| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
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0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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26 Safe Ideas for the 2011 Ultimate Retirement Portfolio |
Seeking Alpha - March 3, 2011 - by Investment Underground
Are you a retiree or an investor searching for income? Then check out this model portfolio we put together. Obviously every investor has different needs and time frames, so we’d advise you to use this portfolio as a starting point for your research as you build a portfolio passive income streams for retirement.
In our model portfolio we allocate 35% of the portfolio to cheap, high-yield dividend stocks, 25% in preferred shares of solid businesses or other fixed income funds, 25% in safe REITs or other physical income producing properties such as an apartment complex or commercial real estate property, 10% in precious metals and commodities and 5% in cash.
Below are some ideas to fill each bucket of the portfolio:
35% High-yield dividend stocks
Exelon (EXC): This dividend king is a utility holding company that provides electricity to 1.6 million customers in southeastern Pennsylvania and 3.8 million customers in Illinois. As well, it provides natural gas retail sales to half a million customers in Pennsylvania. With the largest nuclear fleet of any U.S. utility, Exelon’s 11 nuclear plants in the Midwest and Mid-Atlantic generate 17% of U.S. nuclear power and constitute 80% of Exelon’s generation output. Currently, Exelon trades at $41.04 and yields 5.12%. On a discounted cash flow basis, we believe shares are worth upwards of $70 apiece. Our full long thesis on EXC can be read here.
We also like alternative nuclear fleet operators Southern Energy (SO) and FirstEnergy (FE).
Verizon (VZ): Verizon is an extremely well run business that generates a ton of cash; cash that it uses to pay a hefty 5.37% dividend yield and quickly pay off the debt used to fund the Alltel acquisition. This market leader (the company serves around 94 million subscribers or approximately 25% of the US population) already has an extremely loyal consumer base, and with Apple (AAPL) iPhone pre-orders doing gangbusters thus far, we think those relationships will only grow stronger. While we think Verizon shares are approaching fair value, we believe Apple shares, on the other hand, are overvalued, as we outlined here.
General Mills (GIS): A brand that you may be in touch with every day, especially in the morning, General Mills is another name levered to emerging markets. Of all the names, it seems the most likely to suffer from rising commodities prices as we spoke about here. Investors should weigh the countervailing theses of rising “ag” prices and the strength of a company with such brand omnipresence and product strength.
France Telecom (FTE): France Telecom is the fixed-line and wireless giant of France, with significant interests in Spain, Poland and the Middle East and Africa. What makes this company attractive to income seekers is its hefty dividend yield of 5.8%. Another factor we like about this company is that the dividend only eats around 46% of the firm's free cash flow, making it likely in the near term the company will be able to maintain dividend payment. Shares trade at 22.01 at the time of writing.
Coca-Cola Company (KO) has paid dividends since 1893. Right now, the yield is 2.9%. Recorded investors on March 15 will get their next dividend payment on April 1. Over the last five years, share prices are up over 50%. They currently trade at a P/E of 12.7.
For 2010, reported net revenue was $35.1 billion. Over the past five years, EBT margins have consistently been in the upper 20s, whereas for Dr. Pepper Snapple (DPS), it has been between 14% and 15%. The ROIC for Dr. Pepper Snapple was 9.5% in 2010, but for Coca-Cola it was right near 20%.
In 2010, the company returned $7.2 billion to shareowners in 2010, through $4.1 billion in dividends and $3.1 billion in share repurchases. In 2011, it expects to repurchase $2 billion to $2.5 billion in stock over the course of the year as part of a share repurchase program. The company expects its acquisition with Coca Cola Enterprises to have 2011 cost synergies of $140 to $150 million.
Fidelity National Financial (FNF): Fidelity National provides title and specialty title insurance, claims management and information services throughout the United States. It currently holds the largest market share in the title insurance market, at 38%. It currently yields 3.49%. Shares are worth $22 apiece using a discounted cash-flow analysis. Title insurance premium growth will likely remain strong due to bursts of refinancing and foreclosure sales. Margins will benefit from Fidelity’s further use of cost-cutting technology, and should remain around 9-10% as a result. For more details on FNF, see our full article here.
As an alternative in the title insurance industry, we like First American (FAF), the number two in the industry by market share.
For the complete article.
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| Stuff to look at |
Yield and Income Newsletter: A must have for income investors. subscribe NOW
S&P Commentary and Newsletters: S&P
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| BondsOnline Advisor |
Income Security Recommendation January 2013 Issue.
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