10 Consumer Stocks for a Reliable Portfolio

 

These 10 consumer stocks provide an attractive mix of offense and defense

 

Two years ago, I recommended a group of seven consumer stocks I thought investors should be buying. As it turns out, I may be on to something.

 

Between April 26, 2018 and June 23, 2020, my seven picks averaged a cumulative return (excluding dividends) of 73.3%, more than four times the performance of the S&P 500 over the same period. If you take out the best return, from Lululemon (NASDAQ:LULU) which was up 203.7, and the worst return, from Keurig Dr. Pepper (NYSE:KDP) which was up 10.7%, you get an average of 42.7%. That is still more than double the index.

 

Now, there’s no denying it feels good to see those kinds of long-term returns, but the test of any investor’s mettle is whether they can repeat those gains on more than one occasion.

 

In other words, did I get lucky? Or do I have a knack for finding stocks that stand the test of time? I like to think it’s the latter. That is why I want to try again.

 

Rather than pick 10 consumer stocks I think will do well over the next two years, I’ll divide my selections in half, picking five consumer staples stocks and five consumer discretionary stocks. To help with the process, I’ll choose stocks from the top 25 holdings of the largest ETFs by total net assets.

 

 

For consumer staples, that would be the Consumer Staples Select Sector SPDR Fund (NYSEARCA:XLP). For consumer discretionary stocks, the top ETF is the Consumer Discretionary Select Sector SPDR Fund (NYSEARCA:XLY).

 

With that in mind, here are the top 10 consumer stocks to buy now. My consumer staples recommendations lead the list.

 

Continue reading …

 

3 Reasons Why Cisco Stock Is a Great Investment

 

Markets are reacting too negatively to lowered guidance and short-term headwinds

 

While the novel coronavirus pandemic has upended several sectors, some industries are doing better than others. One such sector is tech. SPDR S&P Software & Services ETF (NYSEARCA:XSW) is up by 41.74% compared to the S&P 500, which is up by just 22.73%. One of the major contributors to this enormous success is Cisco (NASDAQ:CSCO) stock.

 

Many will remember the company from the dot-com bubble burst in the late 1990s. Cisco stock reached some astronomical numbers during that time. And although it hasn’t scaled those heights since, it is one of the most consistent stocks around, up approximately 33% over the last five years.

 

And why not? Cisco has an excellent balance sheet with very little debt. It also boasts excellent operating metrics, juicy dividend yield and is trading at a steep discount to the sector. With so much going for it, it’s hard to argue against Cisco stock right now.

 

 

Cisco Stock Is a Bargain

 

Although Cisco stock has recovered a bit from the drubbing it received at the height of the pandemic in March, shares are still trading at a 25.79% discount to the 52-week high of $50.28 per share. You can chalk that up to the global economic slowdown brought about by the pandemic. However, not all is doom and gloom. Several companies are in the race to manufacture a commercial Covid-19 vaccine. So, the slowdown should start letting up soon, and hopefully, pent up demand will make up for any lost sales.

 

Continue reading …

4 Stocks to Build a Better Growth Portfolio — With Income

 

Smart, active investors should build a portfolio foundation on growth stocks with dividends

 

 

Whether you’re just entering the market or are a stock market veteran, investing in stocks comes down to making your invested cash worth more over time. And this comes not just by an S&P 500 Index that maybe moves up, but by making the time and effort to invest in companies that are growing their revenue and profits as well as their intrinsic value.

 

You are reading this because you are an active investor. That puts you ahead of millions in the U.S. who don’t want to do their homework for investing. My job used to be working with institutions to trade and invest in markets around the globe — particularly in the bond markets, as I am at my core a banker and credit guy. And later I did the investing for folks.

 

But in modern times, my job at Profitable Investing is to provide my ongoing take on economic and market developments and the best investments for growth and income.

 

My quick guidance for you is to think about building a portfolio for growth stocks with a base of dependable sector companies. Then the second story is to add some mid-level companies with proven capability to build revenue and value. And then add the top level of higher-growth-potential companies that come with some risks.

 

 

And for each level, dividends come into the decision process. Dividends aren’t just about cash for retirement living. They are about companies that consider shareholders as primary owners of their businesses. And dividends pay you to be patient through downturns. And they can be piled up and strategically invested again in more stock to further grow the bottom line of your portfolio.

 

And as an old adage that I use, I’ve never met a man gone broke with regular checks coming in.

 

Continue reading …

 

Week's Most Significant Insider Trades: Week of October 26, 2020

 

Disposals:

 

General Mills, Inc. (NYSE:GIS) insider Shawn P. Ogrady sold 6,310 shares of General Mills stock in a transaction dated Thursday, October 22nd. The shares were sold at an average price of $60.77, for a total value of $383,458.70. Following the completion of the transaction, the insider now owns 129,257 shares in the company, valued at approximately $7,854,947.89. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink.

 Shares of General Mills stock traded down $0.50 during midday trading on Monday, reaching $61.28. The company had a trading volume of 66,634 shares, compared to its average volume of 4,125,454. The stock has a fifty day moving average price of $60.65 and a 200 day moving average price of $61.47. The company has a debt-to-equity ratio of 1.24, a current ratio of 0.70 and a quick ratio of 0.49. The firm has a market cap of $37.77 billion, a PE ratio of 16.52, a P/E/G ratio of 2.27 and a beta of 0.60. General Mills, Inc. has a fifty-two week low of $46.59 and a fifty-two week high of $66.14.  Read more …

 

Accenture plc (NYSE:ACN) insider Ellyn Shook sold 5,000 shares of the business’s stock in a transaction that occurred on Friday, October 23rd. The shares were sold at an average price of $227.74, for a total value of $1,138,700.00. Following the transaction, the insider now owns 19,391 shares of the company’s stock, valued at approximately $4,416,106.34. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website.

NYSE:ACN traded up $3.36 during trading hours on Tuesday, reaching $222.59. The company’s stock had a trading volume of 40,944 shares, compared to its average volume of 1,782,384. The company has a market capitalization of $146.27 billion, a P/E ratio of 28.08, a price-to-earnings-growth ratio of 2.86 and a beta of 1.06. Accenture plc has a 12 month low of $137.15 and a 12 month high of $247.82. The stock has a 50 day moving average price of $229.24 and a two-hundred day moving average price of $212.84. Read more …

 

UnitedHealth Group Incorporated (NYSE:UNH) Director Stephen J. Hemsley sold 98,579 shares of the firm's stock in a transaction that occurred on Friday, October 23rd. The stock was sold at an average price of $329.47, for a total transaction of $32,478,823.13. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website.

Shares of NYSE:UNH traded down $2.55 during trading on Tuesday, reaching $320.51. 2,426,439 shares of the company traded hands, compared to its average volume of 4,187,595. The firm has a fifty day simple moving average of $314.09 and a 200 day simple moving average of $302.05. The firm has a market cap of $307.02 billion, a P/E ratio of 18.49, a price-to-earnings-growth ratio of 1.53 and a beta of 0.68. UnitedHealth Group Incorporated has a 1-year low of $187.72 and a 1-year high of $335.65. The company has a quick ratio of 0.84, a current ratio of 0.82 and a debt-to-equity ratio of 0.59. Read more …

 

 

BlackRock, Inc. (NYSE:BLK) Director Mark Wiedman sold 3,850 shares of BlackRock stock in a transaction on Monday, October 26th. The shares were sold at an average price of $626.47, for a total transaction of $2,411,909.50. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link.

Mark Wiedman also recently made the following trade(s):

On Thursday, August 6th, Mark Wiedman sold 360 shares of BlackRock stock. The shares were sold at an average price of $583.20, for a total transaction of $209,952.00.

Shares of BLK stock traded down $13.82 during midday trading on Wednesday, hitting $600.71. 641,802 shares of the company were exchanged, compared to its average volume of 950,465. The firm has a market capitalization of $91.60 billion, a P/E ratio of 19.92, a PEG ratio of 2.20 and a beta of 1.23. The company has a debt-to-equity ratio of 0.66, a quick ratio of 4.02 and a current ratio of 4.02. The firm’s 50 day moving average price is $586.70 and its two-hundred day moving average price is $553.24. BlackRock, Inc. has a 52 week low of $323.98 and a 52 week high of $666.64. Read more …

 

Notable Analyst Upgrades and Downgrades for Week of October 26, 2020

 

Upgrades:

 

Amgen (NASDAQ:AMGN) was upgraded by research analysts at Raymond James from a “market perform” rating to an “outperform” rating in a research report issued on Monday, Briefing.com reports. The brokerage presently has a $255.00 price objective on the medical research company’s stock. Raymond James’ price target indicates a potential upside of 12.26% from the company’s previous close.

AMGN has been the subject of several other reports. SunTrust Banks upped their target price on Amgen from $254.00 to $268.00 and gave the company a “buy” rating in a report on Thursday, July 30th. Jefferies Financial Group upped their target price on Amgen from $285.00 to $300.00 and gave the company a “buy” rating in a report on Wednesday, July 29th. Oppenheimer reduced their target price on Amgen from $280.00 to $275.00 and set an “outperform” rating for the company in a report on Thursday. Cantor Fitzgerald upped their target price on Amgen from $263.00 to $279.00 and gave the company an “overweight” rating in a report on Wednesday, July 29th. Finally, JPMorgan Chase & Co. reaffirmed a “hold” rating on shares of Amgen in a report on Tuesday, September 22nd. Three investment analysts have rated the stock with a sell rating, twelve have given a hold rating and sixteen have issued a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and an average price target of $254.88. Read more …

 

Atlantic Securities assumed coverage on shares of Apple (NASDAQ:AAPL) in a report issued on Monday, The Fly reports. The firm set an “overweight” rating on the iPhone maker’s stock.

Other research analysts also recently issued research reports about the company. Jefferies Financial Group raised their target price on Apple from $135.00 to $140.00 and gave the stock a “buy” rating in a research note on Wednesday, October 14th. ValuEngine downgraded Apple from a “buy” rating to a “hold” rating in a research note on Thursday, October 1st. Wolfe Research began coverage on Apple in a report on Friday, July 24th. They issued an “underperform” rating and a $78.75 price target on the stock. BNP Paribas raised Apple from an “underperform” rating to an “outperform” rating and raised their price target for the company from $77.00 to $140.00 in a report on Friday, September 25th. Finally, Macquarie reaffirmed a “hold” rating and issued a $66.60 price target on shares of Apple in a report on Tuesday, September 8th. Three investment analysts have rated the stock with a sell rating, seventeen have issued a hold rating, twenty-eight have issued a buy rating and one has issued a strong buy rating to the company. Apple currently has an average rating of “Buy” and an average target price of $108.73. Read more …

 

Archer-Daniels-Midland (NYSE:ADM) was upgraded by investment analysts at Monness Crespi & Hardt from a “neutral” rating to a “buy” rating in a research note issued on Monday, Anlyst Ratings reports. The firm presently has a $60.00 price objective on the stock. Monness Crespi & Hardt’s target price points to a potential upside of 15.67% from the company’s previous close.

A number of other equities analysts also recently commented on the company. Stephens assumed coverage on Archer-Daniels-Midland in a report on Thursday, July 9th. They set a “buy” rating and a $52.00 target price for the company. Seaport Global Securities initiated coverage on shares of Archer-Daniels-Midland in a research report on Tuesday, July 28th. They issued a “buy” rating and a $51.00 target price for the company. JPMorgan Chase & Co. raised shares of Archer-Daniels-Midland from a “neutral” rating to an “overweight” rating and set a $60.00 target price on the stock in a research note on Monday, October 19th. Stifel Nicolaus decreased their price target on shares of Archer-Daniels-Midland from $48.00 to $47.00 and set a “buy” rating for the company in a research note on Tuesday, June 30th. Finally, Morgan Stanley lifted their price objective on Archer-Daniels-Midland from $40.00 to $45.00 and gave the company an “equal weight” rating in a research report on Monday, August 10th. Two equities research analysts have rated the stock with a sell rating, two have assigned a hold rating and seven have assigned a buy rating to the company’s stock. Archer-Daniels-Midland has a consensus rating of “Hold” and a consensus price target of $48.40. Read more …

 

 

 

American Express (NYSE:AXP) was upgraded by research analysts at DZ Bank from a “hold” rating to a “buy” rating in a report issued on Tuesday, Briefing.com reports. The firm currently has a $118.00 price target on the payment services company’s stock. DZ Bank’s price target would suggest a potential upside of 21.80% from the company’s current price.

