So it looks like the June gloom is going to spill into July. The good news is we may see some good companies whose stocks have been lifted to unsustainable heights finally see price levels subsiding.
One company that has finally cooled down and looks tempting is Clorox ( CLX). At $72-a-share it is yielding a delectable 3.55% dividend. Let's look at its chart and 200-day MA. You can see that twice since the beginning of May 2012 the stock penetrated below or touched that seemingly magical 200-day moving price average that currently rests around $68. If an investor could patiently wait and buy at that level, the yield-to-price on the dividend bumps up to 3.76%. On May 2, 3 and 4, we saw the intraday price of CLX slide below $67, so it's not unreasonable to expect a better price in the weeks ahead. One of Jim Cramer's recent recommendations to his Action-Alert-Plus subscribers is another dividend darling that may be good to accumulate on pullbacks. I'm referring to General Mills ( GIS), which like Clorox has already reported last quarter's earnings and has slipped below its 52-week high price of $41.06. At its closing price on Monday of $38.98, it is sporting a dividend yield of 3.39%. Here's its one-year chart with its 200-day MA now appearing to be an upside resistance level. If it retests its June 27 low of $36.75 and a trader happened to have a buy-limit order in at that price, the yield-to-price moves up to a more attractive 3.59%.
Promising BuysA good example is Church & Dwight ( CHD), which hit a 52-week high on Monday and is trading at over 25 times current earnings and 21 times forward earnings. That appears to be a lofty level for a company that sells baking soda, pet care products, condoms and an assortment of personal care items. Check out this one-year chart of CHD and you won't be surprised why I think it's poised for a pull-back to at least its 200-day moving average or somewhat below that level.
Both CLX and GIS are trading at much more modest price-to-earnings ratios then CHD. They're also trading at a lower price-to-sales ratio then CHD. During times of high anxiety and tumultuous worldwide financial headlines, stocks like CLX and GIS make for a safer bet with their generous yields. The stock of companies like CHD and Kimberly-Clark ( KMB), which hit its 52-week high on Monday as well, make good candidates for the wish-list of growth-with-income investors who like to buy quality at more affordable prices.