Stocks – Brl Speak http://brlspeak.net/ Wed, 28 Sep 2022 09:30:38 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://brlspeak.net/wp-content/uploads/2021/11/brl-160x160.png Stocks – Brl Speak http://brlspeak.net/ 32 32 2 High Yielding Financial Stocks to Earn Passive Income for Years https://brlspeak.net/2-high-yielding-financial-stocks-to-earn-passive-income-for-years/ Wed, 28 Sep 2022 09:25:00 +0000 https://brlspeak.net/2-high-yielding-financial-stocks-to-earn-passive-income-for-years/ It can be hard to find good returns when things are going well – so now, amid recession fears and a bear market, is a great time for dividend investors to shop. The financial sector is a particularly attractive space if you can think long-term, as some large companies have traded lower and are now […]]]>

It can be hard to find good returns when things are going well – so now, amid recession fears and a bear market, is a great time for dividend investors to shop. The financial sector is a particularly attractive space if you can think long-term, as some large companies have traded lower and are now offering generous dividend yields. For those who want to think outside the box, Toronto-Dominion Bank (TD -0.61%) and T price. Rowe (TROW -0.67%) are two actions that merit further study.

Image source: Getty Images.

1. Toronto-Dominion Bank: No slowdown

The Toronto-Dominion Bank, more commonly known by its initials TD, is one of North America’s largest banks. It has a strong position in its isolated and conservative Canadian home market, and a growing business in the United States. The company estimates that it is the sixth largest bank in North America.

That said, thanks to his Canadian roots, he tends to position himself conservatively at all times. Currently, TD Bank’s Tier 1 capital ratio is 14.9%, second best in North America. It means there is only one bank better positioned to weather economic headwinds as fears of a recession spread. But don’t think TD is hiding, running for cover, or circling the wagons. Far from it, he always seeks to develop his activity.

In February, TD Bank announced its intention to acquire first horizon (FHN -0.60%) for $13.4 billion. He followed that up with the announcement in August that he would buy an investment company Cowen Group (COW 0.42%) for $1.3 billion. Both are helping to move the needle: one is increasing TD Bank’s size in traditional U.S. banking, and the other is expanding its investment business. And thanks to investors worried about the economy and the stock market, shares of this ever-growing bank are trading up around 20% so far in 2022, and the dividend yield is up to a generous 4.4%. TD Bank, meanwhile, has paid an incredible dividend for 164 consecutive years, suggesting income investors can count on the quarterly payout for years to come.

2. T. Rowe Price: Okay, that hurts

T. Rowe Price shares are trading around 45% so far in 2022. No doubt that’s a concerning drop, but it’s not that surprising given the negative sentiment on Wall Street. today. This is because T. Rowe Price is an asset manager and he receives fees based on the assets he manages. The bear market reduced the value of the assets managed by the company and investors took money out of the market because they feared further declines. The numbers are shocking, with the second quarter alone seeing T. Rowe Price’s assets under management plummet by just over $242 billion.

One thing to keep in mind, however, is that T. Rowe has increased his dividend every year for over three decades, making him a dividend aristocrat. The past 30 years have seen a number of material bear markets, including the dot.com crash of 2000 and the Great Recession of 2008-09. And T. Rowe Price continued to increase its dividend throughout the ups and downs of the market. In other words, there is no particular reason to think that the current bear market will be so different.

Meanwhile, second-quarter adjusted earnings of $1.79 per share more than covered the quarterly dividend of $1.20 per share. The resulting payout ratio is approximately 66%. This leaves ample room for more adversity before the dividend is threatened. Given the long history of dividend increases, it seems more likely that dividend increases, even if only token hikes, are likely. The dividend yield is now very attractive at 4.4%.

When others are afraid

There is no way of knowing when a bear market will stop falling and start rising again, making it very difficult to buy during a downturn. However, if you can accept a contrarian approach, the Toronto-Dominion Bank and T. Rowe Price are two financial stocks that seem worth a closer look today for high-yield investors on the lookout. seeking reliable long-term revenue streams.

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Why stocks with Bitcoin and Ethereum exposure are rising today https://brlspeak.net/why-stocks-with-bitcoin-and-ethereum-exposure-are-rising-today/ Tue, 27 Sep 2022 13:10:00 +0000 https://brlspeak.net/why-stocks-with-bitcoin-and-ethereum-exposure-are-rising-today/ © Reuters. Why stocks with Bitcoin and Ethereum exposure are rising today Cryptocurrency-related stocks including Coinbase (NASDAQ:) Global Inc (NASDAQ:COIN), Marathon Digital Holdings Inc (NASDAQ:MARA) and Riot Blockchain Inc (NASDAQ:RIOT) are trading higher on Tuesday as part of of an increase in crypto prices, led by (CRYPTO:BTC) and (CRYPTO:ETH). Bitcoin rallied above the $20,000 level […]]]>

© Reuters. Why stocks with Bitcoin and Ethereum exposure are rising today

Cryptocurrency-related stocks including Coinbase (NASDAQ:) Global Inc (NASDAQ:COIN), Marathon Digital Holdings Inc (NASDAQ:MARA) and Riot Blockchain Inc (NASDAQ:RIOT) are trading higher on Tuesday as part of of an increase in crypto prices, led by (CRYPTO:BTC) and (CRYPTO:ETH).

Bitcoin rallied above the $20,000 level on Tuesday and hit its highest levels in more than a week. Several other cryptocurrencies are rallying alongside Bitcoin, including Ethereum, which moved from a proof-of-work system to a proof-of-stake system in a highly anticipated merger in mid-September.

The crypto is rallying despite a fall in broader markets. The S&P 500 closed Monday at its 2022 lows.

Coinbase is the leading cryptocurrency exchange in the United States. Coinbase shares rose 5.67% to $65.81 at last check.

Marathon Digital focuses on mining digital assets. The company owns cryptocurrency mining machines and a data center to mine digital assets. The stock was up 6.45% at $10.23 at press time.

Riot Blockchain is focused on building, supporting, and operating blockchain technologies. The stock rose 6.72% to $7.15 on Tuesday morning.