A number of other analysts have also weighed in on the stock. Oppenheimer reiterated a “buy” rating on shares of American Express in a research note on Sunday. Morgan Stanley increased their price objective on shares of American Express from $114.00 to $115.00 and gave the stock an “overweight” rating in a research note on Monday, October 5th. Bank of America lowered shares of American Express from a “neutral” rating to an “underperform” rating and cut their price objective for the stock from $106.00 to $95.00 in a research note on Wednesday, September 23rd. Compass Point increased their price objective on shares of American Express from $78.00 to $85.00 and gave the stock a “neutral” rating in a research note on Thursday, July 2nd. Finally, Wolfe Research initiated coverage on shares of American Express in a research report on Friday, July 31st. They set an “outperform” rating on the stock. Six equities research analysts have rated the stock with a sell rating, twelve have given a hold rating and nine have issued a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and a consensus price target of $105.04. Read more …

Best-in-Class Lockheed Martin Remains a Buy

 

The aerospace and defense company continues to deliver, but is undervalued by at least a low double-digit percentage

 

 

I have long been a fan of Lockheed Martin Corp. (NYSE:LMT), the world's largest defense contractor, as the company is in a prime position to capitalize on increases in defense spending.

 

The company posted better-than-expected results earlier this week and raised its guidance once again. The stock experienced a bit of a selloff following the release of the earnings report, but shares continue to look inexpensive based on the company's historical valuation as well as its intrinsic value as calculated by GuruFocus.

 

Let's examine Lockheed Martin's most recent results more in detail.

 

Lockheed Martin reported third-quarter earnings results on Oct. 20. The company's earnings per share of $6.25 were 16 cents ahead of Wall Streets' estimates and an increase of 10.4% from the previous year. Revenue grew 8.7% to $16.5 billion, $358 million more than expected.

 

Every segment within the company showed positive growth.

 

Aeronautics grew 8% to $6.7 billion. This segment continues to benefit from higher volumes for the F-35 program. Classified development contracts were up $130 million. Operating margins fell 20 basis points to 10.6%.

 

 

Missiles and Fire Control was the real standout as sales were up 14% to just under $3 billion. Tactical and strike missile programs experienced an increase in demand. Integrated air and missile defense, led by the Patriot Advanced Capability-3 and Terminal High Altitude Area Defense programs, also saw higher volumes. Lower volumes for the Apache program led to a slight decline in sensors and global sustainment programs. Operating margins improved 20 basis points to 13.6%.

 

Continue reading …

 

Microsoft: High Dividend Growth For This Dividend Achiever

 

Dividend stocks can offer a wide range of yields. High-yield stocks generally have dividend yields above 5%. At the same time, low-yielding stocks, such as those with yields below 2%, can be unattractive for income investors. But income investors would be wise not to completely dismiss low-yield stocks just because they provide less investment income.

 

There is often a trade-off when it comes to dividend stocks, which is that many low-yield dividend stocks can provide much higher dividend growth than their higher-yielding counterparts. Stocks with low yields might pay less income today, but dividend growth stocks could end up generating higher income for their shareholders over the long run.

 

Microsoft (NASDAQ:MSFT) is a dividend achiever, having increased its dividend for over 10 years in a row. Microsoft is a great example of a stock with a low yield today (1%) but the potential for very high income many years down the road, thanks to its high dividend growth.

 

 

Tech Giant Immune To Coronavirus

 

Microsoft Corporation, founded in 1975 and headquartered in Redmond, WA, develops, manufactures and sells both software and hardware to businesses and consumers. Its offerings include operating systems, business software, software development tools, video games and gaming hardware, and cloud services. Core software properties include Windows and Office, while its hardware brands include Xbox and Surface. Microsoft’s market capitalization is now $1.6 trillion, compared to annual underlying earnings power of $44+ billion.

 

Continue reading …

 

3 Utility Stocks With Tried-and-True Gains

 

These utility stocks remained resilient despite the effects of the pandemic

 

 

The utility sector comprises companies that provide essential products and services, including water, electricity, natural gas, sewage, and other services. The sustained demand for these services has helped utility stocks generate stable earnings.

 

Due to the reliability of earnings, these companies can effectively payout dividends at significantly higher average yields. Hence, the unmatched combination of income generation and profitability makes utility stocks an excellent low-risk option for investors.

 

This year, the utility stocks represented by the Utilities Select Sector SPDR ETF (NYSEARCA:XLU), have underperformed the broader market. The S&P 500 index grew 6% since the beginning of the year, while the Utilities ETF fell by nearly 2%.

 

 

Tech stocks have ruled the roost this year, but utility stocks’ importance in a well-rounded portfolio cannot be denied either. Therefore, let’s look at three utility stocks that remained resilient despite the effects of the pandemic.

 

Continue reading …

 

Week's Most Significant Insider Trades: Week of October 19, 2020

 

Disposals:

 

Williams-Sonoma, Inc. (NYSE:WSM) CEO Laura Alber sold 35,000 shares of the firm’s stock in a transaction on Thursday, October 15th. The stock was sold at an average price of $103.93, for a total value of $3,637,550.00. Following the sale, the chief executive officer now directly owns 466,702 shares of the company’s stock, valued at $48,504,338.86. The transaction was disclosed in a document filed with the SEC, which can be accessed through this link.

