Every year I select a list of six stocks and then each beneficiary selects two from the list. I try to provide selections that cover larger and smaller companies, companies from different types of industries, and companies from within the US and outside the US. My goal for each of them is to select a stock that seems reasonably priced, with a good upside, and preferably a decent dividend. Dividend growth is a strong contributor to the long term financial performance of these portfolios.
This isn’t the final list, but these are companies that I am considering. I will gladly listen to opinions of others such as Dan, as well. This list will be cut down to six stocks soon.
- Texas Instruments (TI) – $25, down from 52 week high of $36, 2% dividend yield. US company, $30B market cap, semiconductors. The chip manufacturer is reasonably well run and took a hit with recent earnings guidance which makes them a better buy.
- Bancolombia S.A. (ADR: CIB) – $61, down from 52 week high of $69, 2.2% dividend yield. Colombian company, $12B market cap, banking. This Colombian bank provides a window into a growing Latin America market.
- Anadarko (APC) – $69, down from 52 week high of $85, 0.5% dividend yield (low). US company, $34B market cap, oil & gas exploration. Anadarko is riding the wave of US oil and gas as well as making many overseas discoveries in markets such as Ghana. A play on the growing natural gas solution.
- Wynn Resorts (WYNN) – $140, down from 52 week high of $172, 1.4% dividend. US company with majority Chinese operations, $17B market cap, gambling & hotels. Wynn Resorts now makes most of its money in China, although it does have high end properties on the Las Vegas strip.
- Statoil (ADR: STL) – $23, down from 52 week high of $29, 4.9% dividend. Norwegian company, $74B market cap, oil & gas. Norwegian oil and gas company recently found new fields and is well run and not as subject to Geo-political risk as the other oil “majors”.
- Bank of America (BAC) – $7, down from 52 week high of $15, 0.5% dividend (low). US company, $78B market cap, banking. Warren Buffett recently invested in their preferred stock, a sign of stability. The bank is under pressure due to their purchase of Countrywide but if they can turn it around they have big earnings upside. It is unlikely that the US government will let something terrible drag BAC down because of its giant impact on the US economy (much bigger than Lehman in practical terms)
- Philip Morris International (PM) – $69, not far from 52 week high of $72, 3.7% dividend. International (non-US) company, $121B market cap, cigarettes. This company does not cell cigarettes in the US (that is Altria) but sells them overseas (Marlboro) where it is very strong in many markets and growing in China
- Westpac Banking Corporation (ADR: WBK) – $107, down from 52 week high of $138, 7.2% dividend (very high). Australian company, $64B market cap, banking. Westpac is poised to boom along with the Australian economy based on their strong currency, relatively improved financial position (compared to US and Europe), and of course their huge mineral resources which they can sell to all the Asian economies
- Riverbed Technology (RVBD) – $22, down from 52 week high of $44, no dividend. US company, $3B market cap, technology. This company makes products for security and switching for data centers and cloud computing. Companies of this size are potential acquisition candidates given the large amounts of cash held in Silicon Valley
- Canadian National Railway (ADR: CNI) – $71, down from 52 week high of $81, 1.9% dividend. Canadian company, $32B market cap, railways. Canadian company poised to benefit long term from huge natural resources in country, also US operations.