We began the year with a very strong market that also included a Dow Theory confirmation of the bullish trend and our watch list now contains 19 companies that are within 15% of their 52-week low. The complete list of companies can be found here.
January 14, 2011 Watch
|Symbol||Name||Price||% Yr Low||P/E||EPS (ttm)||Dividend||Yield||Payout Ratio|
|LLY||Eli Lilly & Co.||34.91||9.03%||8.01||4.36||1.96||5.61%||45%|
|JNJ||Johnson & Johnson||62.55||10.01%||12.84||4.87||2.16||3.45%||44%|
|NWN||Nor'west Nat. Gas||45.71||11.35%||16.33||2.80||1.74||3.81%||62%|
Watch List Summary
Insurance names are of particular focus by our team currently. According to Yahoo!Finance, Allstate (NYSE:ALL) sports a price to book ratio (P/B) of 0.86 while Mercury General (NYSE:MCY) has a P/B of 1.27. We are actively buying up many insurance company stocks that have exceptionally low price to book ratios on a relative basis.
Northwest Natural Gas (NYSE:NWN) is again creeping toward its annual cycle of bottoming in February and March. Our October 3, 2009, article (located here) on this topic provides what we believe is extensive reseach on the pattern of cycle bottoms for NWN going as far back as 1970. As a follow-up, another article (located here) that we did on NWN provides technical insights on Edson Gould's Altimeter by comparing the stock price movement between 1995-1997 and 2000-2009. These elements may assist in your fundamental analysis of a great stock with a decent dividend yield.
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 15, 2010, and have checked their performance one year later. The top five companies on that list can be seen in the table below.
|Name||Symbol||2010 Price||2011 Price||% change|
|First Financial Corp.||THFF||28.97||33.12||14.33%|
|1st Source Corp.||SRCE||15.14||19.88||31.31%|
|Dow Jones Industrial||DJI||10,706.99||11,787.38||10.09%|
(Click chart to expand)
While our average return was greater than the market, only two companies, First Financial (NASDAQ:THFF) and Shenandoah (NASDAQ:SHEN), accomplished the 10% benchmark in less than six months. It's also interesting to note that while ExxonMobil (NYSE:XOM) underperformed the market for the majority of the year, it managed to track the market at the end of the one year mark. Taking the dividend into consideration, Exxon may have outperformed the market by about one percent.
Disclosure: I am long CAG, LLY.