Earlier this year, yours truly was asked to participate in a friendly stock picking contest involving nine other bloggers. I happily agreed!
There was nothing about this contest that involved picking dividend growth stocks specifically, but you just know that I can’t pick anything else. I believe in my heart that this strategy is absolutely the way to go to build long-term wealth. I’m so confident in that belief that I have a large percentage of my overall wealth in these stocks and my overall plan is based in large part around this investing strategy.
So, with the 3rd quarter behind us, let’s take a look at where I, and the other nine fine bloggers involved, stand. Let’s first recap my picks:
Philip Morris International is the world’s second-largest tobacco company, behind only China National Tobacco, and holds almost 16% of the non-U.S. market. The firm owns seven of the leading 15 international brands, including Marlboro, the company’s flagship brand that accounted for more than one third of total volume in 2010. Other key brands include L&M, Philip Morris, Bond Street, Chesterfield, Parliament, and Lark.
PM is my largest position in my Freedom Fund. I believe in the long-term prospects of this company, regardless of any short-term price/value fluctuations. PM is currently attractively valued, and I’d be purchasing more if it weren’t already an overweight position for me. It’s yielding a large 3.70% and sports very attractive growth prospects in emerging markets.
General Dynamics Corporation (GD)
Falls Church, Va.-based General Dynamics manufactures ships, armored vehicles, defense-oriented information technology systems, and business jets. The firm gets around 72% of revenue from the Department of Defense and the rest from foreign sales and Gulfstream business jets. In 2010, the firm generated $32.4 billion in sales and $2.6 billion in earnings with the help of 90,000 employees.
GD is another fine company. This stock hasn’t knocked anyone’s socks off this year, as it’s only up 1.34% YTD. But, that underperformance in comparison to the S&P 500 (up 15%) is just one of many reasons I consider it an attractive buy currently. GD sports a solid 3.03% yield, and is very cheap – likely due to the overriding concerns about future DOD budget cuts.
Intel Corporation (INTC)
Intel is the largest chipmaker in the world. It develops and manufactures microprocessors and platform solutions for the global personal computer market. Intel pioneered the x86 architecture for microprocessors.
INTC hasn’t performed well lately. After having a very strong run in the first half of 2012, it’s been crushed lately after cutting earnings guidance. Softer PC demand, due to a weak worldwide economy and high unemployment, have hurt INTC. However, I believe in the company long-term and recently purchased additional shares. I think they will make their way into the mobile space with lower energy architecture, and the server business also looks promising as more people move to mobile/cloud. Current yield is 3.94%.
Emerson Electric Co. (EMR)
Emerson manages five business segments: process management (28% of sales), industrial automation (21%), network power (27%), climate technologies (16%), and tools and storage (7%). Primary products include motors, drives, valves, switches, test equipment, air conditioning compressors, electric tools, and home storage solutions.
Another boring pick, right? Yawn. Just what I like! Boring is beautiful, baby. EMR has payed increasing dividends for 55 straight years and has an extremely diversified business. Hasn’t exactly done great this year, as it’s mostly been range bound, but that just opens opportunities up for long-term investors. Currently yields 3.33%.
Below, you can see how I’ve done compared to the other bloggers in this contest. I’m basically right in the middle, which is perfectly fine! I don’t really think I’ll win this contest, but I’m happy to own all of the above companies and collect the rising dividends they pay me!
Where Does My Money Go +21.99%
Intelligent Speculator +17.52%
My Traders Journal +10.67%
Dividend Growth Investor +10.39%
Dividend Mantra +5.32%
Million Dollar Journey +4.49%
Passive Income Earner +1.34%
Wild Investor -2.21%
The Financial Blogger -11.04%
Beating the Index -13.77%
Full Disclosure: Long PM, INTC, GD, EMR
Thanks for reading.