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In an environment with low bond yields, sustainable and meaningful income based strategies are getting harder to implement. The low-yield environment is causing investors to look into equities to secure a stable income portfolio. However, with increased volatility the job of the investors is becoming harder as stock selection becomes of utmost importance. We’ve therefore run a screen and constructed a portfolio of companies in a wide range of sectors with low levels of volatility, secure dividends and a potential to further increase dividends as well as positive analyst ratings (strong buy or buy).

Coca Cola (NYSE:KO): The world's largest nonalcoholic beverage company, Coca-Cola has a portfolio of more than 500 nonalcoholic beverages including waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and its namesake product Coca Cola. The company has a market cap of $160bn and an enterprise value of 171bn. The company trades on 13x trailing earnings. The company is relatively insensitive to the market with a beta of 0.5x. It has a secure and low payout ratio of 34% and the company presents its investors a 2.7% dividend yield. With a median analyst price target of $77, the company presents the investors a decent capital appreciation potential as well.

Kraft Foods (KFT): Kraft manufactures packaged food products, including biscuits, confectionery, beverages, cheese, convenient meals and various packaged grocery products and is the world’s second largest food company. The company has a market cap of $60bn and an enterprise value of $88bn and trades on 13.5x forward earnings. Kraft is relatively insensitive to the market with a beta of 0.5x. It has a payout ratio of 67% and the company yields an annual 3.4% dividend. With a median analyst price target of $40, the company presents investors a strong capital appreciation potential of over 15%.

Chevron Corp (NYSE:CVX): Chevron is an integrated oil company with operations in petroleum, chemicals, mining, power generation and energy services. The company has a market cap of $192bn and an enterprise value of $184bn. The company trades on 8x trailing earnings and 4x EV/EBITDA. Chevron is relatively insensitive to the market with a beta of 0.7x. Chevron has a secure and low payout ratio of 26% and the company yields an annual 3.3% dividend. With a median analyst price target of $121, the company presents the investors a strong capital appreciation potential of over 25%.

Spectra Energy (NYSE:SE): Its pipeline network of 19,000 miles makes it a leading natural gas infrastructure company in the gathering and processing, transmission and storage, and distribution of natural gas. The company has a market cap of $16bn and an enterprise value of $27bn and trades on 13.7x forward earnings. Spectra tends to move in line with the market with a beta of 0.9x. It has a payout ratio of 57% and yields its investors an annual 4.2% in dividends. With a median analyst price target of $30, the company presents investors a strong capital appreciation potential of 20%.

Emerson Electric (NYSE:EMR): Emerson is a diversified global technology company that provides measurement, control and diagnostics products, industrial automation products, network power products, air conditioning products, and tools and storage products to a wide range of industrial, commercial and consumer markets around the world. The company has a market cap of $32bn and an enterprise value of $35bn. Emerson trades on 11x forward earnings and 7x EV/EBITDA. It has a secure and low payout ratio of 42% and the company yields an annual 3.2% dividend. With a median analyst price target of $56, the company presents investors a strong capital appreciation potential of over 30%.

Southern Company (NYSE:SO): Southern Company is a public utility that supplies electricity in Alabama, Georgia, Florida, and Mississippi, as well as providing digital wireless communications and wholesale fiber optic solutions. The company has a market cap of $35bn and an enterprise value of $56bn. SO trades on 15x forward earnings and 9x EV/EBITDA. Southern is highly insensitive to market volatility with a beta of 0.3x. It has a payout ratio of 79% and the company yields an annual 4.6% dividend.

Xcel Energy (NYSE:XEL): Xcel is a public utility with operations in electricity generation, transmission and distribution and natural gas pipeline, storage and compression in eight states. The company has a market cap of $11.6bn and an enterprise value of $21bn. Xcel trades on 13x forward earnings and 8x EV/EBITDA. Xcel is highly insensitive to market volatility with a beta of 0.35x. It has a payout ratio of 60% and the company yields an annual 4.4% dividend.

Verizon (NYSE:VZ): Verizon provides communications services under two segments: wireless communication services in the United States and wireline communications products and services including voice, Internet access, broadband video and data services globally. The company has a market cap of $100bn and an enterprise value of $147bn. The company trades on 13.5x forward earnings and 4x EV/EBITDA. Verizon is highly insensitive to market volatility with a beta of 0.5x. It has a payout ratio of 100% and the company yields an annual 5.7% dividend. With a median analyst price target of $39, the company presents the investors a strong capital appreciation potential of over 10%.

AT&T (NYSE:T): AT&T provides telecommunications services in the United States and the world, which include wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, telecommunications equipment, managed networking, wholesale services and directory advertising and publishing. The company has a market cap of $165bn and an enterprise value of $226bn. AT&T trades on 10x forward earnings and 6x EV/EBITDA. AT&T is highly insensitive to market volatility with a beta of 0.5x. It has a payout ratio of 50% and the company yields an annual 6.2% dividend. With a median analyst price target of $32.75, the company presents investors a strong capital appreciation potential of over 15%.

Merck (NYSE:MRK): Merck is a global healthcare company, which operates in human health products, vaccines as well as animal health products. Its solutions target a wide range of diseases including Bone, Respiratory, Immunology and Dermatology, Cardiovascular, Diabetes and Obesity and Oncology. The company has a market cap of $98bn and an enterprise value of $102bn. The company trades on 8x forward earnings and 6x EV/EBITDA. Merck is highly insensitive to market volatility with a beta of 0.6x. It has a payout ratio of 160% and the company yields an annual 4.8% dividend. With a median analyst price target of $56, the company presents the investors a strong capital appreciation potential of over 30%. With a median analyst price target of $40, the company presents investors a strong capital appreciation potential of 25%.

Paychex (NASDAQ:PAYX): Paychex is a provider of payroll, human resource, and benefits outsourcing solutions for small- to medium-sized businesses. The company has a market cap of $9.5bn and an enterprise value of $9bn. The company trades on 15x forward earnings and 10x EV/EBITDA. Paychex is relatively insensitive to market volatility with a beta of 0.8x. It has a payout ratio of 87% and the company yields an annual 4.8% dividend. With a median analyst price target of $31.5, the company presents investors a strong capital appreciation potential of over 20%.

McDonalds (NYSE:MCD): MacDonalds operates and franchises McDonald’s restaurants in the global restaurant industry. Its products target the value-conscious consumer in more than 100 countries around the world. The company has a market cap of $89bn and an enterprise value of $98bn. The company trades on 15x forward earnings and 11x EV/EBITDA. McDonald’s is highly insensitive to market volatility with a beta of 0.3x. It has a payout ratio of 48% and the company yields an annual 2.9% dividend. With a median analyst price target of $100, the company presents investors a strong capital appreciation potential of over 15%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: A Balanced Income Portfolio With Secure Dividends