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Doc Eifrig: These stocks will generate profits for decades to come
Saturday, August 11, 2012

 Retirement Millionaire editor Dr. David "Doc" Eifrig recommends the safest, highest-quality stocks for his readers...
The foundation of his model portfolio is built on healthy companies that generate loads of cash and treat shareholders well by buying back stock and paying strong dividends. These are companies with long histories of consistent operations that should still be generating profits decades from now.
 For example, Doc loves U.S. drugstores... These companies, like CVS Caremark and Walgreens, have the tailwinds of one of the biggest trends in the market today – the aging of the Baby Boomers. As Doc wrote in his June 2011 issue...  
The fastest-growing segment in the U.S. is the Baby Boomer crowd, the generation born between 1945 and 1964. For them, health care becomes increasingly important... The growth rate of 65-year-olds in the population will explode in the next 20 years.
Companies that provide quality health-care goods and services at fair prices to this aging U.S. population should make a fortune, no matter what happens in Washington.
Older people use three to four times the amount of prescription drugs as folks under 50. And more than 30 million people will gain Medicare coverage by 2014. This means an increasing number of written prescriptions.
Right now, only 10% of Medicare dollars are spent on pharmaceuticals. If Washington starts looking for cost-effective ways to manage health, prescription drugs will be a quick and easy way to test its hypothesis. In many cases, the use of drugs can ward off diseases for many years. For example, doctors already know blood-pressure pills and diabetes medications prolong lives cheaply.
This demographic shift means big opportunities for companies delivering drugs. Pharmaceuticals could easily grow to 15%-16% of the Medicare pie this decade. And the over-the-counter (OTC) markets will grow along with it. If you're a one-stop shop for health care, you're bound to ride this wave.
 CVS Caremark is that kind of "one-stop shop." It employs 280,000 people nationwide. It's the No. 1 provider of prescriptions in the U.S. and the largest employer of pharmacists and nurse practitioners (advanced nurses who can write some prescriptions). And around 75% of the U.S. population lives within three miles of a CVS store.
The company also has a pharmacy benefits management business (PBM). A PBM is a third-party administrator of prescription drug programs. They leverage their huge network of drug users to negotiate lower prices for employers and governments.
CVS Caremark's third business is called "Maintenance Choice." It gives patients convenient access to inexpensive drugs. (CVS offers 90-day supplies of drugs at mail-order prices, which it can offer through the mail or in-store pick up.) 
 In addition to a strong business operation, CVS has a solid balance sheet and a safe (and growing) 1.4% dividend. The company also buys back stock – more than 4% of the market cap in each of the past two years.
 This week, CVS Caremark announced second-quarter profits rose to $966 million from $816 million a year earlier. Revenue increased 16.3% to $30.7 billion. The company also increased its forecast for full-year earnings to $3.32-$3.38 per share, up from a May forecast of $3.23-$3.33. And the company raised its quarterly dividend in 2012 to $0.163 from $0.125.
 CVS shares were trading for a little more than $45 (off from the all-time high of $48). Retirement Millionaire subscribers are up about 20% since the May 2011 recommendation. And Walgreens is up about 10% since Doc recommended it last November.
 Doc's Retirement Millionaire portfolio is currently loaded with high-quality companies like CVS Caremark, Wells Fargo, and Abbott Laboratories. But a Retirement Millionaire subscription provides even greater benefits than the individual stock picks... Doc teaches his readers how to invest and how to manage a portfolio. He stresses the importance of "asset allocation" – the balance of asset classes in your portfolio. This simple idea is probably one of the most important concepts for investors to grasp.
Diversifying your portfolio, never putting too much money in any one recommendation, and cutting your losses is the best formula for safely making money in the market.
 His newsletter is also loaded with money-saving tips, travel secrets, health tips, and retirement loopholes. All these ideas are archived for constant reference. And the money you'd save from just one of Doc's tips could more than pay for the subscription (which means you get the excellent investment education for free).
Doc actually tracks how much his readers could save using his tips... In the past 12 months, they've saved more than $2,200.
 We want all of our readers to try Retirement Millionaire. It's one of the most valuable newsletters we publish... And Doc is one of the most experienced analysts on our staff. (He's a medical doctor with an impressive Wall Street pedigree.) 
That's why a one-year subscription to Retirement Millionaire only costs $39 a year. And the offer is completely risk-free... If you don't like Retirement Millionaire after four months, we'll refund 100% of your money, no questions asked. To learn more about subscribing to Retirement Millionaire, click here.
Sean Goldsmith

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