When the markets are reeling, active investors who want stocks that are likely to weather the storm should start their search from among these top Dow stocks, all of which come from top rated industries, as well.
Our Long Term PowerRatings help investors and long term traders spot stocks that are both more reliable and better performers than the average stock. Our research, which involved thousands and thousands of simulated stock trades between 1995 and 2007, enabled us to rate stocks on a scale of 1 to 10 on just those two characteristics that investors count on.
Stocks at the lowest end of the spectrum were stocks that were less likely than the average stock to be higher in a year's time. These stocks also tended to gain less than the average stock after one year.
At the other end of the spectrum, however, were the high Long Term PowerRatings stocks. These stocks not only were more likely than the average stock to be higher in a year's time. But also these high Long Term PowerRatings stocks tended to gain more--in some cases, much more--than the average stock after a year.
This is why we encourage investors and long term traders to stick with high Long Term PowerRatings stocks. Our research tells us that, after a year, these are the stocks that are both more likely to be higher than the average stock as well as being more likely to outperform the average stock.
But if there is one thing better than being a top stock, a stock with a high Long Term PowerRating, then that would be being a stock with a high Long Term PowerRating that belonged to an industry with a high Industry PowerRating, as well.
In addition to the research we did on stocks, we also did research on those industry groups that stocks belong to. Did industry group or sector matter in terms of stock performance? Could investors and long term traders can an edge by investing not just in the high Long Term PowerRatings stocks, but also in those high Long Term PowerRatings stocks from industries with high PowerRatings?
We found that the best industry groups, the industries with the highest Industry PowerRatings, dramatically outperformed the average industry group. Specifically, we discovered that industries with PowerRatings of 8 or higher produced an average annualized return of more than 20% between 1995 and 2007. By comparison, the average industry group had an average annualized return of approximately 14.61% over the same time frame.
The differences are even greater when the topmost industry groups, the industries with PowerRatings of 10. We found that 10-rated industries actually produced average annualized returns of more than 35% from 1995 to 2007, more than double that of the average industry group.
Of the five stocks in today's report, fully four of them come from industries with PowerRatings of 10. The fifth stock comes from an industry with a PowerRating of 8. And combined with each stock's Long Term PowerRatings (all five stocks have Long Term PowerRatings of 8 or higher), all five are among the most attractive stocks available to investors right now.
Procter & Gamble (PG | Quote | Chart | News | PowerRating). Long Term PowerRating: 9. Industry PowerRating: 8
Walt Disney (DIS | Quote | Chart | News | PowerRating). Long Term PowerRating: 8. Industry PowerRating: 10
Johnson & Johnson (JNJ | Quote | Chart | News | PowerRating). Long Term PowerRating 8. Industry PowerRating 10
Pfizer (PFE | Quote | Chart | News | PowerRating). Long Term PowerRating 8. Industry PowerRating 10
Verizon Communications (VZ | Quote | Chart | News | PowerRating). Long Term PowerRating: 8. Industry PowerRating: 10.
Looking for more long-term solutions to your investing problems? Don't let the volatility of this market lead you to miss out on stocks you'll be glad to have bought a year from now. Click here to get a copy of our special, Free Report on the "5 Secrets to Successful Stock Investing," and learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Call us at 888-484-8220 to get your copy of the "5 Secrets to Successful Stock Investing" today.
David Penn is Senior Editor at PowerRatings.net.
