Fortune 40 Best Stocks to Retire on:Part 2

This is part 2 of the Fortune 40 Best Stocks to Retire on.

Part 1 | Part 2 | Part 3 | Part 4


We previously looked at the first 10 companies that made up the list in Fortune’s 40 best stocks to retire on. Here we look at the next 10.

40 Best Stocks to Retire On: No.11-20.

  1. Cisco Systems Inc (CSCO)
  2. McKesson Corp (MCK)
  3. 3M Co (MMM)
  4. Microsoft Corp (MSFT)
  5. Parker Hannifin Corp (PH)
  6. Walgreen Co (WAG)
  7. Applied Industrial Technologies Inc (AIT)
  8. Carlisle Companies Inc (CSL)
  9. Cascade Corp (CAE)
  10. National Presto Industries Inc (NPK)

These companies are all very well established in their respective industries. The four companies that I felt were substantially below their fair value were CSCO, MSFT, PH and CSL. MMM was also below its fair value but due to a bad year and declining margins and low FCF growth, I’ve left it out of the group.

All companies have only been based on price and historical numbers. Please make sure that you understand the business and its future roadmap to backup the quantitative fair values. These are not deep value or net net stocks where the downside is limited.

Cisco Systems Inc (CSCO)

This is a great company. Couldn’t find anything wrong with it in terms of numbers.

  • Stock price as of May 5: $19.63
  • Discounted Cash Flow Fair Value: $30.13
  • Graham Value: $37.21

Microsoft Corp (MSFT)

A company that everyone knows already. Great margins, profits and cash generator.

  • Stock price as of May 5: $19.79
  • Discounted Cash Flow Fair Value: $32.17
  • Graham Value: $43.50

Parker Hannifin Corp (PH)

Parker-Hannifin Corporation is a full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components.

PH was one of my earlier holdings that I bought a few months before the crash. I like the growth potential it has and the way it has been run. Already up 60% since the rally.

They have good FCF growth, CROIC and margins are increasing.

  • Stock price as of May 5: $46.59
  • Discounted Cash Flow Fair Value: $69.80
  • Graham Value: $102.91

Carlisle Companies Inc (CSL)

Although the FCF growth and CROIC for CSL is on the low side, the margins are consistent and has a good margin of safety which is important for any stock to be a worthy of holding in retirement.

Carlisle Companies Incorporated (Carlisle) is a holding company for Carlisle Corporation. Carlisle is a diversified manufacturing company, which manufacture and distributes a range of products. They operate in the construction materials, transportation products and applied technologies segment that includes the food service products.

  • Stock price as of May 5: $23.95
  • Discounted Cash Flow Fair Value: $35.27
  • Graham Value: $70

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 premium version with many more features.

The First 20 Companies from Fortune’s List

Fortune40-Best Stocks to Retire on-2



No positions at time of writing.

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