Five supply chain stocks to buy for finding shelter from risks feature recommendations focused on strong-performing industrial stocks favored by BoA Global Research.
The five supply chain stocks to buy amid delays for many industries to obtain the parts needed to manufacture goods to meet demand include two stocks that are executing their business plans particularly well, two others that that the investment firm described as “quality” companies and a fifth that should escape much damage. For investors interested in owning shares in each of the five supply chain stocks to buy, keep in mind the companies are not immune from such problems but they seem more likely than most to sidestep the biggest blows.
Equity markets worldwide have retreated sharply in what has already been a steady slide during September, said Bryan Perry, who leads the high-yield-focused Cash Machine investment newsletter and the Premium Income, Quick Income Trader, Breakout Profits Alert and Hi-Tech Trader services. This retreat stems from concerns about persistent global supply chain disruptions, the potential default by China’s second-largest property developer, Evergrande, Fed policy uncertainty and problems in containing the Delta variant of COVID-19 that combine to fuel inflationary pressures, he added.
These collective fears come as investors seem to expect a correction after 11 straight months without a pullback of more than 3%, Perry advised his Premium Income subscribers on Sept. 21. Even though the market has been rising, the NYSE advance and decline lines have weakened since June and key large-cap stocks have done most of the heavy lifting to sustain the rally since then, he cautioned.
Paul Dykewicz interviews Bryan Perry.
Watch out Not Only for Supply Chain Woes but Inflation, Warns Jim Woods
“Higher inflation means rising input costs, and rising input costs can cause pernicious margin compression,” said Jim Woods, editor of the Successful Investing and Intelligence Report newsletters, as well as the leader of the Bullseye Stock Trader advisory service. “As investors, we need to look at companies that can weather rising costs the most.”
Woods addressed the growing supply chain problems in his most recent Intelligence Report. Woods, a Wall Street veteran, also shared some of his favorite strategies for avoiding the worst of the supply chain fallout and the risk of increased inflation.
Paul Dykewicz discusses investments with Jim Woods, editor of Intelligence Report.
Five Supply Chain Stocks to Buy Include Industrial Manufacturer Dover
One of the stocks BoA touted for the execution of its successful business operations is Dover Corp. (NYSE: DOV), a Downers Grove, Illinois-based manufacturer of industrial products. The company received a buy recommendation and a $190 price objective from BoA on the strength of a 17x enterprise value (EV) / earnings before interest, taxes, depreciation and amortization (EBITDA) multiple of the investment firm’s 2022 estimates.
BoA’s target multiple actually is at a discount to multi-industrial peers trading at 21x 2021 estimates, but the investment firm wrote the comparatively modest valuation is fair due to Dover’s lower EBITDA margins. Risks that could prevent Dover from attaining the price objective of $190 that BoA forecast include slowing U.S. industrial production; not achieving expected returns from organic investments or acquisitions; and slower-than-expected margin improvement.
Dover not only is performing well with its organic growth but through acquisitions, too. On Sept. 15, Dover announced completion of its previously disclosed acquisition of the Espy Corporation, which will become part of the Microwave Products Group (MPG) within Dover’s Engineered Products segment. Espy designs and manufactures advanced electronic radio frequency sensor systems used to detect, record, analyze and geolocate signals.
Just outside of Austin, Texas, Espy offers complete signal intelligence systems with integrated software that is sold globally. Espy’s proprietary machine learning and real-time geolocation technology, together with its software interface, greatly reduce the time needed to identify and process signals of interest while providing high accuracy on a signal’s origin.
One of the Five Supply Chain Stocks to Buy Boosts Its Dividend
Dover’s board of directors on Aug. 5 increased the company’s quarterly cash dividend to $0.50 per share, up from $0.495 per share, to mark the 66th straight year in which the company has boosted its payout. The increase shows Dover’s longstanding policy of returning capital to shareholders.