BTC, ETH Price Action: At press time, Bitcoin was up 7.46% in a 24-hour period at $20,241 and Ethereum was up 7.08% in a 24-hour period at 1,389 $.25.

Photo: Ricardo Gonçalves from Pixabay.

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

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VEU: Foreign stocks are cheap for good reasons (NYSEARCA: VEU) https://brlspeak.net/veu-foreign-stocks-are-cheap-for-good-reasons-nysearca-veu/ Mon, 26 Sep 2022 16:18:00 +0000 https://brlspeak.net/veu-foreign-stocks-are-cheap-for-good-reasons-nysearca-veu/ Frank Ramspott Investment thesis The Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU) invests in a broad basket of international equities. For those looking for geographic and industry diversification, VEU is a good candidate for your watchlist. In light of the recent price drop, many are wondering if VEU is a buy at current levels. I personally […]]]>

Frank Ramspott

Investment thesis

The Vanguard FTSE All-World ex-US ETF (NYSEARCA:VEU) invests in a broad basket of international equities. For those looking for geographic and industry diversification, VEU is a good candidate for your watchlist. In light of the recent price drop, many are wondering if VEU is a buy at current levels. I personally believe that the short-term environment remains very challenging for international markets, which makes the risk-reward trade-off for potential buyers unattractive at the moment. A strong dollar, higher rates for longer, and slowing economic growth are all contributing to prolonged weakness in equity markets around the world.

Policy Details

The Vanguard FTSE All-World ex-US ETF tracks the investment results of the FTSE All-World ex-US index. The strategy provides exposure to developed and emerging non-US equity markets around the world.

If you want to know more about VEU, you can find a detailed list of documents here, including the simplified prospectus and the latest semi-annual report.

Composition of the portfolio

VEU invests around 20% of its total assets in financials, followed by industrials (~13%) and consumer cyclical stocks (~11%). The three main sectors have a combined allocation of around 44%.

the morning star

the morning star

In terms of geographical distribution, more than 15% of the funds are allocated to Japan, followed by China (9%) and the United Kingdom (9%).

the morning star

the morning star

~35% of the portfolio is invested in large cap “mixed” stocks, characterized as large companies where neither growth nor value characteristics predominate. Large-cap issuers are generally defined as companies with a market capitalization greater than $8 billion. The second largest allocation is made up of large-cap value stocks (~27%). Over 85% of the portfolio is invested in large caps, which are generally considered stable companies, with the remainder invested in mid caps.

the morning star

the morning star

VEU is currently invested in 3,620 different stocks. The top 10 holdings represent around 9% of the portfolio, with no company weighing more than 2%. The fund is very well diversified across issuers and meets the criteria of a traditional ETF, which investors buy for diversification purposes. The top 10 holdings include blue chips such as Nestlé, Roche and Novartis.

the morning star

the morning star

Since these are stocks, an important characteristic is the valuation of the portfolio. According to Morningstar data, VEU is trading at ~1.4x book value and ~11x earnings. Although these multiples are relatively low, it is important to take these values ​​with a grain of salt given the macroeconomic outlook and the structure of the portfolio. More than 40% of the portfolio is invested in cyclical stocks, which greatly exceeds 50% if we add data-sensitive sectors. If we enter a phase of slower economic growth, as I believe, these sectors are the most vulnerable to a slowdown and are likely to suffer larger declines.

the morning star

the morning star

A review of past performance

I decided to compare the price performance of VEU to that of the Vanguard Total World Stock ETF (VT) over the past 5 years to determine which was the best investment. During this period, VT benefited from strong US stock market returns and outperformed VEU by more than 29 percentage points. To put VEU’s returns into perspective, a $100 investment in this fund 5 years ago would now be worth $98.74 including dividends, which is a modest absolute return.

Refinitiv Eikon

Refinitiv Eikon

Although VEU’s returns turn positive if we extend the time frame, they are still thin relative to VT, especially considering the favorable macroeconomic environment of the past decade. Given the deteriorating macroeconomic outlook, I am skeptical that VEU will do much better over the next 2-3 years.

Refinitiv Eikon

Refinitiv Eikon

Slowdown in economic momentum to weigh on international equities

Global growth momentum is weakening as central bankers join forces to prioritize inflation. In an effort to address the inflation problem, policymakers are conducting the most intense bullish cycle in decades, as the chart below from Citi illustrates, with the risk of hampering short-term economic growth.

Town

Town

Town

Town

Economic momentum has taken a hit in recent months and expectations of a soft landing are diminishing day by day. According to data from the most recent PMI survey, global economic output fell in August 2022 for the first time since June 2020. Although minor, the decline represents a more generalized worsening of production and demand conditions, both by sector and by location. Companies are also more cautious about cost cutting and hiring given the deteriorating economic situation. Additionally, for the first time since early 2020, the PMI output of the four major developed economies fell. While the Eurozone, UK and Japan all experienced mild contractions, the US saw a more severe contraction. All four countries reported reduced levels of industrial production, which were offset by declining service sectors, with the United States reporting by far the largest decline in the service sector. It certainly looks like a risky environment, except for the strong labor markets in North America and Europe. Since equities exhibit significant volatility, I believe the risk-reward trade-off is biased negatively for the buyers over the next 18 months.

S&P Global

S&P Global

Amid this unprecedented shift in monetary policy, collateral damage in the form of weakening foreign currencies has spread to the point where the dollar is hitting a multi-decade high. This is no coincidence since financial conditions are tightening across the board and therefore the global financial system needs more dollar collateral. On top of that, unprecedented geopolitical tensions are making the dollar even more valuable, and perhaps the only safe haven in town. For those calling for a near-term dollar reversal, I think it’s still premature and the outcome will be largely influenced by the trajectory of the Ukraine conflict, Fed monetary policy, and global economic growth. Until then, international equities carry considerable currency risk and are expected to trade at a premium to US equities.

