Recession concerns are on the rise thanks to this unwelcome combination:
Inverted Yield Curves + No Deal with China + ISM Manufacturing shows contraction = stocks fall again on Tuesday
The lynch pin for all of this is what happens with the US-China trade deal. The theory being that once this dark cloud is lifted from the investment outlook, then a lot of pent up demand gets released thus improving economic growth with stocks on the rise. Rates will probably rise as well putting the inverted yield curve conversation on ice til some future date.
The key to stock ownership at this time is about lowering risk. And that is exactly what this large cap growth & income stock list featuring Sanofi (SNY - Get Rating), Orange (ORAN) and Novartis (NVS) is meant to accomplish.
Let’s talk about how this Top 10 list was put together because each criteria below is a welcome relief to investors. Putting all the pieces together should greatly increases the odds of outperformance.
- POWR Rating of A or B: Only 1438 stocks have this starting point for our discussion. That being top ranks from our proprietary rating system focused on 4 measures of a stocks attractiveness. When you boil it down the POWR Ratings helps you find the most timely stocks ready to outperform.
- Price Above $10 and Price Target Available from Wall Street Analysts: This removed another 203 stocks from our list. The idea being that stocks under $10 are too risky…and this is not a time to take on that excess risk. Second, if Wall Street analysts are not covering the stock, then also risky going in blind to the investment without this important quality check.
- $10 billion+ Market Cap: This means large caps only given the Flight to Safety trade that is going on right now. This criteria removed the most stocks and now we are down to only 388.
- 2%+ Dividend Yield: In this low rate world investors will cling to attractive income producing stocks. Certainly we want the yield to be above the S&P 500 average of 1.8%. This step brought the total universe of stocks down to 152.
- Earnings Estimates on the Rise: Flight to Safety also means to have as flew blemishes as possible. Thus, we do not want to buy shares of any company where their earnings prospects are heading lower. Thus, we screened for stocks with rising earnings estimates for both this year and next. Only 76 stocks are left after this important health check.
- Value: We want to see at least 10% upside from current levels to the target price set by Wall Street analysts. As you might imagine there has already been a lot of activity in the safer stocks since the market first got stirred up in May of this year. So we want to isolate to those that still have attractive capital appreciation potential. This final step is what narrowed the field down to just 10 stocks.
OK…you got the idea. There is a lot of “goodness” packed inside these stocks. See for yourself by clicking on the ticker links to explore the full POWR Rating for each stock (remember the POWR Ratings is a culmination of 4 different ratings that helps investors find the most timely stocks).
|Company||Ticker||Price||Target||Upside %||Market Cap ($mil)||Div Yield %|
|V F Corp||VFC||$81.95||$96.64||17.93%||$32,631||2.49|
|Ford Motor Co||F||$9.17||$10.67||16.36%||$36,587||6.54|
Just an FYI
Enterprise Products Partners (EPD) is one of the conservative stocks already inside the Reitmeister Total Return portfolio. EPD teams up with 8 other stocks and 2 inverse ETFs to provide investors a safe haven during these volatile times.
I welcome you to see all of these recommendations, plus my market outlook, by starting a 30 day trial to the Reitmeister Total Return portfolio.
SNY shares were trading at $44.45 per share on Tuesday afternoon, up $1.50 (+3.49%). Year-to-date, SNY has gained 9.56%, versus a 17.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Steve Reitmeister
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|SNY||Get Rating||Get Rating||Get Rating|
|EPD||Get Rating||Get Rating||Get Rating|
|GM||Get Rating||Get Rating||Get Rating|
|NVS||Get Rating||Get Rating||Get Rating|
|VFC||Get Rating||Get Rating||Get Rating|