Laura Alber also recently made the following trade(s):

On Monday, August 17th, Laura Alber sold 15,000 shares of Williams-Sonoma stock. The stock was sold at an average price of $95.78, for a total value of $1,436,700.00.

NYSE WSM traded down $0.03 during trading on Monday, hitting $104.97. 1,017,417 shares of the company traded hands, compared to its average volume of 1,347,662. Williams-Sonoma, Inc. has a 12 month low of $26.01 and a 12 month high of $107.09. The business has a fifty day simple moving average of $92.51 and a 200 day simple moving average of $80.25. The company has a current ratio of 1.36, a quick ratio of 0.73 and a debt-to-equity ratio of 0.22. The company has a market capitalization of $8.17 billion, a P/E ratio of 20.23, a PEG ratio of 2.35 and a beta of 1.66. Read more …

 

Accenture plc (NYSE:ACN) CEO Julie Spellman Sweet sold 9,228 shares of the firm’s stock in a transaction dated Friday, October 16th. The stock was sold at an average price of $230.57, for a total value of $2,127,699.96. Following the sale, the chief executive officer now directly owns 18,562 shares in the company, valued at approximately $4,279,840.34. The sale was disclosed in a document filed with the SEC, which is accessible through this link. Read more …

Accenture plc (NYSE:ACN) Chairman David Rowland sold 10,938 shares of the business’s stock in a transaction that occurred on Monday, October 19th. The shares were sold at an average price of $229.30, for a total transaction of $2,508,083.40. Following the transaction, the chairman now directly owns 25,170 shares of the company’s stock, valued at approximately $5,771,481. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link.

ACN stock traded up $4.15 during trading on Tuesday, hitting $230.39. 1,767,522 shares of the stock traded hands, compared to its average volume of 2,421,359. Accenture plc has a 1 year low of $137.15 and a 1 year high of $247.82. The firm’s 50 day moving average is $230.53 and its two-hundred day moving average is $210.60. The stock has a market cap of $146.71 billion, a price-to-earnings ratio of 29.20, a price-to-earnings-growth ratio of 2.87 and a beta of 1.06. Read more …

 

FedEx Co. (NYSE:FDX) VP John L. Merino sold 5,000 shares of the company’s stock in a transaction dated Monday, October 19th. The shares were sold at an average price of $289.32, for a total transaction of $1,446,600.00. The transaction was disclosed in a document filed with the SEC, which is accessible through this link.

John L. Merino also recently made the following trade(s):

On Friday, September 18th, John L. Merino sold 24,981 shares of FedEx stock. The shares were sold at an average price of $246.16, for a total value of $6,149,322.96.

NYSE FDX traded up $5.43 during trading on Tuesday, reaching $287.40. 3,919,817 shares of the company traded hands, compared to its average volume of 3,095,121. The company has a market cap of $75.47 billion, a price-to-earnings ratio of 42.45, a P/E/G ratio of 1.52 and a beta of 1.39. The company has a debt-to-equity ratio of 1.19, a quick ratio of 1.64 and a current ratio of 1.69. FedEx Co. has a 1-year low of $88.69 and a 1-year high of $292.69. The stock’s 50 day moving average price is $249.44 and its two-hundred day moving average price is $173.21. Read more …

 

 

Seagate Technology plc (NASDAQ:STX) Director Stephen J. Luczo sold 7,000 shares of the business's stock in a transaction that occurred on Tuesday, October 20th. The stock was sold at an average price of $52.49, for a total value of $367,430.00. The transaction was disclosed in a document filed with the SEC, which is accessible through this link.

Seagate Technology stock traded down $0.20 during trading hours on Wednesday, reaching $51.69. 3,477,659 shares of the stock were exchanged, compared to its average volume of 2,587,235. Seagate Technology plc has a 52-week low of $39.02 and a 52-week high of $64.17. The stock has a market cap of $13.26 billion, a P/E ratio of 13.60, a P/E/G ratio of 9.79 and a beta of 0.96. The company has a debt-to-equity ratio of 2.33, a quick ratio of 1.09 and a current ratio of 1.51. The firm's 50 day moving average is $48.88 and its 200 day moving average is $48.78.

