| Two
Potential New Additions to My "Income Anchors" Portfolio |
Published: March 29, 2005
My monthly High-Yield
Investing newsletter
is devoted exclusively to income-oriented investments. In each issue I
not only introduce my readers to a variety of new high yielding
investing ideas, but I also provide continued guidance on several dozen
of the market's best and brightest income-generating opportunities. I
organize these various picks into the following four model
portfolios...
"Income Anchors"
Portfolio -- This portfolio contains stocks with above-average
dividend yields. And since dividend payments are by no means guaranteed,
I only invest in financially solid companies that should have the
ability to continue paying sizable dividends in the years ahead.
Ultra-High Yield Portfolio
-- This portfolio focuses on quality investment opportunities that offer
above-average dividend yields. These include real estate investment
trusts (REITs), royalty trusts, master limited partnerships (MLPs),
preferred shares, and income deposit securities, among others.
Double-Barrelled Growth Portfolio -- Stocks in this portfolio
offer investors the best of both worlds -- a steady income stream and
strong capital gains. Some of the stocks in this portfolio may have
average or below-average dividend yields (versus the S&P 500) at the
time of purchase, but all are expected to deliver above-average returns
over the long term.
Dividend-Focused Funds Portfolio -- This portfolio includes a
mix of income-oriented-ETFs (exchange-traded funds) and a variety of
outperforming mutual funds. These funds should provide a steady income
stream and also help diversify an income portfolio.
In the analysis below I'll
introduce you to two quality companies that I'm now considering adding
to my "Income Anchors" Portfolio. In addition, I'd encourage
you to stay tuned for further updates throughout the next several weeks.
In those updates I'll introduce you to a variety of additional stocks
and funds that I'm now considering adding to my other portfolios.
"Income Anchors"
Watch List
Although I reserve my actual "Income Anchors" Portfolio picks
for paid subscribers to my monthly High-Yield
Investing newsletter,
below you'll find several companies that I now considering as possible
new additions to this portfolio. I am constantly researching and
following these stocks, and I may eventually add them to this portfolio
if and when their risk/reward profiles meet my stringent investment
criteria:
| Company |
Symbol |
Mar.
28 Price |
Yield |
| National
Fuel Gas |
NFG |
$28.10 |
4.0% |
| Meridian
Bioscience |
VIVO |
$15.13 |
3.2% |
National Fuel Gas (NFG,
$28.10) -- Although this Northeastern gas distributor is a public
utility, the firm generates just a third of its profits from
government-regulated business lines. National Fuel also runs
non-regulated gas pipeline, production and storage businesses, as well
as a timber business. This unique mix gives NFG stable but growing
earnings. It also gives the firm some flexibility in raising money.
For instance, in 2003 National Fuel sold some of its timber lands at top
dollar and used the proceeds to buy new pipeline assets. The added
pipeline has enabled the firm to expand its gas delivery network in New
York and Pennsylvania -- two states with some of the highest gas demand
in the country. In a few years, the company also plans to connect the
pipeline to the high-demand New York City market.
|
Register
for Carla Pasternak's High-Yield Investing newsletter
today and you'll receive as many as SIX in-depth research reports absolutely FREE!
|
|
Although many utilities are now
saddled with heavy debt loads, NFG is an exception. Company management
runs a tight ship and has whittled down its debt -- the firm's
debt/equity ratio now stands at very safe sub-1.0 levels. The firm's
dividends also appear to be secure. NFG's steady earnings growth, which
has measured in at about +6% a year for the past five years, is behind
the firm's remarkable record of 34 straight years of dividend increases.
Right now, NFG yields 4.0% and pays an annual dividend of $1.12 per
share.
Meridian Bioscience (VIVO, $15.13) -- This Biotech firm is one of
the few that pays such a hefty dividend. Far from being a fledgling
upstart, for the past three decades the company has been a profitable
maker of diagnostic kits to test for infectious diseases. The market for
these kits, which account for the lion's share of the firm's earnings,
is highly competitive. However, about five years ago VIVO also moved
into the lucrative business of making proteins and antigens for new
drugs and vaccines. This February, the firm bought a leading maker of
proteins and antigens, O.E.M. Concepts, in the hopes of expanding this
product line. Meridian expects the purchase to add one or two cents to
its bottom line this year and four or five cents next year.
Company earnings, which have grown a robust +20% a year for the last
five years, are expected to grow +13% this year and +32% next year. For
an income investor looking for exposure to the high-growth Biotech
industry, this stock could make an interesting portfolio addition, as
the company pays a 48-cent per share annual dividend (3.2% yield).
Important
Note: The above article was merely a small excerpt from a
recent News Flash we sent to subscribers of our premium, income-oriented
investing newsletter -- High-Yield Investing. In each
issue of that newsletter, editor Carla Pasternak delivers a host of
other investing ideas and tips designed to help you earn steady gains
and above-average income from your portfolio. To receive your copy of
our most recent High-Yield Investing newsletter, as well
as other guidance similar to this every month, you'll need to register
for this separate publication. Please visit one of the following links
to continue...
|
Please Note: The above article was merely a
small excerpt from an issue of our premium income newsletter -- High-Yield
Investing. In each issue Carla Pasternak presents
a wealth of information and timely investment ideas to help you earn a
steady income stream from your investments. To receive a
complimentary three-week trial or to learn more about our High-Yield
Investing service, please visit the following link: http://www.StreetAuthority.com/subscribe.asp#hy |
|
