Kids Portfolio

3M Company (MMM): A highly diversified manufacturer of a broad range of products for the home, industry, and office, 3M sells more than 50,000 items in over 200 countries. One third of annual revenues come from products introduced in the last several years. The company has increased its dividend for 48 consecutive years. The current payout of $1.92 per share exceeds the $1.87 per share earned in 1998. The company earned $4.49 per share in 2006, up from $4.12 in 2005, while revenue totaled $22.9 billion and cash from operations exceeded $3.8 billion, prompting the company to launch a $7 billion repurchase program, its largest ever. Consensus estimates call for 3M to earn about $4.95 per share in 2007 and $5.48 in 2008.

Coca-Cola Co. (The) (KO): The world's largest beverage company and distributor of fruit juices, its brands include Coca-Cola, Sprite, Fanta, Tab, Minute Maid, Evian, Five Alive, and Hi-C. It also owns 36% of Coca-Cola Enterprises ($19 billion in annual sales) which bottles and distributes its products in 48 states, Canada, and several European countries. In all, Coke’s products are sold in more than 200 countries, and KO achieves about three-quarters of its profits from abroad. The company earned $2.37 per share last year, compared with $2.17 in 2005, and is expected to earn about $2.63 and $2.92 per share, respectively, in 2007 and 2008. In February, the board of directors approved the 45th consecutive annual dividend increase, boosting the quarterly payout 10%, from 31¢ to 34¢ per share. Berkshire Hathaway (controlled by Warren Buffett) owns 8.6% of the 2.31 billion outstanding shares.

Johnson & Johnson (JNJ): With over $60 billion in revenues, JNJ is one of the world’s largest and most diversified health-care and consumer products companies. The firm develops, manufactures, and markets products in three primary lines of business: Pharmaceuticals (41% of sales), Medical Devices and Diagnostics (35%), and Consumer Products, including Pfizer Consumer Health (24%). JNJ derived 47% of its business in 2007 from international sales. The company has strong cash flow and a $10 billion share repurchase program, as well as a major corporate restructuring in progress. Consumer Products produces Band-Aids, Tylenol, Mylanta, baby care products, etc. Pharmaceuticals has over 90 drug products marketed worldwide. Medical Devices consists of a variety of high-tech medical devices such as Ethicon sutures, DePuy orthopedic products, and Cordis coronary intervention products.

Kimberly-Clark Corp. (KMB): A leading producer of paper-based personal-care products, Kimberly-Clark’s brand names include Kleenex, Kotex, Huggies, New Freedom, Delsey, Hi-Dri, Scott, Cottonelle, and Viva. The company, which markets its products to businesses as well as in retail stores, has about $17 billion in annual revenues and earned $3.90 per share in 2006, up from $3.78 a year earlier, and is expected to earn about $4.26 per share in 2007 and $4.61 in 2008. It has increased its dividend annually for the last 35 years, and currently pays $2.12 per share annually. Barclays Global owns about 6.6% of the 456.1 million shares, which is down from the 563.4 million outstanding in 1996, thanks to ongoing share buybacks.

Union Pacific Corp. (UNP): Union Pacific is the largest rail system in the United States, operating almost 34,000 miles of track. Sales reached $15.57 billion in 2006, up from $11 billion in 1997. Officers and directors own 1.4%, Berkshire Hathaway owns 15%, Marsico owns 5.5%, and Dodge & Cox owns 8.7% of the 266.215 million shares outstanding. Free cash flow was $135.75 million over the last 12 months, while cash assets stood at $522 million.