Seagate Technology (NASDAQ:STX) last issued its quarterly earnings results on Tuesday, July 28th. The data storage provider reported $1.20 earnings per share (EPS) for the quarter, hitting analysts' consensus estimates of $1.20. The business had revenue of $2.52 billion for the quarter, compared to analyst estimates of $2.62 billion. Seagate Technology had a net margin of 9.55% and a return on equity of 68.62%. The business's revenue was up 6.2% compared to the same quarter last year. During the same period in the previous year, the business posted $0.86 earnings per share. Equities research analysts expect that Seagate Technology plc will post 4.34 EPS for the current fiscal year.  Read more …

 

General Mills, Inc. (NYSE:GIS) insider Sean N. Walker sold 9,062 shares of the business’s stock in a transaction dated Tuesday, October 20th. The stock was sold at an average price of $61.59, for a total transaction of $558,128.58. Following the completion of the sale, the insider now directly owns 66,793 shares of the company’s stock, valued at approximately $4,113,780.87. The transaction was disclosed in a legal filing with the SEC, which is accessible through this hyperlink.

NYSE GIS traded up $0.40 during trading on Thursday, hitting $61.37. 63,908 shares of the company’s stock were exchanged, compared to its average volume of 4,182,932. The company has a current ratio of 0.70, a quick ratio of 0.49 and a debt-to-equity ratio of 1.24. The company has a market cap of $37.27 billion, a PE ratio of 16.30, a P/E/G ratio of 2.31 and a beta of 0.60. General Mills, Inc. has a fifty-two week low of $46.59 and a fifty-two week high of $66.14. The stock’s 50 day moving average price is $60.75 and its two-hundred day moving average price is $61.40. Read more …

 

 

Acquisitions:

 

Fastenal (NASDAQ:FAST) Director Hsenghung Sam Hsu bought 1,000 shares of the stock in a transaction on Friday, October 16th. The shares were bought at an average cost of $45.00 per share, with a total value of $45,000.00. Following the purchase, the director now owns 1,000 shares of the company’s stock, valued at $45,000. The acquisition was disclosed in a filing with the SEC, which is available through the SEC website.

Hsenghung Sam Hsu also recently made the following trade(s):

On Monday, October 19th, Hsenghung Sam Hsu acquired 1,000 shares of Fastenal stock. The stock was acquired at an average cost of $44.50 per share, with a total value of $44,500.00.

FAST stock traded down $0.83 during midday trading on Monday, reaching $44.43. 4,116,533 shares of the company were exchanged, compared to its average volume of 4,562,345. The company has a debt-to-equity ratio of 0.15, a quick ratio of 1.91 and a current ratio of 4.13. Fastenal has a 1-year low of $26.72 and a 1-year high of $49.86. The stock’s 50-day simple moving average is $45.42 and its 200 day simple moving average is $42.40. The company has a market cap of $25.49 billion, a price-to-earnings ratio of 30.43, a price-to-earnings-growth ratio of 3.63 and a beta of 1.19. Read more …

 

Notable Analyst Upgrades and Downgrades for Week of October 19, 2020

 

Upgrades:

 

Franklin Resources (NYSE:BEN) was upgraded by analysts at Keefe, Bruyette & Woods from a “market perform” rating to an “outperform” rating in a report issued on Monday, Briefing.com reports. The firm presently has a $28.00 target price on the closed-end fund’s stock, up from their previous target price of $24.00. Keefe, Bruyette & Woods’ price target points to a potential upside of 19.20% from the company’s current price.

Other equities research analysts also recently issued research reports about the stock. Credit Suisse Group reaffirmed a “sell” rating and set a $20.00 price target on shares of Franklin Resources in a research note on Friday, September 11th. Zacks Investment Research downgraded shares of Franklin Resources from a “strong-buy” rating to a “hold” rating and set a $22.00 price target on the stock. in a research note on Wednesday, August 5th. Citigroup upped their price target on shares of Franklin Resources from $20.00 to $22.75 and gave the company a “neutral” rating in a research note on Thursday, July 30th. Morgan Stanley started coverage on shares of Franklin Resources in a research note on Thursday, September 3rd. They set an “underweight” rating and a $20.00 price target on the stock. Finally, Barclays reissued a “sell” rating and issued a $19.00 target price on shares of Franklin Resources in a research note on Friday, July 17th. Six analysts have rated the stock with a sell rating, nine have given a hold rating and three have issued a buy rating to the company’s stock. The stock has a consensus rating of “Hold” and an average target price of $22.67. Read more …

 

Kansas City Southern (NYSE:KSU) was upgraded by BMO Capital Markets from a “market perform” rating to an “outperform” rating in a report issued on Monday, Anlyst Ratings reports. The firm presently has a $205.00 price target on the transportation company’s stock, up from their previous price target of $200.00. BMO Capital Markets’ price objective would suggest a potential upside of 14.52% from the company’s current price.

