The Biggest and The Best
Since 1984, when we first discovered direct investment plans (DRIPs), we have recommended investing through them as a way to engage in two risk-reducing strategies—that is, diversification among a wide variety of industries and dollar-cost averaging.
Inroduced in the 1960s, there are more than 1,300 companies that offer such plans now, among them some of the biggest and best companies in America.
History tells us that over the past 60+ years, the economic and market trends have been up, interrupted only by recessions every 7-10 years. Although we can’t accurately predict when those will occur, we know that investors who establish a diversified portfolio of high-quality, dividend-paying stocks tend to be richly rewarded.
This article’s criteria focuses on companies that have grown to become the largest and most dominant in their industries and have recorded growing earnings and dividends that have allowed them to withstand recessions and establish themselves as the most respected brand names on earth. In addition to leadership in their industries and brand recognition, we screened for rising earnings and dividends, as well as strong balance sheets and historical consistency.
Moneypaper’s long-time Portfolio Editor, Pat Racaniello, screened for the companies that met the criteria described above. Before making the final selections, I also sought approval from editors Dave Fish and Mike Burke, who agreed on the merits of accumulating these shares for the long-term.
One such company is Coca-Cola (NYSE: KO), which has now increased its dividend annually for 50 consecutive years and has not missed a payout since 1920. Coke is a well-run company whose brand name is the most widely recognized one worldwide. Its financial strength is rated A++ by Value Line and Warren Buffett’s Berkshire Hathaway owns 8.8 percent (200 million) of the 2.257 billion outstanding shares. The annual dividend of $2.04 per share is almost equal to the 2004 earnings of $2.06. Meanwhile, the 2004 dividend has doubled and the payout has more than quadrupled from the $0.50 it paid in 1996. Consensus estimates call for record earnings of $4.00 per share this year and $4.36 in 2013, compared with $3.84 in 2011.
Another example is the fast-food chain Yum! Brands (NYSE: YUM). It operates more than 37,000 restaurants in 110 countries with brand names of KFC, Taco Bell, and Pizza Hut. It also operates 450 casual dining concept restaurants in China, where the company is enjoying exceptional growth. Spun off by PepsiCo in 1997, YUM initiated dividends in 2004 at $0.15 per share; today it pays $1.14. Earnings per share (EPS) have also been moving upward, growing from $2.53 in EPS in 2010 to $2.87 last year, with consensus estimates calling for $3.26 in EPS this year and $3.74 in 2013.You can open DRIP accounts in all the companies included in the portfolio through the DRIP enrollment service offered by Temper of the Times Investor Services, at www.directinvesting.com. (Look below to read profiles of the companies.)
After the one-time fee charged by the enrollment service, there are no further fees. (Once enrolled, you can invest directly into your account with the company in amounts from as little as $25 to up to $10,000—or even more.) However, some of the companies included in the portfolio charge fees for each investment into your plan account. Those companies are shown with an exclamation mark in the company profiles below. To mitigate the effect of such fees, we advise you to invest larger amounts even if you must invest less frequently. For example, instead of investing $100 monthly, invest $300 quarterly.
The “Biggest and the Best” portfolio
Baxter International (NYSE:BAX) is a major international drug supply company that specializes in drug delivery systems, bioscience products, anesthesia, vaccines, and dialysis equipment and treatment. International sales accounted for 58 percent of 2011 gross revenues, while 6.3 percent of sales was devoted to research and development.
Shares outstanding have been reduced from 650 million in 2006 to 550.6 million today. EPS was $3.98 in 2010 and $4.31 in 2011, with $4.55 expected this year. The dividend has been increased from $0.68 per share in 2007 to $1.80 today.
BB&T Corp. (NYSE:BBT) (!) was founded in 1872. BB&T operates 1,775 branches located in 12 Southeastern States. The stock has a book value of $25.71 per share and the company, which remained profitable through the 2009 recession, was one of the first banks to pay back its Troubled Asset Relief Program (TARP) loan. The quarterly dividend is once again on the rise, growing from $0.15 per share in 2009 to the current $0.20. After earning $1.83 in 2011, BB&T is expected to earn about $2.75 this year and $3.04 per share in 2013.
