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The 10 Best Blue Chips For Q4 2011
live (public) 0.30% December 31
. Jeremy Siegel's book, The Future for Investors, which focuses on his all-important "basic principle of investor return": "The long-term return on a stock depends not on the actual growth of its earnings, but on the difference between its actual earnings growth and the growth that investors expected."
Building on this, Rex set up a filter went in search of companies today that have a reasonable chance of exceeding expectations over the next decade and screened based on the consistency, valuation, and dividend growth Siegel highlighted. Specifically, these companies:
- Beat EPS estimates for fiscal 2010 (and 2011, if reported). This is as far back as my screening data goes.
- Have an annualized EPS growth rate of at least 5% over the last 10 years.
- Exhibited growth in dividends per share of at least 5% over the last five years.
- Show signs that payout growth can continue, with a payout ratio less than 60% of earnings.
- Have manageable debt, with a debt-to-capital ratio below 60%.
- Have a current P/E below 27 (the current S&P 500 average is 14).
In addition, he required an ROE of 15% or better over the past three years. To show you how tough this requirement is, it cut the list of passing companies down from 162 to 44.
His highlighed 10 names that passed the screen, sorted by dividend yield:
|
Company |
Market cap (in millions) |
EPS Growth (10-year CAGR) |
P/E |
Dividend Yield |
| Raytheon (NYSE: RTN) | $13,968 | 13% | 8.4 | 4.4% |
| Petroleo Brasileiro (NYSE: PBR) | $133,716 | 11% | 6.3 | 4.4% |
| DuPont (NYSE: DD) | $35,892 | 13% | 15.0 | 4.3% |
| United Parcel Service (NYSE: UPS) | $61,025 | 6% | 16.6 | 3.3% |
| Diageo (LSE: DGE) | $46,397 | 14% | 20.5 | 3.3% |
| Microsoft (NASDAQ: MSFT) |
$205,519 | 15% | 12.1 | 3.3% |
| ExxonMobil (NYSE: XOM) | $345,940 | 11% | 8.9 | 2.6% |
| Schlumberger (NYSE: SLB) | $77,886 | 22% | 22.9 | 1.7% |
| Joy Global (Nasdaq: JOYG) | $6,357 | 26% | 12.1 | 1.2% |
| PotashCorp (NYSE: POT) | $35,740 | 31% | 17.8 | 0.7% |
Source: S&P Capital IQ.
This is a well constructed filter that gives names in a diversified set of categories with significant heavyweights included
| Asset | Fund in this portfolio | Price change* | Percentage |
|---|---|---|---|
| Asset1 | MCD (McDonald’s Corporation) | 0.36% | 21.65% |
| Asset1 | PEP (PepsiCo Inc) | 0.10% | 9.19% |
| Asset1 | APA (APA Corporation) | 0.35% | 2.36% |
| Asset1 | TROW (T. Rowe Price Group Inc) | 0.02% | 19.59% |
| Asset1 | SYK (Stryker Corporation) | 0.58% | 17.38% |
| Asset1 | PCP (Precision Castparts Corp) | 0.02% | |
| Asset1 | INTC (Intel Corporation) | 0.39% | 6.23% |
| Asset1 | NUE (Nucor Corp) | 0.36% | 16.00% |
| Asset1 | CTL (Lumen Technologies Inc) | 0.84% | 2.34% |
| Asset1 | EXC (Exelon Corporation) | 0.46% | 5.21% |
| CASH | CASH (CASH) | 0.0% | 0.03% |
* Day change on 12/31/2019.