KSU has been the topic of a number of other reports. Stifel Nicolaus cut Kansas City Southern from a “buy” rating to a “hold” rating and set a $162.00 price target on the stock. in a research report on Wednesday, August 5th. Bank of America increased their target price on Kansas City Southern from $203.00 to $205.00 and gave the stock a “buy” rating in a research note on Thursday, September 10th. Morgan Stanley upped their price target on shares of Kansas City Southern from $136.00 to $138.00 and gave the stock an “equal weight” rating in a research note on Monday, October 5th. Credit Suisse Group restated a “buy” rating on shares of Kansas City Southern in a research note on Friday, August 7th. Finally, Barclays upped their target price on shares of Kansas City Southern from $150.00 to $175.00 in a research note on Monday, September 14th. One equities research analyst has rated the stock with a sell rating, eleven have assigned a hold rating, nine have assigned a buy rating and one has assigned a strong buy rating to the company’s stock. Kansas City Southern presently has an average rating of “Hold” and an average target price of $171.40. Read more …

 

Archer Daniels Midland (NYSE:ADM) was upgraded by analysts at JPMorgan Chase & Co. from a "neutral" rating to an "overweight" rating in a research report issued on Monday, Anlyst Ratings reports. The firm presently has a $60.00 price target on the stock. JPMorgan Chase & Co.'s price objective points to a potential upside of 20.51% from the company's previous close.

A number of other equities research analysts have also recently commented on ADM. Stifel Nicolaus reduced their target price on shares of Archer Daniels Midland from $48.00 to $47.00 and set a "buy" rating for the company in a research report on Tuesday, June 30th. Credit Suisse Group cut shares of Archer Daniels Midland from a "neutral" rating to an "underperform" rating and reduced their target price for the company from $40.00 to $39.00 in a research report on Monday, July 27th. Stephens started coverage on shares of Archer Daniels Midland in a research report on Thursday, July 9th. They issued a "buy" rating and a $52.00 target price for the company. Morgan Stanley increased their target price on shares of Archer Daniels Midland from $40.00 to $45.00 and gave the company an "equal weight" rating in a research report on Monday, August 10th. Finally, Seaport Global Securities started coverage on shares of Archer Daniels Midland in a research report on Tuesday, July 28th. They issued a "buy" rating and a $51.00 target price for the company. Two equities research analysts have rated the stock with a sell rating, three have assigned a hold rating and six have assigned a buy rating to the company's stock. The company presently has an average rating of "Hold" and an average target price of $46.20. Read more …

 

 

Bristol-Myers Squibb (NYSE:BMY) was upgraded by analysts at Guggenheim from a “neutral” rating to a “buy” rating in a research report issued on Monday, Briefing.com reports. The firm currently has a $70.00 price target on the biopharmaceutical company’s stock. Guggenheim’s target price would indicate a potential upside of 14.30% from the company’s previous close.

A number of other research firms have also issued reports on BMY. Cfra restated a “buy” rating and set a $70.00 price objective on shares of Bristol-Myers Squibb in a research report on Sunday, July 26th. Berenberg Bank started coverage on Bristol-Myers Squibb in a research note on Tuesday, September 29th. They set a “buy” rating and a $73.00 target price on the stock. Seaport Global Securities started coverage on Bristol-Myers Squibb in a research note on Tuesday, July 28th. They set an “outperform” rating and a $75.00 target price on the stock. Raymond James reaffirmed a “buy” rating on shares of Bristol-Myers Squibb in a research note on Friday, September 25th. Finally, Morgan Stanley lifted their target price on Bristol-Myers Squibb from $64.00 to $66.00 and gave the company an “overweight” rating in a research note on Wednesday, August 12th. One investment analyst has rated the stock with a sell rating, four have given a hold rating and fourteen have given a buy rating to the company. The company presently has a consensus rating of “Buy” and a consensus target price of $70.94. Read more …

 

4 Top Dividend Stocks That’ll Pay You Better Than ‘Exciting Trailblazers’

 

Sustainable dividends, low beta and upside potential make these names worth holding

 

 “What causes the out-performance of the prosaic old-style stocks over the more exciting trailblazers?” Wharton Business School professor Jeremy Siegel sought to answer that question some 15 years ago in his analysis of dividend stocks.

