4 Stocks With Pricing Power
1.52%March 27 | MyPlanIQ portfolio symbol P_35474

With the continuing turmoil in world markets driven by the extraordinary drama in Greece, there is increasing focus on dividend bearing stocks. The problem is that these become increasingly pricey as people flock to income producing equities.

We continue to look for and evaluate a wide range of ideas and Janice Revell from Money magazine focused in on companies who can ride out these times by virtue of having pricing power. Her argument is that with inflation likely, the companies who can pass on costs to the customer (igrnoring utilities and commodity based companies) and are not over priced should be a good selection to carry us through. Bear in mind that this article was posted back in April 2011 when the Euro melt down was forecasted but the drama was not in full swing.

She selected four stocks that had pricing power and were not over priced.

  • Sanofi-Aventis (SNY) a drug company that has the benefit of patent protection and has recently made acquisitions to extend their patent portfolio
  • LVMH (LVMUY) sells to the uber wealthy who are more recession proof and their recent price rises have not put off their customers
  • Caterpillar (CAT) has the benefit of a strong sales and support network to minimize downtime which is a major cost concern and the fact that many heavy industries are benefitting from commodity price rises
  • Disney (DIS) may have to sharpen their pencils to get people to visit the magic kingdom but with ESPN firing on all cylinders in sport, they have a very handy network of contributors

This will be interesting to compare with our ETF benchmark of  a balanced portfolio of Dividend producing ETFs and we will see how prescient she has been.

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From 01/19/2010 to 03/27/2024, the worst annualized return of 3-year rolling returns is 3.02%.

From 01/19/2010 to 03/27/2024, the worst annualized return of 5-year rolling returns is 6.98%.

From 01/19/2010 to 03/27/2024, the worst annualized return of 10-year rolling returns is 11.62%.

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