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10 Timely, High-Quality Income Stocks

07/31/2012 9:00 am EST


Kelley Wright

Managing Editor, Investment Quality Trends

Getting into good income stocks at the right time is always a great investment, observes 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 one hundred sixty stocks as of the July 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:

                Prev        Stock                                      Ticker   Payout    S&P
Rank      Rank      Name                                      Symbol   Ratio      Rank      Yield
1              1              Chevron Corp                        CVX        26%        A+          3.4%
2              2              Johnson & Johnson                JNJ          67%        A+          3.6%
3              3              Exxon Mobil                          XOM      28%        A+          2.7%
4              7              CVS Caremark                     CVS        25%        A+          1.4%
5              4              Eaton Corp                           ETN        38%        A             4.1%
6              8              Air Products & Chemicals      APD         46%        A             3.3%
7              6              Occidental Petroleum            OXY       26%        A-           2.6%
8              10            General Dynamics                 GD         30%        A+          3.2%
9              9              Emerson Electric                   EMR       51%        A+          3.6%
10            —            United Technologies              UTX       45%        A+          3.0%

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