For the second quarter ended June 30, Dover generated revenue of $2.0 billion, an increase of 36%, compared to the second quarter of the prior year. Organic growth accounted for 83.33% of the overall gain.
Dover reported Generally Accepted Accounting Principles (GAAP) net earnings for second-quarter 2021 of $265 million, up 112% from the comparable quarter a year ago. The company’s diluted earnings per share (EPS) of $1.82 on a GAAP basis also rose 112%. On an adjusted basis, net earnings of $299 million in Q2 2021 increased 82% and adjusted diluted EPS of $2.06 was also up 82% versus the comparable quarter of the prior year.
Chart courtesy of www.StockCharts.com
CEO of One of the Five Supply Chain Stocks to Buy Boasts of Backlog
“We performed well again this quarter as new order activity remained strong and margin improvement continued its solid trajectory across all segments,” said Richard J. Tobin, Dover’s president and chief executive officer. “Our portfolio is performing above pre-pandemic levels in terms of revenue and margin, and our record-high backlog provides visibility into the second half of the year and in some of our businesses into 2022.
“During the quarter, we saw top-line growth across all of our segments, with the largest contributions to the year-over-year increase from pumps and process solutions, fueling solutions, food retail, marking & coding and the automotive aftermarket businesses. We are encouraged by the demand growth in compressor components, foodservice, and textile printing, and we expect continued recovery in these markets over the balance of the year.
“Our teams have done a commendable job in the first half navigating logistics bottlenecks, component and labor shortages, and cost inflation to meet end market demand and drive solid margin conversion. Our forecast for the balance of the year reflects the expectation that logistics constraints and input cost inflation will neither deteriorate nor improve materially. Despite this dynamic, we believe that our localized manufacturing and sourcing strategy and diverse business mix give us distinct advantages to win in the current demand environment.”
In the second half of 2021, Dover management expressed optimism about the second half of the year, including “robust backlog levels.” The company’s leaders also remain confident about executing operationally to drive portfolio profitability sufficiently to warrant heightened full-year revenue and earnings per share (EPS) guidance.
Five Supply Chain Stocks to Buy Gain Attention from Pension Chairman
“The supply chain problems are going to continue for some time,” said Bob Carlson, chairman of the Board of Trustees of Virginia’s Fairfax County Employees’ Retirement System with more than $4 billion in assets. “In this environment it’s important to invest in companies with high-quality management and long histories of surviving different environments.”
A good example is Dover, said Carlson, who leads the Retirement Watch investment newsletter. Carlson praised Dover for its rising dividend policy and long track record of returning cash to its shareholders.
“Supply chain management is critical to companies these days,” Carlson said. “The economy is booming, yet in the latest earnings season many companies are forecasting lower revenues and earnings. The lower forecasts are due mostly to lost sales and higher costs caused by supply problems.”
Power Management Company Ranks Among Five Supply Chain Stocks to Buy
Eaton Corp. PLC (NYSE: ETN), a Dublin, Ireland-based diversified power management company, gained a buy recommendation from BoA. The company has been in operation for more than 100 years and its business units include electrical products, electrical systems and services, aerospace, vehicles and, most recently, e-mobility.
Eaton’s mission is to improve the quality of life and the environment by using power management technologies and services. The company provides sustainable solutions to help its customers effectively manage electrical, hydraulic and mechanical power safely, efficiently and reliably. Eaton sells products to customers in more than 175 countries.
Sales in the second quarter of 2021 reached $5.2 billion, up 35% from the second quarter of 2020. The increase consisted of 27% growth in organic sales, 5% growth from acquisitions and 3% from positive currency translation, the company reported.
Five Supply Chain Stocks to Buy Include Eaton
Craig Arnold, Eaton’s chairman and chief executive officer, said when reporting the results that the company built on the momentum from its first quarter.
“We delivered record second-quarter adjusted earnings per share and segment margins, and organic sales were slightly above the midpoint of our guidance range, despite supply chain constraints impacting many of our businesses, Arnold said. “We are pleased with how well our businesses are executing in this environment.”
