One of the best way for investors to have consistent gains in the stock market is to stay invested. Jumping in and out and trying to time the market is a recipe for disaster. The long-term view combined with a plan for total return adds up to success for many patient investors. Again, total return is the combined increase in a stock’s value plus dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13% — 10% for the increase in stock price and 3% for the dividends paid.
One of the best vehicles for total return gains is the UBS Dividend Ruler stocks portfolio. This model portfolio rose by 4.9% in the third quarter (total return). Meanwhile, the S&P 500 increased by 4.5%. With stock prices high, and safety a concern for many investors, we screened the Divided Ruler stocks for four companies that should continue to do well in 2018. All are rated Buy at UBS.
This top Warren Buffet holding not only offers safety but an incredible strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.
Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. With coolers getting packed for picnics, parades and vacations you can bet that they will be stuffed with products from this iconic American company. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.
Coca-Cola investors are paid an outstanding 3.23% dividend. The UBS price target for the stock is $51, while the Wall Street consensus target is $48.11. The stock was trading early Wednesday at $45.95 a share.
This remains the undisputed leader in the home improvement retail category. Home Depot Inc. (NYSE: HD) is the world’s largest home improvement specialty retailer, with 2,270 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.
Home Depot stores sell various building materials, home improvement products, and lawn and garden products, as well as provide installation, home maintenance and professional service programs to do-it-yourself (DIY), do-it-for-me (DIFM) and professional customers.
The stock has rallied on the company’s strong fundamentals, as well as a highly consolidated industry position that separates it from other retail subsectors. Home Depot remains, clearly, the “best house on the retail block” with room for continued upside on strong traffic and share gains.
The horrific storms that hit Texas and Florida this summer are almost certain to drive third-quarter results higher. Given the work to repair could take some time, the potential could continue well into 2018. The company will report results in the middle of November.
Shareholders are paid a solid 2.4% dividend. UBS has a $175 price target, and the consensus price objective is $171.70. The shares were trading Wednesday morning near $166.10.