Dec 17, 2010|
Michael Brush checks in with his top stock picks. Michael likes Johnson & Johnson (JNJ) and Gordmans Stores (GMAN). He dislikes Barnes & Noble (BKS) and Borders (BGP)
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Good afternoon welcome back to lunch money very Armstrong with you here. On a Friday afternoon and we're gonna be talking today about stock investing. Specifically a -- talk to -- about some. Electric utility companies that have high dividend yields might wanna take a peek at some of these. In addition we've got our stock picks of the day coming up in just a moment. That'll be with Michael -- before we do that there we're gonna go to the phones talk to Paul all your first call today here on lunch money you don't. -- -- -- Like -- yup you're okay my question has. Interest rates place ought -- puts the people selling. Are you I don't adversely affects mortgage rates but. How to sit in in turn. Effect. Via savings and checking and savings that that I would available that work. No it isn't. Theoretically we should start to see interest rates on money market accounts CD rates and savings accounts increase. Slightly. Over the coming months we haven't seen it go up an awful lot. But what's happened is the ten year treasury went from about 2.3 percent to about 3.5. The two year treasury though has not moved nearly as much in the three month treasury and that's really what affects the rates that you see on savings accounts so. You won't see an increase in savings accounts probably until 2012. Where it's. Really noticeable you might see a slight increase. But it's gonna be 2012. Because you don't you hear about the Fed in what they do with interest rates the short term rates that's what's any impact your savings rates on the money market accounts in the banks. And the Fed has pretty much telegraphed that they have no intention of raising those rates until the last half of 2011. It's great that of course. Paul thanks very much for your call and your questions and that's we're gonna do for the remainder of the show I'd like to talk to you about your investment portfolio all clearly had some questions about savings rates. The other some questions about dividend paying stocks or mutual funds. Feel pretty give -- 6172666868. Is my phone number that's 6172666868. Michael brush Europe next on lunch money are you don't. Good -- a couple stocks you like for us. Here are investing like Warren Buffett today. -- structure which Johnson and Johnson and partly because where. It is position in order. The stock also. Sent to yield more switches so yeah. What do they need to Johnson Johnson -- six Ers are across pharmaceuticals. To consumer products. I don't like on. -- aren't without a -- Yeah pretty stable in terms of its stock prices while right it doesn't. Hold it had issues so that's what a little cheaper to keep having actually issues. -- -- -- -- -- out of this out of this and that so that's a lot to buy into. All right so Johnson & Johnson is the first one the symbol for that stock folks is. And. Guess that's like. Little smaller. Tell where it's not Third -- ever heard one so it's not. The good news not it's not -- -- -- -- -- Our colts like hard. Are these just showed. Months -- stock is up about it. Is -- two hours now but still like it. It's any sort of steer. It's where it's margin just to -- apple retail stuff court -- so. They. Bennett. All right now to stocks you don't like will go through those very quickly. Barnes & Noble and borders both in the same sector at both in the -- book business. On the 2003. Blockbuster. Has I similar rates -- no. Orders. In the streets. Armed and digital distribution of its shares. -- dinosaurs each. Yeah nobody wants the paper books anymore. Michael brush from up on Cox dot com thanks for joining us. Folks you can join us as well our phone number here at WRKO 6172666868. It's a Friday were talking about stocks and I wanted to talk about stocks for folks that had been out of the stock market. And they're thinking okay maybe the world does not coming to an end maybe I need to invest in stocks to get a little bit more return than what I'm getting on my. Savings account at the local banker when I'm getting on my certificate of deposit so I thought I'd start off with companies that are in the electric utility business. And will do is we'll talk about some of these companies -- -- the symbol fort and I give you the current dividend yield on these companies the first one on the list is a company called. Brookfield infrastructure. Partners. And you can buy this stock. The civil forward is let's CB IP is a symbol for the stock and it has a yield of six and a half percent. Think of these companies and stars on the list most of us there appear in the northeast were doing business with the utility company Nstar happens to be the one that I. Write my check to every month -- pretty stable businesses they don't fluctuate in terms of their sales volumes are very much -- their revenues very much. And their expenses are fixed and their profits are regulated typically by the attorney general -- the state regulatory authority that oversees the utility rates. So they're allowed to make a pretty healthy profit this one though you buy this stock and you're getting current tax qualified dividend yield. That's six and a half percent what I mean by tax qualified well. If you were an interest on your money market account at the bank you pay a short you pay ordinary income tax on and that can be as high as 35%. If you have stocks that are paying qualified dividends you'll pay 15% tax on it and Brookfield is one of those -- six and a half percent. Is their current dividend yield another one that you might look at -- not recommending that you run out by the stocks but consider them for your investment portfolio. Particularly. If you're sitting all in cash in you're saying yourself I'm getting killed. Mike cache is really going down in value because. By the time you pay taxes on the paltry amount of interest that you earned. And by the time you. Deal with in the inflation factors. You know it if you make 2% interest on your savings account that's pretty good you really only make in one and a half and then inflation's running at about 4% so really the value of your money is declining. Overtime because of inflation number one in taxes number two. Another stock to consider would be Empire District Electric Co. They have a dividend yield of six point 6% these are very high 6%. Dividends. First energy corporation. This is a five point 9% dividend. And then you've got a couple more here water trail corporation's six point one. Coast six point five. Progress Energy six point one and you -- -- holding six point seven these are dividend paying stocks that are in the electric utilities field. Net have steady streams of income that you could go out he could pick a -- today at a fairly low price -- tuck them away in your portfolio and live on a 6% dividend. Another one that may not be. As safe a sector but something to consider on the last would be Telecom. And when you think about Telecom we all have cellphones AT&T is a major provider of cell phone service particularly appear in the northeast -- really across the country. And that a bill that gets paid you know if you're on heart if your fallen on hard times you're gonna pay your telephone bill because you need that service and there in the big they're big in the cell -- business. AT&T. Civil forest he has a dividend yield of six point 8%. Six point 8% on AT&T. Neither one is century link eight point 4% dividend another one this is when you have to be cautious. Frontier communications thirteen nine point 9% I looked at Allen said G thirteen point 9% that sounds too good to be true. Well it is a look at their statements their income statement I don't think they can afford to pay that. Dividend of thirteen point 9% on a long term basis I don't think it's a sustainable dividend. And then the final and he might take a look at these wind stream. Corporation that's another one with a pretty high dividend we're talking about dividend paying stocks were talking about how you might. Successfully invest in the years 201112. And beyond if you have a question forming my phone number is 617. 2666868. Also. Please feel free to send me attacks my text number 68680. Will be back in a few minutes with more lunch money 6172666868. This is lunch money honey and 680. WRKO.