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Sivy on Stocks

If there is any way to beat the market over the long run, it consists of following the strongest, most secure stocks and trying to scoop them up when they are measurably undervalued.

There are surprisingly few such stocks that you need to follow on an on-going basis -- we've come up 70, which you can track in the table below.

What are the defining characteristics of these great growth stocks? Size is certainly part of it, and almost all of the stocks on the core list have market capitalizations and total revenues that top $5 billion a year.

We also looked for companies with diverse product lines and dominant positions in their industries.

As for growth, we sought companies that are capable of returning a steady 11 percent to 12 percent a year through a combination of earnings gains and yield.

For more on how we picked the stocks and guidance on when to buy, click here for my feature from the December issue of Money magazine.

In addition, I'll be regularly revisiting these stocks every Monday and Thursday in the Sivy on Stocks column on CNN/Money.

Last updated Mon May 17,2004 16:02
Company
(Ticker
symbol)
Current
share
price
52-wk
high
52-wk
low
Proj.
P/E
Proj.
5-year
growth
PEG
ratio
Comments
Time Warner (TWX) $16.27 $19.30 $13.42 27 12.9% 2.1 Diverse collection of media assets still depressed by merger with AOL
Applied Materials (AMAT) $18.54 $25.94 $13.49 23 20.0% 1.2 World's dominant producer of computer chipmaking equipment
Limited Brands (LTD) $19.27 $21.65 $13.00 14 13.3% 1.1 Retailer owns chains such as Victoria's Secret and Bath & Body Works
Cisco Systems (CSCO) $20.95 $29.39 $15.46 28 15.0% 1.9 Leading maker of routers for the Internet is posting very strong sales
Disney (DIS) $22.80 $28.41 $17.45 23 15.0% 1.6 Awaiting advertising recovery at ABC and upturn at theme parks
MBNA (KRB) $23.44 $29.68 $18.61 11 13.3% 0.8 Leading issuer of credit cards and a beneficiary of consumer spending
Staples (SPLS) $24.52 $27.87 $17.87 18 16.8% 1.1 Office-supplies retailer tracks the level of general business activity
Texas Instruments (TXN) $24.93 $33.98 $17.21 23 20.0% 1.2 Top maker of digital signal processors used in communications
Microsoft (MSFT) $25.59 $30.00 $23.59 20 10.0% 2.0 Still the premier software company for PCs, with $50 billion in cash
Intel (INTC) $26.93 $34.60 $18.51 22 15.0% 1.5 Dominates production of microprocessors, with new chips on the way
Alcoa (AA) $28.68 $39.44 $21.83 14 13.6% 1.1 Biggest U.S. aluminum producer, with growth-stock earnings potential
InterActiveCorp (IACI) $28.86 $42.88 $27.46 31 24.1% 1.3 Barry Diller's extraordinary collection of Internet businesses that turn in consistent profits
General Electric (GE) $29.93 $34.57 $26.90 19 10.0% 1.9 Former stellar conglomerate now trading at very low price
Baxter International (BAX) $31.71 $34.70 $22.15 17 11.0% 1.6 Niche medical businesses—drug delivery, blood collection and dialysis
Home Depot (HD) $33.36 $37.89 $27.85 15 12.5% 1.3 Do-it-yourselfers encouraged by strong housing sales and refinancings
Walgreen (WAG) $33.48 $37.42 $28.80 25 15.0% 1.7 Leading drugstore chain posting exceptional gains in same-store sales
Dell (DELL) $34.20 $37.18 $29.23 27 15.0% 1.8 Low-cost PC maker diversifying into other areas of electronics
