Doing business in the U.S. almost exclusively, rather than expanding abroad, is looking like a pretty good recipe for success.
According to Thomson Reuters, 150 of the 500 companies in the S&P 500 make 95 to 100 percent of their revenue inside U.S. borders.
Thomson Reuters analyst John Kozey calls them the "Sold in the USA" portfolio, and these basket of stocks on average are outperforming the S&P 500 benchmark on a 12-month and 24-month basis.
As the market grows more confident in the U.S. economic recovery, Kozey noted, investors on Wall Street are taking a liking to U.S.-centric stocks.
Housing stocks, in particular, have been performing well. Homebuilders DR Horton and Lennar Corp., both of which make nearly all their sales inside the U.S., are up 9 percent and 14 percent, respectively.
Other companies benefiting from the U.S. recovery include American retail names—Macy's, Nordstrom, Ross Stores, J.C. Penney and Target.
Kozey also pointed out that on average "Sold in the USA" stocks have a forward 12-month earnings growth forecast of 9.9 percent, above the S&P 500's 9.3 percent.
Some of the stars in the "Sold in the USA" list have a five-year projected compounded annual growth rate higher than 20 percent, including Chesapeake Energy, Southwest Airlines, NRG Energy, and Cablevision Systems.
Dividends are also highly represented in this index. Eighty-six percent of stocks in the "Sold in the USA" portfolio offer juicy dividends, yielding on average 2.7 percent. Analysts say this is attractive, as investors hunt for yield in this current low rate environment. Some of the dividend yielding sectors like telecom and utilities make up a significant portion of the portfolio. Top yielding stocks on the list include AT&T and Verizon.
The outstanding performance of these domestic darlings though, may not last. "The U.S. has become the crowded consensus trade, but we are starting to see that reverse. This is one of our themes for 2013," said Savita Subramanian, head of U.S. equity and quantitative strategy at BofA Merrill Lynch Global Research.
