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One Of The Most "Boring" Stocks On The Market Offers Growth And Income

 December 13, 2011 11:58 AM

Like many investors, you may favor stocks that pay a healthy dividend but can also shoot up nicely in value. In terms of performance over the long haul, these growth and income stocks are often comparable to (and sometimes even better than) the market. Yet, in many cases they're much less volatile because dividends help temper price fluctuations -- a feature that's more desirable than ever, since massive swings in the major market indexes are now so commonplace.

One growth and income stock I strongly suggest you consider has a dividend yield of 3.5%. Because the company has raised its dividend in 46 of the past 50 years, I expect the dividend to remain healthy going forward. (And with a track record of raising dividends like that, it wouldn't be long before you'd be earning a yield of 5%, 7% -- even higher, based on your original purchase price and how long you hold the stock.)

Another tempting feature of this stock is analysts see the per-share price climbing from roughly $49 now to $75-$95 -- or around 50%-95% higher -- within three to five years. This suggests the potential for yearly returns in the 8.5%-14.5% range. Not bad at all, and quite possibly better than what the market will deliver during that time.

The stock I'm talking about: Kellogg Co. (NYSE: K).

Surprised? I thought you might be. But certainly not because of Kellogg's yield, which has remained quite healthy at about 3%-3.5% for the past few years. I'm referring more to the stock's total return. This has averaged a mere 2.5% annually during the past five years -- not exactly something that would earn Kellogg a reputation as a growth stock.

As I said, though, analysts predict this is going to change, and I think their predictions are more than just hot air. I like the way Kellogg, the top domestic producer of breakfast cereals (with a one-third market share), has positioned itself to regain momentum.

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