Schwab Equity Ratings Highlight Ten Stocks to Watch in 2005
January 19 2005 - 3:24PM
PR Newswire (US)
Schwab Equity Ratings Highlight Ten Stocks to Watch in 2005 SAN
FRANCISCO, Jan. 19 /PRNewswire-FirstCall/ -- Schwab Equity
Ratings(R), Charles Schwab & Co.'s successful approach to stock
selection, have helped identify ten stocks investors should
consider as they review their portfolio for 2005. Greg Forsythe,
developer of Schwab's A, B, C, D, or F stock rating system, said
that the list is comprised of larger market cap stocks, which look
attractive after four straight years of small-cap outperformance.
"The new year is a natural time to clean out the cobwebs from your
stock portfolio," Forsythe said. "You want to eliminate
non-performing investments and replace them with others you think
will do better. We use Schwab Equity Ratings to sort through 3,000
stocks and assign grades that people find easy to use when
determining stocks to buy or sell." Out of approximately 160 A-
rated stocks, Forsythe identified ten in particular that investors
might want to consider when doing their annual portfolio review.
Schwab Equity Ratings' Ten Interesting Stocks, One from Each Sector
Forsythe screened for A-rated mid and large cap stocks representing
each of the market's ten broad economic sectors. They are: Becton
Dickinson (BDX) continues to grow steadily and generate more cash
than its capital requirements, enabling the firm to raise its
dividend and buy back shares. Duke Energy (DUK) has returned to its
roots and is producing strong results after getting caught up in
the energy trading market collapse a few years ago. Electronic Data
Systems (EDS) is recovering from its 2003 earnings collapse and has
reported earnings per share above pessimistic consensus forecasts
four straight quarters. Exxon Mobil (XOM) has steadily ridden the
wave of rising energy prices. Recent stock buy backs and insider
buying signal that management feels the stock is still undervalued.
MetLife (MET) continues to post strong operating results, yet its
valuation appears cheap, reflecting likely overblown fears of
rising interest rates and insurance industry litigation, the reason
for the "pertinent news" asterisk on the chart. Newell Rubbermaid
(NWL) has struggled for years to regain its growth status. Recent
improvements in free cash flow, earnings quality and a 3.4%
dividend are all good signs. PPG Industries (PPG) is prudently
employing its free cash flow strength to pay down debt, buy back
shares and increase its dividend (for the 33rd consecutive year!).
Textron (TXT) is generating strong free cash flow, growth and
earnings that consistently exceed analyst forecasts from its
diverse portfolio of industrial operations. UST (UST) is using its
excess cash flow to buy back shares and pay out a 4.4% dividend
yield, while recent insider buying helps allay fears about
near-term risks from ongoing tobacco industry litigation. Note
"pertinent news" asterisk on the chart. Verizon (VZ) offers
stability and fundamental strength, providing a relatively
conservative way to invest in the rapidly evolving
telecommunications sector. Ten Stocks to Watch for 2005 Schwab
Stock Market P/E Dividend 5Yr Equity Price Cap forecast Yield
Forecasted Company Sector Rating EPS EPS Growth Rate Becton Health
Care A $55.01 $13.5B 19.6 1.3% 12.4% Dickinson Duke Energy
Utilities A $25.40 $23.6B 18.6 4.3% 3.8% Electronic Data
Information A $22.10 $11.1B 86.8 0.9% 10.2% Systems Technology
Exxon Mobil Energy A $51.50 $329.5B 13.7 2.1% 6.8% MetLife
Financial A* $41.03 $30.5B 12.1 1.1% 11.2% Newell Consumer A $23.04
$6.3B 16.9 3.6% 9.4% Rubbermaid Discretionary PPG Industries
Materials A $66.21 $11.4B 16.8 2.7% 8.5% Textron Industrials A
$72.18 $9.9B 21.8 1.9% 12.5% UST Consumer A* $49.71 $8.2B 15.6 4.4%
7.3% Staples Verizon Telecom A $37.68 $102B 14.7 4.1% 6.1% As of
January 18, 2005 About Schwab Equity Ratings Schwab Equity Ratings
offer an objective, disciplined and quantitative evaluation of
approximately 3,000 U.S. equities, more than any other major
brokerage firm. Stocks are assigned grades of A, B, C, D, or F,
reflecting performance potential over the next 12 months. Schwab's
outlook is that "A" rated stocks, on average, will strongly
outperform and "F" rated stocks, on average, will strongly
underperform the equities market over the next 12 months.. The
ratings assess four broad categories: fundamentals, valuation,
momentum, and risk. They are updated each week to reflect new
financial data and other information. Individuals use Schwab Equity
Ratings to make decisions about stocks to buy and sell. Schwab
currently offers six mutual funds based on Schwab Equity Ratings
and publishes a composite stock list comprised of 30 highly rated
stocks across all sectors. For more information, go to
http://www.schwab.com/public/schwab/advice_research/schwab_equity_ratings
(On average, Schwab Equity Ratings' A-rated stocks outperformed the
Dow Jones Wilshire 5000 Composite Index in the 52-week period from
January 12, 2004 through January 10, 2005.(1) The average
performance of all stocks rated A on January 12 2004, through the
52 weeks up to January 10, 2005 was 18.56% compared to a return of
8.14% during that period for the Index. The average performance of
all stocks rated F on January 12 2004 through the 52 weeks to up to
January 10, 2005, was -0.11%. For more information on Schwab Equity
Ratings, including performance details, how performance was
calculated, comparison of performance to benchmarks and limitations
of model performance, visit http://www.schwab.com/serperformance.
About Charles Schwab The Charles Schwab Corporation (NYSE / Nasdaq:
SCH), through its operating subsidiaries, provides securities
brokerage and financial services to individual investors and the
independent investment advisors who work with them. With over 7
million individual investor accounts and more than $1 trillion in
client assets, The Charles Schwab Corporation is one of the
nation's largest financial services firms. Its subsidiary Charles
Schwab & Co., Inc. (member SIPC) provides a complete range of
investment services and products, including an extensive selection
of mutual funds; financial planning and investment advice;
retirement plans; referrals to independent fee-based investment
advisors; and custodial, operational and trading support for
independent fee-based investment advisors. Its subsidiary Charles
Schwab Bank (member FDIC) provides banking and mortgage services
and products. The corporation's other operating subsidiaries
include U.S. Trust Corporation (member FDIC) and CyberTrader(R),
Inc. (member SIPC) .These companies' Web sites can be reached at
http://www.schwab.com/, http://www.schwabbank.com/,
http://www.ustrust.com/, and http://www.cybertrader.com/.
[005-6584] Analyst Certification: Greg Forsythe certifies the views
expressed in these materials accurately reflect the analysts'
personal views about the subject securities and issuers and that no
part of the analysts' compensation was, is or will be related to
the specific recommendations or views in these materials. For
important research disclosures on the companies listed, please
write to Charles Schwab & Co., Inc., 101 Montgomery St.,
Corporate Public Relations, San Francisco, CA 94104. * Check
current news because a potentially significant event has been
announced for this A-rated stock. In any event, you should always
check news on a stock before placing a trade. (1) Performance of a
single stock or group of stocks within a Schwab Equity Ratings
model performance cohort can vary greatly from the performance of
that cohort. The performance figures discussed above represent past
performance and are not indicative of future performance. Investors
would not likely be able to achieve the same performance as that
discussed for various reasons explained in detail on schwab.com.
DATASOURCE: Charles Schwab CONTACT: Sondra Harris of Charles Schwab
Corporation, +1-415-636-3292, or Web site: http://www.schwab.com/
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