Dear Mr. Berko:

I met a broker at a church function, and his investment ideas made sense to me. He will not buy any issues that make tobacco or alcohol, destroy the environment, use live animals in research, produce any items used in the war effort, don’t pay their workers a living wage or do business with a foreign government whose policies are destructive to the United States. He also limits his investment choices to issues that have increased their dividends at least 10 years in a row. He believes companies that increase their dividends every year are strong companies and have good long-term potential.

I have about $9,000 with which to begin my investment program, and my broker wants me to buy 150 shares of National Fuel Gas and 100 shares of WPS Resources. Tell me what you think and I’d be pleased if you have any other suggestions.

D.S., Gainesville, Fla.

Dear D.S.:

This guy’s gates are down, his lights are flashing, but though you may like him, I don’t think his train is coming. I suggest that you find another broker, pronto!

National Fuel Gas Co. (NFG-$32.13) is an integrated natural gas outfit that sells gas to 730,000 customers in western New York and northern Pennsylvania. NFG also owns pipelines between Pennsylvania and the New York-Canada border as well as a large gas storage facility. Yes, this company has increased its dividend for at least 25 consecutive years, but I can’t figure out why anyone would want to own this sorry stock. Revenue growth is almost stagnant and projected earnings growth is embarrassing. I’d be embarrassed to own the stock.

WPS Resources Corp. (WPS-$55.01), a coal-, nuclear- and hydro-fueled utility, provides Wisconsin residents with reliable energy, and its dividend has reliably increased annually for 30 years. However, its earnings reliability is just one step below a long-range weather forecast. Unless this company gets a contract to fuel future colonies on Mars, this stock has nowhere to go during the next half-dozen or more years. I see little revenue or earnings growth and I’d rather have a root canal than own this stock.

That broker’s philosophy is quite noble but I suggest that you consider being a little less noble if you want to make money in the market. There are too few good companies that meet your broker’s “no-sin” criteria. I suggest you wake up and smell reality, because that’s where your future is.

But I do like your broker’s philosophy of owning stocks that have a long history of dividend increases. I, too, believe that a long history of dividend growth often portends reliable principal growth. Buy the following issues, keep them in your broker’s account and — this is important — reinvest all the dividends. Most brokers can reinvest quarterly dividends, and most will charge you a fee each time a dividend is reinvested. That cost can be between 75 cents to $3 per transaction; however, it’s a negotiable fee.

Here are six dividend-growers I’d like to see in your new growth portfolio, and I’d like you to keep these issues for at least 22 years.

Alltel Corp. (AT-$63.25) is an $8.5 billion revenue telephone company with a good history of revenue, earnings and dividend growth. The $1.52 dividend yields 2.4 percent.

AmSouth Bancorporation (ASO-$24.30) is a $3.2 billion revenue commercial bank with offices in the South and Southeast. I — as well as most of our managed accounts — own shares of ASO, and its $1 dividend yields 4.1 percent.

Bank of America Corp. (BAC-$42.09) is among the finest-managed banks in the world, and I believe that it will continue to be so. I — as well as many of our managed accounts — own shares of BAC.

Emerson Electric Co. (EMR-$69.34) is a $16 billion revenue company that designs, makes and sells electromechanical and electronic products and services. EMR has a brilliant past and I think its future is just as bright. Its $1.66 dividend yields 2.39 percent.

Eli Lilly & Co. (LLY-$52.92) has a lily-white reputation in the drug business, and its superb research and development department ensures that this company will continue to prosper in the future. Many of our clients own LLY and its $1.52 dividend yields 2.9 percent.

Kimberly-Clark Corp. (KMB-$58.01) is a $15 billion global consumer products company that makes and markets brand-name products in more than 40 countries. The past has treated KMB’s products quite well, and I believe the future will too. Many of our clients own this stock, which pays a $1.80 dividend and yields 3.1 percent.

These are just a few of the many dividend growth issues I like, and I’ll remind you to be certain that you always reinvest the dividends. This makes your portfolio grow smarter and faster.

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