by Richard Young | March 18, 2010 7:31 am
The market has surged 70% since its lows a year ago, but for many investors that doesn’t mean its time to breathe easy. Securing your retirement fund or providing a steady stream of income via dividends involves a long-term strategy and a conservative approach that makes sure you protect what you’ve won back in the last year and maximize your performance looking forward.
Now I know many of you may be hungry for profits, but I’m not the kind to play fast and lose with my money — or yours, if you trust me to guide you. And when it comes to safeguarding your portfolio, nothing is better than security stocks. I’m not just talking companies that fight terrorism or assist with border security, but also stocks that add to agricultural security where we grow enough food to feed ourselves and energy security where we don’t need Middle Eastern oil.
In my mind, these issues will remain central to the economy in 2010 and beyond. Since they dominate the headlines and will likely remain in focus for years to come. That’s why conservative, long-term investors should focus on energy, agriculture and defense stocks – and preferably ones with hefty dividends that provide a regular payout as they move steadily upwards.
To get you started securing your portfolio, here are seven locked down stocks for April:
Deere & Company (DE) produces John Deere, one of the most iconic brands in American history. It is also one of the oldest. Deere made his first steel plow in 1837, the same year Martin Van Buren was inaugurated president and that brought the Panic of 1837, one of the country’s worst depressions. Through the depression, Deere’s business, built on solid innovation, kept on growing. I expect DE to help lead the new agricultural revolution in 2010 and beyond. My charts show that John Deere’s relative strength has broken a critical resistance point. Look for Deere to outperform the market going forward. The company has a dividend yield of 1.9% and has paid out dividends since 1937.
Energy Transfer Partners (ETP) is my top energy stock right now. There a revolution in natural gas drilling techniques, including horizontal drilling where one well can take the place of dozens of taps under conventional drilling, is adding vast quantities of gas to the nation’s reserves. Much of that gas is trapped in the Fayetteville shale formation in Arkansas. Energy Transfer Partners is building the Fayetteville Express Pipeline to move that gas to markets in the Midwest and Northeast. The Fayetteville Express will be 185 miles long, and have a capacity of 2 billion cubic feet per day. My long-term chart analysis shows Energy Transfer Partners trading below trend. You should buy while this is still the case. On top of this potential, the stock carries a hefty 7.7% dividend yield and has paid dividends reliably since 1998.
General Dynamics (GD) is also a top name in the defense industry, with such iconic war machines as the Abrams tank and the F-16 Eagle as part of its product line. This makes this company a lock for any portfolio. The latest innovation that’s winning GD accolades at the Department of Defense is encrypted communications technology. For generals and intelligence agents in the field who need secure communications, General Dynamics has developed the Sectéra vIPer Universal Secure Phone, which works on traditional cell phone networks, but still offers a Top Secret level of protection. This is an invaluable tool for our troops. My long-term chart shows General Dynamics has fallen below trend but has grown since the end of 2009 with big upwards potential. Buy GD before it crosses above trend. General Dynamics has a 2.3% dividend yield and has paid dividends since 1979.
I don’t just like Kinder Morgan Energy Partners (KMP) because it is a strong energy stock. I also like it because all investors want transparency when it comes to the companies they own in their portfolio. Kinder Morgan has a proven and substantial commitment to transparency, and that goes a long way in the current market. The company goes so far as to publish its budget and copious operational data right on its website. My analysis shows Kinder currently reverting to its long-term trend of steady share appreciation. Buy before it gets well on its way! Kinder Morgan has a dividend yield of 6.6%, and has maintained its dividend since 1992. The stock has a 5-year average return of 11%, proving this stock has staying power.
Northrop Grumman (NOC) is one of the first names in our nation’s defense. The USS George H.W. Bush was the final Nimitz-class aircraft carrier built by Northrop Grumman at the Newport News shipyard. Construction of the carrier began in September 2003, and the ship was delivered in May 2009. Weighing in at 97,000 tons and measuring 1,092 feet long, the ship is massive. And the total price tag? $6.2 billion! Northrop Grumman is already working on the next class of carriers to be built at Newport News, the Gerald R. Ford class. Those are sure to deliver even bigger contracts t to this company. My price chart shows strong momentum building in Northrop Grumman’s shares in anticipation of this construction. The stock’s next major resistance point is $70, so strike now while shares are under $65. NOC has a dividend yield of 2.7% and has featured a quarterly dividend since 1951.
As the largest electricity provider in Kansas, Westar Energy (WR) serves over half a million residents. Westar generates power from a diversified energy portfolio that includes natural gas, wind, coal, nuclear power, and oil. In a year, these power plants generate 27 million megawatt-hours of electricity. My price analysis shows Westar’s higher highs and higher lows as its price climbs. The next key resistance point for Westar is near $22.50 – which is right where shares are right now. Buy before WR breaks out! And remember this company has a nice 5.7% dividend, and a track record of providing dividend payouts since 1924.
United Technologies (UTX) serves and aerospace industry worldwide, and makes the iconic Blackhawk and Superhawk attack helicopters used by our troops in Iraq and Afghanistan. It also manufacturers unmanned vehicles known as the Cypher to keep soldiers out of harms way. In addition to very lucrative defense contracts, conglomerate UTX also is an industry leader in elevators with its Otis brand. As an example of its top-tier status in the building industry, UTX recently provided super-double-decker elevators in the Shanghai World Financial Center that can carry a three-ton load right up to the 94th floor in only two minutes! This is a company that knows what its doing, at home and abroad in hostile territory. My relative strength chart shows United Technologies’ long-term outperformance of the market, and indicates that trend will continue. UTX has a 2.4% dividend yield, and has maintained dividend payments since 1936.
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