J.P. Morgan Chase (JPM) $35.22 $43.84 $25.26 10 10.0% 1.1 Second-largest U.S. bank is nine months into turnaround
Pfizer (PFE) $35.43 $38.89 $29.43 16 13.5% 1.2 Largest drugmaker with enormously powerful R&D capabilities
Viacom B (VIA.B) $37.66 $49.75 $35.62 N/A N/A% N/A Entertainment giant with strong franchises such as VH1 and MTV
Wyeth (WYE) $37.87 $49.95 $36.62 14 10.0% 1.4 Strong pharmaceutical pipeline still eclipsed by liabilities from diet drugs
Sysco (SYY) $37.89 $41.27 $28.54 27 15.0% 1.8 Largest U.S. distributor of food to restaurants and institutions
Washington Mutual (WM) $38.84 $46.85 $36.83 9 11.0% 0.8 Rapidly expanding Seattle-based lender, trading at a bargain P/E
Aflac (AFL) $39.16 $42.60 $29.83 17 15.0% 1.1 Life insurer suffering from recession-induced sluggishness in sales
Clear Channel Comm (CCU) $39.22 $47.76 $36.36 27 18.0% 1.5 Leading radio-station operator awaits advertising upturn
Boston Scientific (BSX) $39.51 $46.10 $23.51 22 20.0% 1.1 Maker of less-invasive medical devices for heart and digestive tract
Abbott Laboratories (ABT) $41.03 $47.25 $37.65 17 12.0% 1.5 Diverse health-care products and a promising pipeline of new drugs
DuPont (DD) $41.13 $46.25 $38.60 17 10.0% 1.8 Largest U.S. chemical company offering above-average dividend yield
First Data (FDC) $41.73 $46.80 $33.26 19 15.0% 1.3 Provider of services for money-transfer and credit-card transactions
Target (TGT) $42.41 $46.81 $32.56 18 15.0% 1.2 The upscale discounter's sales are running a bit below expectations
Boeing (BA) $42.70 $45.10 $28.55 19 10.0% 1.9 Largest U.S. maker of commercial airplanes is awaiting industry upturn
ExxonMobil (XOM) $43.08 $44.24 $34.90 15 9.0% 1.8 International integrated oil giant is key hedge against inflation
Citigroup (C) $44.93 $52.88 $38.09 11 12.0% 0.9 Largest and best-diversified U.S. financial services company
Tribune (TRB) $46.53 $53.00 $44.28 19 12.0% 1.7 Newspaper publisher is a nearly pure play on an upturn in advertising
American Express (AXP) $48.55 $54.99 $39.15 18 13.0% 1.4 Record billings and membership growth hinge on consumer spending
Lowe's (LOW) $49.75 $60.42 $38.20 18 17.5% 1.1 Smaller, cheaper rival of Home Depot looks to state of housing market
Coca-Cola (KO) $49.83 $53.50 $42.28 23 10.0% 2.3 One of the world's most recognized brands is still expanding globally
Best Buy (BBY) $49.83 $62.70 $33.81 17 15.0% 1.2 Consumer-electronics retailer anticipates a cheery holiday season
Anheuser-Busch (BUD) $51.68 $54.10 $48.51 18 11.0% 1.7 World's largest brewer produces half of the beer consumed in the U.S.
Johnson Controls (JCI) $52.00 $62.32 $39.91 12 13.5% 0.9 Control systems and auto parts largely reflect state of auto business
PepsiCo (PEP) $53.50 $55.48 $42.38 23 11.0% 2.1 Pepsi, snack foods and a lower valuation than Coca-Cola carries
Merrill Lynch (MER) $54.30 $64.89 $40.17 11 12.0% 1.0 After three years of job cuts, leading full-service firm is hiring brokers
Harley-Davidson (HDI) $54.63 $59.86 $38.06 19 15.5% 1.2 Leading U.S. maker of motorcycles with fantastically loyal customers
Wal-Mart Stores (WMT) $54.70 $61.31 $50.50 23 14.0% 1.6 World's largest retailer enjoying surprisingly strong sales gains
