April 1, 2017

3 Top Dividend Aristocrats to Buy in April

Income investors who seek stability should start and end their searches with Dividend Aristocrats. To qualify, a company has to have increased its dividend for at least 25 years in a row, which is an achievement that few businesses can replicate.

So what Dividend Aristocrats are great buys right now? We asked a team of Fools that very question. They picked 3M (NYSE: MMM), Medtronic (NYSE: MDT), and TransCanada (NYSE: TRP).

March 31, 2017

A Closer Look at Kimberly-Clark Corp.'s Dividend

What income investors can expect from one of the market's longest-running payouts.

Kimberly-Clark (NYSE:KMB) shareholders underperformed the market last year as the consumer products giant missed its growth targets. The owner of hit global brands like Huggies and Kleenex kept up its market-thumping dividend, though, and in fact boosted its payout at a faster rate than in the previous year.

Below, we'll look at the key metrics supporting Kimberly-Clark's dividend to see what income investors can expect from the company in the years ahead.

March 30, 2017

Has Gilead Sciences Lost Its Way?

Since John Milligan took over as the CEO of Gilead Sciences (NASDAQ:GILD) roughly one year ago, the biotech's shares have steadily marched lower to the tune of a 24% decline. And one of the biggest reasons why is Milligan's decision to invest heavily in share repurchases and forgo a large acquisition -- or a series of smaller acquisitions -- to bring in some much-needed revenue.

The $13.5 billion spent on share repurchases in the past year, after all, could have netted a handful of modestly sized acquisitions. For example, Japan's Takeda Pharmaceutical bought Ariad Pharmaceuticals and its leukemia drug portfolio for only $5.2 billion, and Jazz Pharmaceuticals grabbed Celator's acute myeloid leukemia drug Vyxeos for a mere $1.5 billion -- casting doubt on Milligan's prior assertion that valuations were simply too high to warrant an acquisition frenzy. 

The big picture issue is that the bottom has dropped out of the biotech's hepatitis C franchise in the past year, and 2017 is on track to produce another 40% dip in the biotech's hepatitis C sales, according to Gilead's own dismal forecast. Yet Gilead has stubbornly refused to buy a revenue-generating peer to address this issue head on -- despite exiting 2016 with $32.4 billion of cash, cash equivalents, and marketable securities and a biotech landscape that arguably sports a surfeit of worthwhile buyout targets.

March 29, 2017

CVS Health Is 22% Undervalued

CVS Health (NYSE: CVS) is the largest pharmacy services provider in the U.S. comprised of ~9,700 pharmacies and 1,139 minute clinics. CVS is one of the leading Pharmacy Benefit Managers ("PBMs") providing services such as mail-order, prescription plan management, and claims processing. With 1.6B claims processed in 2016, it is the largest PBM as Walgreens (NASDAQ: WBA) processed 740mm. CVS' size gives it premium negotiating power and scale advantages.

Over the last 12 months, CVS's share price is down 23%. I will argue that this selloff is overblown and positions CVS as a quality company that is attractively valued in widely overvalued market.

March 27, 2017

Hanesbrands: Underappreciated And Undervalued By 30%

Hanesbrands (NYSE:HBI) is one of America's iconic apparel brand manufacturers that is not getting a lot of love lately, which is a shame. Share prices have been weak as slower retail traffic in big box stores takes its toll. Several large brick and mortar retailers have announced sluggish sales and store closings as e-commerce continues to take retail customers away. Several are throwing in the towel altogether. As the battle over online shopping continues to heat up, there could be more pain for retailers as consumers continue to migrate to online shopping.

With such an undercurrent, why would I buy into an apparel maker? The answer is simple, its undervalued, offers strong business model differences, and has a proven track record of expansion through acquisition. Add a history of rewarding shareholders, and HBI would seem like a respectable mid-cap value selection.

March 26, 2017

Will Ventas Make It To The Final 4?

Last week Ventas, Inc. (VTR) was downgraded from “neutral” to “sell” by Goldman Sachs; however, other analysts have also recently downgraded the $12.6 billion healthcare REIT.

Mizuho cut Ventas from a “buy” rating to a “neutral” rating and set a $63.00 price target on the stock in a report on Monday, November 21st. Evercore ISI cut Ventas from a “hold” rating to an “underperform” rating in a report on Friday, March 3rd. Zacks Investment Research cut Ventas from a “hold” rating to a “sell” rating in a report on Monday, January 9th.

Three analysts have rated the stock with a sell rating and ten have given a hold rating to the company’s stock. The company has a consensus rating of “Hold” and a consensus price target of $62.89

I have not reviewed any of the research reports from the other sell-side analysts, but I thought it would be a good time to take a deeper dive into Ventas to determine whether or not there is any reason to modify my current BUY recommendation.

Also, I’m gearing up for bracketology this week and I’ll be providing head-to-head analysis for Ventas and all other healthcare REITs. Consider this article somewhat of a scouting report, as I examine the pros and cons of Ventas as I determine whether or not the company will make it to the Final Four again this year.