Current Dividend Yield: 3.4%
Performance So Far in 2012: +11%
E.I. du Pont de Nemours & Co. (NYSE:DD), colloquially known just as DuPont, is another stock that plays into the cyclical schtick. It is a chemicals giant with more crazy plastics and coatings than you can shake a synthetic stick at, meaning that DuPont revenue is closely tied to business spending. Products include including Tyvek house wrap, Teflon non-stick coatings and stretchy Lycra synthetic fabrics.
The diversity of these products gives DD both a way to stay stable in tough times and the opportunity to tap into growth when the economy recoveries. Obviously, these items aren’t as sexy as a slick smartphone or a luxury automobile. But DD has a broad reach, so it doesn’t really have to worry about one sector or one set of economic data points. This makes it a great long-term investment.
DD stock admittedly lagged the market in 2011 with an 8% decline but has topped the Dow slightly this year. It has refocused its strategy, including a pending sale of its auto paints business to the Carlyle Group (NASDAQ:CG) for about $5 billion.
And as InvestorPlace’s Dan Burrows pointed out in August, “The stock is trading 17% below its own five-year average on a forward earnings basis, while ROE is a very shareholder-friendly 30%.”
The icing on the cake is the 3.4% yield after DuPont added another 2 cents to its quarterly payday, proving this industrial company is not just preserving dividends — but improving them.