It was July 1, 2008 when I first posted Serious Money: Five stable stocks for troubled times. The title speaks for itself. This update, after nine weeks and horrible market conditions, is through Friday October 3, 2008.The index for comparison is the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The S&P closed Friday at 1,099.23 , down 14.12%.
Each of my five picks is beating the market and three of the five are actually up despite crushing news in the financial sector, unemployment and housing. Congress did pass a Wall Street backstop/bailout bill that President Bush has signed, but only after adding another 450 pages and $130 billion to the amount. Although the five stocks have averaged a 0.75% loss, as intended, they easily beat the S&P by 13.37%.
Here are the five stocks that I still think are worth considering. For my original rationale see the linked story above.
1) Johnson and Johnson (NYSE: JNJ) -- when recommended, the stock closed at $64.34 and paid a 2.89% dividend yield. It closed Friday at $66.16 -- up 2.75%. JNJ was featured in Barron's this month as the most respected from the top 100 companies in the world.
2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended, the stock closed at $45.80 and paid a 1% dividend yield. It closed October 3 at $46.08 -- up 0.06% 0.62% Teva (of Isreal) is the largest generic drug company in the world and just got bigger through the acquisition of Barr Pharmaceuticals last month.3) Chubb Corp. (NYSE: CB) -- when recommended, the stock closed at $49.01 and paid a 2.64% dividend yield. It finished at $49.90 -- up 0.18% 1.8% CB is benefiting from AIG's massive problems and is on many lists of stocks to watch in financial publications.
4) Xcel Energy (NYSE: XEL) -- when recommended, the stock closed at $20.07 and paid a 4.81% dividend yield. It finished at $19.35 -- down 3.59%. XEL is a diversified energy play. Energy stocks have been knocked down lately but XEL is doing far better than most.
5) Walt Disney (NYSE: DIS) -- when recommended, the stock closed at $31.20 and paid a 1.11% dividend yield. It closed at $29.54 -- down 5.32%. Historically, the movie business has been a place to hide during recessions.
I reviewed about 600 stocks before settling on these five, generally looking for potential growth in low beta stocks that also have a dividend. The average yield of the five is 2.49%, which is higher than the average stock fund.
Given the current trend in the market and the dour news in the financial pages in general I's still strongly consider these stocks. If one were to invest in the five, they would have a well diversified, high yield, low beta starter portfolio with exposure to international growth and competitive advantages in today's market that would allow a good night's sleep too.
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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Reader Comments (Page 1 of 1)
10-10-2008 @ 1:02AM
Paul K said...
A couple of your numbers just didn't look right: Using your own price quotes, Teva's gain was actually 0.61% and Chubb's was a much more impressive, 1.82%.
10-15-2008 @ 10:55AM
Sheldon L said...
Thanks Paul, it's corrected.