We own Lowe’s, which is the second largest home improvement chain. We find it cheap, as it has a PEG ratio of 1, which means you do not have to overpay for growth potential. Lowe’s has 1,710 stores compared to Home Depot’s (NYSE: HD) near 2,200. The company has a 1.97% dividend yield and a strong balance sheet. It has lost some momentum to Home Depot recently. However, we feel the company has a better growth profile. We think Lowe’s is a good company to own with the current economic conditions. Homeowners are looking to maintain their homes. We are beginning to see big-ticket items like kitchen cabinets start to move for do-it-yourself renovations. We also feel the stores offer a better product mix and cater to a wider market.
We recently sold Medtronic for several reasons. The medical technology company researches, designs, manufactures and sells device-based medical therapies. However, the company has had several major recalls, and they do not appear to have any pricing power. They have lowered their margins, sales figures and long-term guidance. The company has always chased the market leaders in bringing products to the market place. We would suggest selling Medtronic if it is part of your portfolio.
We own French energy giant Total in our income portfolios as it pays a 5% dividend. The company does business in Iran, where U.S. firms do not, and they have a presence in Africa. The company is slow to replace their reserves, but it is solid financially with $17 billion in cash. We definitely recommend owning Total for income purposes.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
