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Blue Chip Expert's Lucky 13

01/30/2015 8:00 am EST


Kelley Wright

Managing Editor, Investment Quality Trends

When it comes to blue chips, income investing Kelley Wright is the expert's expert. Each year, he offers a Lucky 13 Portfolio. In his IQ Trends, he says, "These stocks are selected because they exhibit high-quality, offer good value, and have attractive dividend yields."

We remind investors that each year in the markets is an adventure. There will be ups and there will be downs, and there will be something(s) that no one could predict.

The good news is that predictive powers are not a requirement to be a successful investor. What is required though is the ability to recognize and acquire good value, which, over the long-term, will reward you with rising dividends and capital growth to meet your needs.

Below we present our new Lucky 13 portfolio for 2015. Hopefully, these stocks will provide both safe and excellent returns over the coming year and years to follow.

Abbott Laboratories (ABT):

Healthcare is in a multi-year uptrend, and with a good chance that the Medical Device Tax is abolished, ABT will be a beneficiary. This long-time Dividend Aristocrat is a solid “anchor” position.

AT&T (T):

Telecom isn’t just about talking anymore. Today, we also get TV, email, text, and Internet from various mobile devices and laptops. With AT&T you get one of the major players in this area, a very attractive dividend yield, and solid long-term upside price potential.

Baxter International (BAX):

Another holdover from 2014 and solid anchor position, Baxter has an S&P “A” Quality Ranking and growth designation for outstanding annual dividend growth.

CVS Health (CVS):

The third of our holdovers from 2014, CVS is without peer in this space. An “A+” S&P Quality Ranking and a outstanding annual dividend growth, CVS just produces year in and year out.

Chevron (CVX):

No question about it; a tough year in the oil patch. Be that as it may, we still love the $4.28 per share dividend, the designation for outstanding dividend growth and the S&P “A” Quality Ranking. This is a great core position and long-term hold.

Coca-Cola (KO):

Coca-Cola isn’t flashy, but it generates profits year in and year out, consistently increases its dividend, and remains one of the iconic brands known the world over. While not a growth-stock anymore, the company produces a consistent return on equity and maintains its S&P Quality Ranking of “A+.”

Hasbro (HAS):

Oh, sure, HAS still sells lots of toys and games, but its move into licensing, film, and television distribution has turned the company into a totally different animal. We like the dividend yield and outstanding annual dividend growth, where the annual increases have come at a nice clip.

International Business Machines (IBM)

IBM re-invented itself this year, again. This isn’t the first time and won’t be the last. Of course, when you change your product line there is a lag in earnings, which infuriates. An A+ and outstanding annual dividend, this is a no-brainer. A great long-term hold.

McDonald’s (MCD):

Even Mickey D’s can have a so-so year every now and then. We think that 2015 will be a back-on-track year for the Golden Arches. In the meantime you get a solid $3.40 dividend, outstanding annual dividend growth, and an S&P “A” Quality Ranking.

Philip Morris International (PM)

Defensive plays weren’t in vogue in 2014 but we have a suspicion that a $4.00 dividend, a growth designation, and a little QE by the ECB might just be the ticket in 2015. PM is a monster and when it catches fire it can take off in a hurry. Another great yield play and a solid long-term hold.

Suncor Energy (SU)

Like other energy companies, SU had a rough 2014. Nevertheless, this company is far from down and out. First off, you get a nice dividend and a growth stock with a long-term history for dividend increases. With its S&P “A” Quality Ranking, we also believe the dividend is secure. Lastly, if this one gets bought, we wouldn’t be surprised.

Texas Instruments (TXN)

In the high-tech space, you need some low-tech stuff to make it all work. As long as smartphones, tablets, and hi-def big-screens are all the rage, TXN will be in the tall grass with the big dogs. The tech space should do well in 2015.

ExxonMobil (XOM)

ExxonMobil is still the oil & gas giant. With its latest dividend increase, XOM has attained tour growth designation, which fits quite nicely with its designation as a Dividend Aristocrat and its S&P “A” Quality Ranking. Definitely a long-term core holding.

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