Remember those standardized tests of middle school days? The testing companies would map out where you fell on the spectrum of all students in the country. If you were like me, you were left wondering who those dorks were in the 99th percentile.
Secretly, I always wanted to get one -- just one -- of my marks in that coveted 99th percentile. Alas, by eighth grade I had gotten close but never reached the promised land.
Where are YOU as an investor?
One of the great things about The Motley Fool's CAPS community is that it lets you know what percentile you rank in as an investor.
The system also helps you pick out the very best stocks the market has to offer. By aggregating the opinions of the Foolish community, and giving added weight to our All-Star investors (those with a rank of 80 or better), CAPS lets you know which stocks have earned a coveted five-star rating.
Though these ratings alone can't guarantee you'll end up in the 99th percentile of all investors, they're not a bad start, either. In an effort to help you earn your Foolish stripes, I went though our system and found the 10 most-rated stocks that have earned a five-star rating. Here they are, with the most-often-rated five-stars listed first.
|
Company
|
What They Do
|
Dividend Yield
|
P/E Ratio
|
| Johnson & Johnson |
Medical conglomerate |
3.6% |
15 |
| Altria (NYSE: MO ) |
Tobacco |
6.1% |
16 |
| Chesapeake Energy (NYSE: CHK ) |
Oil and natural gas |
1.1% |
21 |
| Procter & Gamble (NYSE: PG ) |
Consumer goods conglomerate |
3.3% |
16 |
| Berkshire Hathaway (NYSE: BRK-B ) |
Holding company for several divergent businesses |
0% |
14 |
| Transocean (NYSE: RIG ) |
Deepwater oil rigs |
5.4% |
NM |
| Coca-Cola |
Beverages |
2.7% |
13 |
| ConocoPhillips (NYSE: COP ) |
Oil and natural gas |
4.0% |
8 |
| Disney |
Entertainment conglomerate |
1.2% |
14 |
| Valero (NYSE: VLO ) |
Oil refining |
0.9% |
17 |
Source: Fool.com, Yahoo! Finance. NM = not meaningful because of negligible earnings.
A little energy for your portfolio
Foolish investors know that no matter what the hot product is in the tech sector, or which brand of clothing happens to be riding the favorable winds of the latest fad, people will always be in need of one thing: energy.
For those who believe that the price of oil and refined products like gasoline and heating oil will only head in one direction -- up! -- over the coming decades, oil refiner Valero and deepwater-rig maker Transocean provide excellent exposure to this thesis.
If, however, you believe that natural gas will play a bigger role in our energy infrastructure years from now, then Chesapeake and ConocoPhillips, which have launched a campaign to give natural gas a greater role in meeting U.S. energy needs, may deserve a spot in your portfolio.
Too many offerings to count
If energy's not your thing, there's still plenty to pick from. Our CAPS community has picked three conglomerate juggernauts as excellent five-star picks as well.
Johnson & Johnson has exposure to everything from Tylenol to advanced medical devices, while Procter & Gamble probably makes at least half of the products that are in your bathroom. An investment in Disney gets you a little bit of Mickey Mouse, a little bit of Desperate Housewives, and a spot on SportsCenter's Top Ten; and Berkshire Hathaway nets you a piece of excellent businesses so diverse that you'll own part of a massive insurance operation, furniture business, and candy store -- all in one.
A little bit of sin!
I might be pushing it a little bit to call Coca-Cola a "sin" stock, but let's face it: Sugar water simply isn't the best thing for your health. The same can obviously be said of cigarette maker Altria. These two companies profit both from their ubiquity and the repeat business their products inspire. Like it or not, those characteristics lead to lifelong customers, and that's a recipe for a great investment.
A few more ideas from our analysts
One of the reasons that I included the dividend yield that these companies offer is because the presence of a dividend has been shown to produce superior investment returns on a long-term investing basis. If you'd like more dividend ideas for your portfolio, I encourage you to get a copy of The Motley Fool's most requested special free report: "13 High-Yielding Stocks to Buy Today." Inside, you'll get information about 13 stocks that The Motley Fool's top analysts have hand-picked as superior investments for any portfolio. The report is yours today, absolutely free!
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