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Three Triple-Threat Stock Picks

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    Jeff Reeves of Marketwatch argues 'triple threat' stocks have good dividend and growth potential.

  • Duration 3:57
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My next guest says and picking blue chip stocks look for that triple threat.

-- -- the columnist at MarketWatch and he joins us now this latest investing strategy welcome Jack great see you again.

Good to be back I go ahead sum up your latest column for -- triple threat.

Well I -- -- in the March Madness right now I think god people think about basketball and you when you look at -- championship team decides he can find some -- -- -- plays and make a run in the tournament because say -- adopt all stoppers -- because again rained down -- -- I think for investors -- -- -- -- -- -- portfolio that jumps around each try to do all things well that are kind of look for stocks it did three things in particular you got.

A strong balance sheet -- good dividend -- growth potential momentum and shares and then you also have strong profit growth I think those three things -- that's like I tripled that stock.

Unidentified three of those companies that figuring you'd really good -- for -- about what's.

Lot again a lot of conjecture a lot of debate as to where we go from here so those things I just kind of -- -- you what would be the one thing to keep in mind.

Well -- -- you're completely right that's one of the reasons why I think you need to have a diversified investing strategy across these these kind of metrics.

And I think I personally find a lot of value in dividends I think he got a company that reliably has a revenue stream that they can share was shareholders instead of spending on.

You know boondoggles that never pay -- Hewlett-Packard and a bunch of buyouts haven't done anything for the company.

I'd rather have that money is a shareholder so I think that's very important to have could not only does -- give you cash.

They had -- against the downside -- prison companies doing right by us investors not spending its money irresponsible.

Our senior point a triple threat number one dividend Intel's.

Company give an example -- had a steady increase in dividend over the last couple of years here shares -- down a little bit today and what it doesn't make chips for the all popular iPhone and it might give it a bit of a dinosaur reputation is battle liability.

Well yeah let us some people did give it it's a dinosaur by the what -- -- to realize is that -- the company makes the iPhone ships.

Is a fab less semiconductor -- it's not foundry business it doesn't actually make images designs and Intel makes 16% of all the chips used in the world so.

That's actually the reliable revenue is revenue stream that provides for the dividend for that 3% dividend yield is because they -- so many -- regularly now you can say.

They're probably don't have the same upside potential as maybe some of these sexier design jobs but Intel is getting into it I mean they've had a Smart -- -- a launching in Europe.

That they've actually designed to did not it's got their components so they're trying is I think they have the good dividend so that's -- one with a 353%.

Dividend yield right -- Fifteen billion bucks on the ballot sheet.

They're outperformance is pretty impressive three years things happen -- it.

Yet and and you know that the stock prices gone up about 30% in the past five years 20% the last twelve months so they've outperformed -- to -- haven't -- For the market right definitely -- that I got in -- it doesn't have to get to Caterpillar McDonald's a Caterpillar you warned don't think it's cyclical.

And it lives and dies by the health of the housing market there's this cat -- weight down today actually.

And a McDonald's had a great 2011 best stock in the doubts they did -- a little -- year to date but to comment quickly on both of those.

We Saudi cat so actually -- I think is attracted he has got a good price to earnings ratio -- in the same boat it's -- he had a little -- twelve right now despite some impressive earnings growth over the last couple years.

-- Caterpillar was a big outperformer a couple of years ago.

But the reason I think it's got some growth potentially going forward is because it but it also has.

A mining business it's not necessarily just buying those back nosing graders each seat next to -- -- in America.

They they're they're big emerging market company they serve minors in Latin America and in China.

And the other thing that's -- really encouraging to me about Caterpillar's if you look at dividend it's only about one point 617 right now so it's not that impressive.

But -- payout ratios -- point 4%.

Historically as and 500 Sox -- around 50% of the profits back to shareholders so I think there's a dividend bump in the future where you've got a lot of good growth for the company I mean there's a lot of things to be excited.

All right Jeff Reeves will look for your columns and MarketWatch -- flat.

I just up next another.

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