Boeing Co (NYSE:BA) (!) is the leading manufacturer of commercial aircraft and a major producer for both American and foreign military uses. Sales totaled $68.7 billion in 2011 and are expected to rise close to $80 billion this year. The company has a commercial order backlog for 4,000 new aircraft, valued at $308 billion. With this amount of pending production, it should see EPS rise to over $7 by 2017, from an expected $4.68 this year. The company’s new, composite-built 787 Dreamliner is now rolling off the assembly line.
Cisco Systems (NasdaqGS:CSCO) (!) supplies Ethernet switching and Internet Protocol (IP) networking gear and is the world’s largest supplier of high-performance computer internetworking systems. Almost half of 2011’s sales were from foreign sources. The company has only $16.4 billion in total debt, compared with cash of over $48 billion, or $9.54 per share. A quarterly dividend of $0.06 per share was initiated in early 2011 and has since been raised to $0.08. A low “forward” price-to-earnings (P/E) ratio of 9, versus a historical average P/E of 18, makes this a compelling entry point for this stock.
Coca-Cola (see above).
Colgate-Palmolive (NYSE:CL) (!) is one the world’s largest consumer products companies, manufacturing a host of oral-care products, personal grooming items, and a wide range of household cleaning products. Its brand names include Colgate, Palmolive, Softsoap, Irish Spring, Speed Stick, and Ajax, along with pet food products under its Science Diet name.
Since 1994, Colgate has only had three years when earnings did not top the previous year’s profits. The annual dividend has gone from a $0.47 per share in 1996 to the current $2.48. Management has set an annual goal of increasing earnings by 10 percent.
Deere & Co (NYSE:DE) (!) is the largest manufacturer of farm equipment in the world and also makes a wide array of industrial equipment for the construction and forestry industries. For the consumer market, it manufactures lawn and garden tractors and other outdoor power equipment. Dividends date back to 1937 and have been increased for nine straight years, currently totaling $1.84 per share annually. Deere sports a P/E ratio of 10 and a 5-year earnings growth rate of 9.5 percent.
Dover Corp (NYSE:DOV) (!) operates over 40 businesses that produce a wide range of industrial products and manufacturing equipment, growing mainly through acquisitions. EPS dropped in 2009 to $2.00, from $3.67 in 2008, due to the recession. However, the company recovered nicely in 2010 to earn $3.48 in EPS and netted $4.48 in 2011.
Consensus estimates now call for it to earn about $4.74 in EPS this year and $5.36 in 2013. Dover has increased its annual dividend for 56 consecutive years (since 1956) and presently pays $1.26 per share, with another increase expected to be announced in August.
Dow Chemical (NYSE:DOW) is a major manufacturer of basic chemicals, such as benzene, propylene, acetone chlorine, and caustic soda, and also makes a broad range of plastics. Research and development spending was 2.7 percent of 2011’s $59.9 billion in revenues. EPS was $1.97 in 2010 and $2.54 in 2011, with analysts’ consensus estimates calling for a dip to about $2.14 this year, before a rebound to $2.88 in 2013.
The quarterly dividend was recently raised from $0.25 to $0.32 per share, resulting in a yield of 4.4 percent. Dow operates in a cyclical industry that offers above average total return potential for patient investors.
Dr. Pepper Snapple (NYSE:DPS) is one of the largest manufacturers and distributors of non-alcoholic beverages in North America and Mexico and offers a variety of flavored (but non-cola) carbonated soft drinks and non-carbonated beverages. Its products include ready-to-drink teas, juices, juice drinks, and mixers and its brand names include Dr. Pepper, Sunkist soda, 7-UP, A&W Root Beer, Canada Dry, Crush, Squirt, Schweppes, Snapple, Mott’s, Hawaiian Punch, and Clamato. The $0.15 per share quarterly dividend initiated in December 2009 has since been raised three times, to the current $0.34. The company is expected to earn about $2.96 in EPS this year and $3.22 in 2013, compared with $2.79 in 2011.
Genuine Parts (NYSE:GPC) is a wholesale distributor and manufacturer of over 320,000 rebuilt and new auto replacement parts. It also owns and operates 58 NAPA warehouses, 6,000 retail outlets, and six plants to rebuild used auto parts. Dividend increases have come annually since 1956, with the current annual payout of $1.98 per share up from $1.14 in 2001.
EPS was $3.00 per share in 2010 and $3.58 in 2011. Consensus estimates call for the company to earn about $4.08 in EPS this year and $4.39 in 2013. GPC should benefit as the business cycle improves and aging auto fleets are upgraded and maintained.
Home Depot (NYSE:HD) (!) operates a chain of 2,250 warehouse stores in the US, Canada, China, and Mexico, targeting the home remodeling market by selling building materials and home improvement items for both do-it-yourselfers and contractors. The dividend has risen from $0.05 per share in 1996 to the present $1.16, while earnings have gone from $0.43 in 1996 to an expected $2.90 for 2012 (the company’s fiscal year ends in January) and $3.30 in fiscal 2013, as the housing market picks up. The company has ample cash ($2 billion), which should enable it to finance expansion plans for several years.
Hormel Foods (NYSE:HRL) operates 29 food-processing plants and its brand names include Hormel, Spam, Dinty Moore, Top Shelf, Little Sizzler, Chi-Chi Salsa, Kid’s Kitchen, and Mary Kitchen. Dividends have been increased each year since 1987 (46 years), and have been paid since 1928. The Hormel Foundation owns 48.3 percent and officers and directors own 3.4 percent of the 264 million outstanding shares.
A strong balance sheet and conservative business practices make Hormel not only a defensive hedge (everyone must eat daily) but a high-quality growth stock. Total debt is just $250 million, compared with $625 million in cash. EPS should total about $1.85 in fiscal 2012 (ends in October) and $1.96 in fiscal 2013, compared with $1.74 last year.
Johnson Controls (NYSE:JCI) (!) operates three divisions: original equipment for automobile manufacturers (seats and interiors); batteries and power solutions; and climate controls for buildings, fire protection devices, and lighting security systems. The annual dividend has grown from $0.19 per share in 2000 to the current $0.72. After posting earnings of just $0.47 per share in fiscal 2009 (ends in September), profits popped back up $2.00 in 2010 and $2.42 in 2011. Look for EPS of about $2.53 on revenues of over $42 billion this year and $2.95 in fiscal 2013.
Lockheed Martin (NYSE:LMT) is the world’s largest defense contractor and the top provider of Information Technology (IT) services, systems integration, and training to the US government, focusing on space and missile systems, electronics, and aeronautics. Lockheed makes the F-16, F-22, and F-35 aircraft, ballistic and other missile systems, the C-130 military transport, and Titan launch vehicles.
The Joint Strike Fighter aircraft (F-35) will drive sales and earnings for the next 10-20 years, as orders for more than 3,000 for the US and nine foreign countries have already been booked. With replacement parts and service, the entire contract could be worth $1 trillion. The dividend stands at $0.04 per share, providing a yield of 4.4 percent.
Lowe’s Companies (NYSE:LOW) (!) is a well run company whose EPS came in at $1.69 in fiscal 2011 (ends following January). Consensus estimates call for the company to earn EPS of about $1.82 in fiscal 2012 and $2.23 in fiscal 2013. Lowe’s continues to open new stores and has about 1,750 already in operation. Home Depot‘s main competitor, it is a retailer of building supplies, lumber, hardware, tools, and major kitchen appliances. The dividend was recently increased for the 50th consecutive year, rising 14 percent, to $0.16 per share on a quarterly basis.