Refinitiv Eikon

Refinitiv Eikon

All in all, the short-term outlook for VEU looks unattractive to me for the following reasons:

  • Tighter financial conditions are having a negative impact on stock markets around the world. Policymakers are determined to fight inflation, and lower asset prices are part of the plan.
  • The economic dynamic is running out of steam. As a result, I expect volatility to remain high. Stocks are not a hedge against volatility, on the contrary, they generally tend to be negatively correlated.
  • A stronger dollar for longer. The Fed reaffirmed its commitment to higher rates for longer at the last FOMC meeting. This is accompanied by a decrease in liquidity in financial markets around the world and an increased demand for dollar collateral, keeping the dollar in an upper range compared to historical values.

Key points to remember

VEU invests in a diversified portfolio of foreign equities. Given the recent pullback, many investors are wondering if VEU is a good buy at these prices. Personally, I believe that foreign markets are facing an unfavorable economic context, which makes the risk-reward trade-off unattractive for potential buyers. A strong dollar, higher interest rates for a longer period and lackluster economic data are all likely to hamper the outlook for international equities in the near term.

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Advice for retirees to cope with the fall in stocks and bonds https://brlspeak.net/advice-for-retirees-to-cope-with-the-fall-in-stocks-and-bonds/ Sat, 24 Sep 2022 17:01:35 +0000 https://brlspeak.net/advice-for-retirees-to-cope-with-the-fall-in-stocks-and-bonds/ 2022 has not been a good year for stocks and bonds. The S&P 500 fell 23% and the Bloomberg US Aggregate Bond Index fell 14%. This makes things risky for retirees, who may have to sell some of their stocks and bonds to fund their expenses. But dumping these low-priced assets can significantly reduce the […]]]>

2022 has not been a good year for stocks and bonds. The S&P 500 fell 23% and the Bloomberg US Aggregate Bond Index fell 14%.

This makes things risky for retirees, who may have to sell some of their stocks and bonds to fund their expenses. But dumping these low-priced assets can significantly reduce the size of your portfolio.

Morningstar discussed how retirees, especially new ones, can solve this problem with Maria Bruno, head of US wealth planning research at Vanguard.

First, consider reducing your expenses when the value of your portfolio drops. “We talk a lot about focusing on the things you can control by investing,” she said. “Spending is definitely part of that.”

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2 stocks with a low futures price https://brlspeak.net/2-stocks-with-a-low-futures-price/ Fri, 23 Sep 2022 21:17:26 +0000 https://brlspeak.net/2-stocks-with-a-low-futures-price/ Investors may be interested in the following securities as their forward price-earnings multiples trade below or around the S&P 500’s historical average price-earnings multiple of 15. Future earnings projections are based on Morningstar analyst data . Norwegian cruise line The first stock to make the cut is Norwegian Cruise Line Holdings Ltd. (NCLH, Financial), a […]]]>

Investors may be interested in the following securities as their forward price-earnings multiples trade below or around the S&P 500’s historical average price-earnings multiple of 15. Future earnings projections are based on Morningstar analyst data .

Norwegian cruise line

The first stock to make the cut is Norwegian Cruise Line Holdings Ltd. (NCLH, Financial), a Miami, Florida-based cruise operator with a fleet of 28 ships totaling 59,150 berths that sail to various destinations around the world.

Norwegian Cruise Line has a forward price-to-earnings ratio of 10.14, which results from Thursday’s closing price of $14.39 per share and analyst expectations for net earnings per share of around $1.42 for the next full exercise.

The stock has fallen 48.79% in the past year to a market cap of $6.06 billion and a 52-week range of $10.31 to $29.45.

From a profitability perspective, the business has a negative operating margin as it continues to factor in the impact of travel restrictions and other measures to prevent the spread of the Covid-19 virus during the pandemic. In addition to the issue of the pandemic, the war in Ukraine and unfavorable economic conditions weighed on the company’s activity.

Total revenue for the trailing 12 months through the second quarter fell from $23.6 million in 2021 to $2.35 billion. $2.46 billion this year.

Despite the anticipated improvement in occupancy rates (the company expects a 1.34x sequential increase to around 80% for the third quarter of 2022), the result would still not be sufficient to avoid a further loss for the current quarter.

While the fallout from the pandemic and headwinds from global geopolitical tensions surrounding the Russia-Ukraine conflict may continue to weigh on corporate results, analysts remain optimistic that the company will return to positive net income in the near future. .

Analysts expect Norwegian Cruise Line to post positive net income from continuing operations of $1.40 per share in 2023, but expect another loss of $3.76 per share in 2022. The net income reversal could potentially lead to a strong rally in the share price.

On its balance sheet as of June 30, the company had $1.9 billion in cash, but was burdened with total debt of about $12.2 billion, down from $11.6 billion in 2021.

Wall Street sell-side analysts issued a median overweight recommendation rating for the stock with an average price target of $17.23 per share.

Kinross Gold

The second eligible stock is Kinross Gold Corp. (KGC, Financial), an explorer, developer and operator of gold properties based in Toronto, Canada, the United States, Brazil, Chile, Russia, Mauritania and Ghana.

Kinross Gold has a forward price-to-earnings ratio of 8.73, which stems from Thursday’s closing price of $3.55 per share and analyst expectations for earnings of about 41 cents per share for the next full year.

The stock has fallen 32.77% in the past year to a market cap of $4.61 billion and a 52-week range of $3-7.13.

1573260218186448896.png

The company’s profitability depends on the price of precious metals and production volumes. The company reported an increase in gold equivalent production to nearly 454,000 ounces in the second quarter of 2022, representing 19% year-over-year growth, driven by a higher concentration of metals in ore and higher throughput in its deposits in Mauritania.

Despite higher production of salable metal, total all-in sustaining costs per gold equivalent ounce rose 16.6% year-over-year to $1,341 in the second quarter, reflecting pressures inflationary pressures on energy and inputs combined with an increase in waste removed during mining.

The company earned $1,872 per GEO ounce from precious metal sales in the second quarter, up 3.2% from the year-ago quarter. However, rising production costs due to inflationary pressures weighed heavily on margins as a higher price for the precious metal showed it was unable to avoid a 12% margin decline. 3% year over year to $845 per GEO for the quarter.

