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3 “Strong Buy” Dividend Stocks That Look Great After Earnings Beat
3 "Strong Buy" Dividend Stocks That Look Great After Earnings Beat
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Friday’s jobs report from the Bureau of Labor Statistics showed a record 20.5 million people out of work, and the unemployment number spiked to 14.7%. This comes in the middle of earnings season, and results there have been, as expected, grim.
On a positive note, however, investors seem to be taking the bad news in stride. There’s a general belief that the COVID-19 epidemic and its effects are now baked in – that we know the worst is happening, but we also know it’s temporary. As several states move toward reopening and loosening lockdown restrictions, with some encouragement from the Trump Administration, investors are starting to look toward 2H20. Whether a recovery will be a steep V-shape, or a shallower slope is up for debate, but anticipation of a recovery helps to buoy market sentiment.
The upshot here is mixed signals. Macroeconomic signs – the jobs report, the earnings results – are flashing bright warning lights that we are in a recessionary event. But at the same time, investor sentiment – which is by nature forward looking – is generally positive and is boosting the main stock indexes. It’s potentially a buying environment, as long as investors don’t mind shouldering the clear risks.
We’ve opened up the TipRanks database, finding three stocks whose profile justifies the entry risk in today’s unsettled conditions. All three have recently beaten their earnings forecast, and are backed by several analysts, enough to earn a “strong buy” consensus rating. And better yet, for income-minded investors, all three of these stocks show high and reliable dividend yields.
Fidelity National Financial (FNF)
First on our list is a $7 billion player in the mortgage industry. Fidelity National Financial provides analysis, leverage, title insurance, and underwriting services in the commercial and residential mortgage service market. 2019 was a good year for FNF – the company beat the earnings estimates in each quarter of the year.
Fidelity has started 2020 on a similar note, with a strong Q1 earnings report, that beat the forecast and grew substantially year-over-year. EPS came in at 73 cents, 32% above the estimates and up an impressive 69% from Q1 2019.
The earnings were more than enough to cover Fidelity’s quarterly dividend of 33 cents per share. At $1.32 annualized, this dividend yields 5.1%, more than 2.5x the average dividend found among S&P listed companies. Fidelity has been gradually growing its dividend for the past two and a half years. The payout ratio of 45% indicates that the dividend is safe – current earnings easily cover it, and there is plenty of room for further growth.
Reviewing this stock for Stephens, 5-star analyst John Campbell sees a clear path forward: “…we continue to favor FNF as we believe that it offers up the best/most attractive title franchise valuation, it has a clear catalyst with the potential significant FGL accretion, and it has the best operators at the wheel as the industry ventures into what is likely to be a treacherous NT road ahead.”
Campbell’s Buy rating is accompanied by a $43 price target that suggests a 69% upside potential for the stock. (To watch Campbell’s track record, click here)
FNF shares have underperformed the markets so far this year. The stock is down 45%. But after the strong earnings, this makes the stock attractive – it is priced at a discount, has plenty of room to grow, and offers a high dividend return.
Fidelity National’s Strong Buy consensus rating is based on 3 Buys and 1 Hold set in recent weeks. This stock is currently trading for $25.35, and the average price target of $37 implies an upside of 46%. (See FNF stock analysis on TipRanks)
First American Financial (FAF)
Next up on our list is an insurance service company, First American Financial. FAF specializes in title and lenders insurance, as well as property and casualty policies. The company also deals with asset dispositions, commercial due process, foreclosures, and trustee services. While these services are hardly household essentials, they are mainstays of the financial world, and FAF brought in $6.2 billion in top-line revenue in fiscal 2019.
While First American’s Q1 earnings fell sequentially by 41%, the $1.06 reported beat the forecast by over 10%. It was also up 43% yoy. Revenues were also up year-over-year, by 8.4% to $1.4 billion.
The solid earnings underly a reliable 44-cent quarterly dividend that FAF has raised 3 times in the past four years. The payment annualizes to $1.76, and gives a yield of 3.8%, nearly four times higher than can be found in Treasury bonds.
Writing for Compass Point, analyst Chris Gamaitoni writes, “We continue to believe that First American's ability to confidently guide to profitability in this environment coupled with a low-risk balance sheet and benefiting from refinance volume will lead it to appreciate as a "safe haven" in the current environment.”
