Current Dividend Yield: 3.4%
Performance So Far in 2012: +10%
E.I. du Pont de Nemours & Co. (NYSE:DD), colloquially known just as DuPont, is another stock for bulls expecting a cyclical recovery. 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 … though admittedly, if you don’t believe in a cyclical boom on the horizon, there might be short-term pain for chemicals stocks like DD.
The combination of reach and stability means reliable revenue — and thus, reliable dividends. That’s one reason it could be considered a stock to hold long enough for your grandkids to get a piece of the shares. 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%.”
DuPont reports earnings Oct. 23.