Stocks
With interest rates still near historic lows, borrowing money to invest continues to look like an attractive portfolio investing strategy.
Today, you can borrow for as little as 3.5% if you use your home as collateral. Over long periods, the total return on a well-diversified portfolio of high-quality stocks runs to as much as 10%, or around 7.5% after inflation. So …read more »
Big companies like GE and 3M are examples of “GNP (Gross National Product) stocks”. Because they are already huge and sell to a wide variety of customers, investors feel their earnings growth may only match the growth of the overall economy.
However, both GE and 3M successfully restructured their businesses during the recession. The resulting cost cuts should push their …read more »
UNITED TECHNOLOGIES CORP. $71 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 929.1 million; Market cap: $66.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.4%; WSSF Rating: Above Average) is another example of a “GNP stock” with improving growth prospects.
Investors think of United Technologies as a GNP stock because of its diverse operations. It has six …read more »
Under the new financial-reform law, the Securities and Exchange Commission will develop rules to prevent conflicts of interest in the credit rating industry. The law also creates new standards for credit analysts, including passing qualifying examinations.
The new law will raise these three rating providers’ costs. However, all three have improved the quality of their ratings since the 2007/2008 financial crisis. …read more »
VERIZON COMMUNICATIONS INC. $29 (New York symbol VZ, Conservative Growth Portfolio, Utilities sector; Shares outstanding: 2.8 billion; Market cap: $81.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 6.6%; WSSF Rating: Average) owns 55% of Verizon Wireless, which is the largest wireless provider in the U.S.; U.K.-based Vodafone plc owns the other 45%. This business has 92.1 million customers in 50 states, …read more »
FRONTIER COMMUNICATIONS CORP. $7.70 (New York symbol FTR; Income Portfolio, Utilities sector; Shares outstanding: 991.8 million; Market cap: $7.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 9.7%; WSSF Rating: Average) sells Internet and traditional telephone services to 6.2 million customers in 27 states. Its clients are mainly in rural and suburban areas.
The deal with Verizon tripled Frontier’s size. As well, many …read more »
Toyota and Honda made deep cost cuts during the recession. That should help them increase their long-term profitability. However, we prefer Honda for new buying. That’s because Toyota is relying on customer incentives to spur car sales in the wake of several safety recalls. These extra expenses will offset the benefits of its other cost cuts for the next year …read more »
GENERAL MILLS INC. $35 (New York symbol GIS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 651.2 million; Market cap: $22.8 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.2%; WSSF Rating: Above Average) is the second-largest maker of breakfast cereals in the U.S., after Kellogg. Its major brands include Cheerios, Wheaties and Total. The company also makes Progresso soups, Betty Crocker baking …read more »
WESTJET AIRLINES $12.56 (Toronto symbol WJA; SI Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 138.8 million; Market cap: $1.7 billion; No dividends paid) reported that its revenue rose 7.4% in the three months ended March 31, 2010, to $619.8 million from $579.3 million a year earlier. Earnings per share fell 55.5%, to $0.12 from $0.27, mostly due to one-time expansion …read more »
In response to the BP oil spill in the Gulf of Mexico, the Obama administration has banned some offshore operations in the region. The ban, which is being challenged in court, affects oil and gas companies and firms that operate, service and supply drilling rigs. To cut your risk, we recommend focusing on service companies that mainly operate onshore, like …read more »
