Pick: Colgate-Palmolive (CL)
"Disciplined" is the best word to describe Rob McIver -- and the companies he puts money in. The co-manager of the $4 billion Jensen Quality Growth Fund (JENSX) considers only corporations that have produced a 15% return on equity every year for a decade and have a market cap of at least $1 billion. The result: a universe of only about 170 candidates from which to choose. The method has succeeded -- 6.9% annual returns since 1997, compared with the S&P's 5.6% -- and today it points to Colgate-Palmolive. McIver expects double-digit annual earnings growth at the global brands titan, which now garners 80% of its sales from overseas. McIver doesn't focus on stock price, and indeed, Colgate isn't cheap. But it has rock-steady cash flow and 23% operating margins (vs. 14% for its competitors), according to Morningstar, as well as a 2.6% dividend yield and a share buyback program that has bolstered the stock. "With this idea of all-weather business models and consistency during inconsistent times, Colgate fits," says McIver. "It has been in business for 200 years, made an awful lot of money, and it's growing."
--R.D.
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