Eaton’s “sustainable priorities” span five pillars: transparency, shareholder value, workforce, environment and community. Supply chain practices are an integral part of each of these pillars, according to the company.
The company’s supply chain management undertakes “rigorous annual examination” to identify and mitigate a broad spectrum of supply chain risks, Eaton added.
Eaton, One of Five Supply Chain Stocks to Buy, Now Is Seeing Parts Arrive Late
Nonetheless, Arnold recently acknowledged revenue for the third quarter will be reduced because parts it needs aren’t arriving on time. He specifically mentioned its MasterCraft business is having supply-chain problems.
“Those problems seem to be reflected in ETN’s stock price,” Carlson said.
Even so, Eaton is seeing strong demand for its renewable power generation and vehicle electrification equipment, Carlson continued. Sales growth should be strong for at least the next few years, he added.
“The supply chain problems are going to continue for some time,” Carlson said. “In this environment it’s important to invest in companies with high-quality management and long histories of surviving different environments.”
BoA gave Eaton a $195 price objective on a 20x enterprise value EV/ EBITDA multiple based on the investment firm’s 2022 estimates. The target multiple is at a premium to the 18x peer average on 2021 estimates but the valuation is warranted due to expected upside from cyclical operating leverage, strong margin performance and Eaton’s less cyclical portfolio mix, BoA added.
Downside risks to BoA’s price target for Eaton are: a worse-than-expected global industrial recession, particularly in commercial construction; mergers and acquisitions is inherently risky due to the need for availability of accretive synergistic targets and a company’s ability to integrate; and the trajectory of the recovery in automotive and aerospace end markets.
Chart courtesy of www.StockCharts.com
Electronic Instruments Maker Joins Five Supply Chain Stocks to Buy
AMETEK Inc. (NYSE: AME), a Berwyn, Pennsylvania-based manufacturer of electronic instruments and electromechanical devices, gained a recommendation from BoA, too. Its Electronic Instruments consist of advanced analytical, test and measurement products for the energy, aerospace, power, research, medical and industrial markets, while its Electromechanical devices feature automation and precision motion control solutions, highly engineered electrical interconnects, specialty metals and thermal management systems.
For the second quarter ended June 30, AMETEK’s sales reached a record $1.39 billion, a 37% increase from the second quarter of 2020, with organic sales growth of 25%. Operating income increased 39% to a record $316.6 million and operating margins hit 22.8%, up 40 basis points over the prior-year period.
On a GAAP basis, second-quarter earnings per diluted share were $1.00. Adjusted earnings were a record $1.15 per diluted share, up 37% versus the prior year’s adjusted results. Adjusted earnings add back non-cash, after-tax, acquisition-related intangible amortization of $0.15 per diluted share.
“Sales growth and operating performance were exceptionally strong while earnings exceeded our expectations,” said David A. Zapico, AMETEK Chairman and Chief Executive Officer. “Order growth remains robust and broad-based resulting in a record $2.5 billion in backlog. Additionally, our businesses generated outstanding levels of cash flow with free cash flow conversion a strong 114% of net income.”
AMETEK’s Growth Shows Why It Is Among Five Supply Chain Stocks to Buy
Following AMETEK’s second quarter results, it increased its guidance for the year. Overall sales are expected to rise approximately 20% with organic sales up approximately 10%. Adjusted earnings per diluted share are expected to be in the range of $4.62 to $4.68, up 17% to 18% over 2020, rising from AMETEK’s previous guidance range of $4.48 to $4.56 per diluted share.
“We expect overall sales in the third quarter to be up in the mid-20% range compared to the third quarter of 2020. Adjusted earnings per diluted share are anticipated to be in the range of $1.16 to $1.18, up 15% to 17% over the same period in 2020,” concluded Zapico.