 

“The answer is simple,” Siegel wrote in The Future for Investors: Why the Tried and True Triumph Over the Bold and the New. “Although the earnings, sales and even market values of the new firms grew faster than those of the older firms, the price investors paid for these stocks was simply too high to generate good returns. These higher prices meant lower dividend yields and therefore fewer shares accumulated through reinvesting dividends.”

 

What’s his evidence? “From 1950 through 2003, IBM shares sold at an average price 26.76 times annual earnings, while Standard Oil traded at 12.97 times earnings. IBM’s dividend yield (annual dividends divided by share price) was 2.18%, while Standard Oil’s was 5.19%.”

 

That higher dividend yield allowed Standard Oil shareholders to accumulate many more shares, causing returns to snowball, according to a post on the business school’s blog. Siegel concluded that “dividends matter a lot,” an historical trend likely to hold true in the future as well.

 

But there’s more — dividend stocks provide portfolio diversification. In general, companies that pay robust dividends and have sustained dividend growth come from mature industries. These companies have a low beta with relatively stable cash flows. A balanced portfolio has a mix of high and low beta stocks. Dividend stocks provide that balance.

 

 

I also believe that broad market valuations are stretched. Even with a long-term bullish outlook, it makes sense to go overweight on low beta stocks that also provide robust dividends. The top stocks to buy in this article will include some quality low beta dividend stocks.

 

Let’s discuss the following dividend stocks. Continue reading …

 

The 10 Best ETFs for Dividends

 

Income investors love to have dividend stocks in their portfolios. Dividends deliver returns through a down market and allow investors to avoid locking in losses by liquidating down positions. The liquidity, tax efficiency, and diversification provided by exchange-traded funds (ETFs) have made them among the most popular financial vehicles, so there's a substantial appetite for ETFs that can deliver the benefits of strong dividend stocks.

 

This article picks through the ETF universe to identify 10 different ETFs with different exposures and methodologies. They all bring fantastic characteristics to the table in the form of healthy distribution yields, reasonable fees, satisfactory valuation, and ample liquidity.

 

Distribution yield represents trailing 12-month distributions to shareholders divided by the fund's net asset value (NAV). This measures the cash flow moving to shareholders, much like stocks' dividend yields. Investors should be aware that distribution yields are different from dividend yields, but distributions from dividend-focused ETFs should correlate to fund dividend income over the long term. The current S&P 500 weighted average dividend yield is around 1.7% and has hovered around 2% in recent periods, so this list identifies ETFs with distribution yields exceeding that level.

 

Investors avoid high expense ratios, because these reduce returns. Inefficient or over-priced management incurs losses that compound over the long term. However, some fund managers justify higher expense ratios by adding unique value, so funds with proprietary, specialized, or complex methodology have predictably higher expenses. The average ETF expense ratio is around 0.45%, so this is a useful benchmark to avoid excessive fees.

 

 

Liquidity is an important characteristic for any holding. Narrow bid-ask spreads reduce transaction costs and make it relatively easy to purchase investments near a given market spot price. Active markets also ensure that investors will be able to exit a position promptly at a reasonable price. Established ETFs with high assets under management (AUM) and sufficiently high average daily volume (ADV) should meet the basic needs for reputation, management quality, efficiency of scale, and liquidity.

 

Continue reading …

 

7 Dividend Stocks To Buy For Adventurous Investors

 

Dividend stocks come in all different shapes and forms. Let's look at a few names that have become high-yield stocks.

 Everyone loves a good dividend stock, right? Obviously we all like to see our holdings appreciate over time, but getting tossed a nice quarterly yield never hurts. More money in your pocket is always nice, whether you reinvest those returns or not.

 

As a result, dividends get a lot of understandable attention from investors. But just like regular stocks though, there is a wide variance in the types of dividend payers that are out there. There are the steady and dependable names, and then there are the high-volatility, higher-yield names.

 

I want to focus on this latter group. To be clear, I’m not looking for 15% yielders that are facing liquidity issues, now or anytime soon. I want real dividend stocks that seem to have accidentally become high-yielding names. Or at least ones that have high yields and can still generate decent returns.

 

 

Here are my seven dividend stocks for more adventurous investors:

 

Continue reading …