Top Stocks for President's Day

February 13, 2009

The stock market is closed on Monday for President's Day. In honor of the holiday, I'm giving you four top stocks for a President's Day Portfolio – one for each member of Mount Rushmore.

Let's start with Abraham Lincoln, who just celebrated his 200th birthday. What stock better represents the spirit of Honest Abe than Union Pacific (UNP)? The company is the nation's largest railroad. Not only does its vast network bind the union together, the company was also founded in 1862 during the Lincoln presidency.

Union Pacific a Top Stock for President's Day

Union Pacific is steeped in American history. In fact, the company drove in the famous golden spike in Promontory Point Utah in 1869 to complete the first-ever transcontinental railroad line.

I'm happy to say that UNP isn't a mere artifact of history; the business is doing very well today. For its fourth quarter, earnings came in at $1.23 a share, which beat Wall Street's consensus by eight cents a share. When I show people how to buy stocks, this is one of the key indicators I look for.

For 2009, I see Union Pacific earning at least $5 a share which means the stock is going for a great bargain. Union Pacific is a great buy.

Another Great Rail Stock Pick

For a Thomas Jefferson, I think Virginia-based Norfolk Southern (NSC) best suits the genius of Monticello. As you can tell, I like a lot of rail stocks. Norfolk Southern runs over 21,000 miles of track which is enough to travel from New York City to Melbourne, Australia–twice!

As more companies turn to railways as a fuel-efficient way to transport their products, demand for freight trains is soaring. Norfolk Southern's latest quarterly earnings rose 13.3% to $452 million, or $1.21 a share, which was three cents more than Wall Street's consensus. The company also raised its quarterly dividend by two cents, to 34 cents a share. That's a move I like. Norfolk Southern is a Strong Buy, up to $39 a share.

MasterCard a Top Stock Now

Mastercard (MA) is my top stock pick for Teddy Roosevelt. First, the company is based in T.R.'s home state of New York. I like Mastercard, because it will benefit from the recent stimulus plan.

Most importantly, for the fourth quarter, Mastercard's operating profits more than doubled. Since the earnings report came out last week, the shares have rallied over 15%, even as the market has pulled back. I think the man who charged up San Juan Hill would be proud. Mastercard is a great buy.

MCD Is a Great Stock Pick for President's Day

That leaves the Father of our Country, George Washington. I decided to go with one of the best representations of Americana, McDonald's (MCD). The golden arches are instantly recognizable to millions of consumers around the world. It's not just a brand name, McDonald's the symbol of American-style free enterprise.

I've been very impressed by the way the company has revamped itself over the past few years. The restaurant chain just announced that it's opening 175 stores in China. While many companies are slashing their dividends, MCD raised its dividend by 33%. Two weeks ago, the company reported earnings, and for the ninth straight time, it beat expectations.

Here's a fact that might make George Washington proud: The company is doing especially well in Great Britain. McDonald's is an outstanding buy.

There are your four stock picks for President's Day; Union Pacific (UNP), Norfolk Southern (NSC), Mastercard (MA) and McDonald's (MCD). The stock market will be closed on Monday so I hope you enjoy your three-day weekend.