Microsoft’s Massive Cash Flow, Despite The Downturn, Makes It a Buy


Microsoft stock will rebound quickly since its free cash flow covers both its dividends and buybacks





Microsoft (NASDAQ:MSFT) stock is the ultimate anti-recession stock. The company produces so much cash flow and has so much cash that there is no concern about the dividend.

In fact, there is almost no concern that Microsoft will not continue its share buybacks, on top of paying the regular dividend. Let’s look at the simple numbers.

In the quarter ending Dec. 31, 2019, Microsoft produced $10.68 billion in cash flow from operations. After deducting $3.545 billion in capex spending, free cash flow (FCF) was $7.135 billion.

This is more than enough to pay the quarterly 51 cents per share dividend that costs $3.886 billion each quarter. This is 52.8% of the FCF it generates.




In other words, going forward, even if Microsoft generates 20% or 30% less FCF, there would be no concern that the dividend would not be paid. For example, with a 30% cut in FCF to $5 billion, there would still be almost $1.2 billion in excess free cash flow after the dividend is paid.



The Top 7 Dividend Healthcare Stocks Now



The healthcare sector is a great place to find high-quality dividend growth stocks. For evidence of this, look no further than the list of Dividend Aristocrats.

The Dividend Aristocrats are a select group of 64 stocks in the S&P 500 Index, with at least 25 consecutive years of dividend increases. There are currently 6 Dividend Aristocrats that come from the health care sector.

It is easy to see why health care stocks make for excellent long-term investments. The U.S. health care sector widely enjoys high profitability with strong cash flows. After all, people often cannot go without health care, even in difficult economic climates.

And, with an aging population, the U.S. healthcare industry is expected to see robust demand for a variety of healthcare products and services going forward. Lastly, healthcare will see even greater demand due to the spreading coronavirus crisis.


The rankings in this article are derived primarily from our expected total return estimates for every healthcare dividend stock found in the Sure Analysis Research Database. We further narrowed down the list by selecting only U.S.-based companies, with a Dividend Risk score of C or better.

For investors interested in high-quality dividend growth stocks, this article will discuss the top 7 dividend-paying health care stocks to buy now.



The 5 Best Monthly Dividend Stocks to Hide In


While most income-based stocks pay shareholders quarterly, some of the best pay out each month



There’s no denying the obvious. Financial markets across the globe are unstable since the novel coronavirus hit. Fortunately, when markets wobble, investors have a simple solution to steady their portfolios by buying the best monthly dividend stocks. Few equities, if any, provide the rock-steady stability (while paying you on a month-to-month basis just to own them, no less) than the following companies.

Monthly dividend-payers dole out income in the form of dividends (or distributions) each month, as opposed to each quarter.

This group of stocks looks particularly attractive on the heels of rising coronavirus concerns and escalating market turmoil. Most of these monthly dividend stocks are based in North America, with limited international presence. These stocks should be relatively isolated from coronavirus risks for the time being.




Because their financials must support a monthly dividend payment, the companies in this space are stable by nature — their operations are steady, their fundamentals are positioned for the long term, and their cash flows are consistent. Such stability should be highly attractive to investors amid recent market instability.

At the same time, these stocks pay investors big yields. That’s worth a lot today. Fixed income yields are plunging to record lows, to the point where buying a bond won’t give you much real return these days.



Notable Analyst Upgrades and Downgrades for Week of March 30, 2020




Upgrades:



Nike (NYSE:NKE) was upgraded by Wells Fargo & Co from an “equal weight” rating to an “overweight” rating in a report released on Monday, Marketbeat Ratings reports. The brokerage presently has a $99.00 price target on the footwear maker’s stock, up from their previous price target of $87.00. Wells Fargo & Co‘s price target points to a potential upside of 23.70% from the stock’s current price.

Several other analysts have also issued reports on NKE. Piper Jaffray Companies reiterated an “overweight” rating and issued a $110.00 target price (up previously from $101.00) on shares of Nike in a research report on Friday, December 20th. Morgan Stanley dropped their target price on shares of Nike from $119.00 to $88.00 and set an “overweight” rating on the stock in a research report on Tuesday, March 24th. Guggenheim restated a “buy” rating and set a $110.00 price target on shares of Nike in a research report on Friday, December 13th. Deutsche Bank boosted their price target on shares of Nike from $80.00 to $84.00 and gave the stock a “hold” rating in a research report on Wednesday, March 25th. Finally, Raymond James lowered their price target on shares of Nike from $110.00 to $100.00 and set an “outperform” rating on the stock in a research report on Wednesday, March 25th. Four analysts have rated the stock with a sell rating, six have issued a hold rating and twenty-seven have given a buy rating to the company. The company presently has a consensus rating of “Buy” and a consensus price target of $98.13. Read more …

Shares of Nucor Co. (NYSE:NUE) have been assigned an average rating of “Hold” from the fourteen analysts that are covering the company, Marketbeat reports. One analyst has rated the stock with a sell recommendation, five have assigned a hold recommendation and seven have assigned a buy recommendation to the company. The average 12-month price target among brokerages that have updated their coverage on the stock in the last year is $51.50.