Procter & Gamble (NYSE:PG) (!) has operations in over 140 countries worldwide and its brand names include Bounce, Cheer, Comet, Downy, Ivory, Mr. Clean, Spic and Span, Tide, Bounty, Charmin, Pampers, Old Spice, Crest, Head & Shoulders, Prell, Noxzema, Cover Girl, Clearasil, Vicks, Iams, Crisco, Duncan Hines, Sun Drop, and Gillette.
The company generated revenue of $82.5 billion and EPS of $3.93 in fiscal 2011 (ending in June). Earnings may be flat this year because of weakness in Europe, but the company should easily extend its streak of 56 consecutive years of dividend increases, since the current annual payout totals just $2.25 per share. Net profit margins usually average about 12 percent to 14 percent per year.
Verizon Communications (NYSE:VZ) (!) is one of the largest telephone systems in the world, providing communications, information, and entertainment service to over 92 million customers. Verizon Wireless is a joint venture with British-based multinational mobile network operator Vodafone Group, which owns 45 percent. Verizon now pays a dividend of $2.00 per share, following its seventh consecutive annual increase, and yields a hefty 4.5 percent. EPS for 2011 was $2.15 and consensus estimates call for it to earn about $2.50 in EPS this year and $2.81 in 2013.
Wal-Mart Stores (NYSE:WMT) (!) is the largest retailer in the world, operating over 10,200 retail units under 69 different banners in 27 countries. Sales hit $446.9 billion in fiscal 2011 (ending the following January) and the company earned $4.49 per share. Look for EPS of about $4.91 in fiscal 2012 and $5.35 in fiscal 2013.
Wal-Mart has a 10-year earnings growth rate of 11.5 percent and a 10-year dividend growth rate of 18.5 percent. It has increased dividends each year since 1976 and now pays $1.59 per share annually, up from $0.23 in 2000.
Yum! Brands (see above).
(!)-Companies that charge fees
Vita Nelson began her career at Mademoiselle magazine, went on make a market in municipal bonds at Granger & Company and other brokerages in New York City, and was founder, editor, and publisher of Westchester magazine until 1980. A graduate of Boston University, she is currently Chairman of the Board of Temper of the Times Investor Services, co-manager of the MP 63 Fund (DRIPX), and responsible for the contents at www.directinvesting.com.
Inroduced in the 1960s, there are more than 1,300 companies that offer such plans now, among them some of the biggest and best companies in America.
History tells us that over the past 60+ years, the economic and market trends have been up, interrupted only by recessions every 7-10 years. Although we can’t accurately predict when those will occur, we know that investors who establish a diversified portfolio of high-quality, dividend-paying stocks tend to be richly rewarded.
This article’s criteria focuses on companies that have grown to become the largest and most dominant in their industries and have recorded growing earnings and dividends that have allowed them to withstand recessions and establish themselves as the most respected brand names on earth. In addition to leadership in their industries and brand recognition, we screened for rising earnings and dividends, as well as strong balance sheets and historical consistency.
Moneypaper’s long-time Portfolio Editor, Pat Racaniello, screened for the companies that met the criteria described above. Before making the final selections, I also sought approval from editors Dave Fish and Mike Burke, who agreed on the merits of accumulating these shares for the long-term.
One such company is Coca-Cola (NYSE: KO), which has now increased its dividend annually for 50 consecutive years and has not missed a payout since 1920. Coke is a well-run company whose brand name is the most widely recognized one worldwide. Its financial strength is rated A++ by Value Line and Warren Buffett’s Berkshire Hathaway owns 8.8 percent (200 million) of the 2.257 billion outstanding shares. The annual dividend of $2.04 per share is almost equal to the 2004 earnings of $2.06. Meanwhile, the 2004 dividend has doubled and the payout has more than quadrupled from the $0.50 it paid in 1996. Consensus estimates call for record earnings of $4.00 per share this year and $4.36 in 2013, compared with $3.84 in 2011.
