Comfort Zone Investing: Six tranquil havens in a stormy market

Ted Allrich is the founder of The Online Investor and author of the book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he'll offer advice to investors who are just getting started.

Notice the title does not say "Safe Havens." Nothing is safe in the stock market. There are always risks with every stock. Being big doesn't mean safe. Look at WaMu, Fannie Mae, Countrywide, Freddie Mac. Very big. Very gone. And good financial statements don't always mean safe. Remember MCI. Bernie Ebbers cooked the books until they were overdone. Now he sits and tries to come up with new recipes. Only there aren't many opportunities in jail.

No, the idea behind this column is to look at six stocks with attributes that should give investors some feeling of confidence, attributes that, if the numbers are true, should give investors stocks to consider. Each has these elements in common: good growth in sales and earnings in the last five years and large amounts of cash.

Of course, these numbers are from the past, historical facts, not forecasts. What happens in the future, especially in this economic time, is very, very difficult to determine. Make that impossible. But if management continues to show the same skills that produced these favorable numbers, there's a good chance they will continue to manage well even in hard times.

International Business Machines Corporation (NYSE: IBM) develops and manufactures information technology products and services worldwide.
Sales Growth: (last five years annual average): 5%
Earnings Growth: (last five years annual average): 7%.
Total Cash: $12.91 billion
Total Debt: $34.14 billion
Dividend Yield: 2.2%

Johnson & Johnson (NYSE: JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide.
Sales Growth: (Average annual increase for last five years): 11%
Earnings Growth: (Average annual growth for last five years): 14.5%
Total Cash: $12.8 billion
Total Debt: $11.85 billion
Dividend Yield: 3.7%

The Coca-Cola Company (NYSE: KO) engages in the manufacture, distribution, and marketing of nonalcoholic beverage concentrates and syrups worldwide. It principally offers sparkling and still beverages.
Sales Growth: (Annual average for last five years): 4.5%
Earnings Growth: (Past five years annual average): 8.5%
Total Cash: $4.98 billion
Total Debt: $9.31 billion
Dividend Yield: 4%

Nike, Inc. (NYSE: NKE) designs, develops, and markets footwear, apparel, equipment, and accessory products worldwide.
Sales Growth (last five years average): 12%
Earnings Growth (last five years average): 19.5%
Total Cash: $2.73 billion
Total Debt: $793.9 million
Dividend yield: 2.4%

Oracle Corporation (NASDAQ: ORCL), an enterprise software company, engages in the development, manufacture, distribution, servicing, and marketing of database, middleware, and application software worldwide.
Sales Growth: (last five years average): 14.5%
Earnings Growth: (last five years average) 19.5%
Total Cash: $10.65 billion
Total Debt: $11.24 billion
No dividend

Exxon Mobil Corporation (NYSE: XOM) engages in the exploration, production,transportation, and sale of crude oil and natural gas. It also engages in the manufacture of petroleum products, and transportation and saleof crude oil, natural gas, and petroleum products.
Sales Growth (Last five years average annual rate): 16.5%
Earnings Growth (Last five years average annual rate): 25.5%
Total Cash: $38.43 billion
Total Debt: $10.26 billion
Dividend Yield: 2.4%

These stocks aren't automatic buys. They're not necessarily going up. They may go down. More research is required. Investors have to determine if one or all is right for their risk tolerance. Many more attributes make up a good stock. But these are good ones to consider if you're tired of being battered by the market and looking for stocks that have shown solid sales and earnings growth.

Ted Allrich is the founder of Allrich Investment Management LLC.

Tags: Coca-Cola, Coke, Comfort Zone Investing, Exxon Mobil, featured, IBM, JNJ, Johnson and Johnson, KO, Nike, NKE, Oracle, ORCL, Ted Allrich, XOM

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Reader Comments (Page 1 of 1)

3-08-2009 @ 11:58AM

Jim McNally said...

