10 blue chips for growth, value and yield

These quality stocks were selected based on historic patterns of payout and valuation.

By TheStockAdvisors Feb 8, 2013 10:52AM
Stock market report Don Carstens JupiterimagesBy Kelley Wright, Investment Quality Trends

Our Timely Ten list is not just another "best of, right now" list. It is our reasoned expectation based on our methodology and experience for what we believe will perform best over the next five years.

Whether you are looking to build a portfolio from scratch, are partially invested and looking to add new positions, or fully invested and in need of some affirmation and hand holding, the Timely Ten list represents our current top ten recommendations among blue chip, dividend-paying stocks.

Do we believe that all 10 will go up simultaneously or immediately? Of course not. Our four-plus decades of research and experience, however, leads us to believe that these stocks, purchased at current undervalued levels, are well positioned for both growth of capital and income.

Our primary purpose is to assist investors in growing their capital and income base from which to derive cash for their current and future needs.

To that end we believe that high-quality stocks purchased at historically low-price-to-high-yield offers the best potential for downside protection and upside appreciation.

The Timely Ten consists of undervalued stocks that generally have a S&P Dividend & Earnings Quality rating of A- or better, exemplary long-term dividend growth, and a price-to-earnings ratio of 15 or less.

These stocks also sport a payout ratio of 50% or less (75% for Utilities), debt of 50% or less (75% for Utilities), and technical characteristics on the daily and weekly charts that suggests the potential for imminent capital appreciation.

This issue's selections are:

CVS Caremark (CVS)
McDonald's (MCD)
Johnson & Johnson (JNJ)
Coca-Cola (KO)
Union Pacific (UNP)
Occidental Petroleum (OXY)
Reliance Steel (RS)
Cardinal Health (CAH)
ConocoPhillips (COP)
Archer-Daniels Midland (ADM)

A true economic recovery will come in stages. A deflationary-disinflationary cycle requires time for debt to be retired and the demand for goods and services to come in line with the capacity for production.

The good news for value investors is that the inevitable ebb and flow of investor psychology will provide several opportunities to acquire excellent companies at good value.

The key is to be patient and not to get caught up in periodic bouts of irrational exuberance. Investing is a business and should be treated as such. Remember you are buying part of a company; not betting on a horse or buying a lottery ticket.

Your return is established on the buy, not the sell. Buy right, when good value is presented, and the returns will come.

More from TheStockAdvisors.com
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
284
284 rated 2
461
461 rated 3
671
671 rated 4
628
628 rated 5
618
618 rated 6
615
615 rated 7
495
495 rated 8
347
347 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
DYNDYNEGY Inc10
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.