BoA based its $165 price objective on a 23x EV/EBITDA multiple of its 2022 estimates for AMETEK. The target of 23x multiple is at a premium to the peer average trading on 2021E of 22x, which BoA views as fair given the company’s higher margins, strong cost control and cyclical operating leverage. Risks to meeting that price objective are: weaker industrial production trends; a slowing pace of acquisitions; and any disruption in the ongoing relocation of labor to low-cost countries.
Chart courtesy of www.StockCharts.com
Fortive Forges Way onto List of Five Supply Chain Stocks to Buy
Everett, Washington-based Fortive Corporation (NYSE: FTV), a diversified industrial technology conglomerate that was spun off from Danaher in July 2016, won a recommendation from BoA as a provider of technologies for connected workflow solutions across a range of markets. Fortive’s strategic segments of Intelligent Operating Solutions, Precision Technologies and Advanced Healthcare Solutions includes brands with leading positions in their markets.
The company’s businesses design, develop, service, manufacture and market professional and engineered products, software and services. Fortive employs more than 17,000 research and development, manufacturing, sales, distribution, service and administrative team members in 50-plus countries.
Plus, Fortive reported on Sept. 1 that it completed its previously announced acquisition of ServiceChannel Holdings Inc. to become an operating company within its own Intelligent Operating Solutions (IOS) segment. ServiceChannel, with more than 500 enterprise customers in over 70 countries, is a global provider of SaaS-based multi-site facilities maintenance service solutions with an integrated service-provider network of 70,000-plus facilities maintenance service providers.
“The transaction adds another differentiated, high-growth SaaS asset with an attractive runway to drive increasing profitability and free cash flow, and generate strong returns over the next five years, said James Lico, Fortive’s president and chief executive officer. “As we look ahead, we have significant capacity and opportunity for additional capital allocation which will continue to strengthen the portfolio and drive double-digit earnings and free cash flow growth over the long-term.”
Fortive’s second-quarter results, ended July 2, produced a 26.7% jump in revenues from continuing operations to reach $1.3 billion, compared to the same quarter a year ago. For Q2 2021, adjusted net earnings from continuing operations were $238.8 million. Diluted net earnings per share from continuing operations for the second quarter, ended July 2, were $0.48. For the same period, adjusted diluted net earnings per share from continuing operations were $0.66.
Chart courtesy of www.StockCharts.com
BoA gave Fortive a $85 price objective, based on a 23x EV/EBITDA multiple of 2022 EBITDA estimates. The investment firm wrote its target multiple is in line with the peer average of 23x on 2021 estimate. Potential risks to Fortive attaining the price target are a weaker-than-expected capex cycle; redeploying cash into accretive acquisitions; and further strengthening of the U.S. dollar.
Honeywell Gains Spot as One of Five Supply Chain Stocks to Buy
Honeywell International Inc. (NASAQ: HON), a Charlotte, North Carolina-based provider of aerospace and building technologies, performance materials and technologies and safety and productivity solutions, gained a recommendation from BoA. The investment firm’s $270 price objective is based on 20x 2022E EV/EBITDA.
The target multiple is at a premium to peers trading at 18x EV/EBITDA on 2021 estimates, BoA wrote. The investment firm opined that a premium is warranted given a more defensive portfolio yielding resilient margins and above average EPS growth.
Potential risks to the BoA price objective on Honeywell are: acquisitions, specifically if Honeywell overpays for deals in the pursuit of diversifying and expanding into new, faster-growing adjacent markets; unforeseen future sales slowdowns due to economic pressures; and execution around ongoing simplification efforts.
Chart courtesy of www.StockCharts.com
U.S. Census Bureau Warns of Supply Chain Woes
The U.S. Census Bureau conducts a weekly Small Business Pulse Survey measuring the effect of changing business conditions during COVID-19 on the nation’s small businesses and found 67% of small businesses in manufacturing are incurring domestic supplier delays, above the 42% national average. Manufacturing businesses are also experiencing greater foreign supplier delays, production delays and shipping delays versus other sectors.
