Pfizer: A Defensive Play?

This pharmaceutical giant\'s stock has actually fallen since the 2000-02 bear market. Investors may well ask whether it has further to fall or is bound, eventually, to turn around.

The stock market\'s sharp advance on March 6 gave shaken investors some respite from the daily pounding they\'d taken over the past week. But the rally doesn\'t mean that the mini-correction is over. If you\'re worried that there is still more pain to come, it may be time to play defense. In that vein, it\'s worth paying attention to George Putnam, editor of The Turnaround Letter. The newsletter, which specializes in undervalued, out-of-favor securities, has served its subscribers well. Over the past 15 years through January 31, according to the Hulbert Financial Digest, its picks returned 17% annualized, making it the second-best performer among the letters tracked by Hulbert.

Lately, Putnam has been enamored with stocks that have lagged during the bull market. These stocks, he wrote in his March letter, "might perform relatively well if the market were to head down for a while.\"

Putnam screened for companies in Standard & Poor\'s 500-stock index that have actually declined since the horrific bear market ended in October 2002. He whittled that list down to stocks with dividend yields of 2% or more, based on the idea that healthy yields provide some downside protection during a market plunge.

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Staff Writer, Kiplinger's Personal Finance