3 Election-Proof Income Stocks
11/12/2012 11:45 am EST
The election is over, but that distraction is not the only one that concerns the market. Here are a few stocks that will hold up through it all, notes Richard Lehmann of Income Securities Letter.
Affiliated Mangers Group (MGR)
This is an asset management company with equity investments in a diverse group of boutique investment management firms (affiliates). As of the end of the third quarter, aggregate assets under management of AMG’s affiliates was $385 billion in more than 200 investment products. The company’s strategy is to generate growth through acquisitions as well as growth through existing affiliates.
Its partnership approach creates incentives for strong performance by providing affiliate management with equity ownership in its firms alongside AMG. This structure ensures that affiliates maintain operational autonomy in managing their businesses, and thus preserves their entrepreneurial culture and distinct investment process. AMG also provides assistance to its affiliates in marketing, distribution, product development, strategic matters, and operations.
Second-quarter 2012 total revenue was $432.6 million, slightly lower than the $456.2 million posted for the same period in 2011. Net income for the quarter was $6.6 million, compared to $45.5 million posted for the same period in 2011. This decrease was attributable to a writedown in intangible assets. This security is a good investment for tax differed medium-risk portfolios.
This North Carolina-based financial services holding company has more than $178.5 billion in assets and a market capitalization of $21.6 billion. It conducts its operations primarily through its flagship subsidiary Branch Bank and Trust, better known as BB&T.
The company currently operates approximately 1,800 financial centers in 12 states and Washington, D.C., and offers a full range of consumer and commercial banking, securities brokerage, asset management, mortgage, and insurance products and services.
BBT reported second-quarter 2012 revenue of $1.73 billion, slightly above the $1.69 billion reported last year. Net income for those same periods was $518 and $307 million. This non-cumulative security QDI eligible security would make a good addition to a low-risk portfolio.
Blackrock Global Opportunities Equity Trust (BOE)
This fund's objective is to seek current income and current gains, with a secondary objective of long-term capital appreciation. It aims to achieve these objectives by investing at least 80% of its total assets in equity securities or options on equity securities or indices or sectors of equity securities.
Securities in which the trust anticipates investing include both foreign and domestic common stocks, preferred stocks, convertible securities, warrants, depository receipts and equity interests in REITs.
As of June 29, the top five stock holdings in the fund were Exxon Mobil, Apple, British American Tobacco, Wells Fargo, and General Electric. Top sectors were financial, information technology, consumer staples, health care, and consumer discretionary. This is an excellent fund for medium-risk portfolios seeking global exposure.