Dear Mr. Berko:

You discussed three quality stocks (Bank of America, DuPont and GE) with 3 percent yields and safe long-term growth for a reader who wanted high quality and income. I already own two of them but won’t touch Bank of America because its customer service stinks, and they encourage illegal immigration. I want to own high-quality stocks, but I need at least a 4 percent yield on my money. Please recommend some stocks with good potential growth in sales, earnings, dividend payout and share value.

A.T., Elgin, Ill.   Dear A.T.:

You’re right as cotton candy. Bank of America’s customer service really “sphinx,” and its move to give credit cards to illegals who don’t have Social Security numbers has angered rednecks, blue bloods and a large swath of middle-class Americans.

But what really bothered me was a paltry $26 million Securities Exchange Commission fine for issuing false research reports.

UST Inc. (UST-$55.41) owns 76 percent of the moist smokeless tobacco market, with popular names like Skoal, Copenhagen and Red Seal. UST also owns and sells fine wines such as Chateau Ste. Michelle and Villa Mt. Eden. UST has modest but dependable long-term revenue and earnings growth. The $2.40 dividend yields 4.33 percent and should grow between 3 and 5 percent annually.

A.J. Gallagher & Co. (AJG-$28.72) is a $1.5 billion revenue company that provides insurance brokerage, risk management and employee benefit services to commercial, industrial, governmental and institutional organizations. This highly regarded company has a superb history of steady growth in revenues, earnings and dividends. The current $1.24 dividend has increased yearly since 1991, yields 4.3 percent and should improve by 3 percent each year.

Pfizer (PFE-$27.33), with $48 billion in drug revenues, is one of the largest pill-pushers in the world. Its $1.16 dividend yields 4.3 percent, has been increased every year since 1981 and by 2008 or 2009 should begin to grow at a 4 percent to 6 percent rate for the foreseeable future. Earnings should improve modestly as PFE launches several new drugs.

AT&T Inc. (T-$40.03) has $63 billion in revenues, and since its merger with SBC Communications, margins have widened, operational improvements at Cingular (wireless) are adding new subscribers, synergies related to the merger are evident and market penetration is improving. Look for annual earnings growth to be about 4 percent. The current $1.42 dividend yields 3.5 percent and should grow modestly over the next few years.

BB&T Corp. (BBT-$42.13) is a bank holding company with $144 billion in assets and 1,150 branches in the Southeast. Revenues, earnings and dividends have increased every year since BBT went public, and the bank’s outstanding management intends to continue this record. The current $1.68 dividend yields 4 percent and could grow between 5 and 8 percent annually.

Enterprise Products Partners LP (EPD-$32.78), with $14 billion in 2006 revenues, is one of the leading integrated providers of natural gas and natural gas liquids processing, fractionation, transportation and storage services. I expect revenues, earnings and dividends to increase nicely over the next few years. The $1.90 dividend yields 5.8 percent (a good portion is not taxable) and should grow 5 percent to 8 percent annually.

Kinder Morgan Energy Partners LP (KMP-$56.65) is the nation’s largest pipeline master limited partnership, with 27,000 miles of line and 145 terminals. Management recently set a long-term goal of at least 8 percent annual growth for earnings. The current $3.32 dividend (a good portion of which is not taxable) yields 5.9 percent and should increase between 5 percent and 8 percent each year.

Please address your financial questions  to Malcolm Berko, P.O. Box  1416, Boca Raton, Fla. 33429 or  e-mail him at malber@adelphia.net.  © Copley News Service