Another example is the fast-food chain Yum! Brands (NYSE: YUM). It operates more than 37,000 restaurants in 110 countries with brand names of KFC, Taco Bell, and Pizza Hut. It also operates 450 casual dining concept restaurants in China, where the company is enjoying exceptional growth. Spun off by PepsiCo in 1997, YUM initiated dividends in 2004 at $0.15 per share; today it pays $1.14. Earnings per share (EPS) have also been moving upward, growing from $2.53 in EPS in 2010 to $2.87 last year, with consensus estimates calling for $3.26 in EPS this year and $3.74 in 2013.You can open DRIP accounts in all the companies included in the portfolio through the DRIP enrollment service offered by Temper of the Times Investor Services, at www.directinvesting.com. (Look below to read profiles of the companies.)
After the one-time fee charged by the enrollment service, there are no further fees. (Once enrolled, you can invest directly into your account with the company in amounts from as little as $25 to up to $10,000—or even more.) However, some of the companies included in the portfolio charge fees for each investment into your plan account. Those companies are shown with an exclamation mark in the company profiles below. To mitigate the effect of such fees, we advise you to invest larger amounts even if you must invest less frequently. For example, instead of investing $100 monthly, invest $300 quarterly.
The “Biggest and the Best” portfolio
Baxter International (NYSE:BAX) is a major international drug supply company that specializes in drug delivery systems, bioscience products, anesthesia, vaccines, and dialysis equipment and treatment. International sales accounted for 58 percent of 2011 gross revenues, while 6.3 percent of sales was devoted to research and development.
Shares outstanding have been reduced from 650 million in 2006 to 550.6 million today. EPS was $3.98 in 2010 and $4.31 in 2011, with $4.55 expected this year. The dividend has been increased from $0.68 per share in 2007 to $1.80 today.
BB&T Corp. (NYSE:BBT) (!) was founded in 1872. BB&T operates 1,775 branches located in 12 Southeastern States. The stock has a book value of $25.71 per share and the company, which remained profitable through the 2009 recession, was one of the first banks to pay back its Troubled Asset Relief Program (TARP) loan. The quarterly dividend is once again on the rise, growing from $0.15 per share in 2009 to the current $0.20. After earning $1.83 in 2011, BB&T is expected to earn about $2.75 this year and $3.04 per share in 2013.
Boeing Co (NYSE:BA) (!) is the leading manufacturer of commercial aircraft and a major producer for both American and foreign military uses. Sales totaled $68.7 billion in 2011 and are expected to rise close to $80 billion this year. The company has a commercial order backlog for 4,000 new aircraft, valued at $308 billion. With this amount of pending production, it should see EPS rise to over $7 by 2017, from an expected $4.68 this year. The company’s new, composite-built 787 Dreamliner is now rolling off the assembly line.
Cisco Systems (NasdaqGS:CSCO) (!) supplies Ethernet switching and Internet Protocol (IP) networking gear and is the world’s largest supplier of high-performance computer internetworking systems. Almost half of 2011’s sales were from foreign sources. The company has only $16.4 billion in total debt, compared with cash of over $48 billion, or $9.54 per share. A quarterly dividend of $0.06 per share was initiated in early 2011 and has since been raised to $0.08. A low “forward” price-to-earnings (P/E) ratio of 9, versus a historical average P/E of 18, makes this a compelling entry point for this stock.
Coca-Cola (see above).
Colgate-Palmolive (NYSE:CL) (!) is one the world’s largest consumer products companies, manufacturing a host of oral-care products, personal grooming items, and a wide range of household cleaning products. Its brand names include Colgate, Palmolive, Softsoap, Irish Spring, Speed Stick, and Ajax, along with pet food products under its Science Diet name.
Since 1994, Colgate has only had three years when earnings did not top the previous year’s profits. The annual dividend has gone from a $0.47 per share in 1996 to the current $2.48. Management has set an annual goal of increasing earnings by 10 percent.
Deere & Co (NYSE:DE) (!) is the largest manufacturer of farm equipment in the world and also makes a wide array of industrial equipment for the construction and forestry industries. For the consumer market, it manufactures lawn and garden tractors and other outdoor power equipment. Dividends date back to 1937 and have been increased for nine straight years, currently totaling $1.84 per share annually. Deere sports a P/E ratio of 10 and a 5-year earnings growth rate of 9.5 percent.
