Stocks have struggled this year in the wake of the 2009 rally, prompting many investors to turn to defensive names.
Cautious investors looking for steady dividends should consider these 10 stocks. They're rated "buy" and rank among the top 1% of the 5,000 stocks we cover.
10. Raytheon is an aerospace and defence contractor, specializing in high-tech systems. Fourth-quarter net income rose 20 per cent to $504 million and earnings per share climbed 27 per cent to $1.30, boosted by a lower share count. Revenue rose 9.5 per cent to $6.7 billion. Raytheon's operating margin widened from 10 per cent to 11 per cent. The stock has advanced 19 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 2.3 per cent
Price-to-book ratio: 2.1 versus an industry average of 5.6
Three-year annualized profit growth: 15 per cent
9. Becton, Dickinson and Co. sells medical devices and diagnostic equipment. Fiscal first-quarter net income increased 1.4 per cent to $316 million, or $1.30, as revenue increased 12 per cent to $1.9 billion. Becton, Dickinson's operating margin narrowed from 24 per cent to 23 per cent. Its stock has increased 13 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 1.9 per cent
Price-to-book ratio: 3.5 versus an industry average of 4.1
Three-year annualized profit growth: 22 per cent
8. C.R. Bard sells medical products, such as catheters and stents, to health care providers. Fourth-quarter net income dropped 29 per cent to $106 million, or $1.08. Revenue advanced 6.7 per cent to $677 million. The operating margin expanded from 27 per cent to 29 per cent. Its stock has declined 3.4 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 0.8 per cent
Price-to-projected-earnings ratio: 13 versus an industry average of 18
3-Year Annualized Profit Growth: 19 per cent
7. National Health Investors is a real estate investment trust that owns nursing homes and assisted-living centers. The company is scheduled to report fourth-quarter results on Feb. 22. Third-quarter net income climbed 9.5 per cent to $17 million, but earnings per share jumped 31 per cent to 63 cents. Revenue increased 32 per cent to $21 million. The operating margin was 82 per cent. The REIT has advanced 43 per cent during the past year.
Financial strength score: 9.9 out of 10
Cash distribution yield: 6.1 per cent
Price-to-book Ratio: 2.3 versus an industry average of 1.8
Three-year annualized profit growth: 1.8 per cent
6. Procter & Gamble sells household products, including Gillette razors and Tide detergent. Fiscal second-quarter net income dropped 6.9 per cent to $4.7 billion, but earnings per share increased 13 per cent to $1.01. Revenue climbed 6.4 per cent to $21 billion. Procter & Gamble's operating margin widened from 21 per cent to 24 per cent. The stock has appreciated 25 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 2.8 per cent
Price-to-book ratio: 2.7 versus an industry average of 14
Three-year annualized profit growth: 11 per cent
5. Baxter International makes health care products, ranging from intravenous fluids to surgical sealants. Fourth-quarter net income increased 0.5 per cent to $572 million, or 94 cents. Revenue grew 11 per cent to $3.5 billion. Baxter's operating margin was unchanged at 23 per cent. Its stock has declined 0.3 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 2 per cent
Price-to-projected-earnings ratio: 12 versus an industry average of 18
Three-year annualized profit growth: 16 per cent
4. Abbott Laboratories sells medical supplies and diagnostic products. Fourth-quarter net income was unchanged at $1.5 billion, but earnings per share jumped 10 per cent to 98 cents. Revenue increased 11 per cent to $8.8 billion. Abbott's operating margin narrowed from 26 per cent to 24 per cent. Its stock has advanced 1.7 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 2.9 per cent
Price-to-projected-earnings ratio: 11 versus an industry average of 11
Three-year annualized profit growth: 50 per cent
3. Oracle sells business software and servers. Fiscal second-quarter net income rose 13 per cent to $1.5 billion, or 29 cents. Revenue increased 4.5 per cent to $5.9 billion. Oracle's operating margin widened from 36 per cent to 39 per cent. Its stock has gained 42 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 0.8 per cent
Price-to-book ratio: 4.3 versus an industry average of 4.7
Three-year annualized profit growth: 16 per cent
2. Colgate-Palmolive sells household products, including toothpaste and soap. Fourth-quarter profit increased 27 per cent to $631 million, or $1.21 a share, as revenue grew 11 per cent to $4.1 billion. Colgate-Palmolive's operating margin rose from 23 per cent to 25 per cent. Its stock has increased 32 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 2.6 per cent
Price-to-projected-earnings ratio: 15 versus an industry average of 15
Three-year annualized profit growth: 19 per cent
1. McDonald's sells hamburgers and soft-drinks through its franchises. Fourth-quarter net income increased 23 per cent to $1.2 billion, or $1.11. Revenue jumped 7.3 per cent to $6 billion. The company's operating margin expanded from 26 per cent to 28 per cent. Its stock has increased 15 per cent during the past year.
Financial strength score: 9.9 out of 10
Dividend yield: 3.4 per cent
Price-to-projected-earnings ratio: 13 versus an industry average of 35
Three-year annualized profit growth: 8.7 per cent