The Presidential Guessing Game
Ryan is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Do you know who will win the presidential election on November 6? How about the Scott Brown versus Elizabeth Warren race for Senate in Massachusetts? I have no idea. I can only base anything on reports, projections, and polls. Recent Washington Post polls have shown Romney pulling ahead with a 1% advantage; however, it is not the popular vote that puts one in office, as we saw 12 years ago with Al Gore, it is the electoral vote. According to the Washington Post, Obama is in the lead on the electoral side of things, but realistically both still have good chances of winning.
The only thing that can be said for sure about this election season is that it has been expensive. According to a recent report released by opensecret.org, the total cost of this election will reach $5.8 billion, up $0.4 billion from the 2008 elections, which were the most ever spent on elections.
Courtesy of opensecret.org
To put this number into perspective, this money could have hired nearly 140,000 public school teachers, could have bought nearly 8,000,000 households Christmas presents, could have been used to hire 140,000 people, and is equal to the market capitalization of Akamai Technologies. Instead of playing the presidential guessing game with your portfolio, lock some capital into these 3 rock-solid companies that will prosper regardless of the elephants or donkeys proving victorious.
Magellan Midstream Partners (NYSE: MMP)
This company possesses approximately 9,600 miles of pipelines and 50 terminals, and is valued at nearly $10 billion on the market. Both of the candidates for president have spoken about growing American energy capabilities and working towards energy independence, which highly benefits Magellan. Increased production of petroleum will lead to the need for more transportation, and more profits for Magellan. The company has solid year over year growth, 22.09% annualized for the past 3 years, and this should continue into the future. The huge upside to this company, however, is its dinosaur of a dividend. Just recently the company announced it would raise its quarterly dividend to $0.485 per share, up from $0.47. Annualized, the stock now yields 4.52%. Since going public in 2001, the company has continuously paid out dividends, and has never lowered its dividend payout. The company reasonably carries a 21.50 price to earnings ratio, and will prosper no matter who wins the upcoming elections.
Apple (NASDAQ: AAPL)
The fact that this stock is sitting at $600 right now is absurd. There has been a recent flurry of unveils and releases of new products, the most important being the iPhone, in addition to the iPad mini, a new iMac, a 13-inch MacBook Pro, and a new iPod touch. On Oct. 25 the company reported fourth quarter earnings per share of $8.67, revenue of $36.0 billion, and gross margins of 40.0%. iPhone shipments were 1.5 million above consensus, while iPad shipments were 3.3 million below the consensus, but should improve with the iPad mini. The company just recently started paying out a dividend, which annualized yields around 1.75%, and carries a price to earnings ratio of 13.68. This multiple is lower than the multiple McDonald’s or Procter & Gamble carries. Growth is still solid year over year, and the next quarter should be monstrous because of the holiday season. I don’t care if Romany or Obama wins, Apple is one of the strongest companies in the world, and you would have to be crazy to not scoop it up here at the $600 level.
Kimberly Clark Corporation (NYSE: KMB)
If you look sustainability up in the dictionary of publicly traded companies, you will see Kimberly Clark’s logo. The company is valued at $32.46 billion on the market and sells products in approximately 175 countries. Its portfolio of products includes Kleenex, Scott, Huggies, Pull-Ups, Kotex, and Depend. Year over year growth is not explosive, but is stable and in the single digits. The company possesses a decent 17.44 price to earnings multiple and an annualized 3.58% dividend, which has been grown at a steady pace since being set in place. The bottom line for this company is that is doesn’t matter who wins the elections, people are still going to get sick and need tissues, or have to use toilet paper.
The Foolish Bottom Line
These 3 companies have many things in common, they all pay out decently sized dividends, they all have solid and predictable growth trajectories and they all will prosper no matter who wins the elections.
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makinmoney2424 owns shares of Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple, Kimberly-Clark, and Magellan Midstream Partners, L.P.. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.