Several analysts recently weighed in on NUE shares. Zacks Investment Research raised shares of Nucor from a “strong sell” rating to a “hold” rating and set a $41.00 price objective on the stock in a research note on Friday, January 31st. Deutsche Bank upgraded shares of Nucor from a “sell” rating to a “hold” rating and dropped their target price for the company from $45.00 to $37.00 in a report on Monday, March 30th. Longbow Research upgraded shares of Nucor from a “neutral” rating to a “buy” rating and set a $65.00 target price on the stock in a report on Monday, December 9th. Goldman Sachs Group upgraded shares of Nucor from a “neutral” rating to a “buy” rating and dropped their target price for the company from $55.00 to $41.00 in a report on Monday, March 30th. Finally, Credit Suisse Group dropped their target price on shares of Nucor from $57.00 to $54.00 and set an “outperform” rating on the stock in a report on Friday, March 20th. Read more …

Sherwin-Williams (NYSE:SHW) was upgraded by stock analysts at Goldman Sachs Group from a “neutral” rating to a “conviction-buy” rating in a research note issued on Monday, Marketbeat.com reports. The brokerage presently has a $590.00 price objective on the specialty chemicals company’s stock. Goldman Sachs Group’s target price would indicate a potential upside of 36.27% from the company’s previous close.

Other analysts also recently issued research reports about the company. Northcoast Research upgraded Sherwin-Williams from a “neutral” rating to a “buy” rating and set a $620.00 target price for the company in a research report on Monday, March 2nd. Susquehanna Bancshares lowered shares of Sherwin-Williams from a “positive” rating to a “neutral” rating and set a $620.00 price objective for the company. in a report on Tuesday, February 4th. Credit Suisse Group reduced their target price on shares of Sherwin-Williams from $620.00 to $615.00 and set an “outperform” rating on the stock in a report on Friday, January 31st. Zacks Investment Research downgraded shares of Sherwin-Williams from a “hold” rating to a “sell” rating and set a $583.00 price target for the company. in a research note on Friday, March 6th. Finally, UBS Group reduced their price objective on Sherwin-Williams from $580.00 to $566.00 and set a “neutral” rating on the stock in a research note on Tuesday, March 10th. Two equities research analysts have rated the stock with a sell rating, twelve have issued a hold rating, ten have given a buy rating and two have assigned a strong buy rating to the company. The stock has an average rating of “Hold” and a consensus price target of $584.75. Read more …




Wedbush upgraded shares of Wendys (NASDAQ:WEN) from a neutral rating to an outperform rating in a research note issued to investors on Tuesday morning, BenzingaRatingsTable reports. They currently have $21.00 price target on the restaurant operator’s stock, down from their previous price target of $22.00. Wedbush also issued estimates for Wendys’ Q4 2020 earnings at $0.09 EPS, Q1 2021 earnings at $0.10 EPS, Q4 2021 earnings at $0.13 EPS, Q1 2022 earnings at $0.17 EPS and FY2022 earnings at $0.79 EPS.

Other analysts have also recently issued research reports about the stock. Oppenheimer lowered their price objective on shares of Wendys from $26.00 to $22.00 and set an outperform rating for the company in a research report on Monday. MKM Partners upped their target price on shares of Wendys from to in a research note on Thursday, February 27th. Royal Bank of Canada reaffirmed a hold rating and issued a $22.00 target price on shares of Wendys in a research note on Thursday, January 23rd. Piper Sandler reduced their target price on shares of Wendys from to in a research note on Monday. Finally, Morgan Stanley upped their target price on shares of Wendys from $22.00 to $24.00 and gave the stock an equal weight rating in a research note on Thursday, December 19th. Two analysts have rated the stock with a sell rating, fourteen have issued a hold rating and fourteen have assigned a buy rating to the company’s stock. The stock currently has a consensus rating of Hold and a consensus price target of $21.48. Read more …


Should You Buy Johnson & Johnson Stock in October?


JNJ stock's always been a good pick for the long-term healthcare investor, though short-run price volatility is likely



With a market cap of $340 billion, Johnson & Johnson (NYSE:JNJ), the healthcare giant, is currently number 37 on the Fortune 500 list. Over the past 12 months, JNJ stock is down about 7%. This compares to a more than 16% drop in the iShares U.S. Pharmaceuticals ETF (NYSEArca:IHE) which includes JNJ shares at a whopping 22.6% weighting among its 45-stock portfolio.

In August, the consumer and pharmaceutical healthcare firm made the news when an Oklahoma judge found Johnson and Johnson guilty of helping fuel the state’s opioid crisis by aggressively marketing painkillers. The ruling came amid various lawsuits that the company faces regarding its talc-based baby powder.



Now many investors are wondering whether there could be more headaches ahead for the company and how the JNJ stock price might fare in the last quarter of the year. Until its next earnings report in mid-October, I expect JNJ shares to trade between a range, mostly $120-$130. Long-term investors may regard any upcoming weakness in the Johnson & Johnson stock price as opportunity to buy into the shares.