Altria dividend currently yields 3.8% and looking to spin off its international tobacco division

Verizon yields 3.97% and rolling out its fiber-optic network

Medivation is a bio-pharmaceutical company focused on acquiring and developing small-molecule drugs. Its lead compound, Dimebon, is designed to treat Alzheimer's and Huntington's disease. Its other product is a once-daily oral treatment for prostate cancer.

Ocean Rig, is a Norwegian ultra-deep-water-driller; it makes rigs that drill 7,500 to 10,000 feet in water, and send the drill bit down to 30,000 feet. This market is likely to remain tight for the next five years, in part because of the discovery of a new field offshore in Brazil. New rigs are being built to meet demand, but it is difficult to attract rig crews, and there are delays. Contracts are getting longer. Also, the big oil companies are having difficulties with complex deep-water wells. Ocean Rig is well poised to capitalize on the strength of the market this year and next. There are only three active rigs available to satisfy demand over the next two years, and the company owns two of them. The CEO envisioned this situation and has been waiting until contracts roll off to set higher prices.

Investors underestimate TransAlta's exposure to rising power prices. In the next four years, the company will realize about C$400 million of increased profitability primarily from repricing its merchant Alberta and Pacific Northwest power plants. This should drive Ebitda to about C$1.5 billion in 2011. Earnings of C$1.40 a share in '07 should improve to more than C$3 in '11. Normalized discretionary free cash flow is about C$1 a share more than earnings, due to high depreciation and amortization, so the stock is cheaper than its P/E would suggest. The story really gets interesting when you consider the possibility of strategic changes.

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