Old School Value

You are here: Home » Featured » Fortune 40 Best Stocks to Retire on: Part 1

This is Part 1 of the Fortune 40 Best Stocks to Retire On list.

Part 1 | Part 2 | Part 3 | Part 4

Last year in June, Fortune listed 40 companies that it considered as the best stocks for any long term portfolio. These businesses were chosen as the best companies that you could own to retire on.

I must say I do like Fortune’s list of companies because it doesn’t just specify large caps or growth stocks. Instead, it includes large, mid and small caps with a mix of growth, bargain growth and deep value companies.

Although it’s getting close to a year since the list was released, let’s take a look. I’ll be briefly going through 10 companies at a time so as not to pile up your due diligence list.

40 Best Stocks to Retire On: No.1-10

1. Abbott Laboratories (ABT)
2. Coca-Cola Co (KO) – click the link for a KO business valuation report
3. Colgate-Palmolive Co (CL)
4. General Mills Inc (GIS)
5. Illinois Tool Works Inc (ITW)
6. Johnson & Johnson (JNJ)
7. Procter & Gamble Co (PG)
8. US Bancorp (USB)
9. Accenture Ltd (ACN)
10. Chubb Corp (CB)

Of the 10 listed, US Bancorp and Chubb were eliminated as my circle of competence does not extend to financial and insurance businesses.

By looking at the names of this group you wouldn’t expect to see much price discrepencies, but ITW and ACN seem to be the two best stock candidates. Buffett has always said it is far better to buy a great company at a fair price than a fair company at a great price, but for the time being I will disagree with master. I am certain that we can find great companies at great prices. I hope that the remaining list will prove just that.

Illinois Tool Works Inc (ITW)

Illinois Tool Works Inc. (ITW) is a multinational manufacturer of a range of industrial products and equipment. The Company has approximately 875 operations in 54 countries, which are aggregated and organized into seven segments: Industrial Packaging, Power Systems & Electronics, Transportation, Construction Products, Food Equipment, Polymers & Fluids, and All Other.

• Current Price: $31.71
• Discounted Cash Flow Fair Value: $62.03
• Graham Value: $81.73

Accenture Ltd (ACN)

Accenture Limited (Accenture) is a management consulting, technology services and outsourcing organization. The Company’s business is structured around five operating groups, which together comprise 17 industry groups serving clients. The operating groups of the Company are Communications & High Tech, Financial Services, Products, Public Service and Resources.

• Current Price: $26.69
• Discounted Cash Flow Fair Value: $35
• Graham Value: $61.09

Fair Value Calculations with Free Investment Tools

To calculate the fair value of stocks for yourself, you can download the free DCF investing spreadsheet, Ben Graham investment spreadsheet or get the best premium investing spreadsheet with many more features.

Fortune 40 Best Stocks to Retire on

Disclosure

No positions of any stocks mentioned at time of writing

————————————————————————————