PICKING A STOCK

Alice Browning has been a school teacher for the past thirty years. As she approaches retirement age, she has become increasingly concerned over the financial aspects of retirement. She will receive a small pension and qualify for social security benefits, butAlicehas determined that the combination of these will not afford her the quality of life which she is used to$.$ Recently, an aunt passed away and left Alicea legacy of $$100,000.$Alicedecided that she should invest these funds to provide for income in her retirement years.

After discussing the matter with her financial planner, Alice was convinced that a shrewd investment in the stock market might be in order. The broker suggested two promising stocks, American Natural Gas $($ANG$)$ and Jamaica Gas and Electric $($JGE$).$ The former is regulated public utility, while the latter is a high tech firm doing some exciting research in gas exploration technologies.

Alice turned to today's stock listings in her local paper and the following is what she found.

PREVIOUS DIV DIV P$/$E VOLUME HI LO LAST

$52$ Weeks HI$/$LO YIELD RATIO

$44\mathrm{.}0039\mathrm{.}11$ ANG $3\mathrm{.}257\mathrm{.}49118744\mathrm{.}1243\mathrm{.}0944\mathrm{.}00$

$21\mathrm{.}178\mathrm{.}75$ JGE $------2161519\mathrm{.}9817\mathrm{.}8818\mathrm{.}00$

On the basis of this information, which stock would you recommend for Alice? Why? Would your selection have been different if Alice's financial objectives changed?

Some students have trouble viewing the stock table. If so$,$ click on the following excel file for another version.