Wednesday, February 24, 2010


My Top 10 Holdings For 2010:

1. CPFL Energia SA-ADR (CPL)--Brazilian Utility Company

2. Legacy Reserves LP (LGCY)--Energy Limited Partnership

3. AT&T (T)--Telecom

4. Universal Insurance Holdings (UVE)--Insurance

5. Encore Energy Partners (ENP)--Energy Limited Partnership

6. Merck & Co. Inc (MRK)--Pharmaceutical

7. EV Energy Partners (EVEP)--Energy Limited Partnership

8. Philip Morris Intl. Inc. (PM)--Tobacco

9. Calumet Specialty Products (CLMT)--Limited Partnership

10. AstraZeneca CA PLC (AZN)--Pharmaceutical

This is a list of my top 10 investments for 2010. I'm not trying to endorse these particular investments, I only list them for informational purposes.

Tuesday, February 23, 2010


About 15 years ago I worked as a certified dietary manager in a nursing home that catered to quite a few well-to-do seniors. My head cook and I had been discussing stocks and investing quite a bit and he took it upon himself to ask one of the retired businessmen in residence the secret to his retiring as a millionaire. His reply was, "Only invest in things that make money."

When he related the story to me later in the week, my genius response was, "Well Duh!" However, having had a great deal of experience with investing since then and lots of time to study making money work for you, I think I've come to understand just what he was trying to say. He wasn't being cryptic or putting my fellow co-worker on, he was sincere in his advice. I believe now that what he truly meant was to buy assets that generate income. Or only to invest in things that put money in your pocket.

This could be just about anything really. Buying equipment for your business that will generate a return beyond the cost of the purchase. Investing in rental property with positive cash flow. Or, as in my case, investing in dividend paying stocks. I choose to invest mostly in dividend stocks, rather than growth stocks, for the simple fact that dividends are money in your pocket. A stock may or may not go up in price, but a well chosen dividend stock can generate cash flow for years to come.

So his advice was much more valuable than it seemed at the time. It just took me a while to figure it out.

Monday, February 22, 2010


While reviewing AstraZeneca's stats, I also decided to take a look at Glaxo Smith Kline (GSK:NYSE). GSK pays a $2.29 annual dividend per share, which represents a yield of 6.00% on their recent share price of $38.26. Their price to earnings is 10.90 with earnings of $3.49 per share. They also have $3.65 per share in cash, so their dividend should be quite sustainable. Their ROE is 60.40% with a gross margin of 81.70% and a profit margin of 19.50%.

With my purchase of a stake in AstraZeneca, I found myself short on cash to buy a stake in GSK. So I decided to take profits I'd made on Merck to purchase a position in GSK. I think GSK's numbers are better right now and I am retaining the same dollar position I originally held in Merck shares, so it's kind of like playing with the house's money. But I think that I'll actually come out much better with my position in GSK than if I left the entire amount invested with Merck. I'll also be adding an additional source of dividend income.

Glaxo Smith Kline is facing criticism and possible litigation over diabetes drug Avandia, due to implication of increased heart attack risks for persons taking the drug. However, loss of sales of Avandia in the U.S. would cut 2010 and 2011 earnings estimates by less than 1%. While litigation still could have detrimental effects on earnings going forward, I think that overall the company will come out O.K.. It's not unlike a similar situation faced by Merck a few years back. The threat of litigation and the resulting depressed stock price, could spell opportunity for anyone wanting to invest in GSK for the long term.

Wednesday, February 17, 2010


Yesterday was a good day for the market and a good day for shopping for a new addition to my investment portfolios. I've decided to add shares of drug maker AstraZeneca P L C (AZN:NYSE) to my regular investment portfolio and as a long term holding in my IRA account. AZN has earnings per share of $5.19 with a dividend payout of $3.42, which represents a 7.80% return on their recent share price of $43.94. Their ROE is 35.10% and they have $5.38 per share in cash. They have great profit margins and an acceptable level of debt. As a dividend investment, I'm thinking I will do quite well with AZN.

AstraZeneca PLC is focused on the discover, development, manufacturing and marketing of prescription pharmaceuticals and biological products for important areas of healthcare: Cardiovascular, Gastrointestinal, Infection, Neuroscience, Oncology, and Respiratory and Inflammation. Its primary products include Arimidex for hormonal breast cancer, Crestor that provides treatment for managing cholesterol levels, Nexium for acid-related diseases, Seroquel an atypical anti-psychotic therapy for treating schizophrenia and bipolar mania and Symbicort for the treatment of asthma patients. The company is active in over 100 countries with a growing presence in important emerging markets including China, corporate office in London, UK and major R&D sites in Sweden, the UK and the U.S.. The company owns and operates numerous R&D, production and marketing facilities worldwide. It has over 25 manufacturing sites in over 15 countries. It operates a small number of sites for the manufacture of active ingredients in the UK, Sweden and France, complemented byefficient use of outsourcing.

Monday, February 8, 2010



With the market down, I decided to pick up some shares of BMY for my regular investment portfolio and my IRA. Bristol-Myers has a dividend payout of 5.30% and cash per share of $3.21. Their return on equity is 26.50% with a profit margin of 63.10%. Their earnings per share of $1.63 along with available cash makes the dividend payout of $1.28 per share seem secure. I think BMY will be a great addition to my dividend and retirement portfolio.

