Holiday Portfolio: More Nice Than Naughty

The most volatile member of the portfolio over the past month has been pharmaceutical giant Pfizer (PFE Quote). The company dropped a major bombshell in early December when it said it was discontinuing trials of its next-generation cholesterol drug, torcetrapib, due to unexpectedly high death rates in trials.

After slumping more than 10%, Pfizer rallied and gained recent support from a more-than-20% increase in its dividend and the appointment of its president to the additional role of chairman, replacing the outgoing Hank McKinnell. Last week, the company revealed that McKinnell won't go away empty-handed, receiving a $200 million parting gift.

While the Lipitor successor was a disappointment, Pfizer remains flush with opportunities in its pipeline. The sale of its consumer division allows it to focus on new drug development, including potential joint ventures in the lucrative biotech world. And, while the torcetrapib failure shows the risk in new pharmacological developments, Big Pharma remains an important part of a balanced portfolio. Pfizer's nearly 4.4% yield still looks attractive.

Altria (MO Quote) is the most consistent performer in this year's portfolio and will probably stay that way into 2007. While the Kraft (KFT Quote) spinoff may be delayed, unnerving some investors, it provides a potential catalyst into the coming year. Plus, the dividend rose earlier this year, and the company's guidance remains strong.

I know, many readers have issues with owning shares of a tobacco company, but it's legal, and my job here is to help you make money. In short, Altria's cash creation is a moneymaker year in and year out. If you like cash and appreciation, Altria isn't a bad stocking stuffer.