As we approach the end of the year, most of the big Wall Street firms that we cover are fine-tuning their top portfolios and getting them ready for next year. With 2015 looking like a flat to down year for almost all the major indexes, barring a major rally in the final two holiday-shortened trading weeks, portfolio managers are working hard to get a winning plan in place for 2016.
In a recent report, UBS analysts on the Dividend Rulers portfolio made some major changes, adding a top U.S. blue chip and removing a European stock. The portfolio struggled this year not because of the content, but due to dividend stocks being generally out of favor. The Federal Reserve finally lifted rates some, which actually could help the overall sentiment for dividend stocks.
Here we report on the changes to the portfolio and also profile the three top-yielding positions currently held.
Coca-Cola Co. (NYSE: KO) is a huge Warren Buffet holding, and it was added back to the portfolio after a year’s absence. The company is the world’s biggest brand and largest manufacturer of soft-drink concentrate and syrups. It enjoys a 50% share of the world’s carbonated soft drink market and 44% share of the U.S. market.
The UBS team cited currency concerns a year ago when it was removed the stock, and it has essentially traded sideways since. With earnings suspected to have troughed, and the dividend raised 9% over the past year, Coke shares are again a part of the Dividend Ruler holdings.
Investors are paid a solid 3.09% dividend. The Thomson/First Call price target for the stock is $45.28. Shares closed most recently at $43.29.
British American Tobacco PLC (NYSE: BTI) was removed from the list, and the reason cited is the firm has discontinued coverage of the stock in an effort to deploy resources elsewhere. The shares closed Tuesday at $109.51.
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