Previous
Since 03/01/2001
| Name | YTD* Return |
1Yr AR** |
3Yr AR** |
5Yr AR** |
10Yr AR** |
15Yr AR** |
|---|---|---|---|---|---|---|
| The 10 Best Blue Chips For Q4 2011 | 12.1% | 20.1% | 11.4% | 2.4% | 5.8% | 8.1% |
| VFINX (Vanguard (S&P 500) Index) | 7.9% | 27.1% | 8.5% | 13.5% | 12.5% | 14.6% |
| VBINX (Vanguard Balance (60% stocks/40% bonds) | 3.5% | 15.3% | 2.8% | 7.7% | 7.7% | 9.7% |
* YTD: Year to Date
** AR: Annualized Return
| Last 1 Week* | 1 Yr | 3 Yr | 5 Yr | 10 Yr | 15 Yr | Since 03/01/2001 |
2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Annualized Return(%) | -0.2 | 20.1 | 11.4 | 2.4 | 5.8 | 8.1 | 9.0 | 20.1 | -4.8 | 21.0 | -14.4 | -5.2 | 0.7 | 26.1 | 4.8 | 2.0 | 15.2 | 29.6 | -34.1 | 38.1 | 29.3 | 20.6 | 27.3 | 43.3 | -13.4 | -1.5 |
| Sharpe Ratio | NA | 1.47 | 0.76 | 0.08 | 0.28 | NA | 0.36 | 1.47 | -0.36 | 2.01 | -0.38 | -0.34 | 0.05 | 2.08 | 0.35 | 0.08 | 0.75 | 0.96 | -0.71 | 1.61 | 1.47 | 1.21 | 1.93 | 2.67 | -0.6 | -0.15 |
| Draw Down(%) | NA | 7.2 | 16.6 | 35.8 | 38.6 | NA | 53.8 | 7.2 | 16.6 | 4.5 | 32.9 | 11.8 | 10.7 | 7.1 | 12.3 | 18.2 | 18.1 | 28.1 | 53.1 | 13.5 | 14.0 | 11.1 | 5.6 | 12.1 | 30.6 | 25.2 |
| Standard Deviation(%) | NA | 12.7 | 13.6 | 21.2 | 19.4 | NA | 22.5 | 12.7 | 16.9 | 10.2 | 38.2 | 15.2 | 12.6 | 12.5 | 13.7 | 25.0 | 20.2 | 30.7 | 49.1 | 21.8 | 17.7 | 15.2 | 13.7 | 16.0 | 24.1 | 21.3 |
| Treynor Ratio | NA | 0.2 | 0.11 | 0.02 | 0.06 | NA | 0.08 | 0.2 | -0.07 | 0.2 | -0.15 | -0.07 | 0.01 | 0.27 | 0.05 | 0.02 | 0.14 | 0.28 | -0.31 | 0.29 | 0.19 | 0.15 | 0.25 | 0.51 | -0.17 | -0.04 |
| Alpha | NA | -0.02 | 0.0 | -0.02 | -0.02 | NA | 0.02 | -0.02 | 0.0 | 0.01 | -0.07 | -0.02 | -0.04 | -0.01 | -0.03 | 0.01 | 0.01 | 0.02 | 0.06 | 0.12 | 0.04 | 0.06 | 0.06 | 0.06 | 0.03 | 0.02 |
| Beta | NA | 0.92 | 0.9 | 0.89 | 0.97 | NA | 1.02 | 0.92 | 0.88 | 1.01 | 0.98 | 0.79 | 0.98 | 0.98 | 0.98 | 1.03 | 1.08 | 1.06 | 1.12 | 1.23 | 1.38 | 1.24 | 1.04 | 0.84 | 0.86 | 0.86 |
| RSquared | NA | 0.81 | 0.73 | 0.38 | 0.6 | NA | 0.74 | 0.81 | 0.79 | 0.44 | 0.15 | 0.65 | 0.79 | 0.75 | 0.84 | 0.93 | 0.93 | 0.88 | 0.88 | 0.81 | 0.61 | 0.71 | 0.71 | 0.8 | 0.85 | 0.76 |
| Sortino Ratio | NA | 2.1 | 1.04 | 0.09 | 0.34 | NA | 0.47 | 2.1 | -0.47 | 2.97 | -0.4 | -0.51 | 0.07 | 3.17 | 0.51 | 0.11 | 1.08 | 1.38 | -0.96 | 2.3 | 2.22 | 1.75 | 2.89 | 4.34 | -0.84 | -0.2 |
| Yield(%) | N/A | 1.74 | 2.24 | 2.35 | 2.29 | N/A | 1.96 | 1.75 | 2.23 | 2.76 | 2.38 | 2.69 | 2.18 | 2.19 | 2.29 | 2.16 | 2.25 | 2.56 | 1.67 | 2.05 | 1.94 | 1.12 | 1.0 | 0.86 | 0.66 | 0.53 |
| Dividend Growth(%) | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
*: NOT annualized;YTD: Year to Date
**Inception: starting from 03/01/2001
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