I love the film “Wall Street.” It’s one of my all-time favorites, and one of the reasons why I’ve spent the past 35 years in the investment business.
The story revolves around the exploits of the rich but crooked corporate raider Gordon Gekko.
In my favorite scene in the movie, Gekko wakes his protege with an important mission.
“Money never sleeps, pal. Just made 800,000 in Hong Kong gold. It’s been wired to you. Play with it. You’ve done good, but you gotta keep doing good. I’ve showed you how the game works. Now school’s out.”
This memorable moment from the film rings true because money never sleeps.
And if you think about it for a second, you realize that it’s a key concept for growing your wealth.
You can only work so many hours in the day, and you can’t rely on your job alone for your entire financial wellbeing.
But there are companies you can invest in that are generating money all across the world, day and night, 365 days a year. Add on top of that a company that will pass on those profits to you through dividend payouts in the here and now, and that’s how you really can generate long-term wealth.
Today, I’m going to share three stocks on my “Money Never Sleeps” list for 2023.
Each will include TradeSmith’s Health Indicator to show if the company is currently considered a “buy,” our Volatility Quotient (VQ) to measure the risk associated with the investment, and the dividend yield as of this writing.
Money Never Sleeps Stock No. 1: AT&T Inc. (T)
- Health Indicator: Green Zone
- VQ: 23.54% (Medium Risk)
- Dividend Yield: 5.83%
I’m a fan of the concept of buying what you know, and one thing everyone knows is how often they text or make phone calls.
When was the last time you made a cell phone call, or more likely, sent a text?
Probably more times in the last 24 hours than you can remember.
The average American makes or takes about 12 cell phone calls each day, and also sends or receives an average of 41 text messages per day, according to Pew Research.
Now, multiply that by roughly 320 million Americans who have cell phones and you’re talking about almost 17 billion calls and texts every single day. And that adds up to big business for cellular communications companies.
And do you know who gets a big piece of the action on those billions of calls and texts per day? Ma Bell, that’s who.
Okay, I know what you’re thinking.
AT&T?
Boring.
But before you hang up on this line of thinking, understand that this is not your grandmother’s Ma Bell.
AT&T today is a leaner and meaner corporation. After years of restructuring and spinoffs, T is squarely focused on vital telecommunication services today.
And with America in transition to 5G networks nationwide, that means more profits in the company’s pockets. In 2021 alone, T generated over $114 billion in operating revenue from its vast telecommunications networks.
T earned a whopping $41.9 billion in operating cash flow in 2021. And it uses a good chunk of that cash to pay rich dividends to its shareholders. T boosted its dividend almost every year that it has been publicly traded — up until its recent restructuring and the spinoff of its Time Warner Media division, that is, when it reduced the payout.
And as a T shareholder, every single call or text message sent at any time of the day or night means you earn a little piece of the profit that generates those dividends. Your money never sleeps.
Money Never Sleeps Stock No. 2: Anheuser-Busch Inbev (BUD)
- Health Indicator: Green Zone
- VQ: 26.88% (Medium Risk)
- Dividend Yield: 0.68%
For me, there’s nothing like a cold Bud Light when I get home from a workout, but that’s not the only time people enjoy a beer.
All across the world, at any moment of the day, people are drinking Inbev products in bars, picking them up while getting their groceries, or buying them in a nearby liquor store.
In addition to Bud Light and Budweiser, InBev brews over 500 beers, such as:
- Beck’s
- Corona
- Hoegaarden
- Michelob Ultra
- Modelo
- Stella Artois
As of 2020, InBev dominated the global beer market, with Bud Light, Corona, and Michelob Ultra as the three top-selling beers.
However, the company is not hanging its hat on just its traditional beer lineup.
It’s expanding through other categories, like nonalcoholic beer and spritzers.
Source: InBev Q3 2022 Investor Presentation
BUD also has tremendous pricing power through its brands. If the cost of ingredients and supplies goes up, InBev can pass those on to consumers who are willing to pay a little more to get the drinks they know and love.
There are things people will trade down for — like buying a cheaper laundry detergent brand – but most folks aren’t going to give up their favorite alcoholic beverage.
Money Never Sleeps Stock No. 3: J.M. Smucker Co. (SJM)
- Health Indicator: Green Zone
- VQ: 18.09% (Medium Risk)
- Dividend Yield: 2.79%
J.M. Smucker Co. is ingrained into many families’ daily lives, with Mom and Dad brewing a pot of Folgers Coffee every morning, the kids packing PB&Js created from Smucker’s strawberry jelly and Jif peanut butter in their lunchboxes, and the family dog placing its head on your lap and pulling at your heartstrings until it gets its daily Milk-Bone treat.
And because of how ingrained these products are into people’s lives, they are constantly buying them across the world at all hours of the day.
Much like InBev, J.M. Smucker Co. has pricing power, which means it can raise prices without losing many customers because they know and love the company’s products.
You can see from the company’s presentation slide below just how big of a reach it has:
It’s also a company that was recently crowned a Dividend Aristocrat. If regular dividend stocks offer a feeling of security, Dividend Aristocrats offer that feeling on overdrive. To earn the title of “Dividend Aristocrat,” a company must:
- Be part of the S&P 500 — a symbol of prestige because investors use the S&P 500 as a benchmark for the health of the overall stock market.
- Pay and raise its dividend for 25 straight years — a sign of commitment from the company as well as financial health.
- Have a minimum market cap of $3 billion — a sign that a company has an established business with a long operating history.
- Have average daily trading volumes of at least $5 million — ensuring that there are people who would want to buy your shares if a time comes when you’d want to sell them.
Bottom Line: Even though stocks got off to a hot start this year, we’re still plagued by many of the same concerns as last year: a slowing economy, inflation that is cooling but is still high, and uncertainty as to what the Federal Reserve will do next.
All of those unknowns mean it’s even more important to earn income and have money in the here and now to protect yourself against whatever the market throws your way.
— Keith Kaplan
Source: TradeSmith