Get Strategic with the Timely Ten

11/11/2011 7:15 am EST

Focus: STOCKS

Kelley Wright

Managing Editor, Investment Quality Trends

Just like any other strategy, investors can get carried away as they try to diversify for safety and long-term total returns, notes Kelley Wright of Investment Quality Trends.

My 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, it would require holding 161 stocks as of the Mid-October 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.

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:

Rank Name Symbol
1 Coca-Cola Co KO
2 Johnson & Johnson JNJ
3 AT&T Inc. T
4 Abbott Labs ABT
5 United Technologies UTX
6 PepsiCo Inc PEP
7 Eaton Corp ETN
8 Exelon Corp EXC
9 CVS Caremark CVS
10 3M Company MMM

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