NEW YORK (TheStreet) -- As a trader, I love when a stock moves higher after I bought it. As an investor, I rarely will consider a stock for a long-term investor that doesn't pay a dividend. The bigger the better, as long as its chances of a continued payout are reasonable.
Synthesizing monster dividend payers with briskly appreciating stocks is on par with finding the
you started hint-dropping as a great holiday gift idea on a clearance sale for less than half price (with 4matic thrown in for free).
Unlike my odds of Benz calling in the next couple of weeks, the odds of finding what you want in investments is significantly easier, and can move you a long way towards the AMG model.
Merck is a global research-driven pharmaceutical company dedicated to putting patients first. Established in 1891, Merck discovers, develops, manufactures and markets vaccines and medicines to address unmet medical needs. The company devotes extensive efforts to increase access to medicines through far-reaching programs that not only donate Merck medicines but help deliver them to the people who need them. Merck also publishes unbiased health information as a not-for-profit service. Merck trades an average of 11 million shares per day with a market cap of $141 billion
52 Week Range: $33.13 to $48.00
Book Value: $18.16
Price To Book: 2.5
Earnings Payout Percentage: 55%
For 2012, Merck shares are like Superman, up up and away. Merck shares are up about 40% in the last year, and the company continues to pay a dividend yield well above 3%.
Investors are receiving $1.68 in dividends per year, for a yield of 3.7%. Analysts are calling for a price target of $48.50. We are not far from the target price, and often when a target price is breached, analysts guide higher. Just the act of guiding higher puts a spring in the step of the company's stock.
There is almost no desire by short-sellers to move against this stock. Short interest hardly moves the needle with only 0.7% of the float.
Eli Lilly discovers, develops, manufactures, and sells pharmaceutical products worldwide. The company's neuroscience products treat schizophrenia, mixed/manic episodes, and bipolar maintenance; depression, diabetic peripheral neuropathic pain, anxiety disorders, fibromyalgia, and chronic musculoskeletal pain; attention-deficit hyperactivity disorders; obsessive-compulsive and panic disorders, and bulimia nervosa; and bipolar and treatment-resistant depression. Eli Lilly trades an average of 8.4 million shares per day with a market cap of $57 billion.
52 Week Range: $35.46 to $53.99
Book Value: $12.79
Price To Book: 4
Earnings Payout Percentage: 54%
The shares have moved higher 36% over the last 52 weeks. Analysts are calling for a price target of $50.36. A quick look at the chart displays the fact that "we did that, done that before" and the trend is your friend so far. I recommended Lilly a few months ago, and that worked out well.
After the recent pullback in price, Eli Lilly is once again in the kill zone. Investors are receiving $1.96 in dividends for a yield of 3.8%. A very nice yield for a company demanding only 14 times earnings to buy a share.
In the last month, the stock has really moved higher with a 11.6% increase. Since the start of the year, it appears the shares are up over 25%. Again, the pullback gives the stock a chance to breathe, and it may trade down near $50 a share due to the "round number" effect, but take that as a buying opportunity.
Presently, based on the float ,the short interest is unimportant and not a worry. The small amount of short interest is 1.9%. I would keep an eye on this number after the election for clues in the market direction into 2013.
Johnson & Johnson
Caring for the world, one person at a time ... inspires and unites the people of Johnson & Johnson. We embrace research and science -- bringing innovative ideas, products and services to advance the health and well-being of people. Employees of the Johnson & Johnson Family of Companies work with partners in health care to touch the lives of over a billion people every day, throughout the world. Our Family of Companies comprises: The world's sixth-largest consumer health company The world's largest and most diverse medical devices and diagnostics company The world's fifth-largest biologics company And the world's eighth-largest pharmaceuticals company We have more than 250 operating companies in 60 countries employing approximately 129,000 people. Our worldwide headquarters is in New Brunswick, New Jersey, USA. Johnson & Johnson trades an average of 11.1 million shares per day with a market cap of $196 billion.
52 Week Range: $61.05 to $72.74
Price To Book: 3.2
Earnings Payout Percentage: 77%
Johnson & Johnson may not have the sex appeal of many tech companies, but money never goes out of fashion. I am in the camp that believes in holding quality companies (I mean the income statement and balance sheet, not if they are popular)
Johnson & Johnson fits very well into the camp of a core holding. The dividend is large enough that even if you buy wrong, history (along with the fat dividend) tends to wash you of your sins quickly.
Investors are receiving $2.44 yearly in dividends for a yield of 3.4%. The TTM Price-to-earnings ratio is a little rich at 23. However, it falls to a very comfortable 13 looking forward. Johnson & Johnson recently declared the new dividend amount of 61 cents per share for the quarter.
Shares have really appreciated, gaining 11% in the last year, and the average analyst target price for Johnson & Johnson is $75.31.
With short interest above 5%, investors will want to monitor changes to know if short sellers turn up the warning signals. Otherwise, the current 6.4% of the float short isn't relatively small, but also not a major concern yet.
Freeport-McMoRan Copper & Gold
Freeport-McMoRan is engaged in mineral exploration and development, mining and milling of copper, gold, and silver in Indonesia, and the smelting and refining of copper concentrates in Spain and Indonesia. It is the world's lowest-cost copper producer and one of the world's largest producers of copper and gold. FCX's operations are conducted through its subsidiaries, P.T. Freeport Indonesia (PT-FI), P.T. IRJA Eastern Minerals Corporation (Eastern Mining) and through Atlantic Copper, S.A. (Atlantic). Freeport Mcmoran trades an average of 15.8 million shares per day with a market cap of $37 billion
52 Week Range: $31.08 to $48.96
Book Value: $18.06
Price To Book: 2.2
Earnings Payout Percentage: 37%
The company currently pays $1.25 per share in dividends for a yield of 3.2%. The yield isn't the largest in this group of companies, albeit the stock is perhaps one of the better values. Gold prices are elevated, but miners are not gaining nearly at the same pace.
Shares are modestly higher from a month ago and remain bullish. Technically speaking, the 60-day moving average recently moved above the 200-day average, which is very bullish.
Shares in the company have fallen 1% from a year ago. The average analyst target price for Freeport Mcmoran is $49.68. Ideally, I would like a little more pullback in the price to under $38 before entry. Under $38 brings us right to the edge of the support level and allows us to buy on a dip.
At the time of writing and from the latest short interest report, the short interest is minor and not a cause of distraction. The small amount of short interest is 2.9%.
J P Morgan
JPMorgan Chase is a leading global financial services firm. The bank is a leader in investment banking, asset management, private banking, private equity, custody and transaction services and retail and middle market financial services. A component of the
Dow Jones Industrial Average
, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers and the world's most prominent corporate, institutional and government clients. J P Morgan trades an average of 24 million shares per day with a marketcap of $158 billion
52 Week Range: $28.28 to $46.49
Book Value: $50.12
Price To Book: 0.8
Earnings Payout Percentage: 23%
JPMorgan has nearly a 3% yield. I like JPMorgan because the
loves banks and housing. The Fed, with QE3 and running the printing presses overtime, is doing all it can to ensure both improve. Shareholders receive $1.20 annually in dividend payments. You only need to look at the stock price to find out what happens when the Fed is on your side.
The shares have moved higher 25% over the last 52 weeks. Analysts are now calling for a price target of $46.58. The trend technically is bullish, and Jamie Dimon makes the Teflon Don look like crazy glue.
The smart money doesn't want to bet against Mr. Dimon either, and JPMorgan's short interest is only 1.2% of the average trading float.
At the time of publication, the author held no positions in any of the stocks mentioned.