Credit Suisse (NYSE:CS) is one of the largest investment banking firms in the world. This Swiss-based company is involved in investment banking, investment management, financial advisory services, mergers and acquisitions, and more. When one of the most highly regarded investment banking firms offers some of their favorite dividend stock picks for 2012, it makes sense to consider them. Credit Suisse carefully researched global stocks that it calls the "new gold standard." These stocks offer investors a way to have solid dividend income and yet still be defensive. Furthermore, Credit Suisse believes these companies carry lower risk and pay higher yields when compared to government debt. Dividend stocks have performed well in 2011, and 2012 is likely to be just as good or better, as investors seek safety and yield in a low-rate environment.
Here is a closer look at some of the top dividend stock picks from Credit Suisse:
Procter & Gamble (NYSE:PG) is a United States-based manufacturer of consumer goods. This company owns many well-known brands, such as Downy, Duracell, Tide, Olay, Pantene, Braun, Fusion, Gillette, and many more. Since soap, razor blades, batteries, and shampoo are steady sellers even in a tough economy, it's easy to see why many investors consider this as a defensive stock. This company has growth potential from consumers in emerging market countries. As incomes rise in those countries, more consumers will choose to buy brand names that Procter & Gamble offers. In late November, this stock dropped to about $61, but has been rising. I would wait for dips before buying.
Here are some key points for PG:
- Current share price: $65.81
- The 52 week range is $57.56 to $67.72
- Earnings estimates for 2011: $4.19
- Earnings estimates for 2012: $4.56
- Annual dividend: $2.10 per share which yields 3.2%
Philip Morris International (NYSE:PM) is a United States based maker of tobacco products and cigarettes. This company owns and markets under a variety of brand names such as Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, etc. Investors consider tobacco stocks to be defensive because cigarettes sell in good times and bad. This stock traded at around $62 in October, but has been trending higher. The $74 level appears to be a support area, so it makes sense to wait for pullbacks.
Here are some key points for PM:
- Current share price: $77.32
- The 52 week range is $55.85 to $77.03
- Earnings estimates for 2011: $4.87 per share
- Earnings estimates for 2012: $5.19 per share
- Annual dividend: $3.08 per share which yields 3.9%
Pfizer, Inc. (NYSE:PFE) is a major pharmaceutical company, with popular drugs such as Lipitor, Lyrica, Celebrex and many others. Pfizer is well diversified and it has a strong balance sheet. The dividend payout is easily covered by earnings, and this may allow the company to raise the dividend in the future. The average S&P stock only yields about 2%, and Pfizer shares offer almost twice the yield. This stock has been a clear winner recently and now trades around the 52 week high, so wait for pullbacks to the $20 range.
Here are some key points for PFE:
- Current share price: $21.84
- The 52 week range is $16.63 to $22
- Earnings estimates for 2011: $2.28 per share
- Earnings estimates for 2012: $2.31 per share
- Annual dividend: 80 cents per share which yields 3.7%
Kraft Foods, Inc. (KFT) is a United States-based maker of juices, candies, crackers, snacks and many other food products. Kraft owns many popular brands such as Oscar Mayer, Maxwell House, Trident, Dentyne, Halls, Jacobs, Nabisco, Oreo, LU and others. Food, candies and snacks will sell in any economic environment, and that is why this stock is viewed as being a defensive play. In late November, Kraft shares dropped to about $34, but lately have been on a steady rise. I would wait for pullbacks below $35 before buying.
Here are some key points for KFT:
- Current share price: $37.77
- The 52 week range is $30.21 to $38.27
- Earnings estimates for 2011: $2.27 per share
- Earnings estimates for 2012: $2.52 per share
- Annual dividend: $1.16 per share which yields 3.1%
British American Tobacco (NYSEMKT:BTI) is a U.K.-based maker of tobacco products and cigarettes, with well-known brand names such as Benson & Hedges, Dunhill, Kent, Lucky Strike, Pall Mall, Kool, and Rothmans. Tobacco products are always a stable source of revenue, and that won't change even if the European debt crisis worsens. The dividend is solid and easily covered by earnings. This stock has been performing very well in a weak market and it will probably continue to do so. It makes sense to buy on any significant dips.
Here are some key points for BTI:
- Current share price: $91.36
- The 52 week range is $72.59 to $96.64
- Earnings estimates for 2011: $5.96 per share
- Earnings estimates for 2012: $6.51 per share
- Annual dividend: $2.37 per share which yields 2.6%
Intel Corporation (NASDAQ:INTC) designs and manufactures chips used in notebooks, netbooks, desktops, mobile phones, consumer electronics devices, etc. Intel and other tech companies have recently warned that the flooding in Thailand has impacted financial results. If earnings are worse than expected when Intel reports, the stock could drop. Because of this and the recent run in the stock, it makes sesne to wait for dips, and for more clarity once the quarterly earnings are released. Intel has a solid balance sheet and a very attractive dividend, so buying on major dips makes sense overall.
Here are some key points for INTC:
- Current share price: $25.14
- The 52 week range is $19.16 to $25.78
- Earnings estimates for 2011: $2.37 per share
- Earnings estimates for 2012: $2.38 per share
- Annual dividend: 84 cents per share which yields 3.3%
Merck and Company, Inc. (NYSE:MRK) is a pharmaceutical, vaccine and consumer health product company. Some of the consumer products include sunscreen lotions, foot care products, cold and flu medicines, nasal sprays, and more. These types of products are steady sellers even during recessions and that makes Merck a great defensive stock to buy on dips. Like many dividend stocks, Merck has been rising, but a pullback to around $35 seems likely, so patient investors should wait for better buying opportunities.
Here are some key points for MRK:
- Current share price: $38.32
- The 52 week range is $29.47 to $39
- Earnings estimates for 2011: $3.75 per share
- Earnings estimates for 2012: $3.83 per share
- Annual dividend: $1.68 per share which yields 4.4%
Data is sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.