(MONEY Magazine) – THIS MONTH: --Take these three drug stocks and wake up richer. --Time is running out for tobacco stocks. --A fast-moving colossus rewards shareholders.

The Dow Jones Industrial Average recently hit a high of 5894.74. Drat! Where are you going to find bargain blue chips that you don't have to worry about if prices keep behaving like this? Enter Stanley Nabi, who has found a few. He is the chief investment officer at New York City's Wood Struthers & Winthrop, which manages more than $5 billion for wealthy individuals. When he looks for bargains, Nabi, 66, likes to keep in mind the ultraconservative investment needs of a mythical little old lady whom he calls Aunt Sophie. "I think of her as a retired schoolteacher in her mid-seventies, who isn't satisfied earning 4.5% in a money-market account," he says. "She missed the market's 50% rise over the past five years and has come to me now asking, 'What stocks do I buy?'"

His answer is a portfolio of 30 equities that he believes will return at least 11% to 13% annually in the next five years--or slightly more than three times the anticipated rate of inflation--with a minimum of risk. Why three times? "Once to protect Aunt Sophie's purchasing power, once to give Uncle Sam his due and once to provide Sophie with an honest, real return," Nabi says. As for the minimized risk, Nabi reckons that if Standard & Poor's 500-stock index falls 15% over the next year--as MONEY's chief investment strategist Michael Sivy anticipates--the Aunt Sophie selection would likely decline only 5%, on average.

To find his auntie equities, Nabi screened a universe of 1,000 companies for financially sound multinationals with products or services that people use in good times and bad. That hurdle, he says, will help support the stocks' prices and profits even if the economy tips over into recession next year. Then he looked for outfits with reliable earnings growth, generally 9% to 17% annually in the past five years, and the potential to continue or even accelerate that growth in the next five years. But to make sure he wasn't overpaying, he eliminated any stock with a price/earnings ratio more than 6% above the S&P's 15, based on estimated 1997 earnings, or with dividend growth below 7% annually, the average growth rate for the S&P 500's payout.

MONEY asked Nabi for the five Aunt Sophie picks with the lowest risk and greatest return potential. These stocks, which also received two thumbs-up from the dozen other Wall Street analysts we consulted, all trade on the New York Stock Exchange and are profiled below in descending order of their potential returns.

--H.J. Heinz (ticker symbol: HNZ; recently traded at $33.75; 3.4% yield). This $9.1 billion Pittsburgh food conglomerate sells its flagship brand ketchup, Star-Kist tuna and more than 4,000 other products worldwide. Though the food industry is growing only about 3% annually, Heinz is pouring on profits through savvy acquisitions like its $725 million purchase of Quaker Oats Inc.'s pet-food operations in 1995. Now the company's $1 billion in pet-food sales worldwide has put it just behind the industry leader, Ralston Purina, in market share. Nabi sees Heinz, fueled by acquisitions, expanding its earnings an average of 11% annually during the next five years. Until investors wake up to Heinz's improving fortunes, says Tony Spare, a San Francisco money manager, "They're paid to wait with a dividend yield that isn't much less than a six-month certificate of deposit pays." Nabi expects Heinz shares to hit $40 within 18 months, for a 24% total return.

--Kimberly Clark (KMB; $87.25; 2.1%). Somewhere in your home you'll probably find something made by this $13.7 billion Dallas consumer-products giant--Kleenex tissues, Huggies disposable diapers or Scott toilet paper. Nabi praises Kimberly's 1995 merger with Scott Paper Co. because Scott's strong presence in Europe helped Kimberly nearly triple its European consumer- product sales in 1995 to $2.7 billion. Stephen Keane, an analyst at Robert W. Baird & Co. in Milwaukee, expects foreign sales to generate 45% of Kimberly's revenues within five to seven years, vs. 30% in 1995. Nabi says KMB, recently trading at 15.9 times estimated 1997 earnings, is undervalued when compared with most consumer-products companies, which have P/Es of 17 to 20. He sees the company expanding earnings at an average of 12% annually in the next five years and predicts the shares will rise to $104, for a 22% total return in the next 18 months.

--Republic New York (RNB; $69.75; 2.2%). Controlled by the secretive Lebanese financier Edmond Safra, Republic has $48.6 billion in assets and 95 branches in New York, Florida and California. "It's one of the most strongly capitalized banks in the country," Nabi says. Because it has not been aggressively promoting credit cards, he believes, Republic will be hurt less by the soaring personal bankruptcies that are beginning to cloud the outlook for its peers. (See In Your Interest on page 84.) Nabi says the stock is a bargain, recently trading at 8.9 times estimated 1997 earnings, vs. 11 to 12 for other banks. "It's one of the best values in bank stocks," agrees Merrill Lynch senior bank analyst Judah Kraushaar. Nabi sees earnings gaining 9% annually in the next five years and expects RNB's shares to reach $83 in the next 18 months, for a 22% total return.

--Amoco (AN; $70.25; 3.7%). While oil stocks have risen an average of 10.5% so far this year, shares of Amoco, the $31 billion Chicago energy giant, fell 2.4%. What gives? Investors are worried that profits in Amoco's chemical unit, which last year provided 41% of the company's operating income of $2.4 billion, are slowing down. But Fadel Gheit, an analyst at Fahnestock & Co. in New York City, who recently upgraded his rating on Amoco to a buy, believes those concerns are exaggerated. Amoco supplies nearly 40% of the world's purified terephthalic acid, or PTA, a raw material used to make polyester. PTA prices worldwide have fallen 40% to 50% over the past six months, owing in part to trade conflicts between the U.S. and China, a major polyester manufacturer. But Gheit believes that eventually economic sanity will prevail over politics. Nabi notes that Amoco is using its strong cash flow to increase its oil and gas exploration and production abroad. He thinks the company will increase annual earnings an average of 10% during the next five years, lifting shares to $81 within 18 months, for a 21% total return.

--General Dynamics (GD; $66.75; 2.5%). With $3 billion in sales, General Dynamics is a leading defense contractor, specializing in aircraft, submarines, destroyers and tanks. One of this Falls Church, Va. company's main attractions is $1 billion in surplus cash and practically no debt. "The company has the flexibility to pursue growth through acquisitions, as well as ample room for dividend increases," says Peter Aseritis, an analyst at CS First Boston in New York City. For instance, Aseritis believes gd might merge with or purchase Tenneco's $1.8 billion Newport News Shipbuilding unit after Tenneco spins Newport off as a public company. This acquisition would enable gd to add aircraft-carrier manufacturing to its roster and cut costs through consolidation, Aseritis says. The analyst expects gd to expand both profits and dividends at an average rate of about 10% annually during the next five years. Nabi, meanwhile, looks for GD shares at $77 within 18 months, for a 19% total return.