The best strategy for keeping up with inflation is to focus on companies yielding 2% to 5%, while delivering steady growth in their payouts. It's the smart bet over the long haul, advises Benjamin Shepherd, editor of Survival of the Fittest.
These stocks tend to be larger, blue chip companies that also have strong pricing power in their respective markets, so cash flows increase even as inflation heats up.
As a result, they're able to steadily increase their dividend payouts at a rate that ideally exceeds that of inflation.
Those same companies are also likely to be generating capital gains precisely because they're able to produce reliable cash flow and profit growth.
Between capital gains and growing dividends, investors are able to live comfortably in inflationary periods with a minimum drawdown on their investment principal. Below are two companies that fit the bill.
Over the past five years, Kimberly Clark (KMB) has grown its dividend by better than 3% annually, while generating a total return of 64.7%, thanks to the addition of capital gains.
Best Life Sciences Stocks To Own Right Now: International Business Machines Corporation(IBM)
International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.
Advisors' Opinion:- [By Rex Crum]
Other gains came from IBM Corp. (IBM) , Yahoo Inc. (YHOO) , Intel Corp. (INTC) �and Microsoft Corp. (MSFT) .
- [By Rick Munarriz]
Briefly in the news
IBM (NYSE: IBM ) proved mortal on Thursday, missing Wall Street's profit expectations for the first time in ages. Outside of a quarter in 2007 when IBM merely matched analyst bottom-line estimates, IBM managed to keep its impressive streak of beats going until now. BTIG Research initiated coverage of Netflix (NASDAQ: NFLX ) with a Buy rating and a $250 price target. Some may argue that BTIG is late to the game, since the stock has already tripled from last year's low, but better late than never. Intel (NASDAQ: INTC ) didn't do itself any favors by missing Wall Street's profit projections. Rival Advanced Micro Devices (NYSE: AMD ) surpassed expectations, but it still recorded a loss. It was also surprising to hear Intel's CEO tease about lower prices. Folks won't be spending good money on tech if they see prices falling in the near future.
And now let's take a quick look at some of the other stories that shaped our week. - [By Eshna Basu]
Juniper is optimistic about the wide acceptance of the SDN technology. Hence, it is working closely with technology partners such as IBM (IBM), Check Point (CHKP), Red Hat (RHT) and Riverbed (RVBD) to make SDN deployments easy and fast.
Top Blue Chip Companies To Buy Right Now: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.
Advisors' Opinion:- [By David Hanson and Matt Koppenheffer]
In this video, Motley Fool financial analysts David Hanson and Matt Koppenheffer discuss three reasons American Express is well-positioned and a possibly better than Visa (NYSE: V ) or MasterCard (NYSE: MA ) �as�way to play the growth in plastic.�
- [By Jonas Elmerraji]
You don't have to be an expert technical analyst to figure out what's going on in shares of Visa (V) right now. The preeminent payment network is currently bouncing higher in a well-defined uptrend that's propelled shares since the start of 2013. This week, with shares testing that trendline support level for an eighth time, we're coming up on an ideal time to be a buyer.
But don't buy shares of Visa anticipating a move higher. Instead, wait for the bounce. Buying off a support bounce makes sense for two big reasons: it's the spot where shares have the furthest to move up before they hit resistance, and it's the spot where the risk is the least (because shares have the least room to move lower before you know you're wrong). And by actually waiting for the bounce to happen first, you're ensuring the Visa can actually still catch a bid along that line.
Remember, trendlines do eventually fail, and when this one does, you don't want to be holding the bag. We could very well get our bounce today in Visa. If you decide to buy, keep a tight stop in place.
- [By Travis Hoium]
One of the best competitive advantages a company can create is built using what's called a network effect. The more users a company has, the more users it attracts, which attracts more users and the cycle continues. Visa (NYSE: V ) has created one of the best network effects in the world with its massive payment processing system, building a lead over Mastercard (NYSE: MA ) and American Express (NYSE: AXP ) , who are the two other big players in the business.
- [By Rick Aristotle Munarriz]
Alamy Companies can make brilliant moves, but there are also times when things don't work out quite as planned. From an underwhelming iPhone event to Pandora's new CEO, here's a rundown of the week's best and worst moves in the business world. Apple (AAPL) -- Loser Shares of the consumer tech giant had rallied heading into Tuesday's iPhone event, but the love didn't last. The stock began to sell off while Apple was still presenting its updated smartphones. There were no smartwatches, no high-def smart TVs, and no magical unicorns offered up at the presentation. The market was also unimpressed to find that the cheaper iPhone that everyone was hoping would make inroads into Android's 80 percent global market share wound up being just $100 cheaper than the new iPhone 5s. Apple only updates its iPhones annually, so it was also a letdown to see the company once again fail to produce phones with screens larger than four inches. Yes, Apple is spicing up the shell colors across both new iPhone lines, but the actual screens are too small compared to the larger Android devices that many consumers are choosing these days. Pandora (P) -- Winner The leading music streaming service had been searching for a new CEO for months, and it finally found one. Brian McAndrews -- who at one time ran digital marketing powerhouse aQuantive before selling it to Microsoft (MSFT) in a $6 billion deal -- will take control of the leading media platform that serves up 1.35 billion hours a month to its more than 72 million active listeners. It's a smart hire. Pandora didn't need a big terrestrial radio guru. Pandora isn't about content programming. It already has the technology in place that serves up timely music recommendations and adapts to a listeners preferences. Pandora's major challenge remains to monetize its growing airplay, and that's where McAndrews is the perfect fit for a fast-growing company that's just starting to impress marketers. The Dow -- Loser The Dow Jones Industr
Top Blue Chip Companies To Buy Right Now: Chevron Corporation(CVX)
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.
Advisors' Opinion:- [By Jon C. Ogg]
Chevron Corp. (NYSE: CVX) CEO John Watson recently told a Houston audience that crude oil running $100 per barrel is becoming the new standard in the oil and gas industry — and that consumers will pay more than they used to. Merrill Lynch just recently upgraded shares of BP PLC (NYSE: BP) and Exxon Mobil Corp. (NYSE: XOM) with Buy ratings. They were targeting close to 20% expected total returns in their calls, when you include dividends. These two Buy ratings would almost certainly not be in place if they thought oil would go to $75 and stay there.
- [By Johanna Bennett]
Major oil companies declined with Exxon Mobil (XOM) down 0.6% to $93.68 and Chevron (CVX), off 0.6% to $122.02. �ConocoPhillips (COP) shares fell 0.37% to $72.66.
- [By Ben Levisohn]
Total’s strength comes as U.S oil majors have stalled today. Exxon Mobil (XOM) has ticked down 0.1% to $87.69 , Chevron (CVX) has fallen o.4% to $125.07 and�ConocoPhillips (COP) has dropped 0.3% to $70.35.
Top Blue Chip Companies To Buy Right Now: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By Dividends4Life]
Memberships and Peers: KMB is a member of the S&P 500, a Dividend Aristocrat, a member of the Broad Dividend Achievers��Index and a Dividend Champion. The company's peer group includes: The company's peer group includes: Procter & Gamble Co. (PG) with a 3.1% yield, Colgate-Palmolive Co. (CL) with a 2.3% yield, and Clorox Corporation (CLX) with a 3.4% yield.
- [By Dividend Growth Investor]
In a previous article, I outlined that it is getting more difficult to find quality dividend paying stocks to buy. Most of the usual suspects like Kimberly-Clark (KMB) or Colgate-Palmolive (CL) are very overvalued today, which prevents me from adding to my positions there. Other companies like Chevron (CVX) are attractively valued today, but unfortunately my portfolio is overweight in them. Currently I find the oil sector to be cheap and have some of the lowest P/E ratios in the market. However, I would hate to be concentrated in one sector which is exposed to the fluctuating prices in its commodity products.
Top Blue Chip Companies To Buy Right Now: Philip Morris International Inc(PM)
Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.
Advisors' Opinion:- [By Selena Maranjian]
Why Altria?
The company is what's left after international operations were spun off in the form of Philip Morris International (NYSE: PM ) in 2008. While Philip Morris is favored by many because of lower tobacco taxes and regulations in many parts of the world, as well as the fact that many economies are growing more rapidly than ours, Altria still manages the very valuable Marlboro brand domestically, where it recently held a commanding 43% market share.
Top Blue Chip Companies To Buy Right Now: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.
Advisors' Opinion:- [By Bill Maurer]
With four straight payments of $0.225 per quarter, Intel investors will be waiting to hear if the next payment will be higher. It is certainly possible that Intel could raise the dividend at the next quarterly report, or maybe even before then. My prediction would be a raise to either $0.24 or $0.25 a quarter, and there is the potential that they also announce an expanded buyback too. Intel has the highest dividend yield in terms of large cap tech names, when you think of companies like Apple (AAPL), Microsoft (MSFT), Cisco Systems (CSCO), etc.
- [By Quick Pen]
Strategies to maximize share Every wireless carrier is trying to get a greater share of this market. AT&T is promoting Apple�� (AAPL) devices heavily. Smaller rival T-Mobile (TMUS), which has been giving tough competition to AT&T in the past few quarters, is trying to make its offer more attractive by providing a chunk of data for free. It is also offering a gift card worth $100 to its customers if they buy both an iPhone and an iPad.
Top Blue Chip Companies To Buy Right Now: McDonald's Corporation(MCD)
McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.
Advisors' Opinion:- [By Ravagadus]
The breakfast wars are heating up nicely in the form of a three-way challenge between McDonald's (MCD), Yum Brands (YUM) Taco Bell and Starbucks (SBUX). The fight is on to lure unsuspecting customers from One Breakfast table to another.
- [By John Maxfield]
Adding to the Dow's woes are shares of General Electric (NYSE: GE ) and McDonald's (NYSE: MCD ) , which are down by 4% and 2%, respectively. While GE's earnings, announced earlier today, increased by 16% on a year-over-year basis and finished in line with analyst estimates, the company tempered forward guidance, thanks in large part to Europe.
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