Dover Corp (NYSE:DOV) (!) operates over 40 businesses that produce a wide range of industrial products and manufacturing equipment, growing mainly through acquisitions. EPS dropped in 2009 to $2.00, from $3.67 in 2008, due to the recession. However, the company recovered nicely in 2010 to earn $3.48 in EPS and netted $4.48 in 2011.
Consensus estimates now call for it to earn about $4.74 in EPS this year and $5.36 in 2013. Dover has increased its annual dividend for 56 consecutive years (since 1956) and presently pays $1.26 per share, with another increase expected to be announced in August.
Dow Chemical (NYSE:DOW) is a major manufacturer of basic chemicals, such as benzene, propylene, acetone chlorine, and caustic soda, and also makes a broad range of plastics. Research and development spending was 2.7 percent of 2011’s $59.9 billion in revenues. EPS was $1.97 in 2010 and $2.54 in 2011, with analysts’ consensus estimates calling for a dip to about $2.14 this year, before a rebound to $2.88 in 2013.
The quarterly dividend was recently raised from $0.25 to $0.32 per share, resulting in a yield of 4.4 percent. Dow operates in a cyclical industry that offers above average total return potential for patient investors.
Dr. Pepper Snapple (NYSE:DPS) is one of the largest manufacturers and distributors of non-alcoholic beverages in North America and Mexico and offers a variety of flavored (but non-cola) carbonated soft drinks and non-carbonated beverages. Its products include ready-to-drink teas, juices, juice drinks, and mixers and its brand names include Dr. Pepper, Sunkist soda, 7-UP, A&W Root Beer, Canada Dry, Crush, Squirt, Schweppes, Snapple, Mott’s, Hawaiian Punch, and Clamato. The $0.15 per share quarterly dividend initiated in December 2009 has since been raised three times, to the current $0.34. The company is expected to earn about $2.96 in EPS this year and $3.22 in 2013, compared with $2.79 in 2011.
Genuine Parts (NYSE:GPC) is a wholesale distributor and manufacturer of over 320,000 rebuilt and new auto replacement parts. It also owns and operates 58 NAPA warehouses, 6,000 retail outlets, and six plants to rebuild used auto parts. Dividend increases have come annually since 1956, with the current annual payout of $1.98 per share up from $1.14 in 2001.
EPS was $3.00 per share in 2010 and $3.58 in 2011. Consensus estimates call for the company to earn about $4.08 in EPS this year and $4.39 in 2013. GPC should benefit as the business cycle improves and aging auto fleets are upgraded and maintained.
Home Depot (NYSE:HD) (!) operates a chain of 2,250 warehouse stores in the US, Canada, China, and Mexico, targeting the home remodeling market by selling building materials and home improvement items for both do-it-yourselfers and contractors. The dividend has risen from $0.05 per share in 1996 to the present $1.16, while earnings have gone from $0.43 in 1996 to an expected $2.90 for 2012 (the company’s fiscal year ends in January) and $3.30 in fiscal 2013, as the housing market picks up. The company has ample cash ($2 billion), which should enable it to finance expansion plans for several years.
Hormel Foods (NYSE:HRL) operates 29 food-processing plants and its brand names include Hormel, Spam, Dinty Moore, Top Shelf, Little Sizzler, Chi-Chi Salsa, Kid’s Kitchen, and Mary Kitchen. Dividends have been increased each year since 1987 (46 years), and have been paid since 1928. The Hormel Foundation owns 48.3 percent and officers and directors own 3.4 percent of the 264 million outstanding shares.
A strong balance sheet and conservative business practices make Hormel not only a defensive hedge (everyone must eat daily) but a high-quality growth stock. Total debt is just $250 million, compared with $625 million in cash. EPS should total about $1.85 in fiscal 2012 (ends in October) and $1.96 in fiscal 2013, compared with $1.74 last year.
