Nothing's business as usual. We know that. We have had a collapse of pretty much epic proportions because of both the coronavirus and the oil price war, both of which are specters that will wreak so much havoc that people feel compelled to sell as much as they can.
I get it. Scary times. We are afraid for our health and the health of our families. And we don't want to lose our job or our nest eggs. You can also see my commonsensical five-part plan that will, I believe, blunt the financial impact of the coronavirus, while we go about dealing with and defeating the virus itself, which I am confident we will do. There is simply no reason we have to have massive unemployment and a vicious recession because of something exogenous like this virus. We cannot let the good working people of this country lose their jobs and their savings, because of an imported disease that's not of our own making.
But this is, in the end, still, about "Mad Money," not mad science or mad Fed policy. And that means we have to be on the lookout for opportunities that are being created by this panic because, even today, panic never made anyone a dime.
How are we going to do this? How do we take advantage of the new bargains?
I think we have to fall back on what worked in the Great Recession. We examined what we called were Accidental High Yielders, meaning companies that pay good dividends that we are not worried about because the companies have good balance sheets and the stocks should never have been that low to being with. Hence the rubric accidental.
For us that means we do a screen of companies that yield 4% or better that have good businesses that will continue to function and function well in this environment. This is one of my favorite things to do because it is all clinical, unemotional and will give many of you what you most crave: fixed income while you wait for the stocks to recover. I am going to go in the order of what I like qualitatively, rather than just alphabetical order or height of yield.
First up, is United Parcel Service (UPS) . We all know the brown trucks. We know that the company's got the best brand name and offers fabulous service. But we also know that the stock is not doing well. Today we learned that Carol Tome, the retired CFO of Home Depot (HD) , has been named CEO of UPS. She replaced David Abney, who will stay on as executive chairman. Now this change brings on the most savvy financial mind of our generation. I think that Carol was integral into making Home Depot the undeniable powerhouse that it is. She also helped the company fend of Amazon (AMZN) , something that UPS most certainly needs some help doing. I know that UPS can pay its dividend which gives you a yield of 4.6% and given that she's been on the board she can figure out ways to keep it at that level and not sacrifice service or make the company less competitive. No matter what, Carol's fantastic. It's terrific to see her running such a complex organization because that's just what her brainpower is made for. Congratulations Carol for this much deserved albeit unexpected appointment.
Second, I'm going with AbbVie (ABBV) . These pharmaceutical companies aren't getting the respect they deserve. They have growth, good balance sheets, and shrewd managers like Richard Gonzales. Abbie is buying Allergan (AGN) -- just waiting for a final government check off -- and then Gonzales will get busy running the Allergan drugs, including botox, through the much bigger, worldwide sales force. I know, for a fact, as the spokesperson for the America Migraine Foundation that Allergan's new pill Ubrelvy (where do they come up with these names, it's worse than Mondelez) can stop a migraine in its tracks. A migraine's like an elephant that runs at you and hits you and then stomps on you all day until you go to sleep. This pill doesn't' stop the elephant from charging, but it does get it off your head. I like that. AbbVie yields 5.88% a terrific get.
Third is Verizon (VZ) . It's finally come down to where I feel strongly that it almost has to be bought. I just finished my Dow series and I suggested that you buy Verizon into today's maelstrom. Verizon's the premium provider, with a balance sheet that will allows the gigantic build out of 5G unabated and ahead of others. The lack of price sensitivity of your cellphone bills is extraordinary. You can't live without it. That's why I am salivating at the 4.8% yield. I know what you are thinking, how about AT&T (T) with a 6.55% yield? I like it, but it's not as rock solid at Verizon's yield and I think Verizon snaps right back when this virus runs its course.
Fourth, how about a bank? Hold your nose on this one, but Wells Fargo (WFC) has a new executive at the helm who is so smart, so honest, so clever and, yes, so funny, that I think the stock has to be bought here. Charlie Scharf, the new CEO, used to run Visa and he made Visa into the technological powerhouse that it became. I used to think Charlie was too intimidating to be the boss because of his no-nonsense beating. But, you know what, that's pretty much what the broken Wells Fargo needs. Why risk it? Because despite all of the bank's misdeeds, the customers still love it. The bank won't be able to be cleaned up very quickly. But the previous chairwoman, Elizabeth Duke, a lightning rod for the regulators quit this week allowing Charlie to put in his own team. He's so respected he will get whoever he calls. Why own it now if it isn't going to be turned around so fast? Because he's giving you a 6.79% yield, that's why.
Fifth? We need a utility.Tom Farrell runs Dominion Energy (D) . Dominion is a low cost power producer that also owns a liquified natural gas terminal in an era where many think that the natural gas export industry has had it, because of so much supply. Tom has told us over and over that these contracts he has are ironclad. I believe him. That's why it doesn't seem to me to be a stretch to go for the 5% yield.
Last, sixth, I want a tech, a tech that's levered to an unassailable trend: 5G. One of the best 5G plays is Qualcomm (QCOM) , which has a huge amount of intellectual property in every phone. The company used to be the equivalent of a law firm, being sued by customers and suing right back. That's all past, including the nasty dispute with Apple (AAPL) . To get this stock at about a 4% yield with such terrific growth prospects is too good to pass up.
I don't know when this selloff stops. We don't have a financial fiscal plan in place in Washington that I think can save many companies while we wait for the scourge to run its course.
But I think that UPS, AbbVie, Verizon, Wells Fargo, Dominion and Qualcomm, purchased together, give you a phenomenal yield with good growth and fine balance sheets. I like them so much that if they go down more, I want more of them. And more and more. Well just keep buying. These stocks get cheaper as they go lower. At this point that's all you can ask for from this unforgiving market.