Top 5 Stock Picks with Attractive Dividend Yields for Long Term Investors

Update April 2012: We still believe that these Top 5 Dividend Stocks that we recommended at the start of 2011 will continue with their out-performance. So, we maintain our Buy & Hold stance on all of the names discussed below.

At present, recovery has lasted well despite economic woes surrounding the housing market and unemployment still sticking at concerning levels. But where will the stock market head in 2011 is the key question puzzling investors as we still do not have a clear indication of that.

Those who find it hard to coupe with volatility and don’t believe in taking much risks should opt for defensive stocks, blue chip names and high dividend yielding stocks while constructing or reshuffling their portfolio for 2011.

$3.95 Flat-Rate Stock Trades

Below is a list of blue chip names with good dividend payouts and well diversified businesses, which anyone may include in his portfolio in order to increase resistance against sudden shocks and generate somewhat consistent returns.

Bristol-Myers Squibb (BMY)

Investors in health care stocks still have cheers left from recent health care reforms and the retiring baby boomers are an addition to the hopes of demand in growth for such services.

Bristol-Myers Squibb is currently priced around $25 and has a decent market cap of $44.6 billion. The P/E ratio for this company stands at 14.2, Price/Sales at 2.95 and Price/Book at 2.91.

Bristol-Myers Squibb deals in the fast growing pharmaceuticals and nutritional care industry. It has a strong distribution network that caters directly to government agencies, hospitals, pharmacies, and through a wide spread network of wholesales, retailers and distributors.

Bristol-Myers Squibb’s stock price estimates for 2011

• Bullish Estimates- $32
• Fair Price Estimates-$26
• Conservative Price Estimate- $19

Bristol-Myers Squibb’s gets stiff competition from Novo Nordisk A/S (NVO) which has a market cap at $64.8 billion and Eli Lilly And Co with market cap of $40.3 billion.

Intel (INTC)

IT giant Intel’s stock is currently trading around $21, and company’s market cap is at $122.2 billion. Investors can bank upon their attractive dividend yield at 3.29%. Other important valuation numbers for concerned investors are P/E ratio at 11.8, Price/Sales at 3.22 and Price/Book at 2.69.

Intel’s business revolves around designing, manufacturing and selling components such as microcontrollers, embedded processors, microprocessors, chipsets, network devices and communications products.

They are leaders in developing advanced integrated technology components for communications and computing industries. They also expertise in developing integrated platforms configured to achieve optimized user computing solution.

Our price Forecasts for Intel’s Stock in 2011

• Bullish Estimates- $34
• Fair Price Estimates-$25
• Conservative Price Estimate- $18

Statistics of Intel’s closest Competitors

• Taiwan Semiconductor Manufacturing Co (TSM) has a market capitalization of $62.6 billion and has managed to gain around 10% in last one year.
• Texas Instruments Inc (TXN) has a market capitalization at $39.2 billion and its P/E ratio stands at 13.8.
• Broadcom Corp (BRCM) has a market capitalization of $21 billion and it P/E is very high at 28.1.

Coca-Cola (KO)

Currently trading around $65, Coca-Cola has a market cap of $150 billion and a dividend yield of 2.72%. Their P/E ratio stands at 19.9, Price/Sales at 4.26 and Price/Book at 5.29. Company’s global reach and a consistent dividend payout history make it an outstanding contender in our handpicked list of blue chip stocks.

Our Price Estimates for Coca-Cola Stock in 2011

• Bullish Estimates- $78
• Fair Price Estimates-$70
• Conservative Price Estimate- $62

There is absolutely no need to discuss about Coca-Cola’s profile here as it is already well known around the globe. However, we can move forward by telling you that the company was founded way back in 1892.

PepsiCo (PEP) is the only comparable competition here and its market cap stands at $102.9 billion. Its P/E is slightly inexpensive at 16.4.

Verizon (VZ)

Currently trading around $34, Verizon Communications has a market cap of $96.2billion. Their dividend yield is extremely lucrative at 5.73% and their other stats are P/E ratio 212.8, Price/Sales at 0.87 and Price/Book at 2.26

Verizon operates in two segments that are domestic wireless communications and wired communications. This company is a key player in telecom industry.

Latest Forecasts on Verizon’s Stock Price for 2011

• Bullish Estimates- $41
• Fair Price Estimates-$32
• Conservative Price Estimate- $26

Verizon’s industry peer Telefonica SA (TEF) has a market cap of $104 billion and its return on stock price has been a negative 20% in last one year.

If the rumors involving iPhone and Verizon come out to be true, then 2011 will be a good year for the stock.

Procter & Gamble (PG)

The share price is currently trading close to $63 with company’s total market cap topping $179 billion. Current dividend yield is very attractive at 3.05% and a glance at other important numbers looks interesting with P/E ratio at 17.7, Price/sales at 2.20 and Price/Book at 2.85.

As a leading manufacturer of consumer goods, Procter & Gamble has presence in over 180 countries. The business can be divided into six major segments namely, Family Care, Home care, Pet Care, Grooming, Health Care, and Beauty.

After clubbing up information from price estimates made by various financial websites and professional analysts we have come up with set of these three:

Price targets for the Procter & Gamble stock in 2011.

• Bullish Target- $76
• Fair Price Estimate- $70
• Conservative Target- $60

Closest competitors to P&G and their Statistics:

• Colgate Palmolive (CL) has a current market cap of around $37 billion and P/E ratio at 18.3.
• Kimberly Clark (KMB) has a market capitalization around $25 billion and P/E ratio is at 13.9.

Note: You may use the comments section to discuss any stock tips that you feel can outperform the market in 2011 and beyond. Also, use the section to leave any stock query that you may have.

Disclaimer

Investing in Stocks is subject to market risks and we do not guarantee any profits from the picks mentioned in this article. We have compiled the list after researching through advices given on various financial websites and other financial media. So conduct your own research or avail services of a financial advisor before making any investments.

Mutual Funds and ETFs that can Outperform