Johnson Controls (NYSE:JCI) (!) operates three divisions: original equipment for automobile manufacturers (seats and interiors); batteries and power solutions; and climate controls for buildings, fire protection devices, and lighting security systems. The annual dividend has grown from $0.19 per share in 2000 to the current $0.72. After posting earnings of just $0.47 per share in fiscal 2009 (ends in September), profits popped back up $2.00 in 2010 and $2.42 in 2011. Look for EPS of about $2.53 on revenues of over $42 billion this year and $2.95 in fiscal 2013.
Lockheed Martin (NYSE:LMT) is the world’s largest defense contractor and the top provider of Information Technology (IT) services, systems integration, and training to the US government, focusing on space and missile systems, electronics, and aeronautics. Lockheed makes the F-16, F-22, and F-35 aircraft, ballistic and other missile systems, the C-130 military transport, and Titan launch vehicles.
The Joint Strike Fighter aircraft (F-35) will drive sales and earnings for the next 10-20 years, as orders for more than 3,000 for the US and nine foreign countries have already been booked. With replacement parts and service, the entire contract could be worth $1 trillion. The dividend stands at $0.04 per share, providing a yield of 4.4 percent.
Lowe’s Companies (NYSE:LOW) (!) is a well run company whose EPS came in at $1.69 in fiscal 2011 (ends following January). Consensus estimates call for the company to earn EPS of about $1.82 in fiscal 2012 and $2.23 in fiscal 2013. Lowe’s continues to open new stores and has about 1,750 already in operation. Home Depot‘s main competitor, it is a retailer of building supplies, lumber, hardware, tools, and major kitchen appliances. The dividend was recently increased for the 50th consecutive year, rising 14 percent, to $0.16 per share on a quarterly basis.
Procter & Gamble (NYSE:PG) (!) has operations in over 140 countries worldwide and its brand names include Bounce, Cheer, Comet, Downy, Ivory, Mr. Clean, Spic and Span, Tide, Bounty, Charmin, Pampers, Old Spice, Crest, Head & Shoulders, Prell, Noxzema, Cover Girl, Clearasil, Vicks, Iams, Crisco, Duncan Hines, Sun Drop, and Gillette.
The company generated revenue of $82.5 billion and EPS of $3.93 in fiscal 2011 (ending in June). Earnings may be flat this year because of weakness in Europe, but the company should easily extend its streak of 56 consecutive years of dividend increases, since the current annual payout totals just $2.25 per share. Net profit margins usually average about 12 percent to 14 percent per year.
Verizon Communications (NYSE:VZ) (!) is one of the largest telephone systems in the world, providing communications, information, and entertainment service to over 92 million customers. Verizon Wireless is a joint venture with British-based multinational mobile network operator Vodafone Group, which owns 45 percent. Verizon now pays a dividend of $2.00 per share, following its seventh consecutive annual increase, and yields a hefty 4.5 percent. EPS for 2011 was $2.15 and consensus estimates call for it to earn about $2.50 in EPS this year and $2.81 in 2013.
Wal-Mart Stores (NYSE:WMT) (!) is the largest retailer in the world, operating over 10,200 retail units under 69 different banners in 27 countries. Sales hit $446.9 billion in fiscal 2011 (ending the following January) and the company earned $4.49 per share. Look for EPS of about $4.91 in fiscal 2012 and $5.35 in fiscal 2013.
Wal-Mart has a 10-year earnings growth rate of 11.5 percent and a 10-year dividend growth rate of 18.5 percent. It has increased dividends each year since 1976 and now pays $1.59 per share annually, up from $0.23 in 2000.
Yum! Brands (see above).
(!)-Companies that charge fees
Vita Nelson began her career at Mademoiselle magazine, went on make a market in municipal bonds at Granger & Company and other brokerages in New York City, and was founder, editor, and publisher of Westchester magazine until 1980. A graduate of Boston University, she is currently Chairman of the Board of Temper of the Times Investor Services, co-manager of the MP 63 Fund (DRIPX), and responsible for the contents at www.directinvesting.com.