The percentage of respondents reporting supply chain issues has almost doubled from the prior year, the bureau reported. It seems supply chain issues have eased a bit in August but remain challenging.
Delta Variant of COVID-19 Affect Five Back-to-School Stocks to Buy
The Delta variant of COVID-19 has proven to be highly transmissible and is raising concerns from health experts about the spread of the virus. The Centers for Disease Control and Prevention (CDC) is blaming the variant for recent spikes in case numbers and deaths.
However, the variant also is leading to a rise in the number of people vaccinated against COVID-19. As of Sept. 21, 212,255,202 people, or 63.9% of the U.S. population, have received at least one dose of a COVID-19 vaccine. The fully vaccinated total 182,012,343 people, or 54.8%, of the U.S. population, according to the CDC.
COVID-19 cases worldwide, as of Sept. 21, total 229,513,803 and led to 4,707,676 deaths, according to Johns Hopkins University. U.S. COVID-19 cases hit 42,410,289 and caused 678,405 deaths. America has the dreaded distinction as the country with the most COVID-19 cases and deaths.
The five supply chain stocks to buy can help investors identify businesses that are mitigating the problem of delayed parts that is causing many other companies to suffer.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for special pricing!
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‘Build Back… You Know, The Thing’: Americans Have No Idea What’s In Biden’s Economic Plan
‘Build Back… You Know, The Thing’: Americans Have No Idea What’s In Biden’s Economic Plan
While Congressional Democrats spar over the ultimate size of President Biden’s "Build Back Better" economic plan, Bloomberg astutely points out that..
While Congressional Democrats spar over the ultimate size of President Biden's "Build Back Better" economic plan, Bloomberg astutely points out that Americans have no clue what they're signing up for with their tax dollars. In fact, according to a CBS News poll published Oct. 10, just 10% of Americans say they know the specifics of the bill, while only 1/3 think it would benefit them directly.
What's more, "Not even Congress knows what the bill would accomplish, with the contents of the plan changing day-by-day as Democrats squabble over how much it should spend, who it should benefit and who should pay for it."
For example, on Tuesday, the White House suggested it would jettison free community college. The next day, Democrats were focused on proposed tax hikes after moderate Sen. Kyrsten Sinema (D-AZ) put her foot down over corporate and personal tax rates.
In an attempt to provide some clarity (don't hold your breath), Biden on Thursday night held a CNN town hall-style event (on the same night as Dune's US release).
In short, their messaging sucks.
"I will state the obvious, but they need to shift the focus away from process to policy. So far, the coverage around their proposal is all around Democratic divisions, which inevitably makes it impossible to sell," said former Marco Rubio communications director, Alex Conant. "Frankly, they need to talk about what their goals are," he added. "Why is this necessary?"
Republicans, on the other hand, are clear on their messaging; "Massive government spending leads to massive tax hikes," according to GOP strategist Ron Bonjean. "When you have a shifting number and shifting programs, it becomes confusing to follow."
Instead of focusing on the legislation’s new investments in child care, the elderly, education, healthcare and climate change, Democratic lawmakers have openly haggled over the price tag. A standoff between the party’s progressive and centrist factions has created cable news-ready drama.
“Given how much is wrapped up in this package, it was always going to be a long and intense negotiation,” said Ben LaBolt, a former spokesperson for President Barack Obama. “One way to start is to build the case for the way this will help middle class families and focus the public on those conversations, while at the same time preserving room for the closed-door negotiations to bring all of the elements of the party together for the biggest, most comprehensive approach possible.” -Bloomberg
In a Wednesday speech in Scranton, PA, Biden tried - and failed - to convey how his economic agenda would help working class families - by intermingling stories about growing up in the area and programs contained in the legislation.
"Frankly, they’re about more than giving working families a break; they’re about positioning our country to compete in the long haul," said Biden, doing his usual poor job of reading a teleprompter. "Economists left, right, and center agree."
Meanwhile, Biden - let's face it, Biden's 'advisers' have failed to ink a final compromise between warring factions of Democrats. For the Build Back Better plan to pass, every single Senate Democrat must be on board. As moderates Sinema and Joe Manchin (D-WV) balk on the price tag and demanding deep cuts, progressive House Democrats are sure to similarly balk at passing the smaller, $1.2 trillion infrastructure package that's already passed the Senate.
While advocacy groups have started to spend heavily to promote policies in the plan, most of the discussion remains centered on its cost.
Biden’s advisers are banking on the presumption that ordinary Americans don’t pay much attention to the machinations of everyday Washington. Much as they were during the presidential campaign, the president’s aides are largely dismissive of what they call horse-race stories.
But Biden’s team had a much easier time selling his pandemic relief legislation, the American Rescue Plan, in March, with its convenient focus on three clear issues -- money for vaccines, money to re-open schools and checks sent directly to American households. -Bloomberg
"They haven’t laid out why we need this, other than Democrats are in power now and aren’t going to have it again for a long time," said Conant.
Good luck with that.
Parents were fine with sweeping school vaccination mandates five decades ago – but COVID-19 may be a different story
Public health experts know that schools are likely sites for the spread of disease, and laws tying school attendance to vaccination go back to the 1800s.
The ongoing battles over COVID-19 vaccination in the U.S. are likely to get more heated when the Food and Drug Administration authorizes emergency use of a vaccine for children ages 5 to 11, expected later this fall.
California has announced it will require the vaccine for elementary school attendance once it receives full FDA approval after emergency use authorization, and other states may follow suit. COVID-19 vaccination mandates in workplaces and colleges have sparked controversy, and the possibility that a mandate might extend to younger children is even more contentious.
Kids are already required to get a host of other vaccines to attend school. School vaccination mandates have been around since the 19th century, and they became a fixture in all 50 states in the 1970s. Vaccine requirements are among the most effective means of controlling infectious diseases, but they’re currently under attack by small but vocal minorities of parents who consider them unacceptable intrusions on parental rights.
As a public health historian who studies the evolution of vaccination policies, I see stark differences between the current debates over COVID-19 vaccination and the public response to previous mandates.
Compulsory vaccination in the past
The first legal requirements for vaccination date to the early 1800s, when gruesome and deadly diseases routinely terrorized communities. A loose patchwork of local and state laws were enacted to stop epidemics of smallpox, the era’s only vaccine-preventable disease.
Vaccine mandates initially applied to the general population. But in the 1850s, as universal public education became more common, people recognized that schoolhouses were likely sites for the spread of disease. Some states and localities began enacting laws tying school attendance to vaccination. The smallpox vaccine was crude by today’s standards, and concerns about its safety led to numerous lawsuits over mandates.
The U.S. Supreme Court upheld compulsory vaccination in two decisions. The first, in 1905, affirmed that mandates are constitutional. The second, in 1922, specifically upheld school-based requirements. In spite of these rulings, many states lacked a smallpox vaccination law, and some states that did have one failed to enforce it consistently. Few states updated their laws as new vaccines became available.
School vaccination laws underwent a major overhaul beginning in the 1960s, when health officials grew frustrated that outbreaks of measles were continuing to occur in schools even though a safe and effective vaccine had recently been licensed.
Many parents mistakenly believed that measles was an annoying but mild disease from which most kids quickly recovered. In fact, it often caused serious complications, including potentially fatal pneumonia and swelling of the brain.
With encouragement from the Centers for Disease Control and Prevention, all states updated old laws or enacted new ones, which generally covered all seven childhood vaccines that had been developed by that time: diphtheria, pertussis, tetanus, polio, measles, mumps and rubella. In 1968, just half the states had school vaccination requirements; by 1981, all states did.
Expanding requirements, mid-20th century
What is most surprising about this major expansion of vaccination mandates is how little controversy it provoked.
The laws did draw scattered court challenges, usually over the question of exemptions – which children, if any, should be allowed to opt out. These lawsuits were often brought by chiropractors and other adherents of alternative medicine. In most instances, courts turned away these challenges.
