I always enjoy this time of year. The Christmas music, decorations, family gatherings, holiday plays and stock picks. Stock picks? Yes, ’tis the season for stock predictions! Virtually every financial writer will pen an article selecting his or her top picks for the upcoming year. I enjoy reading them and the logic behind the picks. As a long-term buy and hold investor, generally most aren’t useful for me; nevertheless, I find them entertaining and sometimes there is a gem to be found.
Andrea Tse, in an article from TheStreet.com believes consumer-goods stocks are poised to grow next year as the economy lifts and consumer spending rebounds. Here are her 6 picks for 2010:
- Scotts Miracle-Gro (SMG) - A leading international supplier of products for the lawn and garden market.
- Clorox (CLX) – A manufacturer and marketer of consumer products including Clorox bleach, Armor All, STP, Kingsford, Hidden Valley, etc. CLX is a Dividend Aristocrat that has increased its dividend for the last 32 consecutive years.
- Procter & Gamble (PG) – A leading consumer products company that markets its household and personal care products in more than 180 countries. PG is a Dividend Aristocrat that has increased its dividend for the last 53 consecutive years. [Analysis]
- Philip Morris International (PMI) – An international tobacco company.
- Johnson & Johnson (JNJ) – A leader in the pharmaceutical, medical device and consumer products industries. JNJ is a Dividend Aristocrat that has increased its dividend for the last 47 consecutive years. [Analysis]
- PepsiCo (PEP) – a major international producer of branded beverage and snack food products. PEP is a Dividend Aristocrat that has increased its dividend for the last 37 consecutive years. [Analysis]
Fortune says it’s unlikely that equities will enjoy a repeat of the mass revival of 2009. But, they believe these 10 companies should prosper even if the markets don’t:
- MasterCard (MA) – A global leader in credit card transaction processing and brand licensing providing services in over 210 countries and territories.
- Amedisys (AMED) – A provider of home health care and hospice services in the eastern, southern and southeastern U.S.
- Qualcomm (QCOM) – Focuses on developing products and services based on its advanced wireless broadband technology.
- Petrohawk Energy (HK) – Independent oil and gas company that is engaged in the acquisition, production, exploration, and development of oil and gas properties.
- Baxter International (BAX) – Global medical products and services company provides critical therapies for people with life-threatening conditions.
- Quanta (PWR) – Provides specialized contracting services, offering end-to-end network solutions to the electric power, gas, telecommunications and cable television industries.
- Salesforce.com (CRM) – A leading provider of on-demand customer relationship management applications.
- American Tower (AMT) – Operates the largest independent portfolio of wireless communications and broadcast towers in North America.
- Renhe (RNHEF) – Develops air-raid shelters in China.
- Vornado (VNO) – REIT that owns a diverse group of properties, including Northeast retail properties, New York City office buildings, and other interests. VNO is a Dividend Achiever that has increased its dividend for the last 37 consecutive years.
James Altucher in an article on Daily Finance presented his 10 favorites for 2010:
- Assured Guaranty (AGO) – Provides financial guaranty insurance and reinsurance, as well as mortgage guaranty coverage.
- Wellcare Health Plans (WCG) – Provides managed care services targeted exclusively to government-sponsored health care programs.
- Potash (POT) – One of the world’s largest diversified fertilizer companies and the world’s largest potash producer.
- Cash America (CSH) – Owns and operates pawnshops in the United States.
- Becton Dickison (BDX) - Provides a wide range of medical devices and diagnostic products used in hospitals, doctors’ offices, research labs and other settings. BDX is a Dividend Aristocrat that has increased its dividend for the last 37 consecutive years. [Analysis]
- Hillenbrand (HI) – Hillenbrand is the largest supplier of products to the funeral service industry.
- Telecom Corp. of New Zealand (NZT) – Provides telecommunications and information technology products and services to residential and business customers in New Zealand and Australia.
- STEC (STEC) – Designs, makes and markets custom and open-standard memory solutions based on Flash memory and dynamic random access memory DRAM technologies.
- Alvarion (ALVR) – Sells wireless broadband connectivity infrastructure products that allow telecom carriers and service providers to deliver high-speed data and voice services.
- GlaxoSmithKline (GSK) – International pharmaceutical company formed in December 2000 through the merger of British drugmakers GlaxoWellcome and SmithKline Beecham.
As a long-term, buy-and-hold income investor, many of the stocks in the above lists don’t meet my criteria for a buy. Dividend investors are looking for stocks that will perform well over the long run, not just 2010. As such, I prefer to start with this list of stocks.
Full Disclosure: Long CLX, JNJ, PEP, PG. See a list of all my income holdings here.