The Dow Jones is down around 300 points again (Update: closed down 450) so it's time to revisit my stable stock picks to see how they are holding up. Each of my five picks is beating the market and all of them are up despite crushing news in the financial sector every day since my last report.The prediction business is highly speculative, but I gave it a try anyway, searching for stocks that would hold their value. This update is a spot-check of my earlier post, Serious Money: Five stable stocks for troubled times. The closing prices are from yesterday but these companies are doing well in today's down market too as the government steps in again and bails out AIG with $85 billion.
The standard for comparison is the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The S&P closed yesterday at 1,213.59, down 5.47%. The percentage gains for the stable stocks do not include dividends. They are up 4% for a 9.47% advantage. The volatility in the market today may alter some of the data points so expect an after market update. Update: the following five stocks remain ahead of the market but they did turn down in the last hour.
1) Johnson and Johnson (NYSE: JNJ) -- when recommended, the stock closed at $64.34 and paid a 2.89% dividend yield. It finished at $69.80 -- up 8.48% -- and is trading up this morning. JNJ was featured in Barron's this week as the most respected from the top 100 companies in the world. Final Update: down $-0.29 to $69.51
2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended, the stock closed at $45.80 and paid a 1% dividend yield. It finished at $45.96 -- no change -- and is trading slightly down this morning. Teva is the largest generic drug company in the world and just got bigger throught the acquisition of Barr Pharmaceuticals. Final Update: down $-1.25 to $44.11
3) Chubb Corp. (NYSE: CB) -- when recommended, the stock closed at $49.01 and paid a 2.64% dividend yield. It finished at $54.72 -- up 11.65% -- and CB is trading up today. CB is benefiting from from AIG's massive problems. Final Update: down $-2.74 to $51.98
4) Xcel Energy (NYSE: XEL) -- when recommended, the stock closed at $20.07 and paid a 4.81% dividend yield. It finished at $20.87 -- up 3.98% -- and XEL has been up and down in morning trading today. XEL is a diversified energy play. Final Update: down $-0.13 to $20.74
5) Walt Disney (NYSE: DIS) -- when recommended, the stock closed at $31.20 and paid a 1.11% dividend yield. It closed at $32.51 -- up 4.2% -- and is trading down slightly this morning. Historically the movie business has done well during economic downturns as people try to escape their grief. Final Update: down $-0.32 to $32.19
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.
So far so good for the pursuit of stability, a relief after seeing the finance page.
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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