Does a nearly 400 point bounce in the Dow industrials mean investors shouldn't be thinking about both growth and income when it comes to their stock portfolios?
One of the best things about our Long Term PowerRatings for stocks is that when it comes to growth and income, you can have your cake and eat it too.
Stocks with our highest Long Term PowerRatings, stocks with PowerRatings of 8, 9 or 10, have been among the most reliable and best performing stocks after a year. Our research, analyzing thousands and thousands of simulated stock trades from 1995 to 2007, showed that these high Long Term PowerRatings stocks have been higher one year later more than 74% of the time. Compare that to the average stock, which has been higher one year later less than 68% of the time.
In addition to being more reliable, stocks with Long Term PowerRatings of 8 or higher outperformed the average stock by significant margins. The average stock, from 1995 to 2007, realized a 12-13% average gain after one year. We found that 8-rated stocks averaged a gain of more than 17% after one year.
Our highest-rated stocks performed even better. Stocks with Long Term PowerRatings of 10 were higher one year later 81% of the time and, after one year, averaged gains of more than 20%.
When you combine the reliability and performance track record of high PowerRatings stocks, you have a edge that will enable you to build a stock portfolio full of stocks that are likely to outperform the average stock in a year's time. And when you combine this capacity for growth with a solid dividend yield, you have an almost irresistible recipe for good growth and income investment.
The three high PowerRatings stocks in today's report all have this potential for growth and reliable income. If you are nervous about climbing into the market--even after a day when the Dow rallies nearly 400 points, then consider these growth and income stocks as a reasonable compromise between opportunity and safety.
In addition to noting the Long Term PowerRatings and PowerRatings charts of each stock, I've also included the dividend yields below.
Colgate-Palmolive (CL | news | PowerRating | PR Charts ). Long Term PowerRating 9. Dividend yield: 2.10
Consolidated Edison (ED | news | PowerRating | PR Charts ). Long Term PowerRating 9. Dividend yield: 5.90
Pfizer Inc. (PFE | news | PowerRating | PR Charts ). Long Term PowerRating 8. Dividend yield: 6.10.
Looking for more long-term solutions to your investing problems? Don't let the volatility of this market cause 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.
