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Hard to Go Wrong with the Timely 10

06/14/2012 11:45 am EST


Kelley Wright

Managing Editor, Investment Quality Trends

Instead of worrying about the volatility of today's markets, it's better to simply find stocks that can move through this storm without taking on water and kick off a safe dividend to boot, writes Kelley Wright of Investment Quality Trends.

Investment Quality Trends' primary purpose is to assist subscribers in growing their capital and income base from which to derive cash for their current and future needs. To that end, we believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation.

For subscribers to effectively mirror our Model Portfolio for performance-tracking purposes (every stock in the Undervalued and Rising Trend categories), would require holding 159 stocks as of the Mid-May issue; clearly too many positions to be practical.

The Timely Ten, therefore, is not just another “best of, right now” list. It is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years.

Do we believe that all ten will go up 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 looking to build a portfolio from scratch, are partially invested and looking to add new positions, or fully invested and in need of some affirmation and hand holding, The Timely Ten represents our top ten recommendations as of each issue. Short of utilizing the personal investment management services of our sister company, this is as close to hands on advice you can get.

The Timely Ten consists of undervalued stocks that generally have a S&P Dividend & Earnings Quality rating of A- or better, a “G” designation for exemplary long-term dividend growth, a P/E ratio of 15 or less, a payout ratio of 50% or less (75% for Utilities), debt of 50% or less (75% for Utilities), and technical characteristics on the daily and weekly charts that suggests the potential for imminent capital appreciation. This issue’s selections are:

                Name                                      Symbol                   Payout Ratio         Yield
1              Eaton Corp                            ETN                        38%                         3.5%
2              Chevron Corp                       CVX                        26%                         3.7%
3              Exxon Mobil                          XOM                      28%                         2.9%
4              Coca Cola Co                        KO                          54%                         2.7%
5              Johnson & Johnson            JNJ                          67%                         3.9%
6              Union Pacific                        UNP                        33%                         2.2%
7              Air Products & Chem          APD                       46%                        3.2%
8              United Technologies           UTX                       40%                         2.6%
9              Procter & Gamble                 PG                           69%                         3.6%
10            Occidental Petroleum          OXY                       26%                        2.7%

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