UBS Investment Research recently published a report entitled "Global Equity Strategy" on November 30, 2011, enlisting the global top 40 stocks for investment in 2012. The Consumer Staples, Healthcare, and Technology sectors have been given an overweight rating whereas the rating for Financials, Discretionary, and Utilities sectors is underweight. The report isn't publicly available but we will discuss the most important points in two articles. This is the first of two articles. (Part II)
Comcast Corporation (CMCSA) provides entertainment, information, and communications products and services. Comcast has been given a buy-rating by UBS Investment Research. According to UBS, Comcast's expected price-to-earnings ratio is 11.4x for the next year. Net debt accounts for 61% of total equity for the company and its expected return-on-equity ratio for 2011 is 8.6%. Shares of Comcast are currently trading at $24.73.
McDonalds Corporation (MCD) operates as a global food-service retailer. It has been given a buy-rating by UBS and is part of the Consumer Discretionary market segment. UBS expects a price-to-earnings ratio of 16.3x in 2012. It has a relatively high enterprise-value to EBITDA ratio of 10.8 and a dividend yield of 2.7%. Shares of McDonalds are currently trading around $99.
Mattel Inc. (MAT) engages in the design, manufacture, and marketing of toys. Shares of Mattel are currently trading near 52-week highs, around $28 per share. The company has a dividend yield of 3.3% and a price-to-earnings ratio of 10.8x. Mattel has reported a return-on-equity ratio of 29% while net debt accounts for 36% of total equity. The company reported an average quarterly growth of 9% which is higher than the industry average. UBS has given the company a buy-rating.
Altria Group (MO) manufactures and sells cigarettes, smokeless products, and wine on a global scale. Altria has been given a buy-rating by UBS. Shares of the company are currently trading at $28.4 per share. Altria has a price-to-earnings ratio of 12.7x and a dividend yield of 5.8%. It has a relatively high return-on-equity ratio of 92% while net debt accounts for 255% of total equity. Altria has an enterprise value to EBITDA ratio of 9.7.
Chevron Corp. (CVX) engages in petroleum, chemicals, mining, power generation and energy operations. Chevron has a price-to-equity ratio of 7.5x and a relatively high dividend yield of 3.2%. The company reported a return-on-equity ratio of 23% and it has an enterprise value to EBITDA ratio of 2.9. Shares of Chevron are currently trading near its 52-week high, around $110 per share. Chevron has been given a buy-rating by UBS.
ACE Limited (ACE) provides a range of insurance and reinsurance products. Its shares are currently trading at $69.6 per share and the company has been given a buy-rating by UBS. ACE Limited has a dividend yield of 2.1% and a price-to-book-value ratio of 0.9x. UBS expects the price-to-earnings ratio to be 8.9x in 2012. The company has earnings per share of $5.4.
Cardinal Health, Inc. (CAH) operates as a healthcare services company providing pharmaceutical and medical products and services. It has been given a buy-rating by UBS and has reported a quarterly revenue growth of 9.6%. UBS expects its price-to-earnings ratio to reach 12.9x in 2012 while a dividend yield of 2.1% was reported at the end of 2011. Net debt accounts for 10% of total equity and the company has reported a return-on-equity of 16.8%. Shares of Cardinal Health are currently trading around $41 per share.
Johnson & Johnson (JNJ) develops, manufactures, and sells a range of health-care products. The company is expecting a dividend yield of 3.7% at the end of 2011 and is also expecting a price-to-earnings ratio of 12x. Johnson & Johnson has a negative net debt-to-equity ratio of 23% and a return-on-equity ratio of 22%. Shares of the company are currently trading near yearly highs, around $65.4 per share. Warren Buffett's $2.5 billion investment in Johnson & Johnson confirms that the stock is a solid long-term investment.