I'm guessing 2009> won't be a big year for Chinese milk. Also, don't count on a viewership bounce for either "Flip This House" and "Flip That House," television programs on A&E and TLC, respectively. And somehow I feel like Eliot Spitzer will have a quiet year.
Among stocks, though, a few of 2008's biggest flops look poised to pay off nicely in 2009. Some companies have lucrative products in the works. Some seem likely to prosper from competitors' pain. Some will reward investors just by being so ugly: Bottomed-out stock prices despite plenty of financial strength give them big, safe dividend yields.
Caterpillar (CAT) is a best-of-both-worlds stock. It has the heavy machine exposure to give it a profit surge once global construction picks up, the service- and parts-income and fat dividend to make money for shareholders in the meantime. I recommended the stock in a search for contrarian investments on Oct. 30. It's up 10% versus a 10% decline for the S&P 500 index. With a 3.9% dividend yield, it still looks cheap.
Just last week I suggested that bargain hunters have a look at Boeing (BA) . Among factors that punished the stock over the past year; a stalled travel industry, strapped airlines, production delays for the company's new jumbo jet and a late-year strike by machinists. Yet as I noted last week, Boeing now trades at its 1995 price. It will deliver 158 more planes this year than back then and has triple the sales and profits. And at the risk of being disappointed a sixth time after two years of postponements, Boeing's new Dreamliner is expected to make its maiden flight early next year.
General Electric (GE) seemed not quite punished enough at $19 in late October. Based on the company's mismatched business units, too-big-to-grow size and over-reliance on finance divisions to make money, I reckon it deserves what I think of as the "ugly price." That's the lowest value I'd generally assign to a financially strong company. It's equal to 25 cents on the dollar for assets the company owns free and clear, plus $10 for each $1 in yearly dividend payments. For GE, that works out to $15. Shares are just over $16 now.
Don't bet on an early 2009 bounce for Intel (INTC) . Sales of notebooks, the best-performing computer category in recent years, are expected to remain flat compared to 2008. Desktops and server sales are forecast to fall 10% to 15%. Netbooks -- small, minimally powered notebooks for surfers -- are hot, with sales expected to more than double next year. But those carry cheap chips, and so Intel's fortunes look dim for the next couple of quarters. Keep the stock in mind, though. Intel has a mountain of cash and a 3.9% dividend yield that would swell to 5% if the stock dropped to $11. And tech reviewers have gushed over the company's newest generation of chips for full-power machines.
Have a look if you like at some details on these and some other names in the table below.
||General Electric Co.||Conglomerates||$16.07||-56.65||8.50||7.72|
||Intel Corp.||Semiconductor-Broad Line||14.34||-46.21||12.92||3.91|
||Boeing Co.||Aerospace/Defense-Maj Dvd||41.12||-52.98||9.08||4.09|
||Caterpillar Inc.||Farm/Construction Machnry||41.78||-42.42||7.01||4.02|
||Northrop Grumman Corp.||Aerospace/Defense-Prd/Svc||43.15||-45.13||8.31||3.71|
||Harley-Davidson Inc.||Recreational Vehicles||15.83||-66.11||5.19||8.34|