USA Compression and Disney have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – October 25, 2023 – Zacks Equity Research shares USA Compression Partners USAC as the Bull of the Day and Disney DIS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on AbbVie ABBV, Amgen AMGN and Gilead Sciences GILD.
Here is a synopsis of all five stocks.
Bull of the Day:
USA Compression Partners is a Zacks Rank #1 (Strong Buy) that has a D for Value and a B for Growth. USAC is one of the largest independent natural gas compression services and they recently increased pricing by more than 11%. Since that time, the stock has moved higher. Let’s explore more about this company in this Bull of The Day article.
Description
SA Compression Partners LP engages in the provision of compression services in terms of total compression fleet horsepower. Its services include processing and transportation of natural gas through the domestic pipeline system and enhancing crude oil production through artificial lift processes. The company was founded by Eric Dee Long in1998 and is headquartered in Austin, TX.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For USA Compression Partners, I see one beat and three misses of the Zacks Consensus Estimate. The most recent quarter was the beat.
Earnings Estimates Revisions
Earnings estimates revisions is what the Zacks Rank is all about.
For USAC, estimates are moving higher.
This quarter has moved from $0.10 to $0.11.
Next quarter is holding still at $0.13.
The full year 2023 has seen estimates move from $0.30 to $0.31 over the last 60 days.
Next fiscal year has seen a move higher from $0.55 to $0.60 over the same period.
Valuation
The valuation is a little high, but the growth suggests that the stock should see a more reasonable valuation soon. The forward PE is 82x, but if we stretch the time horizon out to next year, we see the number cut in half. The price to sales comes in at 3.2x and the company has seen operating margins move from 5.15% to 6.35%.
Bear of the Day:
Disney is a Zacks Rank #5 (Strong Sell) has seen earnings estimates slide lower recently despite a good history of beating Zacks Consensus Estimate. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
The Walt Disney Co. engages in the business of international family entertainment and media enterprise. It owns and operates television and radio production, distribution and broadcasting stations, direct-to-consumer services, amusement parks, and hotels. It operates through the following business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences, and Products. The company was founded by Walter Elias Disney on October 16, 1923 and is headquartered in Burbank, CA.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of DIS, I see three straight beats of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For DIS I see annual estimates moving lower of late.
The current fiscal year consensus number moved lower from $3.68 to $3.66 over the last 60 days.
The next year moved from $5.22 to $4.90 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Additional content:
3 Biotechs with Decent Dividends for a Steady Return
The Zacks Biomedical and Genetics industry continues to grapple with issues like unfavorable foreign currency fluctuations that affect premium growth. Also, volatile global equity markets and low bond yields put enormous pressure on the insurer’s capital position. Amid volatile market conditions, companies with an impressive dividend history make for a solid investment option.
Despite the aforementioned challenges, the Biomedical and Genetics industry has gained 12.5% until Oct 18 compared with the Medical sector’s growth of 7.3%.
High-quality dividend stocks like AbbVie, Amgen and Gilead Sciences with an impressive dividend history, might fetch promising returns for investors.These companies have consistently announced dividend hikes, which highlight their pro-shareholder stance.
Majority of the biotech players do not generate enough revenues to fund their operations and are dependent of external funds. A company starts generating revenues following a successful FDA approval and launch of any drug. Thus, the rising interest rate environment is likely to hurt the margins of biotech players as the industry players needs huge amount of capital to continue clinical studies before getting an FDA approval.
Moreover, the launch of a product requires significant amount of capital. As Fed hints at additional interest rate hikes amid high inflation, dividend-bearing stocks are likely to help tame some volatility amid an uncertain macro environment.
Stocks with a strong history of dividend growth belong to mature companies and are less susceptible to large swings in the market. They act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, they also offer downside protection with a consistent rise in payouts.
Additionally, these companies have superior fundamentals like a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some valuable characteristics.
3 Biotech Stocks to Watch Now
In order to choose some of the best dividend stocks from the industry, we have run the Zacks Stock Screener to identify those with a dividend yield in excess of 2% and a sustainable dividend payout ratio of less than 60%.
AbbVie: Headquartered in North Chicago, IL, AbbVie enjoys a leading position in key therapeutic areas, including immunology, hematologic oncology, neuroscience, aesthetics and eye care. The company pays out a quarterly dividend of $1.48 ($5.92 annualized) per share, which gives it a 3.97% yield at the current stock price. This company’s payout ratio is 47%, with a five-year dividend growth rate of 9.06%. (Check AbbVie’s dividend history here.)
The company is also active on the buyback front. During the first half of 2023, ABBV repurchased shares worth $1.6 billion. As of June-end, it had $4.8 billion available for repurchase under its active share repurchase program.
AbbVie Inc. dividend-ttm | AbbVie Inc. Quote
Amgen: Headquartered in Thousand Oaks, CA, Amgen is one of the biggest biotech companies in the world, with a strong presence in the oncology/hematology, cardiovascular disease, neuroscience, inflammation, bone health, and nephrology and neuroscience markets.
Amgen pays out a quarterly dividend of $2.13 ($8.52 annualized) per share, which gives it a 3% yield at the current stock price. This company’s payout ratio is 48%, with a five-year dividend growth rate of 10.18%. (Check Amgen’s dividend history here.)
The company also has buyback plans. Although the company did not repurchase shares during the first half of 2023, it had $7 billion under its share repurchase authorization as of June 2023. AMGN had repurchased shares worth $6.3 billion during 2022.
Amgen Inc. dividend-ttm | Amgen Inc. Quote
Gilead Sciences: Headquartered in Foster City, CA, Gilead Sciences is a pioneer in the development of drugs for the treatment of human immunodeficiency virus, liver diseases, hematology/oncology diseases and inflammation/respiratory diseases. GILD pays out a quarterly dividend of 75 cents ($3.00 annualized) per share, which gives it a 3.77% yield at the current stock price. This company’s payout ratio is 48%, with a five-year dividend growth rate of 4.87%. (Check Gilead Sciences’ dividend history here.)
The company is also active on the buyback front. During the first half of 2023, GILD repurchased shares worth $500 million. As of June-end, it had $4.3 billion available for repurchase under its share repurchase program announced in 2020.
Gilead Sciences, Inc. dividend-ttm | Gilead Sciences, Inc. Quote
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Amgen Inc. (AMGN) : Free Stock Analysis Report
Gilead Sciences, Inc. (GILD) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
AbbVie Inc. (ABBV) : Free Stock Analysis Report
USA Compression Partners, LP (USAC) : Free Stock Analysis Report
