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The following is a list of the top high yield companies which Wellington Capital Management is holding.

Stock

Symbol

Shares Held - 06/30/2011

Shares Held - 09/30/2011

Forward Yield

Exxon Mobil Corp.

XOM

67706079

70038676

2.30%

Chevron Corp.

CVX

39394350

41064979

3.20%

Merck & Co. Inc.

MRK

112489651

116041053

4.60%

Wells Fargo & Company

WFC

155386942

147121008

1.80%

Pfizer Inc.

PFE

184422994

183075746

3.80%

AT&T Inc.

T

98548637

100122990

6.00%

JPMorgan Chase & Co.

JPM

87656353

91767040

3.10%

Source: 13F filing

The five I like best

Wells Fargo and JPMorgan are two low risk banking stocks with relatively stronger balance sheets. Wells Fargo has historically generated above peer performance across a number of key valuation metrics and this is likely to continue in the longer term. The bank is likely to manage through the current tough macro environment by controlling costs, cross selling legacy WB customers and buying back shares to generate 11% 2012 ROE, ahead of many peers.

JPMorgan Chase is another stable bank with strong capital position, business mix diversity and better dividend yield. Since 2004 JPM has strengthened its risk controls and business rationale. This has enabled it to post solid growth and excellent relative navigation of credit crunch. Going forward, the company continues to invest in growing its global franchise in spite of regulatory challenges. In addition to its global growth, there is a good scope for it to gain share from competitors with relatively weaker balance sheet.

Among the Oil & Gas names in the above list, I prefer Chevron Corp. The stock has underperformed its peer Exxon Mobil after the recent news on Chevron’s Brazilian oil spill. The stock is down 0.5% since November 10 when the news was first out. This compared to a 6% gain in Exxon's stock price during the same period. Given that the spill is estimated at 2,400 Bbls (well below 0.1% of Macondo), this underperformance clearly is an overreaction by the investors and would eventually correct causing the upside in Chevron’s stock.

I am not too positive on AT&T. Although its break-up with T-Mobile came somewhat along expected lines, the failure of this deal is a net negative for AT&T as it will now have to look elsewhere for the spectrum. Further, fall off of this deal is not good from a competitive point of view for AT&T. AT&T would have been a more powerful competitor with the merger. Without the deal, both Verizon (VZ) and Sprint (S) should be better able to compete.

I like Merck and Pfizer given the defensive nature of their business. Both stocks have outperformed the S&P 500 (significantly since September 30 with gains of 13% and 19% respectively vs 7% gain in S&P 500 (NYSEARCA:SPY).

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

Source: Wellington's Top Yielding Holdings