10 Stocks for an All-American Portfolio

by Alyssa Oursler | July 2, 2013 9:07 am

#5 IndependenceAs we celebrate our country’s independence with grilling, family and fireworks later this week, we also should take time to acknowledge the companies that help keep our economy rolling.

And I don’t mean companies that just seem all-American. Even Real America Index[1] member Coca-Cola (KO[2]) and Yum Brands‘ (YUM[3]) KFC get huge chunks of revenue overseas[4] despite their red-white-and-blue branding, while more than a third of S&P 500 sales overall come from international markets.

Instead, I’m talking about companies that get most, if not all, of their sales right here in the homeland.

Don’t worry: We sorted through the S&P 500 and picked one company from each sector that fits the bill for you. The resulting portfolio is an impressive pile of homegrown names with combined year-to-date gains of 21% — better than the broader market. If you’re not already proud to be an American, this portfolio sure should make your patriotic blood start pumping.

Take a look:

Compare Brokers[5]


Kroger KR stock to sellSector: Consumer Staples
YTD Performance: +34%

First up, we have Kroger (KR[6]), the country’s largest supermarket chain. The company gets 94% of its revenue from grocery locations — with convenience stores, fueling centers and even fine jewelry stores make up the rest — and 100% of it stateside.

Kroger boasted revenue of $96.8 billion worth last year from locations in 31 states, making the Cincinnati-based company America’s 23rd-largest retailer based on annual sales.

That scale has translated to results. Kroger stock has improved 50% in the past 12 months and is more than doubling the market so far in 2013, even in the face of a recent post-earnings selloff. In fact, it remains ahead of rocketing rivals like Safeway (SWY[7], +30% YTD) and Harris Teeter (HTSI[8], +23%) so far this year.

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AutoZone AZO

Sector: Consumer Discretionary
YTD Performance: +20%

AutoZone (AZO[9]) is another U.S. all-star, even though the nation’s largest auto parts retailer has slowly been expanding its footprint beyond our borders.

Last year, AutoZone announced that its Alldata diagnostic and repair software would be sold across the pond and in Canada. Plus, the company also opened its very first store in Brazil and has a handful of Mexico locations.

But consider this: In 2012, AutoZone hit the 5,000-store mark. Not only are more than 4,600 of those are located here at home, but they boasted domestic same-store sales growth of 4% last year and brought in the bulk of AZO’s $8.6 billion in revenue.

The stock sure is something for us Americans to be proud of, too. It has posted a gain of 21% since Jan. 1, and that upward trajectory isn’t new, either. AZO has grown earnings by over 22% annually over the last five years, which has translated to a more-than-quadrupling in its stock price.

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Waste Management

Waste Management WMSector: Industrials
YTD Performance: +21%

When it comes to America the beautiful, credit home-grown Waste Management (WM[10]) for helping keep it that way.

Sure, the Houston-based company brands itself as “the largest environmental solutions provider in North America,” but in reality, its Canadian locations are more of a side show.

Instead, Waste Management’s network of recycling facilities, transfer stations and landfills — the largest network in the industry, mind you — got more than 94% of its operating revenue here in the U.S. of A. last year.

And WM does more than just pick up your trash. It also is rewarding investors with 21% year-to-date appreciation and an annual 3.6% dividend yield on current prices.

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Regions Financial

Regions Financial RFSector: Financials
YTD Performance: +35%

Financials as a whole have been on a roll this year, and red-white-and-blue ones are no exception.

Just consider Regions Financial (RF[11]). Started as a holding comppany with 40 locations in Alabama, it now boasts more than 1,700 banks and 2,100 ATMs in 16 states across the South and Midwest.

In the most recent quarter, Regions beat earnings estimates thanks in part to loan growth and a growing net interest margin.

RF shares have improved 44% in the past year — more than double the broader market — and a YTD climb of 35% to nearly triple the S&P 500.

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Southwestern Energy

Sector: Energy
YTD Performance: +10%

While it has been a shaky start to the year for energy companies thanks to beaten-down prices, domestic play Southwestern Energy (SWN[12]) is weathering the storm as well, if not better, than most.

The stock is in the black by double digits so far this year — slightly behind the market, but better than a host of other American plays.

Southwestern Energy, which receives all of its revenue from the U.S., is exploring shale opportunity in Pennsylvania, Texas, Arkansas and Oklahoma. It recently announced acquisition of approximately 162,000 net acres in the Marcellus Shale, for example.

While SWN does own acreage in Canada, it hasn’t started drilling or pumping crude and deferred its capex program there until late 2013.

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airgas 185Sector: Materials
YTD Performance: +7%

Slumping commodities prices have been weighing on the materials sectors as well, with the Materials SPDR (XLB[13]) gaining under 4% year-to-date and the overall sector forecast to post a 7% decline on average in Q2 earnings.

With that in mind, the 7% YTD climb Airgas (ARG[14]) has put up — while unimpressive compared to the rest of this list — is still something to be proud of.