Johnson & Johnson (JNJ) $54.72 $56.39 $48.05 18 13.0% 1.4 Best-diversified health-care company with superbly consistent track record
Anadarko Petroleum (APC) $55.40 $57.03 $40.27 10 9.0% 1.2 Leading exploration and production company for natural gas
Colgate-Palmolive (CL) $56.17 $60.99 $48.56 21 11.0% 1.9 Maker of toothpaste, soap and laundry detergent appears undervalued
Amgen (AMGN) $56.39 $72.37 $55.80 23 21.0% 1.1 Former biotech diversifying beyond two blockbuster products
Union Pacific (UNP) $56.59 $69.56 $55.81 13 10.0% 1.4 Largest U.S. railroad, tied to freight traffic and trading, at a bargain P/E
Schlumberger (SLB) $57.20 $66.75 $44.50 28 15.0% 1.9 Oil service company especially sensitive to new oil exploration
Genentech (DNA) $60.04 $68.25 $24.50 38 25.0% 1.5 Original biotech company now boasts 11 successful products
UnitedHealth Group (UNH) $62.49 $68.50 $46.85 16 17.0% 1.0 Health insurer's acquisition of Mid-Atlantic allows for cost cutting
Nike B (NKE) $65.90 $78.56 $49.60 18 13.4% 1.4 World's largest footwear maker feels the swoosh of recovery
American Intl. Group (AIG) $69.43 $77.36 $54.20 15 15.0% 1.0 World's largest insurer is benefiting from a surge in premium rates
FedEx (FDX) $70.44 $78.05 $59.01 20 15.0% 1.4 Overnight shipper by air and ground tracks overall business activity
Fortune Brands (FO) $72.39 $80.50 $48.34 16 12.0% 1.3 Superb collection of consumer brands from golf balls to bourbon
Lilly (LLY) $72.76 $76.95 $56.51 25 14.0% 1.8 Top drugmaker is ready to launch several promising new products
ConocoPhillips (COP) $73.45 $75.56 $51.29 10 8.0% 1.3 Cheaper alternative to ExxonMobil as a hedge against inflation
Omnicom Group (OMC) $78.61 $88.82 $63.42 20 12.5% 1.6 World's largest ad company posts earnings gains on better ad market
Aetna (AET) $79.29 $95.09 $52.60 11 15.0% 0.8 Health insurer recovering from business lost because of corporate layoffs
Bank of America (BAC) $79.81 $84.90 $72.04 10 10.0% 1.1 Acquisition of FleetBoston helps consumer business, and stock is cheap
United Technologies (UTX) $82.04 $97.84 $64.93 15 10.0% 1.6 Conglomerate looking for upturn in its aerospace markets
3M (MMM) $82.94 $88.70 $61.25 22 12.0% 1.9 The maker of Scotch tape is seeing sales gains for many products
Illinois Tool Works (ITW) $84.59 $89.40 $60.94 19 14.0% 1.4 Maker of fasteners and construction items benefiting from recovery
IBM (IBM) $85.35 $100.43 $78.73 17 10.0% 1.7 Diverse computer giant looks for upturn in corporate IT spending
Gannett (GCI) $86.27 $91.38 $73.54 17 10.0% 1.7 Publisher of USA Today and 100 other newspapers tracks advertising
Hershey Foods (HSY) $88.95 $90.37 $67.04 22 10.0% 2.2 Brand extensions and cost cutting wring higher profits from chocolate
General Dynamics (GD) $94.37 $97.00 $62.28 16 12.0% 1.4 Diversified defense company making aircraft, ships and subs
Northrop Grumman (NOC) $98.83 $105.16 $82.92 16 10.0% 1.7 Maker of stealth bomber expects visible earnings gains in 2004
Procter & Gamble (PG) $106.21 $108.85 $86.51 22 11.0% 2.1 Superb collection of widely recognized consumer brands
Projected P/E based on earnings estimates for this fiscal year. Growth based on earnings projections for the next five years.
Source: Thomson/First Call



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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.