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After seeing the interest in yesterday's Serious Money: Five stable stocks for troubled times, I decided to track the stocks on a quarterly basis to see how they hold up over time (otherwise, what would be the purpose of discussing them in the first place?).
I said that all five have shrewd, conservative management teams and have been in the right place, at the right time -- and prepared. The standard for comparison will be the Standard & Poors 500 Index which closed on June 30, 2008 at 1,280.00. Although my original story was published yesterday, I will be using the second quarter end point for my five stocks as well.
1) Johnson and Johnson (NYSE: JNJ) closed at $64.34 and pays a 2.89% dividend yield.
2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) closed at $45.80 and pays a 1% dividend yield.
3) Chubb Corp (NYSE: CB) closed at $49.01 and pays a 2.64% dividend yield.
4) Xcel Energy (NYSE: XEL) closed at $20.07 and pays a 4.81% dividend yield.
5) Walt Disney (NYSE: DIS) closed at $31.20 and pays a 1.11% dividend yield.
I reviewed about 600 stocks before settling on these five. The average yield of the five is 2.49%. That is higher than the average stock fund.
These are not necessarily the stocks I think will appreciate the most in the next twelve months. That list probably would include a few downtrodden names. These are the stocks that I think will hold up well if the stock market continues to be dismal over the next year. Remember the subject was stability. It is not a coincidence that all of them pay a dividend. That is almost always a key factor in long term success.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I currently own shares of JNJ.
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