You sound like a complete ASS. I love your comment, these are not necessarily going up, they may go down. The only way you can make money is by using someone else money. Your nothing but a hero on someone else credit. When the Dow hits 5k i would love to hear you run your stupid mouth. JMc

3-08-2009 @ 1:18PM

David said...

I've been trying to figure out what our government and the Federal Reserve are up to? The politics are beyond my comprehension however the economic part is a "little" easier.

Unraveling the mess has been far too perplexing untill finding the following web site. The site is a series of 22 videos, some 5 minutes, some 14 minutes that CLEARLY spells out fundamentals as to our economy and where things are going.

I'll not say more, other than this is Not Hype, its not Opinion, its facts and figures. What you come away with is raw information that will prepare you.

I'd rather be armed. Hope all of you feel the same?

http://www.chrismartenson.com/about

3-08-2009 @ 6:46PM

Frieda said...

The Obama meltdown is like a plague that is slowly working its way thru the system and the great doctor is not applying the vaccine to control the disease. Instead he's handing out aspirin (bailout money) and hoping it all goes away. WE can't rely on the Capital Hill Gang, they just steal vaccine ( pork) and hope the great doctor Obama will handle things. Its hard to believe that these so called professionals cannot work the bank problems out. If they are weak, merge them with strong ones. If they are insolvent, close them! Move the toxic assets into a central market. You dont need to nationalize.......... merge or close. Use any funding to back those banks that are merging or help with backing on restructured mortgages. Mr Obama, stop playing chicken with the free world economy.

3-09-2009 @ 1:14AM

MYTAKE said...

OBAMA AND CONGRESS ARE GOOD AT CONDEMING CEOS OF BAILED OUT POORLY OPERATED COMPANIES. CONGRESS HAS A BIG NERVE SINCE THEY HAVE DONE A HELL OF A JOB WITH THIS COUNTRY AND YET THEY VOTE SELVES RAISES, GET BEST MED. BENEFITS, PLENTY OF BREAK(VACATION TIME) AND OTHER PERKS. OBAMA SHOULD REMIND CONGRESS OF THEIR SHORTCOMINGS AND MAYBE ASK THEM TO TAKE AVERAGE MED BENEFITS LIKE THE REST OF US AND ALLOW THE VOTERS TO DECIDE IF THEY DESERVE RAISES IN SALARY OR CUTS. CONGRESS DOES PRETTY WELL FOR THEMSELVES. IT'S ABOUT TIME THEY KNEW WHAT THE AVERAGE VOTER HAS TO LIVE WITH.

3-09-2009 @ 5:02AM

Frank Black said...

The "Obama" meltdown? Have you already forgotten 8 years of raping the treasury w/ no bid contracts to pursue a war strictly for the financial profit of a few well connected to the administration, even members of the administration? Obama's been in office for under three months. Who has been there for the past 8 years? Does anyone remember the the energy policy, designed to drive the price of oil up 500%, created by the oil company opertaive, Richard (Dick) Cheney in secret meetings at the White House? Why are we in the financial mess we're in? Hmmm...could it be the official policy of DEREGULATION of the industries of political cronies these 8 years? We didn't even need lobbyists, lobbyists were directly writing legislation these past 8 years. Does any remember President George W. B. Chucklenuts campaign "Ownership Society" stump speech, and debate talking points? This is the only REAL issue Republicans object to with the bailout: They don't want to have to start paying as much of a percentage of their real income in taxes as working people. That's it. Everything else is theater to sell it to working people. From the looks of things it appears these posters are still buying it.

3-09-2009 @ 5:56AM

paul said...

Obama has failed to engender confidence on Wall St. Because of this, the Stock Market downturn has become a plunge. He had a small window of opportunity to take the reigns and slow or reverse the trend. He didn't do it. It now appears that his new group of financial advisors are inept and searching for a direction. Time is running out. If you ask me, I feel the "ink is in the milk". Too late to do anything now; our fate is sealed.