Holiday Portfolio: What a Bunch of Turkeys

Not Quite Up in Smoke

Two names that, while not immune, have weathered the storm better than others are Altria (MO Quote) and its international brother, Philip Morris International (PM Quote). While not entirely spared the impact of the global economic collapse, the products of this tandem tend not to feel as much an economic impact as other consumer discretionary goods. Moreover, the solid balance sheets and big cash generation continue to provide strong dividends to investors. While still down on the year, the dividends -- and consistent dividend hikes -- ease a bit of the pain for investors.

While both have not existed, independently, across a complete economic cycle, it is likely that Altria has stronger legs in an economic recovery, assuming the U.S. gets its house in order as a global economic leader. Nibbling at safe, high-yielding equities in the current environment is beginning to make a lot of sense for investors.

Building Blocks

While down nearly 20%, the one stock in the portfolio that may make the most sense in this economic environment is Equity Residential Properties (EQR Quote), a real estate investment trust (REIT) with a nationwide portfolio of multifamily housing focused on the middle and upper-middle class.

Interestingly, in times of economic chaos, demand for apartments increases just as demand for purchased homes decreases. And, even as mortgage rates continue to come in, more and more homeowners and potential homeowners are being forced to rent. That benefits companies like Equity Residential that have consistent product offerings.

While rent rates may feel a pinch as the economy continues to contract, Equity Residential has proved itself an astute manager of costs and very efficient operator. The 6.5% dividend provides support as well.

Happy Thanksgiving

I've been in the investment and finance business for more than two decades, and it's safe to say the events of the last several months have been unprecedented and the challenges of the market have been, in many cases, chilling.

Yet we continue to live in a nation that affords opportunities unrivaled in the world and in a country that provides freedom to live, succeed -- and even sometimes fail -- unlike any other. For that we should all be thankful. It has certainly been a tumultuous year, yet there is still plenty for which to give thanks.

Happy Thanksgiving to all!

HOLIDAY 2008: THANKSGIVING DAY Talking turkey ... not a lot to gobble about Recent Price 12/31/2007 Price Change Current Dividend Current Yield Advanced Micro Devices (AMD:NYSE) $1.80 $7.35 -75.51% -- -- Altria (MO:NYSE)** $15.80 $22.20 -28.83% $1.28 8.10% Philip Morris International (PM:NYSE)*** $41.20 $49.40 -16.60% $2.16 5.24% Bank of America (BAC:NYSE) $14.80 $41.42 -64.27% $1.28 8.65% Cheniere Energy Partners (CQP:AMEX) $4.57 $15.80 -71.08% $1.70 37.20% Equity Residential Properties (EQR:NYSE) $29.77 $37.04 -19.63% $1.93 6.48% Unweighted Average -55.18% Source: Company Reports, Bloomberg, TSC Research ** Represents Altria absent the Philip Morris International spinoff. Does not include Altria dividend ***Philip Morris International spun from Altria