These 3 Stocks Have A Medicinal Touch

Another hedge for uncertain times is the health care industry. The industry has been beaten down with the rest of the market . Many of these companies are trading at low p/e multiples well below their norm. Three that come to mind are Sanofi-Aventis(SNY), Pfizer(PFE), and Merck(MRK). All three
are trading at p/e's under 13 with debt/equity ratio's under .25 and all sport dividends around 5% or better with Pfizer having a 7.5 % yield. You also have some added support by big name value investors buying in. Warren Buffets Berkshire Hathaway has bought into SNY and Bruce Berkowitzs Fairholme Capital has about 10% of their fund invested. Plus all three have growing free cash flow.

5 Defensive Plays

Here are 5 stocks for uncertain times. Each company pays a dividend, has a PE ratio of 18 or less, a high return on equity, and debt/equity ratio of .52 or less. Four out of five companies have been in business for over 100 years.

P/E ROE Div% D/E ratio

Costco(COST) 18 14 1.2 0.25

Hormel(HRL) 14 16 2.3 0.21

Johnson&Johnson(JNJ) 13 26 3.3 0.30

Coca Cola(KO) 16 27 3.7 0.48

Proctor & Gamble(PG) 16 17 2.7 0.52

* prices as of 10/10/2008

Costco is a Big Box discounter that sells everything from, snack foods to home furnishings.
Hormel Foods sells meat products under various brand names such as SPAM, Dinty Moore, and Valley Fresh. Everyone knows Coke with its bright red cans and funny shaped bottles which serves up brands such as COKE, FANTA, and SPRITE. Proctor & Gamble is in the personal products industry and owns brand names such as Head & Shoulders, Cover Girl, and Gillette. While Johnson & Johnson has TYLENOL, BAND-AID, LISTERINE.


The author suggest further research before investing. The author does not hold positions in any of these companies except JNJ.

STOCKMANMARC