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Tuesday, August 19, 2008

* My Top 5 Stocks

Now that more than half the year is behind us, I thought it would be interesting to look at my top 5 performers through July 31, 2008. As dismal as the stock market has been this year, there are still some bright spots. One bright spot is that my top five performers have all achieved double-digit positive total returns since I owned them and positive returns in 2008. Here they are with comments:


#5 - McDonald's (MCD) + 4.4% Total 2008 Return
Last November, I bought this burger maker for $57 in spite of only paying one dividend per year. I was rewarded by MCD moving to quarterly dividends and a 2008 total return of 4.4% and 13.8% since my Oct/2007 initial purchase.

#4 - Johnson & Johnson (JNJ) + 6.4% Total 2008 Return
This is a company that I waited on a good entry point for a long time. In early February of this year a door opened and I snatched up some shares at $63. It has been well worth the wait with JNJ earning 6.4% this year and an annualized yield of 16.6% since my July/2007 purchase!

#3 - Health Care Property Investors Inc. (HCP) + 10.4%
Total 2008 Return
HCP is a hold-over from my yield chasing days. With a July 31, 2008 yield of 5.05%, it keeps the quarterly cash rolling in. However, with a 10.4% total return for 2008, it is not just another pretty dividend stock. Since March 2005, when I opened my position, it has earned me a 15.3% annualized return.

#2 - Canadian National Railway Company (CNI) + 11.5%
Total 2008 Return
On July 31, 2008 CNI had the lowest dividend yield of all my holdings. I had to swallow hard when I initiated a position in it last November at $47. Now, I am breathing easy with a 30.2% annualized return since my Nov/2007 initial purchase.

#1 - Wal-Mart (WMT) + 24.8%
Total 2008 Return
WMT cut its dividend growth rate and accelerated its share price appreciation. Earlier this year I put it "On The Shelf" since it no longer met meet my minimum criteria for additional purchases. On July 31, 2008, WMT's life-to-date annualized yield was 20.5% and was up nearly $10 from my July 2007 initial purchase.

Unfortunately, not all of my holdings performed this well. For the every top, there is a bottom. Thursday, we'll take a look at my bottom five holdings.

Disclosure: Long in JNJ, CNI, HCP, MCD and WMT.

(Photo: Steve Woods)

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