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Timely Ten: Dividend Values

10/25/2013 9:00 am EST


Kelley Wright

Managing Editor, Investment Quality Trends

Our goal is to help investors grow their capital and income base from which to generate cash for their current and future needs, advises Kelley Wright, blue chip value investor and editor of IQ Trends.

To that end, we believe that shares of high-quality stocks purchased at an historically repetitive area of low-price to high-yield, offers the greater potential for downside protection and upside appreciation.

The Timely Ten is not just another best of, right now list. Rather, it is our reasoned expectation—based on our methodology and experience, that these ten currently Undervalued stocks offer the greatest real total-return potential over the next five years.

Do we believe that all ten will appreciate simultaneously or immediately? Of course not.

Our four-plus decades of research and experience, however, leads us to believe that these stocks, purchased at current Undervalued levels, are well positioned for both growth of capital and income.

Whether you are building a portfolio from scratch, are partially invested and seeking new positions, or are fully invested and in need of some affirmation and hand holding, The Timely Ten represents our top ten current recommendations.

The Timely Ten is comprised of stocks that generally have an S&P Dividend & Earnings Quality ranking of A- or better, a designation for exemplary long-term dividend growth, and a P/E ratio of 15 or less.

They also have a payout ratio of 50% or less, long-term debt-to-equity of 50% or less (75% for Utilities), and technical characteristics on their daily and weekly charts that suggest the potential for imminent capital appreciation.

Based on this criteria, here are our current Timely Ten selections:

  • Chevron Corp. (CVX)—yielding 3.3%

  • CVS Caremark (CVS)—yielding 1.6%

  • Coca-Cola (KO)—yielding 2.9%

  • Baxter International (BAX)—yielding 3.0%

  • Walgreen (WAG)—yielding 2.3%

  • McDonalds Corp. (MCD)—yielding 3.3%

  • PepsiCo (PEP)—yielding 2.8%

  • ExxonMobil (XOM)—yielding 2.9%

  • Occidental Petroleum (OXY)—yielding 2.7%

  • Wal-Mart Stores (WMT)—yielding 2.5%

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