10 excellent, low volatility stocks with consistent returns. Part 2

by Justin Weinger on July 6, 2013

While we don’t pretend on this blog to be a stock experts, the 10 stocks that we’ve picked are so solid and have such a long history of success that recommending them doesn’t really force us to go out on a limb. If you missed part 1 you definitely will want to take a moment after you’re done here and go take a look at it because the 5 companies we recommend in that one are just as good or better than the 5 were bringing you today. Look closely at the reasons that we give for picking these five stocks as you can use the same ones to help you choose any other stock that you wish. Enjoy.

One of only 4 AAA rated companies, Automatic Data Processing (ADP) is the biggest provider of outsourced payroll services on the planet. Since 2008 when their annual dividend was $1.16 per share it has steadily risen and today holds at $1.58.   With employment numbers in the United States trending up, and improved economy and better employment picture would be a huge help for ADP  while a recession, while it would do some damage, could definitely be withstood by this extremely strong company. With huge untapped markets in small to midsize businesses, as well as opening markets overseas, ADP has plenty of room for expansion as well.

If you like the taste of Coca-Cola (KO) you’re in luck because you can order it in over 200 countries as well as its sister drinks Sprite, Fanta, Fresca and Tab. Coke also owns Minute Maid orange juice and Powerade energy drink as well as Dasani bottled water, and is dominant in practically every type of beverage that there is with the exception of milk. 70% of Coca-Cola’s sales are actually outside of the United States and the company is investing heavily in these countries including Brazil, Russia, China and many of the other large emerging markets. This is not a cheap stock by any means but, because of its high price to earnings ratio, many feel it’s definitely a rock-steady investment.

As long as you’re not squeamish about investing in tobacco (some people are, some people aren’t), shares of Phillip Morris  International (PM) are a rock-solid investment.  It is predicted that by the year 2020 the amount of smokers globally will rise from 1.3 to 1.4 billion people. These numbers are expected to hold even if the population declines by 1% annually! Their best-selling brand, Marlborough, had a 9% increase last year and Parliament, their luxury brand, a 12% increase. Although smokers are feeling the pinch to their wallets because of frequent cigarette price hikes, those price hikes help Philip Morris to offset some of the losses that they’ve had from declining sales in parts of Europe. Add to that Philip Morris’s habit of increasing their regular dividends and a 20% boost in the payout rate last year, and their stock looks golden.

With annual sales of more than $400 billion, Wal-Mart (WMT)is by far the world’s largest retailer. Indeed, over 100 million people visit a Wal-Mart store every week. The retail giant seems to be coming out from under any worries that an investigation into their operations in Mexico would have long-term negative effects on the  brand. Interestingly, Wal-Mart’s stores, generally known to be some of the biggest around, are going to be downsizing as they open their new Wal-Mart Express stores. The plan is to better penetrate smaller, more rural markets and also many underserved urban markets. Wal-Mart is also directing millions of dollars and man-hours into their Internet division, something that they believe will allow them to take on Internet retail giant Amazon. An excellent stock for any diversified portfolio no doubt.

The last on our list of 10 is household brand giant Procter & Gamble (PG). with some of the biggest brands in the world including Tide laundry detergent, Duracell batteries and Charmin bathroom tissue, P&G have more brands than any other household goods maker that generate at least $1 billion in annual sales. Although the company has not been immune to the financial problems in the United States and Europe as well as slower than expected growth in emerging markets, they have  countered these problems with a five-year, $10 billion cost-saving program that, if successful, should increase their profit margins significantly. Because of some disappointing short-term projections their stock is now at what could be described as bargain-basement levels, definitely something to think about if you’re looking for a stock to add to your portfolio.

All 10 of the companies that we featured have been around for a long time and, in general, have taken good care of their stockholders. As we said before, were not stock experts but, with companies like these, you don’t have to be a stock expert to know that they would be a valuable addition to any portfolio. We hope you enjoyed this two-part blog series and remind you to come back and check in often as we post new financial information on many different subjects and topics every week. See you then.


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