- 5/1/08 to 5/1/09 return: -14% vs. -36% for the Dow
- 5/1/08 to present: -2% vs. -12% for the Dow
During the past several years, cash-rich Verizon has emerged as the frontrunner in mobile telecom. It boasts more than 40% of devices running the Google (NASDAQ:GOOG) Android platform, and this year it finally started carrying the Apple (NASDAQ:AAPL) iPhone. It is the largest carrier in the nation, and now that a merger between AT&T (NYSE:T) and T-Mobile is facing federal antitrust lawsuits, it likely will stay that way. The company weathered the 2008-09 downturn remarkably well — and though it is flat since spring 2008, it offers a mammoth 6% dividend. A payout that large is very attractive as 10-year T-Notes yield under 2% right now.
- 5/1/08 to 5/1/09 return: -7% vs. -36% for the Dow
- 5/1/08 to present: +47% vs. -12% for the Dow
In recent years, McDonald’s (NYSE:MCD) has had nowhere to go but up. The stock has tripled since 2004 when current CEO Jim Skinner took the helm, thanks to a 50% increase in sales per store in the same period. The stock did just take a hit recently with global same-store sales that didn’t hit expectations, but it was the 100th straight month of growth in same-store sales, with 3.5% gains. While that might not have been as brisk as some investors were looking for, there just aren’t a lot of high growth options right now.
What’s more, McDonald’s knows how to protect its balance sheet, with EPS set to double from $2.31 in fiscal 2007 to a projected $4.60 or so in 2011 compared with revenue growth of about 60%, from roughly $26 billion in 2007 to a projected $40 billion or so this fiscal year. That proves McDonald’s can grow earnings impressively even if revenues don’t grow at a significantly slower rate. Throw in a 3% dividend yield and you’ve got a keeper in McDonald’s.
- 5/1/08 to 5/1/09 return: +2% vs. -36% for the Dow
- 5/1/08 to present: +25% vs. -12% for the Dow
Clorox (NYSE:CLX) makes much more than its namesake bleach and is a consumer products powerhouse behind brands that include Hidden Valley Ranch dressings, Kingsford charcoal and Glad storage bags, to name a few. Clorox was embroiled in some drama this summer as iconic investor Carl Ichan offered to buy out the company for $10.2 billion — though many think it was just a stunt to bait other buyers into a sweeter offer.
The board deflected Icahn’s bid, but don’t think that this signals CLX is a bad company or has bad management. Shares have performed nicely amid the market turmoil. A hefty 3.5% dividend on top of that also is quite attractive.
Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.