It's that time of year again. I'm going to suggest seven stocks for
you to consider for 2015.
Last year's list averaged a disappointing 6% return, far short of
the S&P 500's 12% return for the year.
My portfolio's returns were squashed by Meridian Bioscience's
(VIVO) 37% loss. The maker of medical
diagnostic test kits ran into tough competition and the resulting
price cuts depressed earnings. Another pick, natural gas pipeline
operator Plains GP Holdings (PAGP), got
hit by the energy sector downturn and ended the year with a 1% loss.
My remaining five picks were: NextEra Energy
(NEE), up 26%, Wells Fargo Bank (WFC),
up 23%, Blackstone Mortgage Trust (BXMT),
up 14%, Cinemark Holdings (CNK), up 13%,
and Verizon Communications (VZ), up 1%.
Here's this year's list. I know that it's somewhat unfashionable,
but this is a "buy and hold" portfolio; that is, these stocks are
intended to be held until year's end. All are dividend payers. That
way, if the market tanks, you'll still be collecting dividends while
you wait for an upturn.
Six Flags Entertainment (SIX)
A repeat from two-years-ago, Six Flags owns and operates 16
amusement parks in the United States, one in Mexico City and one in
Montreal, Canada. Six Flags has a troubled past, emerging from a
2009 bankruptcy in 2010. Shortly thereafter, the firm brought in a
new CEO who has embarked on an aggressive program to grow revenue by
adding major new attractions to the parks. It has worked. September
quarter earnings and cash flow were both up double-digits vs.
year-ago. Moreover, Six Flags will benefit from lower gasoline
prices, which should put more money in people's pockets in 2015.
Also adding to its long-term outlook, Six Flags recently announced
plans to build new theme parks in China and Dubai. Current dividend
yield is 4.8%.
Cinemark Holdings (CNK)
Cinemark, a repeat from 2014, is one of the largest U.S. movie
theater operators, another sector likely to benefit from lower
gasoline prices. Further, in addition to more than 330 theater
complexes in the U.S., Cinemark owns over 150 theaters in Latin
America, which is a faster growing market. Thanks to a lack of
appealing product, movie attendance was down in 2014, but analysts
expect higher grossing movies this year. Yield 2.8%.
Hospitality Properties Trust (HPT)
Hospitality owns hotel properties that it leases to major operators
such as Marriott and Wyndham. It also owns travel centers located
adjacent to interstate highways. Both the hotel and travel center
businesses should also benefit from lower gas prices. Hospitality is
a real estate investment trust (REIT), which is similar to a regular
corporation except that REITs don't pay federal corporate taxes if
they distribute at least 90% of taxable income to shareholders as
dividends. Yield 6.2%.
Macquarie Infrastructure Trust (MIC)
Macquarie owns and operates a variety of infrastructure properties,
the largest segment being corporate and private airplane repair and
fueling facilities located at airports. These are also businesses
likely to benefit from lower fuel costs. Although organized as
trust, MIC is treated as a corporation for income tax reporting
purposes. Yield 5.6%.
Physicians Realty Trust (DOC)
A July 2013 IPO, Physicians, also a REIT, owns healthcare properties
leased to physicians, hospitals and other healthcare operators. Its
properties are typically on a campus with a hospital and/or other
healthcare facilities. Being a recent IPO, Physicians is still in
fast-growth mode. Yield 5.3%.
Tekla Life Sciences (HQL)
Tekla is a closed-end fund that focuses on U.S.-based
biotechnology and pharmaceutical stocks, expected to be a hot
industry again in 2015. Closed-end funds are similar to conventional
mutual funds, but unlike conventional funds that sell and redeem
shares as needed, CEFs sell a fixed number of shares via an IPO.
After that, the funds trade like stocks. For reasons too involved to
spell out here, CEFs should outperform conventional mutual funds
specializing in the same sector. Yield 7.3%.
Wells Fargo (WFC)
Another repeat from 2014, Well Fargo, one of the largest U.S. banks,
offers retail and commercial banking, insurance, investment,
mortgage, and consumer finance services, coast to coast. Large banks
in general should do well again this year, and, as I commented last
year, "Wells Fargo is as good as it gets." Yield 2.7%.
These are my ideas. However, do your own due diligence before you
act. The more you know about your stocks, the better your results.