Avoid International Headaches With These Stocks
Bob is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Headlines from across the globe are rattling the markets again, a trend that seems to resurface every few months. This time, uncertainty regarding an election in Italy has market bulls on their heels. On Feb, 25, the Dow Jones Industrial Average fell 216 points and the S&P 500 lost 1.8% on concerns that an election gridlock would harm Italy’s ability to deal with its debt crisis. Worries surrounding Europe’s debt problems seem to shake the market’s confidence on a regular basis. If you’re sick and tired of having to keep up with international headlines, there is a way to escape. Here are a few highly profitable U.S.-based stocks that derive all of their revenues from the United States.
Altria (NYSE: MO) has a history that stretches back more than 180 years. Formerly the Philip Morris Companies, Altria slowly built a list of brands consisting of multiple products. Its tobacco offerings include Philip Morris USA, which holds the juggernaut Marlboro brand. Through its acquisition of UST Inc., Altria has smokeless tobacco offerings including the Skoal and Copenhagen brands. Altria also owns Ste. Michelle Wine Estates, John Middleton cigars, and a stake in brewing company SAB Miller. The stock trades for a modest price-to-earnings ratio of 16 and yields 5.2% at recent prices.
Retailer Walgreen (NYSE: WAG) operates drugstores across the United States. It provides consumer goods and services, pharmacy, and health and wellness services. Walgreen has been on quite a tear, as the stock has climbed more than 20% over the past year. In 2012, Walgreen provided investors with the 37th consecutive annual dividend increase. Furthermore, the dividend raise marked the largest increase in the company’s history. Walgreen has shoved cash back to investors. The stock has raised its shareholder distribution at a compound annual growth rate of 24% over the past five years. Walgreen is surely one of the most shareholder friendly companies in existence, and offers investors a solid dividend yield of 2.8% at recent prices.
Utility stocks such as Southern Company (NYSE: SO) provide electricity for customers based in the southeast United States. Investors can sit back and enjoy a 4.5% dividend yield without the fear of an unraveling European economy. Southern has demonstrated a clear pattern of rewarding its shareholders, since the company has raised its dividend for 11 straight years. Even more impressive, Southern has paid uninterrupted dividends to shareholders every quarter since 1948. Southern probably isn’t cheap at 16 times trailing twelve month earnings per share, but investors could certainly do worse than a reliable utility with a market-trouncing dividend yield.
The Foolish takeaway
The European debt crisis has reared its ugly head once again. Along with the stock market’s beating on Feb. 25, the Volatility Index soared more than 30% on the day. Seen as the market’s ‘fear gauge’, the VIX is a telling indication that the market is far from resting easy about what’s happening across the globe. However, you don’t need to lose sleep about the seemingly never-ending string of worries coming out of Europe. It’s certainly possible to insulate your portfolio against international headline risks. These three stocks generate all their sales within the United States, which certainly isn’t an economy experiencing runaway growth, but is at least measurably better off than the economies in Europe.
Robert Ciura owns shares of Altria Group. The Motley Fool recommends Southern Company. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!