There is still much uncertainty about upcoming fiscal changes. One way to navigate these turbulent waters is to take a safer, long term approach. This includes companies in the middle of large cycles such as internet service providers and mobile services as well as strong companies with modest but consistently rising dividends.
I believe the mobile phone industry has multiple years of growth ahead of it. Stocks like Verizon (VZ) offer many subsidized phones on a lengthy contract that help to increase margins. It also offers a large, reliable 4G network that will be complete by the middle of next year. Verizon’s FiOS services continue to grow as well. Overall, Verizon is doing well, and reported their free cash flow for the first nine months this year is 50% higher year-over-year.
Slow and steady makes it easier to go the distance. Manufacturers of products that last forever are good examples of this. Clorox (CLX) will have its 100th anniversary next year, and has been increasing its dividend for 35 consecutive years. With a 5-year dividend growth rate of almost 14%, Clorox is a company that will let you sleep well at night.
The cliff is approaching, but there is no need to worry. In my opinion, Verizon and Clorox are good safe bets for the coming months that I think will allow you to rest easy.
The investments discussed are held in client accounts as of October 31. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Certain information contained in this presentation is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. The manager believes that such statements, information and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions