10 Top Stock Picks From Morgan Stanley

(Adds performance of new picks in second paragraph.)

BOSTON ( TheStreet) -- The 10 stocks that Morgan Stanley ( MS) added to its model portfolio in the past 45 days show a defensive bent, as they pay hefty dividends in industries that have a history of weathering tough times.

Morgan Stanley's Most Strategic Portfolio had a return of 2.1% from the beginning of the year through Nov. 4, compared with a 1% gain for the S&P 500 Index. Since their inclusion date in the bank's portfolio, the 10 stocks have risen an average of 6.4%. One stock, Axis Capital Holdings ( AXS), has gained 22.9% since it was added to the model portfolio Sept. 23. Two stocks have been losers, with one dropping 5%.

The Wall Street firm said in a Nov. 6 research note that its model portfolio of 48 stocks is overweight in utilities, health care and consumer staples, and is underweight in consumer discretionary and industrials, both of which have underperformed this year.

Here are the 10 latest additions to Morgan Stanley's model portfolio, all made since Sept. 16:

Colgate-Palmolive ( CL), one of the world's largest consumer-product companies, was added to the portfolio Sept. 23 and gets a 2% weighting recommendation. It makes and sells its namesake toothpaste and detergents, as well as shampoos, deodorants and shaving products.

Colgate's shares are up 12.4% this year, which is also its three-year average annual return. Colgate has a market value of $43 billion and a projected dividend yield of 2.63%.

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Ameren Corp. ( AEE), an $8 billion public utility and holding company, serves 2.4 million electric and 940,000 natural gas customers in Missouri and Illinois. The Sept. 16 portfolio pick, with a 2% weighting recommendation, carries a whopping 4.96% projected dividend yield.

Its shares are up 18.6% this year and have an average annual return of 3.4% per year.


Entergy Corp. ( ETR) is the second-largest nuclear power plant operator in the U.S., with six facilities. As a regulated utility, it distributes power to 2.7 million customers across the Southeast. The $12 billion company's wholesale division sells power throughout the Northeast.

The shares are up 1.6% this year and have an average annual return of 9.8% over 10 years, with a 4.78% projected dividend yield. Entergy gets a 3% portfolio allocation and was added Sept 16.

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Northrop Grumman ( NOC) is one of the five largest defense contractors to the U.S. government. The biggest unit is aerospace, which makes up 38% of revenue. Other divisions include electronic systems and information systems.

The $15 billion company's shares are down 0.3% this year, but have a three-year average annual return of 12.6%. The projected dividend yield is 3.5%. Northrop gets a 2% allocation in the portfolio and the stock was added Sept 16.


General Dynamics ( GD), with a $23 billion market value, is a diversified government contractor operating with five divisions, among them aerospace and combat. The company makes everything from tanks to business jets but its big winner is its defense-oriented information-technology-systems unit.

General Dynamics shares are down 8% this year, but have a 2.4% average annual return over three years. The stock carries a projected dividend yield of 2.96%. General Dynamics gets a 2% allocation in the portfolio, and it was added Sept 16.

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Pfizer ( PFE) is one of the world's biggest developers of prescription medicines for humans and animals, and it has a broad portfolio of patent-protected drugs.

The $156 billion company's shares are up 16% this year and an average of 6.3% over three years. The shares have a projected dividend yield of 4.07%. Pfizer gets a 3% allocation in the portfolio and was added Sept 16.


Axis Capital Holdings ( AXS) is a provider of specialty insurance and reinsurance worldwide. Its focus is on covering specialized classes of risk, including terrorism, aviation and marine, war, political risk and offshore energy.

The $4 billion company's shares are down 11% this year, but over three years, the average annual return is 6.4%. The stock carries a 2.94% projected dividend yield. It gets a 1% allocation in the portfolio and was added Sept 23.

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Chubb ( CB) is the 12th-largest property-casualty insurer in the U.S. Third-quarter earnings slumped 48% from a year earlier, largely due to Hurricane Irene claims payouts.

Its shares, which are up 15% this year, have a three-year average annual return of 11.6%, resulting in a market value of $19 billion. They carry a 2.31% projected dividend yield. Chubb gets a 1% allocation in the portfolio and was added Sept 23.


Halliburton ( HAL) is a leader in the booming oil-services industry. Its services include everything from pressure pumping to drilling, as well as employee-support services across North America and about 80 countries worldwide.

Its shares are down 8.4% this year, but have a three-year average annual return of 24%, giving it a $35 billion market value. They have a projected dividend yield of 0.97%. It gets a 1% allocation in the portfolio and was added Oct. 28.

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LyondellBasell Industries ( LYB) is one of the world's largest plastics, chemical and refining companies. The company manufactures products at 58 sites in 18 countries and sells to customers in more than 100 countries.

Its shares are up 2.6% this year and 29% over the past year, giving it a market value of $20 billion. Its shares carry a 2.3% projected dividend yield. LyondellBasell gets a 2% allocation in the portfolio and was added Oct. 28.

>>To see these stocks in action, visit the 10 Top Stock Picks From Morgan Stanley portfolio on Stockpickr.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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