Gamaitoni’s $74 price target indicates a 60% upside and bolsters his Buy rating on the stock. (To watch Gamaitoni’s track record, click here)
All in all, First American has received 5 analyst reviews in recent months, including 4 Buys and 1 Hold, making the consensus rating a Strong Buy. FAF shares are selling for $46.38 and have an average price target of $58.60, more cautious than Gamaitoni’s but still suggesting a healthy 26%. (See First American stock analysis at TipRanks)
Total SA (TOT)
The final stock on our list is a giant of the oil industry. Total SA boasts a $90 billion market cap, even after falling 29% in the current bear cycle. The company shows the high revenues and profits typical of Big Oil, with an annual top line exceeding $200 billion and earning above $11 billion. Even the current period of low prices won’t fully derail TOT’s overall performance; the company is big enough to pad the hit, and the product always has a market.
Slack demand in Q1 did have an impact on earnings, however. The 66 cents per share was 20% higher than expected, although it was down 44% year-over-year. On a positive note, Q1 was the third consecutive quarter that saw earnings beat expectations.
Total SA pays out a reliable dividend to shareholders, and even though market conditions are volatile the company announced an increase in the dividend payment effective in Q2. The new payment, 74.75 cents per share quarterly, will annualize to $2.99 and give a yield of 8.5%. The recently announced dividend increase is a sign that company management is confident in their ability to continue returning profits to shareholders. It is also a good sign for investors interested in an oil play.
Ryan Todd, of Piper Sandler, sees Total SA as well-positioned for future gains. He writes, “…while the release was largely devoid of transformative updates, a further pruning of FY20 capex and opex targets, a relatively more constructive near-term downstream outlook, and operational momentum following its 1Q beat should be enough given the relative underperformance in the equity vs. its European peers over the last month.”
Todd puts a $45 price target on TOT shares, along with a Buy rating. His target implies an upside potential of 29%. (To watch Todd’s track record, click here)
Wall Street’s analyst corps has sent in 9 reviews on TOT, with a breakdown of 8 Buys to 1 Hold. The stock has an average price target of $43.52, which suggests a 25% premium from the $34.81 current trading price. (See Total SA stock analysis on TipRanks)
To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
The post 3 "Strong Buy" Dividend Stocks That Look Great After Earnings Beat appeared first on TipRanks Financial Blog.
Government
Low Iron Levels In Blood Could Trigger Long COVID: Study
Low Iron Levels In Blood Could Trigger Long COVID: Study
Authored by Amie Dahnke via The Epoch Times (emphasis ours),
People with inadequate…
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Authored by Amie Dahnke via The Epoch Times (emphasis ours),
People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.
A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.
Long COVID Patients Have Low Iron Levels
Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.
In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.
According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.
But it can jeopardize a person’s recovery.
“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”
The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.
“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”
The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.
1 in 5 Still Affected by Long COVID
COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.
Government
Walmart joins Costco in sharing key pricing news
The massive retailers have both shared information that some retailers keep very close to the vest.
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As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters.
The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.
The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.
Related: Popular mall retailer shuts down abruptly after bankruptcy filing
It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.
You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.
Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.
However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.
Image source: Joe Raedle/Getty Images
Walmart sees lower prices
McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.
During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.
"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.
He was specific about where the chain has seen prices go down.
"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."
McMillon said that in other areas prices were still up but have been falling.
"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.
Costco sees almost no inflation impact
McMillon avoided the word inflation in his comments. Costco (COST) Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.
The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.
"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.
Galanti made clear that inflation (and even deflation) varied by category.
"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.
bankruptcy pandemic trumpGovernment
Walmart has really good news for shoppers (and Joe Biden)
The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.
Share this:
As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters.
The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.
The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.
Related: Popular mall retailer shuts down abruptly after bankruptcy filing
It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.
You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.
Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.
However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.
Image source: Joe Raedle/Getty Images
Walmart sees lower prices
McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.
During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.
"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.
He was specific about where the chain has seen prices go down.
"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."
McMillon said that in other areas prices were still up but have been falling.
"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.
Costco sees almost no inflation impact
McMillon avoided the word inflation in his comments. Costco (COST) Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.
The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.
"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.
Galanti made clear that inflation (and even deflation) varied by category.
"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.
bankruptcy pandemic trump
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