It’s that time of
year again. I’m going to suggest five stocks for you to consider for
Looking at last
year’s numbers, from the time the article was published (January
11), through December 30, my picks averaged a 5%
return, woefully underperforming the S&P 500’s 16% gain. Four
of last year’s picks recorded gains, but one big loser, Life Storage
(LSI, formerly SSS) down 19%, ruined everything. AbbVie (ABBV), up
21%, did the best.
Humbled, but undaunted, here are
five new picks for 2017. As usual, they are all dividend payers.
CenturyLink (CTL): Originally
a rural telephone company, CenturyLink has grown via acquisitions
to become a major provider of broadband, voice, video, data and
managed services to residential and business customers. A recent
large acquisition could spur even more growth. Meanwhile,
CenturyLink is paying a hefty 8.5% dividend yield.
HP, Inc. (HPQ): Hewlett
Packard, Silicon Valley’s first high-tech firm, split into two
separate companies in November 2015. HP Inc. retained HP’s slow
growth computer and printer businesses, while Hewlett Packard
Enterprise Company (HPE), took over HP's sexy networking and
software services businesses. But HP Inc. could turn out to be the
Cinderella of this story. It recently introduced a new line of 3D
printers that could change everything. 3D printers, used to create
three-dimensional objects, have been too slow to be used for mass
production applications. But HP says its new "Jet Fusion" 3D
printers can produce products “ten times faster” and at lower cost
than competitive printers. If so, 3D printer sales could turn HP,
Inc. into a fast growth company. Dividend yield 3.6%.
The largest cruise ship
operator, Carnival operates more than 100 ships under 10 brands
including Carnival, Princess, Holland America and Cunard. With its
shares returning only 8% last year, the
market isn’t excited about Carnival’s growth prospects. But they
haven’t been paying attention. Carnival has reported strong growth
in recent quarters and has plans underway to continue that story.
Dividend yield is 2.7%.
Kraft Heinz Company (KHC): In 2013,
Warren Buffet’s Berkshire Hathaway and 3G Capital, an investment
group founded by a trio of Brazilian billionaires, bought out H.J.
Heinz. Then, in 2015, they took over Kraft Foods and merged it with
Heinz to form Kraft Heinz. The 3G management is applying innovate
strategies to spur growth. Dividend yield is 2.7%.
NutriSystem (NTRI): Weight
loss marketer NutriSystem was floundering until new management took
over in November 2012. Spurred by new product introductions,
earnings and revenue growth resumed in 2014 and has continued,
uninterrupted, since then. But there’s more to this story.
NutriSystem recently acquired the rights to the “South Beach Diet”
brand and plans to introduce its South Beach Diet programs early
this year. That should be a big deal. Dividend yield is 2.0%.
As always, consider my picks to be
research candidates, not a buy list. The more you know about your
stocks, the better your results.