As such, pro forma net income from ongoing mining operations was 3 cents per share, compared to 5 cents in the prior year quarter.

Looking forward, the company expects production between 2.04 million and 2.26 million ounces of GEO in 2022 and between 2.19 million and 2.42 million ounces of GEO in 2023.

However, the AISC should continue to increase in the near future. In 2022, this is expected to be $1,240 per GEO, compared to $1,138 per GEO in 2021. With no specific company forecast for AISC in 2023, the following gives an idea of ​​how the position could continue to evolve: It is possible that despite the aggressive attitude of the American Federal Reserve to slow the rapid increase in the prices of goods and services, certain inflationary pressures will persist and the AISC will increase again slightly in 2023. This inflation seems quite ingrained considering the nature of its triggers.

Therefore, in addition to higher production, it will take a lot of help from the price of gold, but it currently seems to be suffering from rising interest rates. Gold futures, which expire in December this year, have fallen steadily since the start of 2022, around when the Fed started raising interest rates. Year-to-date contracts are down 9.5% to a level of $1,653.80 an ounce at the time of this writing.

This gold price is well below (down 11.6%) the average Kinross Gold was able to generate from sales in the second quarter and should continue this trend as interest rates tighten. This factor makes it a risky stock to invest in now.

But after the rise in interest rates, the economy could enter a recession phase as early as this quarter, according to analysts. This, combined with geopolitical tensions centered around the Russian-Ukrainian conflict, could trigger a period of heightened market volatility accompanied by heightened uncertainty.

Assuming investors buy enough safe-haven gold to unintentionally create an imbalance between demand and supply, a higher gold price environment could emerge. For the price to recover above its second quarter level, the demand for gold as a hedging instrument must rise sharply in the face of monetary policy tightening. This is quite difficult, but not impossible given the current macroeconomic conditions. If this happens, Kinross Gold’s operations and earnings will certainly benefit, resulting in very strong upside potential for the stock price.

Wall Street sell-side analysts issued a median recommendation rating of overweight with an average price target of $5.89 per share.

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Utilities stocks beat the market. Now they look expensive. https://brlspeak.net/utilities-stocks-beat-the-market-now-they-look-expensive/ Wed, 21 Sep 2022 07:30:00 +0000 https://brlspeak.net/utilities-stocks-beat-the-market-now-they-look-expensive/ Utilities stocks, a historically defensive sector of the market, have done their job this year, producing a positive total return as the S&P500 the index fell sharply. Now may be the time to eliminate them. The Utilities Select Sector SPDR the exchange-traded fund (ticker: XLU), which was down 1.5% at $73.87 on Tuesday afternoon, has […]]]>

Utilities stocks, a historically defensive sector of the market, have done their job this year, producing a positive total return as the

S&P500

the index fell sharply. Now may be the time to eliminate them.

The

Utilities Select Sector SPDR

the exchange-traded fund (ticker: XLU), which was down 1.5% at $73.87 on Tuesday afternoon, has a positive total return of 5% so far in 2022, compared to a negative return of 18% for the S&P 500. Energy stocks are the only other sector in the black.

Yet utilities now look expensive because of their dividend yields relative to Treasuries and corporate bonds, as well as their price-earnings ratios relative to the S&P 500 index.

The average electric utility dividend yield is now 3.2%, lower than the 3.55% on the 10-year Treasury. Over the past decade, utility dividends have risen by an average of one percentage point relative to the 10-year Treasury, according to a June report from Citigroup that downgraded the sector from neutral to underweight.

The sector’s average price-to-earnings ratio is 21, based on this year’s projected earnings, and around 19.5 on estimated 2023 earnings. By comparison, the S&P 500 is trading at a discount, earning less of 18 times the estimated earnings of 2022 and 16 times the earnings of next year. Based on 2023 earnings, the utilities sector has the same P/E ratio as faster-growing tech stocks.

Other interest rate-sensitive sectors have fared less well than utilities this year, including real estate investment trusts and telecommunications stocks. They can offer better value now.

The Vanguard Real Estate Index ETF, at $88, has returned negative 22% so far in 2022 and returned 3.2%.

Verizon Communications

(VZ), which hit a 10-year low on Tuesday, ended at $40.59 and is up over 6%. Verizon stock has posted a negative 18% return this year, while

AT&T

(T), at $16.56, posted a negative return of 6% in 2022 and a return of 6.6%.

One utility skeptic is Chris Davis, president and portfolio manager at Davis Select Advisors, which manages the Davis New York Venture Fund (NYVTX).

“I’m still baffled by why utilities with high payout (dividend) ratios trade at the multiples they do against things like banks,” he said. “I think the dividend outlook for banks over a longer period will be much more favourable,” Davis said in a statement. Barrons podcast on Monday. Bank stocks are down an average of almost 20% this year and many are yielding 3.5% or more.

Electric utilities like

duke energy

(DUK),

South Co
.

(SO), and

Consolidated Edison

(ED) tend to have dividend payout ratios of 65% or higher. Bank payout ratios (annual dividends divided by projected 2022 earnings per share) are typically below 40%. Banks have similar returns to utilities, but their P/E ratios are closer to 10 than 20.

Davis said an unappreciated risk for regulated electric utilities is whether companies can get approval for rate increases to offset rising costs.

“Utility investors haven’t had a long environment of rising costs — you’ve had 20 to 30 years of falling costs,” Davis said. “Running a regulated business when costs are falling and therefore not having to pass on price increases is easier than going to regulators and saying, ‘let the prices go up’.”

Another risk with utility stocks is that they may fall to reflect higher bond yields, making their dividends less attractive compared to what investors can get from low-risk government debt, not to mention the declines in other sectors sensitive to stock market rates.

So why do utilities trade well? A favorable outlook and positive fund flows could be the answer. The $18 billion Utilities Select Sector SPDR ETF saw about $5 billion in positive net flows in 2022.

