TIAA-CREF Growth & Income
Small and large pick: Dividends
Not much has changed in Susan Kempler's strategy since she took the helm of TIAA-CREF's $3 billion Growth and Income Fund ( in 2005. She has always sought high-quality companies with rising earnings and cash flow, delivering 7.7% annualized returns over 10 years, vs. 6.4% for the S&P. )
Comcast is undergoing a transition that offers the growth Kempler likes. The cable giant's 51% stake in NBCUniversal, which it purchased in 2011, has brought a new source of revenue, which boomed 32% in the third quarter compared with the year-earlier quarter because of strong ad spending for the Olympics and political campaigns, and improving ratings for its once-moribund network lineup. Comcast will continue to up its stake until it owns 100% of NBCUniversal in 2017. Meanwhile its cable business, which accounts for 63% of revenue, has pared infrastructure spending, leaving cash for $6 billion worth of dividends, buybacks, and R&D. "The business isn't just collecting monthly cable bills anymore," says Kempler. "They're powered by [cable and Internet] technology that makes it better than its peers."
Beware of munis priced at bubble levels. They'll always pop in the end.