There was scant public protest. In contrast to today’s vocal and well-networked anti-vaccination activists, organized resistance to vaccination remained on the fringes in the 1970s, the period when these school vaccine mandates were largely passed. Unlike today, when fraudulent theories of vaccine-related harm – such as the discredited notion that vaccines cause autism – circulate endlessly on social media, public discussion of the alleged or actual risks of vaccines was largely absent.
Through most of the 20th century, parents were less likely to question pediatricians’ recommendations than they are today. In contrast to the empowered “patient/consumer” of today, an attitude of “doctor knows best” prevailed. All these factors contributed to overwhelmingly positive views of vaccination, with more than 90% of parents in a 1978 poll reporting that they would vaccinate their children even if there were no law requiring them to do so.
Widespread public support for vaccination enabled the laws to be passed easily – but it took more than placing a law on the books to control disease. Vaccination rates continued to lag in the 1970s, not because of opposition, but because of complacency.
Thanks to the success of earlier vaccination programs, most parents of young children lacked firsthand experience with the suffering and death that diseases like polio or whooping cough had caused in previous eras. But public health officials recognized that those diseases were far from eradicated and would continue to threaten children unless higher rates of vaccination were reached. Vaccines were already becoming a victim of their success. The better they worked, the more people thought they were no longer needed.
In response to this lack of urgency, the CDC launched a nationwide push in 1977 to help states enforce the laws they had recently enacted. Around the country, health officials partnered with school districts to audit student records and provide on-site vaccination programs. When push came to shove, they would exclude unvaccinated children from school until they completed the necessary shots.
The lesson learned was that making a law successful requires ongoing effort and commitment – and continually reminding parents about the value of vaccines in keeping schools and entire communities healthy.
Add COVID-19 to vaccine list for school?
Five decades after school mandates became universal in the U.S., support for them remains strong overall. But misinformation spread over the internet and social media has weakened the public consensus about the value of vaccination that allowed these laws to be enacted.
COVID-19 vaccination has become politicized in a way that is unprecedented, with sharp partisan divides over whether COVID-19 is really a threat, and whether the guidance of scientific experts can be trusted. The attention focused on COVID-19 vaccines has given new opportunities for anti-vaccination conspiracy theories to reach wide audiences.
[Over 115,000 readers rely on The Conversation’s newsletter to understand the world. Sign up today.]
Fierce opposition to COVID-19 vaccination, powered by anti-government sentiment and misguided notions of freedom, could undermine support for time-tested school requirements that have protected communities for decades. Although vaccinating school-aged children will be critical to controlling COVID-19, lawmakers will need to proceed with caution.
James Colgrove has received funding from the National Library of Medicine, the Greenwall Foundation, the Milbank Memorial Fund, and the William T. Grant Foundation.cdc disease control emergency use authorization covid-19 vaccine fda spread
2 High Yielding Canadian Dividend Stocks to Add Today
Many investors are looking to achieve financial freedom. Ditching that 9-5 job and being financially free is certainly a lifestyle to get excited about. To achieve this, many buy high-yielding Canadian dividend stocks. But, what many don’t realize is…
Many investors are looking to achieve financial freedom. Ditching that 9-5 job and being financially free is certainly a lifestyle to get excited about.
To achieve this, many buy high-yielding Canadian dividend stocks. But, what many don't realize is that the dividend yield of a company is not the first thing you should be looking at. In fact, a high yield can sometimes be a looming disaster. Look no further than the record-breaking amount of dividend cuts we had during the COVID-19 pandemic.
There's no point in purchasing a high yielding Canadian dividend stock if you're going to watch your capital shrink. So, in this article we're going to highlight a few options that not only present a high dividend yield for investors buying stocks to churn out more passive income, but a reliable dividend yield, one that can stand the test of time.