“The industry has been at its best for 10 or 15 years,” says John Bartlett, president of Reaves Asset Management, which manages Reaves Utility Income (UTG), a closed-end fund that currently trades around $31. dollars per share.

It may surprise many investors that supposedly stodgy utilities have beaten the S&P 500 for the past 20 years. The SPDR Utilities Select Sector ETF has average annual returns of 11%, compared to 10% for the S&P 500. And over the past decade, utilities have been just one percentage point behind the index, with annual returns of 11.2% versus 12.3% for the S&P 500. .

Over the next decade, utilities will invest heavily in renewable energy by shifting away from coal and, to a lesser extent, natural gas, and building transmission lines. This growth is expected to fuel the growth in average earnings for singles in most utilities. Combine that with 3% returns and investors could generate high single-digit annual total returns, with low volatility, Bartlett says. Dividend growth could average around 5% per year.

It favors the industry leader

NextEra Energy

(NEE), which owns well-run utility Florida Power & Light and the nation’s largest portfolio of renewable energy assets. NextEra stock, at around $85, returns 2%, below the industry average on stronger earnings growth prospects. NextEra is trading at 30 times projected earnings this year, a premium for the group. Bartlett sees potential for increases in the company’s earnings estimates for 2023 and 2024.

Bartlett also likes

Public Service Enterprise Group

(PEG), which is trading around $65, or about 19 times expected earnings per share for 2022, with a yield of 3.2%. He says the stock price has been hit this year by the impact of a weaker stock market on the company’s retirement assets. Bartlett says the New Jersey-based company is participating in an attractive offshore wind project in the Atlantic Ocean.

Bartlett is less enamored with New York-based Con Ed, whose $97 stock is up about 14% this year. Con Ed is trading at 22 times forecast 2022 earnings and yielding 3.3%.

Write to Andrew Bary at andrew.bary@barrons.com

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2 Stocks David Rolfe and Daniel Loeb see eye to eye https://brlspeak.net/2-stocks-david-rolfe-and-daniel-loeb-see-eye-to-eye/ Tue, 20 Sep 2022 18:34:19 +0000 https://brlspeak.net/2-stocks-david-rolfe-and-daniel-loeb-see-eye-to-eye/ Summary Loeb and Rolfe both hold positions at UnitedHealth and Disney in the three months ended June 30. They both sold shares of one stock, while buying the other. Even though gurus Daniel Loeb (Trades, Portfolio), leader of Third Point, and David Rolfe (Trades, Portfolio), head of Wedgewood Partners, have different investment strategies, they still […]]]>

Summary

  • Loeb and Rolfe both hold positions at UnitedHealth and Disney in the three months ended June 30.
  • They both sold shares of one stock, while buying the other.

Even though gurus Daniel Loeb (Trades, Portfolio), leader of Third Point, and David Rolfe (Trades, Portfolio), head of Wedgewood Partners, have different investment strategies, they still have a few things in common.

Taking an event-driven, value-driven approach to stock picking, Loeb’s New York-based company is known for taking activist positions in underperforming companies with a catalyst that will help unlock shareholder value. .

By contrast, St. Louis-based Rolfe’s firm approaches potential investments with the mindset of a business owner, striving to generate significant long-term wealth by analyzing a handful of… ‘undervalued companies that have a dominant product or service, consistent profits, revenue and dividends. growth, are highly profitable and have strong management teams.

According to GuruFocus’ aggregate portfolio, a Premium feature based on 13F repositories, the two gurus both hold positions within the UnitedHealth Group.
A H
Inc. (UNH, Financial) and The Walt Disney
SAY
Co. (DIS, Financial) at the end of the second quarter.

Investors should be aware that 13F filings do not provide a complete picture of a company’s holdings as the reports only include its positions in US stocks and US certificates of deposit, but they can still provide valuable insight. Additionally, reports only reflect trades and holdings as of the most recent portfolio deposit date, which may or may not be held by the reporting company today or even when this article was published.

UnitedHealth Group

In the three months ended June 30, Loeb reduced its investment in UnitedHealth (UNH, Financial) by 5.79%, while Rolfe reduced its stake by 1.15%. They have a combined equity portfolio weighting of 12.47% in the stock.

The Minnetonka, Minnesota-based company, which provides healthcare plans and services, has a market capitalization of $488.08 billion; its shares were trading around $521.42 on Friday with a price-to-earnings ratio of 27.26, a price-to-book ratio of 6.69 and a price-to-sales ratio of 1.64.

The GF value line
VALUE
suggests that the stock is currently slightly undervalued based on historical ratios, past financial performance and analysts’ future earnings projections.

The company has high outperformance potential with a GF score of 90 out of 100. It scored high points for profitability, growth and financial strength, medium scores for momentum and low points for GF value.

GuruFocus rated UnitedHealth’s financial strength at 7 out of 10. Although the company has issued new long-term debt over the past three years, it is at a manageable level due to adequate interest coverage. The Altman Z-Score of 4.04 also indicates that he is in good standing, even though assets are accumulating at a faster rate than revenue growth. Moreover, value is created as the business grows since the return on invested capital eclipses the weighted average cost of capital.

The company’s profitability scored 9 out of 10 thanks to an expanding operating margin, strong returns on equity, assets and capital that outperform the majority of competitors and a Piotroski F-Score high of 8 out of 9, meaning the conditions are healthy. Due to recording consistent growth in profits and revenue, UnitedHealth has a Perfect Predictability rating of five out of five stars. According to research by GuruFocus, companies in this ranking have an average return of 12.1% per year over a 10-year period.

GuruFocus estimates that Loeb has earned 27.88% on the investment he has held since Q4 2020. Rolfe has generated a return of 22.15% since establishing the position in Q3 2021.

Gurus holding large positions in the stock include Vanguard Health Care Fund (Trades, Portfolio), Dodge & Cox, Ruane Cunniff (Trades, Portfolio), Barrow, Hanley, Mewhinney & Strauss, Jeremy Grantham (Trades, Portfolio) and Spiros Segalas (Professions, Portfolio), among others.

disney

Loeb entered a 1 million share stake in Disney (DIS, Financial) during the quarter, while Rolfe strengthened his position by 16.46% to 2,300 shares. Together, they have a combined equity portfolio weighting of 2.27% in the stock.

The Burbank, Calif.-headquartered media and entertainment giant, which is known for its classic movies and theme parks, has a market capitalization of $194.82 billion; its shares were trading around $108.47 on Friday with a price-to-earnings ratio of 62.12, a price-to-book ratio of 2.06 and a price-to-sales ratio of 2.42.

According to the GF Value Line, the stock is currently significantly undervalued.

The GF score of 77 out of 100 indicates that the company is likely to have average performance in the future. While Disney received high ratings for profitability and GF value and moderate rankings for financial strength and momentum, its growth rating was low.

Disney’s financial strength was rated 5 out of 10 by GuruFocus. In addition to insufficient interest coverage, the low Altman Z-Score of 2.04 warns that the company is under pressure. WACC also eclipses ROIC, so it struggles to create value.

The company’s profitability was rated 8 out of 10. Although margins are shrinking and returns are lower than more than half of its industry peers, Disney has a high Piotroski F-Score of 8. Despite declining earnings per share in recent years, it has a one-star predictability rating. GuruFocus found companies with this rank yield, on average, 1.1% per year.

Data from GuruFocus shows that Loeb has gained around 26.07% on the investment so far, while Rolfe has lost around 22.68% on his stake since inception in the first quarter.

Other gurus with prominent positions at Disney include PRIMECAP Management (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), T Rowe Price Equity Income Fund (Trades, Portfolio), Tom Gayner (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), Yacktman Asset Management (Trades, Portfolio), Bill Nygren (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.

Composition of the portfolio

Loeb’s $4.22 billion equity portfolio, consisting of 58 stocks in the quarter ended June 30, is primarily invested in healthcare, energy and utilities.

Rolfe’s $579 million equity portfolio, comprised of 40 stocks, is primarily invested in the technology, financial services and communication services sectors.

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Stocks muted, Sweden launches salvo of central bank hikes https://brlspeak.net/stocks-muted-sweden-launches-salvo-of-central-bank-hikes/ Tue, 20 Sep 2022 08:42:00 +0000 https://brlspeak.net/stocks-muted-sweden-launches-salvo-of-central-bank-hikes/ Join now for FREE unlimited access to Reuters.com Register The Swedish central bank raises 1 percentage point Dollar steady near two-decade highs The Fed, BoE and Swiss central banks are watching Eurozone rates rise LONDON, Sept 20 (Reuters) – Stocks were little changed on Tuesday as investors braced for bigger central bank interest rate hikes […]]]>

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  • The Swedish central bank raises 1 percentage point
  • Dollar steady near two-decade highs
  • The Fed, BoE and Swiss central banks are watching
  • Eurozone rates rise

LONDON, Sept 20 (Reuters) – Stocks were little changed on Tuesday as investors braced for bigger central bank interest rate hikes to curb inflation, with Sweden setting the pace ahead of its U.S., Swiss and and British later in the week.

The dollar was flat near a two-decade high against major peers, crude oil prices were little changed and eurozone bond yields hit new multi-year highs on concerns over high prices Energy.

Asian and European stocks took advantage of Monday’s advance on Wall Street to post modest gains, with the STOXX Index (.STOXX) of 600 European companies flat.

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The benchmark is down about 16% for the year as the fallout from the war in Ukraine and rising borrowing costs fuel recession fears.

The MSCI All Country Stock Index (.MIWD00000PUS) was ahead 0.2%, leaving it down about 20% from its January high. US equity futures, the S&P 500 e-minis, advanced 0.22%.

Sweden’s central bank raised rates a full percentage point more than expected on Tuesday and warned of more to come. The Fed is also expected to raise rates at the end of a two-day meeting on Wednesday, with the Bank of England expected to rise on Thursday. Read more

“Tighter monetary policy around the world will increase headwinds for risky assets – after all, central bankers are deliberately trying to slow aggregate demand,” ING Bank said.

Markets expect rates to climb to 4.5% by early 2023, compared to the current Fed policy rate range of 2.25% to 2.5%. Read more

Luca Paolini, chief strategist at Pictet Asset Management, said the US central bank would likely ease the pace of increases over the next year.

“The market, in a way, is probably expecting rates to spike,” Paolini said, adding that market attention would then turn to how rising rates were affecting savings and corporate earnings. companies.

“We haven’t fully seen it yet, I believe, as a significant decline in earnings which I think will come. The decline in bonds is limited,” Paolini said.

Inverted yield curves or long-term interest rates lower than short-term rates have also historically been a red flag for stock buying, he added.

The projection of terminal rates also jumps

THE CONTRARY CHINA

The Chinese central bank kept its key rates unchanged at a monthly fixing on Tuesday, as expected. Read more

The other exception is the Bank of Japan, which is also due to meet this week and has shown no sign of abandoning its ultra-loose yield curve policy despite a drastic drop in the yen and inflation at its pace. fastest in eight years. Read more

“Just because no one expects anything to come out of Japan, the central bank could be the most interesting this week as any hint that it will change anything could have massive implications for the yen. “, said Paolini.

Stock trading resumed in Japan on Tuesday after a public holiday. The Nikkei (.N225) advanced 0.4% as tech stocks largely contributed to the gain.

China’s blue-chip CSI300 index (.CSI300) rose 0.12% while Hong Kong’s Hang Seng index rose 1.2%.

Sentiment in Hong Kong was also boosted after the government signaled that the change to its COVID-19 hotel quarantine policy for all arrivals was coming soon, saying it wanted an “orderly opening”. Read more

On Monday, the S&P 500 gained 0.69%, the Nasdaq gained 0.76% while the Dow Jones Industrial Average (.DJI) rose 0.64%.

Rising interest rates prompted a sell-off in government bonds. The yield on the benchmark 10-year Treasury bill was 3.5082% after hitting 3.518% on Monday, its highest level since April 2011.

The US two-year yield, a barometer of future inflation expectations, touched 3.9664% after hitting a new near 15-year high of 3.970%.

Rising US Treasury yields helped strengthen the dollar and made gold less attractive.

The dollar index, which measures the currency against six peers, was 0.128% stronger at 109.680.

Spot gold traded at $1,670 an ounce, down 0.3%

U.S. crude rose 0.3% to $86.01 a barrel. Brent crude rose 0.4% to $92.48 a barrel.

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Reporting by Huw Jones, additional reporting by Julie Zhu; Editing by Edwina Gibbs and Alison Williams

Our standards: The Thomson Reuters Trust Principles.

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Looking for at least 8% dividend yield? Analysts Suggest 3 Dividend Stocks to Buy https://brlspeak.net/looking-for-at-least-8-dividend-yield-analysts-suggest-3-dividend-stocks-to-buy/ Mon, 19 Sep 2022 23:05:12 +0000 https://brlspeak.net/looking-for-at-least-8-dividend-yield-analysts-suggest-3-dividend-stocks-to-buy/ What’s been happening in the markets lately? Since the start of this year, we have seen a prolonged downtrend, and now a cycle of high volatility. Investors can be forgiven for feeling some confusion, even a jolt, trying to follow the rapid highs and lows of the past few weeks. One important fact stands out, […]]]>

What’s been happening in the markets lately? Since the start of this year, we have seen a prolonged downtrend, and now a cycle of high volatility. Investors can be forgiven for feeling some confusion, even a jolt, trying to follow the rapid highs and lows of the past few weeks.

One important fact stands out, however. Over the past three months, since mid-June, we’ve seen rallies and troughs – but markets haven’t seriously challenged that mid-June low. Examining the situation of the research firm Fundstrat, Tom Lee makes some extrapolations from this observation.

First, Lee points out that some 73% of S&P-listed stocks are in a real bear market, having fallen more than 20% from their peak. Historically, he notes that such a high percentage is a sign that the market has bottomed out – and goes on to note that S&P lows usually come soon after a peak in the rate of inflation.

Which brings us to Lee’s second point: annualized inflation in June recorded 9.1%, and in the two readings released since then, it fell 0.8 points, to 8.3%.

Getting to the point, Lee advises investors to “buy the dip”, saying, “Even for those in the ‘inflationary’ camp or even the ‘we’re in a long-term bearish camp’, the fact is that if the main CPI has peaked, the stock market lows of June 2022 should be sustainable.

Some Wall Street analysts would seem to agree, at least in part. They recommend certain stocks as “buy” right now – but they recommend stocks with high dividend yields, in the range of 8% or more. Such a high yield will provide real inflation protection, providing a cushion for cautious investors – those in the “inflationary” group. We used the TipRanks database to get details on these recent picks. here they are, with the analyst’s commentary.

Rhythm Capital Corp. (RITM)

We’re talking about dividends here, so we’ll start with a real estate investment trust (REIT). These companies have long been known for their high and reliable dividends and are frequently used in defensive portfolio arrangements. Rithm Capital is the new name and branding of an older, established company, New Residential, which converted to an internally managed REIT effective August 2.

Rithm generates returns for its investors through smart investments in the real estate sector. The company provides both capital and services – ie loan and mortgage services – to investors and consumers. The Company’s portfolio includes origination of loans, real estate securities, real estate and residential mortgages and MSR-related investments, with the bulk of the portfolio, approximately 42%, being dedicated to mortgage services.

Overall, Rithm has $35 billion in assets and $7 billion in equity investments. The company has paid more than $4.1 billion in total dividends since its inception in 2013, and in 2Q22 had a book value per common share of $12.28.

During this same Q2, the last operating under the name of New Resi, the company showed two key indicators of interest to investors. First, earnings available for distribution were $145.8 million; and second, of that total, the company distributed $116.7 million through its common stock dividend, for a payout of 25 cents per share. It was the fourth consecutive quarter with a dividend paid at this level. The annualized payment, of $1, gives a return of 11%. This is more than enough, under current conditions, to provide a real rate of return to ordinary shareholders.

Kenneth Lee of RBC Capital, a 5-star analyst, explains several reasons why he supports the name: “We favorably view RITM’s available cash and liquidity position given the potential deployment in attractive opportunities. We favor RITM’s continued diversification of its business model and its ability to allocate capital between strategies, and its differentiated ability to create assets… We have an outperform rating on RITM shares given the potential benefits to BVPS of the rate hike.

This outperform (i.e. buy) rating is supported by a price target of $12, suggesting a 33% one-year gain. Based on the current dividend yield and expected price appreciation, the stock has a potential total return profile of approximately 44%. (To see Lee’s track record, Click here)

While only three analysts have tracked this stock, they all agree it’s a stock to buy, resulting in unanimous support in Strong Buy’s consensus rating. The shares are selling for $9 and their average price target of $12.50 suggests an upside of around 39% for the year ahead. (See RITM stock forecast on TipRanks)

Omega Healthcare Investors (OHI)

The second company we’ll look at, Omega, combines the characteristics of healthcare providers and REITs, an interesting niche that Omega has filled with skill. The company has a portfolio of skilled nursing facilities (SNF) and senior living facilities (SHF), with investments totaling some $9.8 billion. The portfolio leans towards NFCs (76%), the rest being in SHF.

Omega’s portfolio generated net income of $92 million for 2Q22, up 5.7% from $87 million in the prior year quarter. Per share, this amounted to 38 cents EPS in 2Q22, compared to 36 cents a year ago. The company had adjusted funds from operations (adjusted FFO) of $185 million in the quarter, down 10% year-over-year from $207 million. Important for investors, the FFO included a fund available for distribution (ADF) of $172 million. Again, that was down from 2Q21 ($197 million), but it was enough to cover current dividend payments.

This dividend was declared for common stock at 67 cents per share. This dividend is annualized at $2.68 and gives a strong yield of 8.4%. The last dividend was paid in August. In addition to dividend payments, Omega is supporting its stock price through a stock repurchase program, and in the second quarter the company spent $115 million to repurchase 4.2 million shares.

