David Goldman, Senior Editor of First Things, has put together a list of deflation beating high yield stocks.
Here’s how he screened for stocks:
Someone has to benefit from this. The state and local govt pension funds, the insurers, everyone who has to lend money is in trouble. Capital intensive industries with steady cash flows benefit: their borrowing costs should collapse over time. Utilities, basic materials, consumer non-cyclicals, etc. fit the bill.
I screened the universe of stocks for companies with
1) high LT debt to equity ratios
2) investment grade ratings (or at least high junk)
3) low implied vol (below S&P itself)
4) low earnings volatility
5) high dividend payouts
There are the stocks he picked.
- Altria, MO, 8.5% allocation
- Bristol Myers Squibb, BMY, 7.6% allocation
- Reynolds American, RAI, 4.3% allocation
- Exelon Corporation, EXC, 4.2% allocation
- Duke Energy Corporation, DUK, 8.6% allocation
- Plains All American Pipeline, PAA, 8.7% allocation
- Cellcom Israel, CEL, 4.3% allocation
- Consolidated Edison, ED, 8.8% allocation
- Kinder Morgan Energy Partners, KMP, 8.6% allocation
- Partner Communications Company, PTNR, 4.3% allocation
- GlaxoSmithKline, GSK, 3.2% allocation
- DuPont, DD, 4.4% allocation
- Southern Company, SO, 8.5% allocation
- Energy Transfer Partners, ETP, 6.4% allocation
- Eli Lilly, LLY, 4.2% allocation
- Kimberly Clark Corporation, KMB, 5.4% allocation
Goldman also made clear he is also invested outside of equities.
To check out his whole portfolio, head to Asia Times >