Boring Blue Chips Continue to Outperform

We’re watching growth & income DOW stocks outperform the S&P 500 this year.  It may not be exciting, but it’s a no-brainer for people focused on beating the S&P, while still minimizing risk.  Here’s another old standard with strong enough earnings growth to make it onto the Goodfellow LLC Recommended List.

Whirlpool Corp. (WHR, $114.35) manufactures and markets household appliances throughout the world.  The appliances include all your standard washers, dryers, refrigerators, etc.; and smaller kitchen appliances as well.  Some of the many brands it produces include Whirlpool, Kenmore, Maytag, and KitchenAid.  Its fastest area of geographic growth is Latin America, which currently makes up about 27% of annual sales.

Revenues have been flat for several years, approximately $18 billion annually.

Wall Street projects Whirlpool’s earnings per share (EPS) to grow 35%, 16% and 17% in fiscal years 2013 through 2015.  (WHR operates on a December fiscal year.)

WHR’s price earnings ratio (PE) is 12.0 with a ten-year PE range of 4-21.  The dividend yield is 1.75%, and the  long-term debt ratio is 28.5%.

Standard & Poor’s Research (S&P) gives Whirlpool’s stock a Qualitative Risk Assessment of “Medium”.  “Our risk assessment reflects WHR’s leading market share across many brands, offset by intense industry rivalry and heightened competition from foreign companies. We view home appliances as a cyclical business, albeit less so than other large-ticket items like home furnishings or automobiles.”

We’ve been watching WHR stock for a while.  WHR has traded at $110 three times in the last six years.  The reason we’re recommending the stock today is that it appears immediately ready to break out of a trading pattern and begin reaching new highs.  We recommend that growth stock investors, growth & income investors, and value investors buy now.

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Happy investing!

Crista Huff

President

Goodfellow LLC