Reliability found in Enbridge (TSX:ENB)
If you're an income investor, you've likely heard of Enbridge (TSE:ENB). The company has paid a notoriously high yield for decades, and has maintained one of the longest dividend growth streaks in the country, raising consistently for more than 2 and a half decades.
Enbridge is a midstream company with a growing renewable energy portfolio. To give an indication of the company's dominance, it states that it is responsible for shipping more than 20% of the natural gas that is consumed in the United States, and 25% of North America's crude oil.
Enbridge (TSX:ENB) and the renewable future
Its renewable energy portfolio is quite small, accounting for only 3% of 2020 adjusted EBITDA, but it is one that is growing fast, and investors should take note. As we move further into the future, renewables will no doubt play a key role in Enbridge's growth.
There's also a chance you've glanced at Enbridge during a pre-screen and avoided the company due to excessively high payout ratios. Which, is fairly reasonable. The company is currently paying out over 110% of trailing earnings towards its dividend. But, you may be missing a massive opportunity here.
When analyzing pipelines, you want to be looking at something called distributable cash flow, or DCF. This cash flow calculation is produced by the company themselves, and calculations can vary to some degree. Given the complex business structure of a pipeline company, this is the most reliable indicator to use when it comes to dividend safety.
In 2021, Enbridge expects to generate $4.70-5 in distributable cash flow. With a dividend of $3.34 per year, this puts the company's payout ratio at 66.8% on the high end. Of note, Enbridge's target is to keep its payout ratio within this range, and the company has done so for quite some time.
Consistent cash flows in "take or pay" contracts
How has it managed to do so? Cash flow with pipelines is extremely consistent, due to long term take or pay contracts. Regardless of whether or not Enbridge is shipping product, the pipeline space is paid for. And not only this, Enbridge can turn around and charge someone else to utilize that space, even if it has already been paid for and goes unused.
This creates an extremely reliable cash flow stream despite the price of natural gas or oil, and is one of the major reasons why Enbridge and other midstream companies are not as susceptible to volatility in commodity prices.
Yielding 6.47%, Enbridge is a solid option to help you bolster your passive income stream and start generating long-standing wealth.
Beefy distribution in A&W Revenue Royalties Income Fund (TSX:AW.UN)
Royalty funds are often avoided due to their complex and confusing structure. However, many of them provide excellent opportunities for investors looking to generate passive income. A&W Revenue Royalties Income Fund (TSE:AW.UN) is one that does just that.
Many bears will point out that A&W in the United States has been struggling. However, in Canada it is a much different story.
A&W thriving in Canadian space
The company has over 1,000 restaurants in Canada and had system sales of over $1.4B in 2020, despite being in a global pandemic. The company has proven to be exceptionally skilled at marketing its products and has some of the best industry leading growth out of all fast food chains in Canada.
As a royalty company, A&W Royalty collects "top line" cash flows. Which means it is solely dependent on the sales driven through A&W restaurants. This means that its distribution can vary depending on how well the restaurants do, but overall it has been extremely reliable when it comes to payments.
Yes, the chain did suspend its $0.10 monthly distribution because of the pandemic in 2020, however it quickly made up for this by providing 2 special distributions of $0.30 and $0.20 when operations started back up later in the year.
Sales growth through the first 6 months of 2021
Prior to the pandemic, the company had achieved mid to high single digit same store sales growth over the last half decade, and it's off to a roaring start in 2021 as well, with 12.2% sales growth through the first 6 months. Through the first 6 months of the year the company has also added 34 new restaurants. To put this into perspective, the company added 37 in all of Fiscal 2020.
The fund yields 4.77%, and pays out on a monthly basis. Payout ratios will look high, but if you understand the operations of a royalty company, you'll know that it aims to pay out the vast majority of its distributable cash back to shareholders.
Overall, it seems consumers are willing to eat at A&W despite higher costs, which bodes well for the company's growth. It does this with great marketing and higher quality food than similar chains like Burger King and Mcdonalds, and investors are likely to enjoy a beefy (no pun intended) distribution for quite some time.
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