What would be your choice of a stock that fulfills the above criteria for long term (5-10 years)investment? Warren Buffet likes Giant Consumer Stocks like Coke, P&G and McDonalds…
I like DOW.
SXT
I have BP for the nearly 6% dividend despite the oil volatility.
Here’s the best place to ask that http://talk.collegeconfidential.com/discussion/comment/18364274/#Comment_18364274
Its tricky to mix the yield with the total return. Assuming that a company’s dividend is maybe 40-50% of its earnings, the market ends up adjusting the valuation to reflect whatever growth the overall market expects. Low growth industries (autos, refining, and other mature businesses) tend to have higher yields. Higher growth businesses tend to have lower yields (in part because they tend to pay out less of their earnings since they have good growth opportunities on which to use the money themselves).
Go to google finance and use the stock screener, and set a minimum (and a maximum) yield [say 1% to 2.5%) and then set a minimum market cap (company value) [say 1.5billion or so] and then look at your list of about 600 companies.
You can try Apple, Wells Fargo, Walmart, Disney, Home Depot, CVS, and a host of others. The lower the yield, the higher the growth prospects in general. Costco yields just under 1%, but todays dividned is up 66% from five years ago, and is triple what it was ten years ago. That’s an example of the trade off. Exxon yields over 3%, but the dividend is only up 225% from 10 years ago.
Some of the consumer stocks are good, but as I get older I worry that generational changes make it tough for some of them to keep up as tastes change (mcdonalds, etc). Smuckers seems well run to me, with a lot of good brand names.
The brands that cater to younger tastes and have higher growth typically don’t have much or any yield (chipotle).
Jym I am aware of the thread started by dstark you mentioned. But I thought it is more for stock day traders than long term investors who are more of a “holder”.
I own all 3, but I am trying to divest myself of KO and MCD because all they do is sell garbage. Especially KO. When I think about it, it’s just mind boggling that this huge mega giant billion dollar global firm pretty much only sells carbonated sugar water. (I still remember how Scully was lured to Apple from Pepsi… “Do you want to sell sugar water for the rest of your life or do you want to change the world?”) Have already lightened up on other purveyors of death, like LO. Should get out of PM. INTC was purchased for dividends at 4%, but now is less than 3%. Not sure where I would go today. I am trying to lighten up, ie looking at things to sell, not buy.
My son, with a long term investment horizon, has been sticking mostly to S&P index funds with little prompting from me.
XOM pays a good dividend that is considered by many analysts to be relatively safe for the time being. And the stock price is depressed due to the oil glut. But some aren’t comfortable owning shares of an oil giant, for a variety of reasons.
IWM. It’s not one stock, it’s thousands. It’s an index fund. Low low management costs, regular dividend.
What WMI would be different from many other index mutual funds?
@MidwestDad beat me to it: XOM. And it’s at a bargain price per share now.
I like XOM too but its stock price is more expensive than BP as in $100+ vs $40+.
Wow, edit to say I checked XOM price and it is down, I have not looked at this stock because I thought it was pricey. Now it finally came down.