Mickey D’s, Starbucks has a more diversified approach to the consumer selling branded packaged goods in grocery stores/online.  Starbuck’s brand comes with better connotations than McDonald’s (i.e., when you think of Starbucks, you might think overpriced, burnt coffee, but you don’t think that the food is going to kill you).  McDonald’s is still battling the Super Size Me stigma from over a decade ago and thankfully, Starbucks has never had to deal with such negative awareness amongst costumers (though I suppose that you could argue that Starbucks has to deal with political headwinds created by its admittedly left-leaning founder, Howard Schultz).

Another popular DGI stock that I like to compare Starbucks to is Coca-Cola.  I think Starbucks has the potential to be a dividend powerhouse in the food/beverage space just like Coca-Cola .  Sure, coffee isn’t exactly necessary to human survival, but it is a beverage chock full of addictive substances (caffeine and sugar) and therefore, I don’t expect to see demand wane anytime soon, regardless of the broader economy.  Does this ring a bell?  (hint, hint: Soda, without the negative health foods connotations).

I didn’t have the chance to get in on Coca-Cola early (back in the early 20^th century), so investing in Starbucks today is the next best thing, in my opinion.  Starbuck’s 5-year DGR is 24.08%.  This is very impressive and has played a large role in my personal Starbucks position, which is the fifth largest in my portfolio.

Starbucks is maturing as a company.  It has saturated the U.S. market and is now seeking growth in international markets (namely China).  Sales growth and same store sales are slowing and while this is upsetting to some, I expect it.  I don’t mind to see Starbucks mature so long as management continues to reward shareholders so generously.

What does concern me (which is why this company didn’t make the top 3) is Starbuck’s valuation.  This company trades for ~26x earnings, which is a hefty price to pay for a company with single digit top-line growth.  I fear multiple contraction when it comes to Starbucks.  I think this has the potential to be a drag on total returns for investors moving forward.  Because of this, as well as the company’s reliance on the volatile Chinese market (and government) for future growth, Starbucks is on the “near miss” list, instead of in the top 3.