We end 2010 and begin 2011 with high quality companies on our Dividend Watch List. The table below provides investors with some great prospects for the new year. The complete list of companies can be found here.
December 31, 2010 Watch List
|Symbol||Name||Price||% Yr Low||P/E||EPS||Dividend||Yield||Payout Ratio|
|CAG||ConAgra Foods, Inc.||22.58||7.42%||14.29||1.58||0.92||4.07%||58%|
|JNJ||Johnson & Johnson||61.85||8.78%||12.70||4.87||2.16||3.49%||44%|
Top Five Performance Review
In our ongoing review of the NLO Dividend Watch List, we have taken the top five stocks on our list from January 1, 2010 and have check their performance one year later. The top five companies on that list can be seen in the table below.
|Name||Symbol||2009 Price||2010 Price||% change|
|California Water Service||CWT||36.82||37.27||1.22%|
|Exxon Mobil Corp.||XOM||68.19||73.12||7.23%|
|CR Bard, Inc.||BCR||77.9||91.77||17.80%|
|Aqua America Inc||WTR||17.51||22.48||28.38%|
|Dow Jones Industrial||DJI||10,520.10||11,577.51||10.05%|
click to enlarge
It is worth noting that we've had personal experience will all of the stocks mentioned above within the last 18 months. Although SuperValu (SVU) shows a major decline of over -30% during the 2010, we were able to achieve an annualized return of nearly 400% with our recommendation and subsequent sell recommendation in the month of January 2010 (article here).
California Water (CWT) was recommended on January 3, 2010 (article here) and we suggested that, based on cycle analysis, the prospects of CWT making a substantial move above the prior high would be between 2011 and 2012. CWT proved to be an income generater in 2010 for investors who managed to hold the stock understanding that the price probably wouldn't take off immediately. Our downside targets are still in place for anyone considering the stock.
ExxonMobil (XOM) was another recommendation that we made in January of 2010. The stock fell 15% during the year and recovered to return 10% on a total return basis which prompted our sell recommendation in December 2010 (article here).
Bard Corp (BCR) provided annualized returns of 29% at the time of our August 2009 sell recommendation (article here). We had held the stock for approximately 4 months with satisfactory results. As noted in all of our sell recommendations, we seek modest annualized returns of between 9% and 12%. Therefore, accomplishing 29% allows us to take advantage of other opportunities that may exist at the time.
AquaAmerica (WTR) was a runaway success in the past year considering the performance of the market overall and that a water utility is only expected to provide income to investors. As indicated in the chart above, WTR's total return exceeded over 30% (dividends plus appreciation). In December 2010, we provided our sell recommendation of AquaAmerica (article here) after garnering an annualized total return of nearly 80%.
Disclaimer: On our current list, we excluded companies that have no earnings. Stocks that appear on our watch lists are not recommendations to buy. Instead, they are the starting point for doing your research and determining the best company to buy. Ideally, a stock that is purchased from this list is done after a considerable decline in the price and extensive due diligence. We suggest that readers use the March 2009 low (or the companies' most distressed level in the last 2 years) as the downside projection for investing. Our view is to embrace the worse case scenario prior to investing. A minimum of 50% decline or the November 2008 to March 2009 low, whichever is lower, would fit that description. It is important to place these companies on your own watch list so that when the opportunity arises, you can purchase them with a greater margin of safety. It is our expectation that, at the most, only 1/3 of the companies that are part of our list will outperform the market over a one-year period
Disclosure: I am long CAG.