Well, the market was in the dumps yesterday and is even worse today. So this may be a good time to check on my list of stocks for those looking for equities that are stable enough to ride out this bearish storm.
This update is a spot-check of my earlier post Serious Money: Five stable stocks for troubled times, to see how my picks are holding up so far. Closing prices are for August 12, 2008.
The standard for comparison will be the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The following are the five stocks with closing prices from July 1.
1) Johnson and Johnson (NYSE: JNJ) -- when recommended the stock closed at $64.34 and paid a 2.89% dividend yield. It finished at $71.70 -- up 11.44%
2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended the stock closed at $45.80 and paid a 1% dividend yield. It finished at $46.41-- up 1.3%.
3) Chubb Corp. (NYSE: CB) -- when recommended the stock closed at $49.01 and paid a 2.64% dividend yield. It finished at $48.39 -- down 1.26%.
4) Xcel Energy (NYSE: XEL) -- when recommended the stock closed at $20.07 and paid a 4.81% dividend yield. It finished at $20.60 -- up 2.64%
5) Walt Disney (NYSE: DIS) -- when recommended the stock closed at $31.20 and paid a 1.11% dividend yield. It closed at $32.16 -- up 3%.
I reviewed about 600 stocks before settling on these five, generally looking for potential growth in low beta stocks. The average yield of the five is 2.49%, which is higher than the average stock fund.
Since I first posted this story, the five stocks are up an average of 3.42%, compared to the S&P 500 Index which is at 1288.59, up less than 1% over the same period. So the index offered stability over the last six weeks while my five stocks grew and had the larger yield.
In my original analysis I was just looking for stability, but I'll take the gain anyway. The real issue is whether this group continues to hold up if the market tanks. Our colleague James Cramer remains controversial but one of the things he often reminds investors of, that I wholeheartedly agree with is that there is always an opportunity somewhere. I think these five stocks provide that opportunity even if the market becomes increasingly bearish.
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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