I have been working on finding a screen that will generate solid stock picks that will provide adequate portfolio growth, yet still provide some defense in a down market. So far, we have shown that a limited P/E ratio, dividends, and a debt ratio that is under control will help limit possible pitfalls.
Four stocks have passed the developing screen, and are worthy a look.
The Cooper Companies, Inc. (NYSE: COO)
A developer and manufacturer of healthcare products, Cooper Companies markets its products through CooperVision and CooperSurgical. The Vision division manufactures the Bioinfinity contact lenses, and CooperSurgical produces clinical products with a focus on the health of women.
As we see it, the P/E ratio of 20.5 and a dividend, while small, is start, makes it a possible buy if one sees that its Cooper’s debt is miniscule (D/E = 0.1).
Covidien (NYSE: COV)
Another developer and distributor of healthcare products, Covidien has a strong focus on bariatric procedures varicose veins. This Irish based company has an attractive P/E ratio of 17, and a dividend yield of 2.00%. While its debt ratio is 0.52, it is manageable, especially considering its strong margins.
Potash Corporation of Saskatchewan, Inc (NYSE: POT)
While the numbers look for Potash look strong (P/E = 12 and Yield = 4.5%), the agrichemical industry is going through a lot of upheaval, so one should approach this one with caution. Issues of concern include CF Industries (NYSE: CF) selling its Florida phosphate division to The Mosaic Company (NYSE: MOS). Additionally, issues abroad in Belarus have rocked prices for potash.
Telecom Argentina (NYSE: TEO)
A telecommunications provider for Argentina, TEO is ultra-cheap with a P/E of 8, and a healthy 4.57% dividend yield. What makes this company attractive is they a running the business without running up the credit; the debt ratio is 0.02.
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