MILLBURN, N.J. (Stockpickr) -- I congratulate the Texas Rangers on making it to the World Series for the first time in team history, despite the fact that they had to beat my New York Yankees to do it. The Rangers make their home at the Rangers Ballpark in Arlington, in Arlington, Texas, a suburb of the Dallas-Ft. Worth metro area.
I've been wanting to look at regional portfolios for some time, and what better time to start than now. I'll begin by looking at some
, an integrated oil and gas company headquartered in Irving, Texas, ranks second on the Fortune 500. It has a market capitalization of $313.2 billion and as such is the largest capitalized stock in the
Just this week, Exxon Mobil and its largest peers,
all reported earnings, with generally strong results in all segments. Exxon earned $1.44 per share, vs. consensus estimates for $1.39 per share.
After many years of tough conditions for refineries, it appears that refining margins have begun to expand. These margins, often referred to as crack spreads, are the differential between the price of the raw crude oil and the profit earned after sales of the refined product.
Earlier this year, Exxon Mobil purchased XTO Energy, one of the largest producers of natural gas. In my opinion, this was a savvy acquisition and one that is already paying off for the company.
Finally, Exxon Mobil pays a dividend of $1.76 per share per year, which equates to a yield of about 2.6%.
, the telecommunications behemoth, is headquartered in Dallas and ranks seventh on the the Fortune 500, with a market capitalization of $169.2 billion.
AT&T has plenty going for it these days. To begin with, the company is benefitting from the massive demand for smartphone products, especially for the
iPhone, for which it currently enjoys an exclusivity deal for wireless servicing. Though
is reportedly getting in on the iPhone act soon, the entire market for those products will continue to expand and is far from maturation or saturation. AT&T will continue to be a cash cow, and its yearly dividend of $1.68, or 5.90%, is quite safe.
What AT&T really needs -- which Verizon can offer -- is high-speed cable and internet products. It is not likely that AT&T will build its own infrastructure, so it would have to buy another company, such as
I would consider AT&T or Verizon, which yields 6%, as appropriate in any
, the engineering and construction company, is one of Exxon Mobil's neighbors in Irving. Fluor ranks No. 111 on the Fortune 500 and has a market capitalization of $8.9 billion.
>>Who Owns Fluor?:
Fluor is a good company that got caught with some bad wind-farm project investments, which will cause it to take a large third-quarter charge of about 70 cents per share, leaving the company with an estimated loss of 6 cents for the quarter. Once you back that out, Fluor should earn about $2.90 to $3.20 this year, compared with a decline from $3.75 earned a year ago. These earnings shortfalls are reflected in the stock price, which has declined nearly 50% since the spring of 2009.
Looking into 2011, as the U.S. and emerging nations seek to rebuilt or repair infrastructure, companies such as Fluor should see a pickup in business. If like me you prefer to buy stocks when they're cheap and sell them when they're expensive, Fluor might fit the bill.
Consumer products company
, also based in Irving, ranks No. 126 on the Fortune 500 and has a market capitalization of $25.8 billion. The company is known for products such as Scott Paper, Kleenex, Huggies and Kotex.
As with other consumer companies, you will be trading away growth for income. The company grows earnings at a consistent annual rate of about 8% but pays an above-average annual dividend yield of about 4.2%.
Recently, Kimberly-Clark delivered a quarter worthy of being flushed down the toilet, resulting in 6% drop in the stock price, but overall, this company's stock tends to be rather stable, often trading between $55 and $65 dollars. Right now, it is headed down to the $55 level, at which time the stock might be worthy of accumulation.
, based in Plano, Texas, is ranked No. 133 on the Fortune 500 and has a market capitalization of about $7.5 billion. J.C. Penney, which as a mall anchor store locates most of its store in shopping malls, has undergone a renaissance over the past few years, transforming itself from a stodgy old catalog retailer into a mid-market retailer appealing to shoppers seeking a higher quality than
but without a deep enough wallet to shop at the high-end department stores. J.C. Penney's main competition is most likely
J.C. Penny has a pretty good track record of beating analysts' estimates. In fact, in the last 30 days, the company has received a plethora of positive EPS revision for 2010 and 2001.
Please note: The Fortune 500 list of companies is published every May by
magazine. The S&P 500 is a dynamic index based on market capitalization, the constituent data of which is only available to subscribers and is not publicly disseminated.
-- Written by Scott Rothbort in Millburn, N.J.
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At the time of publication, Rothbort had no positions in stocks mentioned, although positions can change at any time.
Scott Rothbort has over 25 years of experience in the financial services industry. He is the Founder and President of
, a registered investment advisor specializing in customized separate account management for high net worth individuals. In addition, he is the founder of
, an educational social networking site; and, publisher of
. Rothbort is also a Term Professor of Finance at Seton Hall University's Stillman School of Business, where he teaches courses in finance and economics. He is the Chief Market Strategist for The Stillman School of Business and the co-supervisor of the Center for Securities Trading and Analysis.
Mr. Rothbort is a regular contributor to
TheStreet.com's RealMoney Silver
website and has frequently appeared as a professional guest on
Fox Business Network
and local television. As an expert in the field of derivatives and exchange-traded funds (ETFs), he frequently speaks at industry conferences. He is an ETF advisory board member for the Information Management Network, a global organizer of institutional finance and investment conferences. In addition, he is widely quoted in interviews in the printed press and on the internet.
Mr. Rothbort founded LakeView Asset Management in 2002. Prior to that, since 1991, he worked at Merrill Lynch, where he held a wide variety of senior-level management positions, including Business Director for the Global Equity Derivative Department, Global Director for Equity Swaps Trading and Risk Management, and Director for secured funding and collateral management for the Global Capital Markets Group and Corporate Treasury. Prior to working at Merrill Lynch, within the financial services industry, he worked for County Nat West Securities and Morgan Stanley, where he had international assignments in Tokyo, Hong Kong and London. He began his career working at Price Waterhouse from 1982 to 1984.
Mr. Rothbort received an M.B.A., majoring in Finance and International Business from the Stern School of Business, New York University, in 1992, and a B.Sc. in Economics, majoring in Accounting, from the Wharton School of Business, University of Pennsylvania, in 1982. He is also a graduate of the prestigious Stuyvesant High School in New York City. Mr. Rothbort is married to Layni Horowitz Rothbort, a real estate attorney, and together they have five children.