Bristol-Myers Squibb Company was incorporated under the laws of the State of Delaware in August 1933 under the name Bristol-Myers Company, as successor to a New York business started in 1887. In 1989, Bristol-Myers Company changed its name to Bristol-Myers Squibb Company as a result of a merger. It is a global biopharmaceutical and related health care products company whose mission is to extend and enhance human life by providing the highest quality pharmaceutical and related health care products. The Company, through its divisions and subsidiaries, is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of pharmaceutical and nutritional products. The Company reports financial and operating information in two segments, Pharmaceuticals and Nutritionals. The Nutritionals segment is operated through the Company's subsidiary Mead Johnson Nutrition Company. The Nutritionals segment, through Mead Johnson, manufactures, markets, distributes and sells infant formulas and other nutritional products, including the entire line of ENFAMIL products. The ENFAMIL LIPIL product is the first infant formula in the U.S. to contain the nutrients docosahexaenoic acid and arachidonic acid. The Pharmaceuticals segment competes with other worldwide research-based drug companies, smaller research companies and generic drug manufacturers. These products are sold worldwide, mainly to wholesalers, retail pharmacies, hospitals, government entities and the medical profession. The Pharmaceuticals segment is comprised of the global pharmaceutical and international consumer medicines businesses. The products comprises of cardiovascular; virology, including human immunodeficiency virus infection; oncology; affective and other disorders; and immunoscience. The Company promotes its products in medical journals and directly to health care providers such as doctors, nurse practitioners, physician assistants, pharmacists, technologists, hospitals, Pharmacy Benefit Managers, Managed Care Organizations and government agencies. The markets in which the Company competes are generally broad-based and highly competitive. The Company is subject to global regulation by regional, country, state and local agencies.

Monday, February 1, 2010


In a further effort to increase dividend income, while boosting prospects for continued growth of my portfolio, my latest move is to sell my shares in Sysco Food Service (SYY) and replace them with Clorox (CLX). While I believe that Sysco is a good long term investment I think that Clorox will fair better. I also believe that Sysco has enjoyed somewhat of a boost from reductions in transportation related expenses over the past year. While both stocks are affected by transportation costs, I think it likely that Sysco will suffer more of a negative impact to earnings should oil prices increase.

Clorox Company was founded in Oakland, Calif., in 1913 and is incorporated in Delaware. The Company is a leading manufacturer and marketer of consumer products. The Company sells its products mainly through mass merchandisers, grocery stores and other retail outlets. It markets some of consumers' most trusted and recognized brand names, including its namesake bleach and cleaning products, Green Works(tm) natural cleaners and laundry products, Poett(r)and Mistolin(r)cleaning products, Armor All(r) and STP(r) auto-care products, Fresh Step(r) and Scoop Away(r) cat litter, Kingsford(r) charcoal, Hidden Valley(r) and K C Masterpiece(r) dressings and sauces, Brita(r) water-filtration systems, Glad(r) bags, wraps and containers, and Burt's Bees(r) natural personal care products. With approximately 8,300 employees worldwide, the Company manufactures products in more than two dozen countries and markets them in more than 100 countries. The Company operates through strategic business units which are aggregated into four reportable segments: Cleaning, Lifestyle, Household and International. Cleaning consists of laundry, home-care, professional products and auto-care products marketed and sold in the United States. Products within this segment include laundry additives, including bleaches, under the Clorox(r) and Clorox 2(r) brands home-care products, mainly under the Clorox(r), Formula 409(r), Liquid-Plumr(r), Pine-Sol(r), S.O.S(r) and Tilex(r) brands natural cleaning and laundry products under the Green Works(tm) brand and auto-care products mainly under the Armor All(r) and STP(r) brands. Lifestyle consists of food products and water-filtration systems and filters marketed and sold in the United States and all natural personal care products. Products within this segment include dressings and sauces, mainly under the Hidden Valley(r) and K C Masterpiece(r) brands water-filtration systems and filters under the Brita(r) brand and all natural personal care products under the Burt's Bees(r) brand. Household consists of charcoal, cat litter and plastic bags, wraps and container products marketed and sold in the United States. Products within this segment include plastic bags, wraps and containers, under the Glad(r) brand cat litter products, under the Fresh Step(r), Scoop Away (r) and Ever Clean(r) brands and charcoal products under the Kingsford(r) and Match Light(r) brands. International consists of products sold outside the United States. These products include home-care, laundry, auto-care, water filtration, charcoal and cat litter products, dressings, plastic bags, wraps and containers, and insecticides, mainly under the Clorox(r), Javex(r), Glad(r), PinoLuz(r), Ayudin(r), Limpido(r), Clorinda(r), Poett(r), Mistolin(r), Lestoil(r), Bon Bril(r), Nevex(r), Brita(r), Armor All(r), STP(r), Green Works(r), Sabra(r), Pine-Sol(r) and Agua Jane(r), Ever Clean(r), Chux(r), Kingsford(r), and Hidden Valley(r) brands.

Most of the Company's products are nationally advertised and sold within the United States to mass merchandisers, warehouse clubs, and dollar, military and other types of retail stores mainly through a direct sales force, and to grocery stores and grocery wholesalers mainly through a combination of direct sales teams and a network of brokers. The markets for consumer products are highly competitive. Most of the Company's products compete with other nationally advertised brands within each category and with private label brands and generic non branded products in certain categories. The Company must comply with various environmental laws and regulations in the jurisdictions in which it operates, including those relating to air emissions, water discharges, the handling and disposal of solid and hazardous wastes and the remediation of contamination associated with the use and disposal of hazardous substances.

Replacing Sysco with Clorox shares is the last step in realigning my stock portfolio for 2010. For the remainder of the year I will be adding to my current positions and may add additional stocks, if I find any I believe will do well. In my next post, I will be listing my top 10 holdings for the beginning of 2010. As with all my postings, I will be doing this for informational purposes only. I do not recommend that anyone follow my investments or advice blindly. I do recommend doing your own research and finding investments that are right for you.