Evaluating Omega’s second quarter results, Stifel analyst Stephen Manaker said the quarter was “better than expected”. The 5-Star Analyst writes: “Headwinds remain, including the effects of COVID on occupancy and high costs (particularly labor). But occupancy is increasing and should improve further (assuming no COVID relapse) and labor costs appear to be rising at a slower rate.

“We continue to believe the share price is attractive; it trades at 10.2x our 2023 AFFO, we expect 3.7% growth in 2023 and the balance sheet remains a source of strength. We also believe OHI will maintain its dividend as long as the recovery continues at an acceptable pace,” the analyst summed up.

Manaker continues his comments with a Buy rating and a price target of $36 that shows confidence in a 14% upside on the one-year horizon. (To see Manaker’s track record, Click here)

Overall, the street is split down the middle on this one; based on 5 buys and holds each, the stock gets a moderate buy consensus rating. (See IHO stock forecast on TipRanks)

SFL Company (SFL)

For the latest stock, we will shift away from REITs and into shipping. SFL Corporation is one of the world’s leading shipping operators, with a fleet of some 75 vessels – the exact number may vary slightly, as new vessels are acquired or old vessels are retired or sold – of which the size ranges from giant Suezmax cargo ships of 160,000 tons to tankers to dry bulk carriers of 57,000 tons. The company’s vessels can transport almost any commodity imaginable, from bulk cargo to crude oil to finished automobiles. SFL-owned vessels are operated through charters, and the company has an average charter backlog through 2029.

Long-term fixed charters for ocean carriers are big business and in 2Q22 they brought in $165 million. In net income, SFL reported $57.4 million, or 45 cents per share. Of this net income, $13 million came from the sale of older vessels.

Investors should note that SFL’s vessels have a large charter backlog, which will keep them in business for at least the next 7 years. The charter backlog totals over $3.7 billion.

We mentioned fleet turnover, another important factor for investors to consider, as it ensures that SFL operates a viable fleet of modern vessels. During the second quarter, the company sold two former VLCCs (very large crude carriers) and a container ship, while acquiring 4 new Suezmax tankers. The first of the new vessels is expected to be delivered in the third quarter.

In Q2, SFL paid its 74e consecutive quarterly dividend, a record of reliability that few companies can match. The payout was set at 23 cents per common share, or 92 cents annualized, and had a robust return of 8.9%. Investors should note that this is the fourth consecutive quarter in which the dividend has been increased.

DNB’s 5-star analyst Jorgen Lian is optimistic for this shipping company, seeing no particular downside. He writes: “We believe there is considerable long-term support for the dividend regardless of the potential benefits of strengthening offshore markets. If we include our estimated earnings from West Hercules and West Linus, the distributable cash flow potential could approach $0.5/share, in our view. We see significant upside potential, while the order book supports the current valuation. »

Lian puts his take on the numbers with a price target of $13.50 and a buy rating. Its price target implies a one-year gain of 30%. (To see Lian’s track record, Click here)

Some stocks slip under the radar, garnering little criticism from analysts despite performing well, and this is one of them. Lian’s is the only current review on record for this stock, which is currently priced at $10.38. (See SFL stock forecast on TipRanks)

To find great stock trading ideas at attractive valuations, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ stock information.

Disclaimer: The opinions expressed in this article are solely those of the analysts featured. The Content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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Stocks of lithium, solar and electric vehicles are accelerating traders https://brlspeak.net/stocks-of-lithium-solar-and-electric-vehicles-are-accelerating-traders/ Mon, 19 Sep 2022 12:30:00 +0000 https://brlspeak.net/stocks-of-lithium-solar-and-electric-vehicles-are-accelerating-traders/ The past week has been brutal for the bull indices, with the Nasdaq, S&P 500 and Russell 2000 losing between 4.5% and 5.8%. The Nasdaq and S&P 500 broke through their short-term support lines, while the Russell 2000 continues to hang on a thread. From a positioning perspective, I can’t justify switching from day trading […]]]>

The past week has been brutal for the bull indices, with the Nasdaq, S&P 500 and Russell 2000 losing between 4.5% and 5.8%. The Nasdaq and S&P 500 broke through their short-term support lines, while the Russell 2000 continues to hang on a thread. From a positioning perspective, I can’t justify switching from day trading to swing trading until the price action improves. At a minimum, it would be nice to see more charts that look like first leg bases than bearish fourth leg continuation breakdowns.

While major averages and most technology areas look bearish, we cannot ignore the resilience in EV, lithium and solar stocks.

I’m an advisor to a private battery storage solutions company that competes with Enphase Energy (ENPH), so I follow the space closely. With all the news about brownouts in California and power grid outages in Puerto Rico, it’s easy to see why investors are flocking to stocks like Enphase. But if you don’t care to know more about energy storage, just pull up a chart from Enphase and you’ll see why momentum traders are long energy storage.

But investors aren’t just buying solar stocks. Companies in the lithium sector are also on investors’ radars. Names like Livent Corp. (LTHM), Albemarle (ALB), Piedmont Lithium (PLL) and Sociedad Quimica Chile (SQM) are all doing incredibly well.

Based on what is happening in Argentina, the demand for lithium, especially from Chinese buyers, is skyrocketing. I have a client who is to drill a lithium brine production well in Argentina in a few weeks. According to the project geologist, Chinese buyers are everywhere and anyone nearby is trying to make purchase deals or acquire any promising assets.

But again, if you don’t care to learn more about the fundamentals of lithium, just look at the charts. While it’s impossible to know how far the lithium bull market will go, buyers don’t seem ready to back down.

And then there is the market for electric vehicles. While the charts of Nikola (NKLA), Proterra (PTRA) and XPeng (XPEV) look terrible, buyers are not giving up on shares of Tesla (TSLA) and Rivian Automotive (RIVN). I’m not rushing to buy TSLA as the stock seems to be stuck between $300 and $200 for a while. But as long as it holds above $200, it’s hard to be bearish. And on Rivian, while I don’t care about truck designs, I’d be interested in stock on a high volume break above $40.

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