Two of the Best Stocks Money Can Buy

Blood in the Streets

(From Feb. 1, 2014)

Here’s a company that I really like that is down over 10% from its 2013 high and has everything a bargain-hunting retired person should be looking for.

Canadian National Railway (NYSE: CNI).

First of all, rails are virtual monopolies. And I love monopolies. Seven railroads dominate all of the United States, Canada and well into Mexico with almost no overlap in their service areas.

Canadian National is the most efficient – 15% more efficient than the best of the other six. It is the only one with access to three coasts – Pacific, Atlantic and the Gulf. It covers all of Canada, 75% of the U.S. and is into Mexico, as well.

It has raised its dividend 17 years in a row at a growth rate of 16%. And maybe most important to retired folks, its business is diversified over geographies and commodities. Also, 77% of its revenues are derived from six different areas:

1. Intermodal
2. Energy
3. Grain
4. Forest products
5. Metals and minerals
6. Coal

And this diversity is what will beat the one weakness all rails have that can affect retired folks… their cyclical natures. The more diversified their revenue sources the less they will fluctuate less when the inevitable slowdowns hit the different markets they serve.

It has an 11% growth factor for the next five years. It will benefit from the U.S. housing boom and the energy boom in North America. Its exposure to three coasts means it will participate in the exploding middle class in Asia, an improving European Union and the U.S.’s improving economy.

It Doesn’t Get Any Better Than This Stock

(From January 4, 2014)

And they don’t get any better than Wells Fargo (NYSE: WFC).

Here’s a bank that, despite the constant flow of lawsuits against big banks in 2013, has remained somewhat unscathed and business has flourished.

It reported:

• Record net income in the last quarter, up 13% year over year.
• Both its loan growth and deposits were up.
• Improving real estate pricing has allowed Wells Fargo to reduce its loan losses by $1.4 billion.
• Its stock is very reasonably valued at 13 times earnings.

There is still some bad news to come about big bank lawsuits in 2014, so this is somewhat of a contrarian play. But with a 2.6% dividend and good growth figures for the next five years, it is a solid pick in an essential business and perfect for almost any retirement portfolio.

Take a look at one of the best banks in the world, Wells Fargo.