Six Stocks for 2006

~ Happy New Year! ~

David Gardner and Motley Fool analyst Seth Jayson spoke on NPR about their six stock recommendations that they believe will beat the market in 2006. This program ran on December 23, 2005, and you can listen to it here.

Continuing on that theme, here are six stock picks that I believe have a good chance at beating the market in 2006. I will keep these picks in mind for my virtual million dollar portfolio when I begin trading on January 5th, 2006:

Pfizer Inc. (PFE) - Mentioned in the previous post, Pfizer took a beating last year, partly due to the Vioxx troubles associated with Merck. Pfizer's price/earnings ratio is still a little high at 21, but its dividend yield ratio is 3.80%. Pfizer is one of the Dogs of the Dow stocks of 2005.

Verizon Communications (VZ) - Verizon is another stock that appears on MSN Moneycentral's Dogs of the Dow list from 2005. Verizon is currently priced relatively cheap, with a price/earnings ratio of only 10.21. Its dividend yield ratio is 5.10%.

William Wrigley Jr. Co. (WWY) - This stock does have a higher price/earnings ratio than others on the list, coming in at 27.82. However, Wrigley's traditionally trades at a p/e of about 30, so this is a relatively cheaper price. Plus, Wrigley's higher price/earnings can be overlooked for the longer term investor, when compared to their astounding long range performance.

Allstate Corp. (ALL) - Allstate has a reasonable price/earnings ratio of 19.6. Their stock price was hit hard by the hurricane season last year, with the price dropping to 52 dollars per share in September and November. However, Allstate is in the business of insuring against these types of disasters. In fact, recently the company has announced premium price increases. This has provoked little fanfare from the public, which would seem to point out that Allstate is now spending publicity capital garnered from the hurricanes.

3M Company (MMM) - Also reasonably priced, with a price/earnings ratio of 19.2. In April of last year, 3M Company was trading at a value of 84 dollars per share. This dropped off to finally rest at 70 dollars per share in November. With the announcement of new CEO George Buckley and a debt/equity ratio of only 0.07, 3M Company should be a safe bet.

Bank of America Corporation (BAC) - Bank of America has a low price earnings ratio of 11.12. They just finished their acqusition of MBNA, which makes them "the nation's No. 1 card issuer when measured by balances." Their price/book ratio is only 1.84, and their debt/equity ratio is 0.99. Bank of America should also be buoyed by the likely stoppage of the Federal Reserve's increases in the short-term lending rates.

Though these are indeed all relatively attractive stocks at the moment, I will of course reevaluate based on changes in the market conditions when I begin trading with the virtual million dollar portfolio on January 5th.

~ Have a happy and a healthy new year,

and may only good things come to you! ~