The S&P 500 is down around 6.0% in the past month and 8.84% in the past two months. The S&P 500 had a year to date return of 12.8% at the start of April but the YTD return has fallen to 4.43% as of the end of May. With the pullback in the S&P 500, investor should take a closer look at the potential of total return investments. With a total return investment, you get the security of a dividend with a potential of price appreciation when the market moves higher in the future months. The market pullback has decreased these stock prices 8-10% which will add to the total price appreciation when the market rebounds. In addition, these stocks are positioned in growing industries. These are the stocks that have the potential of 30% in total return in the next year.
Equipment and machinery maker Deere & Co (DE) has pulled back 9.8% since the beginning of April 2012. DE is trading at $74.20 with a 12-month price target of $111. DE has a dividend yield of 2.43%. Combined, the potential total return for 12-months is 52% (price increase to target and dividend yield). On May 16, Deere posted higher quarterly earnings and sales that topped estimates and raised its full-year profit outlook on rising global demand for farm equipment. The U.S. farm sector is booming on higher worldwide food demand and as biofuels help drive up crop production. Companies like Deere are benefiting from record-high farm income that is spurring farmers to update their equipment. DE has an equity summary score of 9.6 out of 10 for a Very Bullish outlook.
Chevron (CVX) is one of the world's leading integrated energy companies that are involved in virtually every facet of the energy industry. CVX is down 8.96% since the beginning of April 2012. CVX is trading at $98.21 with a 12-month price target of $132. CVX has a dividend yield of 3.69%. Combined, the potential total return for 12-months is 38%. We view positively its aim to develop LNG projects and build a top gas supply position in emerging Asia-Pacific markets. The Atlas Energy deal provides an industry-leading position in the Marcellus Shale, and it has solid acreage at the Wolfcamp and Utica shales. CVX has an equity summary score of 9.4 out of 10 for a Very Bullish outlook.
Honeywell (HON) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; and performance materials. HON is down 9.2% since the beginning of April 2012. HON is trading at $55.53 with a 12-month price target of $72. HON has a dividend yield of 2.65%. Combined, the potential total return for 12-months is 32%. We view HON's emphasis on building environmental and combustion controls and its turbocharger products as benefiting from a strong global trend toward energy efficiency. We see Aerospace benefiting from rising global fleet sizes, demand for better fuel economy, and aftermarket demand. We also expect specialty chemical volume to reflect global demand for petroleum products and overall global economic growth. HON has an equity summary score of 7.9 out of 10 for a Bullish outlook.
Exxon Mobile Corp (XOM), formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company. XOM is down 8.29% since the beginning of April 2012. XOM is trading at $79.61 with a 12-month price target of $103. XOM has a dividend yield of 2.86%. Combined, the potential total return for 12-months is 32%. We believe XOM will benefit from "big-pocket" upstream growth opportunities in the deepwater, LNG, onshore unconventional, and ventures with state-owned companies. We think XOM's advanced technology permits project development in a timely and cost-efficient manner. In addition, we see its upstream business benefiting from a strong pipeline of long-lived assets with an improving decline rate of 3%, and the downstream unit should benefit over the long term from its complex large refineries, which offer feedstock and product flexibility. We see further expansion of activities in global LNG and frontier regions and targeted divestments across businesses. XOM has an equity summary score of 9.2 out of 10 for a VERY Bullish outlook.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.