Airgas describes itself as “known locally nationwide” thanks to its footprint of more than 1,100 locations across the U.S. In fact, it is the leading U.S. producer of atmospheric gases, one of the largest U.S. suppliers of safety products, and a leading U.S. supplier of refrigerants, ammonia products and process chemicals.

That status has paid off. ARG currently boasts 12 consecutive quarters of revenue and earnings growth, along with a yield just shy of 2%.

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Verizon Communications (NYSE:VZ)Sector: Telecom
YTD Performance: +17%

Wireless access is increasingly becoming an American staple, and Dow component Verizon (VZ[15]) is leading the revolution.

The company has a huge 4G LTE network — larger than rival AT&T (T[16]) — in addition to offering high-speed Internet. Plus, it boasts higher subscriber growth and average revenue per account than its competitor, which has helped it to nine straight quarters of revenue growth … and impressive stock gains.

Although most telecoms don’t offer much in the way of growth, VZ is currently outpacing the broader market year-to-date with a 17% climb. That blows away AT&T’s 5% improvement.

Oh, and VZ rewards shareholders with a dividend yield north of 4% that the company has consistently improved for years.

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paychexSector: Information Technology
YTD Performance: +18%

America isn’t all about blue-chip corporations like Verizon, though, and that’s precisely why Paychex (PAYX[17]) is a natural choice for the technology representative in our portfolio.

Paychex is an American success story if there ever was one. It started as a one-man shop in 1971 and has since grown to a $2 billion-a-year business that’s run out of more than 100 offices all across the country. Paychex provides payroll, human resource and benefits to small-to-medium-sized businesses — the backbone of America.

Small business has made for good business, too; Paychex has maintained or improved earnings for more than 12 straight quarters.

And while shares took a dip recently thanks to flat income and a not-so-hot outlook, PAYX still is an outperformer so far this year, beating the S&P 500 by 5 percentage points.

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NRG Energy

NRG185Sector: Utilities
YTD Performance: +15%

NRG Energy (NRG[18]) is next on the list, as its portfolio of companies combine to make the largest competitive power generator in the U.S. and a leader in U.S. solar power development. NRG generates more than 47,000 megawatts (MW) of fossil fuel, nuclear, solar and wind capacity.

NRG — the parent of retail electricity providers like Reliant, Green Mountain Energy Company and Energy Plus — does business across more than 100 locations in 19 states and Washington, D.C., with nearly half of its megawatts coming from its East region and another 35% coming from states along the Gulf.

Sure, it makes a few megawatts internationally, but they only account for roughly 1% of its total generation, according to NRG’s recent annual report.

For the patriotic cherry on top, the company’s solar and repowering initiatives will create a total of 8,000 jobs from 2007 to 2014 — around the number of Americans that NRG currently employs.

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wellpoint185Sector: Healthcare
YTD Performance: +35%

Now that universal healthcare is an American ideal, WellPoint (WLP[19]) is an obvious choice for an all-American company.

Heck, there’s a pretty decent chance that you’re familiar with WellPoint — even if you don’t realize it. One in nine Americans receives medical coverage through the healthcare provider, making it one of the nation’s largest health benefits company. The total tally: 36 million members in its affiliated health plans and nearly 67 million individuals served through its subsidiaries.

So far this year, WellPoint is quite the comeback story. WLP shares dropped by double digits in 2012 — a reality that led to the ousting of then-CEO Angela Braly. Joseph Swedish was announced as the new head honcho in February, and WLP has climbed 24% since then, improving the stock’s YTD returns to 34%.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

  1. Real America Index: https://investorplace.com/real-america-index/
  2. KO: http://studio-5.financialcontent.com/investplace/quote?Symbol=KO
  3. YUM: http://studio-5.financialcontent.com/investplace/quote?Symbol=YUM
  4. huge chunks of revenue overseas: https://investorplace.com/2012/12/5-all-american-companies-that-arent/
  5. Compare Brokers: https://investorplace.com/options-trading/broker-center/
  6. KR: http://studio-5.financialcontent.com/investplace/quote?Symbol=KR
  7. SWY: http://studio-5.financialcontent.com/investplace/quote?Symbol=SWY
  8. HTSI: http://studio-5.financialcontent.com/investplace/quote?Symbol=HTSI
  9. AZO: http://studio-5.financialcontent.com/investplace/quote?Symbol=AZO
  10. WM: http://studio-5.financialcontent.com/investplace/quote?Symbol=WM
  11. RF: http://studio-5.financialcontent.com/investplace/quote?Symbol=RF
  12. SWN: http://studio-5.financialcontent.com/investplace/quote?Symbol=SWN
  13. XLB: http://studio-5.financialcontent.com/investplace/quote?Symbol=XLB
  14. ARG: http://studio-5.financialcontent.com/investplace/quote?Symbol=ARG
  15. VZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=VZ
  16. T: http://studio-5.financialcontent.com/investplace/quote?Symbol=T
  17. PAYX: http://studio-5.financialcontent.com/investplace/quote?Symbol=PAYX
  18. NRG: http://studio-5.financialcontent.com/investplace/quote?Symbol=NRG
  19. WLP: http://studio-5.financialcontent.com/investplace/quote?Symbol=WLP

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