This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why Value Funds Could Lead the Markets

A high-dividend holding is AT&T (T), which yields 5.4%. Levine says the company's wireless business is growing, but the landline operation is shrinking. As a result, he doesn't expect the company to report much earnings growth. Still, the dividend alone should deliver decent results. "This is a steady stock that should help to reduce the volatility of the fund," Levine says.

How to Turn Apple's Stock Into an Income Stream >>

A growing holding is CVS Caremark (CVS), which operates a retail drug chain and a pharmacy benefit manager. The stock only yields 1.4%, but the company should grow as drug sales continue climbing relentlessly.

Nuveen Dividend Value returned 2.7% annually during the past five years, outdoing 96% of peers. The fund looks for rock-solid companies that seem likely to increase their dividends. The portfolio managers aim to find shares that have fallen out of favor.

The managers recently bought Carnival (CCL) after one of the company's cruise ships sank off Italy. The shares plummeted as investors reacted to the negative headlines. "Carnival has very good cash flows, and the cash flows are improving," says David Chalupnik, Nuveen's head of equities.

Another holding is Pfizer (PFE). Because it is showing little growth, the pharmaceutical giant may look boring. But Chalupnik says the company generates huge amounts of cash. The management is unlocking value by selling off parts of the company at rich prices.

6 Stocks to Benefit From Truckers' Switch to Natural Gas >>

A low-risk fund is Federated Equity-Income, which has returned 1.0% annually during the past five years, outdoing 83% of peers. The fund excelled during 2008, outdoing 93% of peers. Portfolio manager John Nichol limited losses by avoiding financials with uncertain prospects. Nichol emphasizes blue chips with growing dividends. Holding include International Business Machines (IBM) and Chevron (CVX).
Stan Luxenberg is a freelance writer specializing in mutual funds and investing. He was executive editor of Individual Investor magazine.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.27 -0.76%
FB $101.00 1.47%
GOOG $684.12 0.89%
TSLA $143.67 -3.09%
YHOO $27.10 1.04%


Chart of I:DJI
DOW 15,914.74 -99.64 -0.62%
S&P 500 1,851.86 -0.35 -0.02%
NASDAQ 4,283.5920 +14.8290 0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs