|Day's Range||1.6000 - 2.4500|
When it comes to investing, a new price trend is something we all can enjoy. But when you can effectively hedge that bet with a pairs trade in CVS (NYSE:CVS) and Merck (NYSE:MRK), that's a prescription for profits. Let me explain.Source: Shutterstock It nearly goes without saying interest rate policy and the U.S. China trade war have been on most investors' minds of late. Some days Wall Street is bullish, while on others, it's seemingly the end of the world as we know it. But for MRK stock and CVS shareholders, real catalysts off and on the price charts are happening right now.On Thursday, the Donald Trump administration announced it is walking away from a plan to eliminate rebates large pharmaceutical companies pay to pharmacy benefits managers, which negotiate drug prices on behalf of buyers such as insurance companies. Bottom line, for a drug manufacturer like Merck, this is potentially a huge headwind. Likewise, it could be a boon for CVS stock.InvestorPlace - Stock Market News, Stock Advice & Trading TipsUnder the scrapped rebate proposal, Merck would more or less have been able to retain its lucrative pricing model. Now though, and with the Trump administration still searching for a victory in promised lower healthcare costs to individuals, it's likely drug companies are going to be casualties to that end. That's bad news for MRK shareholders. And conversely, much of what's been ailing CVS stock has been eradicated. * 7 Dependable Dividend Stocks to Buy And on the price charts of CVS and MRK, reaction to the reports have confirmed the prescription for long-term profits by pairing up an improving CVS stock and a fatigued-looking MRK stock. Buy CVS StockShares of CVS stock have been correcting for the past four years, since hitting an all-time-high of $103.64 in July 2015. The days of CVS' bearish cycle, however, don't just look numbered -- they appear to be all but over.As the monthly chart shows, this week's news-induced bid has confirmed a monthly candlestick pivot low in shares of CVS. More importantly, the low is supported by the 62% retracement level dating back to the financial crisis. Further, stochastics is bullishly backing up the idea of a meaningful bottom as the indicator signals a crossover in oversold territory.CVS Stock Trade: Buy CVS stock today, look for upside towards $75-$80 in the coming months and size your position accordingly based on pattern risk of around 11%. Short MRK StockShares of MRK stock look prone to a larger cycle of profit-taking following what I'll call a period of bullish influenza after breaking out last July from a corrective base-on-base pattern. The news this week has had the effect of shaping a confirmed bearish engulfing reversal candlestick.The monthly chart in Merck also shows a bearishly supportive setup, as the indicator has been bearishly diverging from the price as new highs were hit. Net, net the technical evidence points to profit-taking and possibly an even larger bearish cycle for MRK stock.MRK Stock Trade: Short MRK stock today. Similar to CVS, a slightly larger stop-loss of 11% looks appropriate for containing dollar risk. Exit the position if the topping pattern turns lethal for bears and shares manage to make new highs.Investment accounts under Christopher Tyler's management do not own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post A Pairs Prescription for CVS Stock and Merck appeared first on InvestorPlace.
Since July of 2016 CVS Health (NYSE:CVS) has been a nightmare for investors. This time three years ago, CVS stock traded at a little more than $97, today it trades at something closer to $57.Source: Shutterstock Despite making what seemed like smart moves, like dropping cigarettes, converting to a health format, adding clinics, and buying Aetna, the stock has continued to sink.But analysts have suddenly warmed to CVS' story. In the last month, the shares are up 8%. On July 11 alone they rose 4.68%. Even at that price, CVS is still selling at a retailer's multiple of less than half its revenue.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's an illustration of the difference between the marketplace and the stock market. It's a great opportunity for investors with a long-term view. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Chronic Conditions and CVS StockAmerica spends 18% of its GDP on health care, but 75% of that is spent treating and monitoring chronic conditions. These are preventable diseases like heart disease, diabetes, and kidney disease.This is what CVS has been focused on. By delivering services as well as products through almost 10,000 stores, the company hopes to gain a bigger share of this $1.1 trillion bonanza. Preventing obesity, treating alcoholism and ending smoking could be worth trillions more.Analysts have been focusing on drugs, in the form of Amazon (NASDAQ:AMZN) and its Pillpack service or CVS' Caremark Pharmacy Benefit Manager, but CVS has been diversifying away from the pure-intermediary model.Aetna alone brings 22 million insurance accounts to the party. If CVS' network can reduce the costs of covering those people, it can offer lower prices that increase that number. That's what its HealthHUB strategy is all about.Deliver the most common services and treatments from a storefront, add front-line clinics for primary care, of which CVS already has 1,100, and you have more cost control than any insurance rival. CVS hopes to turn 1,500 of its outlets into HealthHubs in the next two years. CVS Stock and the Real CompetitionCVS' rivals in this area aren't Amazon or even Walgreens Boots Alliance (NYSE:WBA). They're other insurers like United Healthcare (NYSE:UNH), which dominates the private insurance market and managed care companies like Centene (NYSE:CNC), which uses company-owned facilities to handle Medicare and Medicaid at a profit.Investors haven't credited any of CVS' moves for political reasons. Democrats talking about converting all health care to a publicly funded system makes them nervous. The possible end of Obamacare, pricing tens of millions out of the insurance market, also makes them nervous.But CVS' strategy can work in either case. If Democrats expand Medicare the companies that can cut costs fastest will benefit. If people are left without insurance, stores that offer the lowest-cost primary care and services grow. The Bottom Line on CVS StockIn its first-quarter report for 2020, delivered May 1, CVS earned $1.4 billion, $1.62 per share fully diluted, on revenues of $61.6 billion. This is the first fiscal year that has begun since the Aetna deal closed. CVS raised earnings guidance for the full year. Its 50 cent per share dividend, with its fat 3.6% yield, is thus affordable.Because of its retail operation, CVS is the only insurer that can rival United Healthcare in size. That company's revenues for the first quarter were $60.3 billion. It has four times the market share of Aetna in private insurance.Most analysts consider United Healthcare the biggest winner in health care, but macro trends may be running against it. CVS stock is a winner for income investors right now, with that fat, affordable dividend.Dana Blankenhorn is a financial and technology journalist. He is the author of a new environmental story, Bridget O'Flynn and the Bear, available now at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN and CVS. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post CVS Stock Is a Buy as It Prepares to Take on Private Insurance appeared first on InvestorPlace.
DEEP DIVE Despite all the good economic news, earnings growth is expected to slow to a crawl this year for large U.S. companies. It may also surprise you that the health-care sector is seen as one of the exceptions.
We study the impact of Trump's dropping of the proposed drug rebate rule on some health ETFs with exposure to pharmacy benefit managers and healthcare insurers.
Green Growth Brands (CSE: GGB) (OTCQB: GGBXF) has received a purchase order from American Eagle Outfitters (NYSE: AEO) for hemp-derived CBD infused personal care products. The deal will see GGB’s products hitting shelves at nearly 500 of American Eagle stores. The Supreme Cannabis Company (TSX: FIRE) (OTCQX: SPRWF) and Blissco Cannabis (CSE: BLIS) (OTCQB: HSTRF) reported […]The post Cannabis Stock News Daily Roundup July 12 appeared first on Market Exclusive.
In early morning trading, futures on the Dow Jones Industrial Average are up 0.29%, and S&P 500 futures are higher by 0.22%. Nasdaq-100 futures have added 0.20%.Source: Shutterstock In the options pits, calls continued their usual leadership role on Thursday, while overall volume settled to average levels. Specifically, about 18 million calls and 14.4 million puts changed hands on the session.Meanwhile, over at the CBOE, the single-session equity put/call volume ratio normalized after Wednesday's super low reading. The metric climbed back to 0.61 to end in the location of the 10-day moving average.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOptions traders swarmed the following three stocks. Bed Bath & Beyond (NYSE:BBBY) continued its trend of earnings deterioration with weak numbers for the fiscal first-quarter. Merck (NYSE:MRK) and CVS Health (NYSE:CVS) both saw sharp moves following news that the White House was ending its drug rebate plans.Let's take a closer look: Bed Bath & Beyond (BBBY)A quick Google search following this week's earnings release for ailing retailer, Bed Bath & Beyond, reveals a litany of ominous-sounding headlines. And, well, they're all probably justified. For the fiscal first-quarter, the company posted a loss of $2.91 per share. After adjusting for miscellaneous items, however, earnings came in at 12 cents per share, marking a 68% decline. Comps were down 6.6%, and revenue grew to $2.57, which was well below last year's $2.75 billion in the same quarter.Sellers took to the streak driving BBBY stock as low as $10.43 before a rapid recovery carried it back near the high of the day. The chart continues to look like garbage, warning anyone who cares about technical analysis to stay far away. That said, the intraday rebound was impressive and could deliver some short-term relief. * 7 Short Squeeze Stocks With Big Upside Potential On the options trading front, puts were all the rage. Total activity ballooned to 777% of the average daily volume, with 108,356 contracts traded; 70% of the trading came from call options alone.The expected move ahead of earnings was $1.54 or 13.3%, so with the stock rallying back to near unchanged on the session, anyone who shorted volatility before the report and held steady through the morning drop came out a big winner. CVS Health (CVS)CVS Health has been in decline for years, but scored a rare win yesterday after the White House halted plans that "would have curtailed rebates that drug manufacturers pay pharmacy benefit managers (PBMs) in return for winning placement of high-priced products on lists of drugs that insurers cover with affordable co-pays."Although CVS stock closed up 4.68% on the session, it was mostly a sell-the-news reaction. It was up as much as 8.6% before sellers swarmed and capitalized on the gift. The chart still looks terrible, but Thursday's jump did complete a five-month basing pattern, so there is a chance that a short-term bottom has been put in place.On the options trading front, optimism drove traders into call options throughout the session. By day's end, activity grew to 539% of the average daily volume, with 170,938 total contracts traded. Calls claimed 66% of the session's sum.Implied volatility jumped to 31% or the 41st percentile of its one-year range. Premiums are now pricing in daily moves of $1.13 or 1.9%. Merck (MRK)CVS Health wasn't the only stock impacted by the White House announcement. Companies that manufacture and sell drugs like Merck were whacked after the news. Barrons has an insightful take you can find here. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The single day 4.5% drop took some $7 billion off the market cap of MRK stock and pushed it back below its 50-day moving average. The uptrend is now on shaky footing, and the stock is in technical no man's land. If the weakness persists, use $77 as your first downside target. It would take a recovery to $85 before negating the bearish signals created by Thursday's swoon.On the options trading front, put popularity only slightly edged out calls. By the closing bell, activity climbed to 392% of the average daily volume, with 100,295 total contracts traded. Puts accounted for 52% of the take.The plunge did light a fire under implied volatility, driving the measure up to 24% or the 52nd percentile of its one-year range. Premiums are officially pumped, suggesting short options strategies are the way to go if you're inclined to trade here.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Friday's Vital Data: Bed Bath & Beyond, CVS and Merck appeared first on InvestorPlace.
Another win for the market on Thursday, with the S&P 500 ending the session up 0.23% to finish the session at just a hair below 3,000. The volume grew once again on the third-straight daily gain, though it is still below average.Source: Shutterstock CVS Health (NYSE:CVS) and UnitedHealth Group (NYSE:UNH) ranked among the session's biggest winners, up 4.7% and 5.5%, respectively, after President Trump decided to not enact new rules that would stymie rebates on pharmaceutical purchases. At the other end of the spectrum, Merck (NYSE:MRK) led the losers on Thursday, as the President's move worried some that it could end up being pharmaceutical companies that bore the brunt of any cost-control initiatives. Merck shares ended the day down by 4.5%. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Headed into the final trading day of the week, though, it's HollyFrontier (NYSE:HFC), Activision Blizzard (NASDAQ:ATVI) and Vertex Pharmaceuticals (NASDAQ:VRTX) that merit the closest looks from traders. Here's why, and what to look for.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Vertex Pharmaceuticals (VRTX)Vertex Pharmaceuticals is still technically in a long-term uptrend, guided higher by a rising support line that extends all the way back to late-2017. Although it has ebbed and flowed along the way, it has made higher highs and higher lows for some time now.The flavor of the advance changed in a fundamental way this year, however, and although it has been more erratic than not, current and prospective owners may want to note that the repeated bearish swings are taking a cumulative toll on the broad uptrend. Click to Enlarge * Chief among the changes in the timbre of the major rally is the fact that for the first time in several quarters, VRTX has logged a streak of lower highs. They're plotted in yellow on both stock charts. * The long-term support line is marked with a dashed blue line on both charts. * It's easy to look past in the wide swings we've seen since the beginning of 2018, but the most recent round of weakness has pulled the purple 50-day moving average line below the white 200-day line for the first time since mid-2018 (although that instance proved to be a great entry point). HollyFrontier (HFC)Late last month, HollyFrontier shares were able to punch through a long-standing falling resistance line, and proceed to test their 100-day moving average line, marked in gray on both stock charts. That test ultimately failed, sending HFC lower again. Shares only needed to take a small step back before renewing a much-needed running start. The second effort made a big dent on Thursday. * 7 Marijuana Stocks With Critical Levels to Watch Click to Enlarge * The resistance line in question is marked in yellow on both stock charts. In retrospect, May's steep selloff served as the capitulation the chart needed. * Although it faltered the first time when attempting to push past the moving average line (highlighted), Thursday's second attempt worked nicely. * While the volume behind the runup since May's bottom is on reasonably healthy volume, the pace hasn't been healthy. HollyFrontier isn't yet stochastically overbought, but it's getting to that point fast. Activision Blizzard (ATVI)Finally, within nothing more than a quick glance, Activision Blizzard shares merely look stuck in a trading range. And, that may well be the case. A deeper look at some of the more subtle clues, however, suggests the bulls may be working on a bigger-picture recovery of last year's oversized pullback. The inflection point is within sight too, with a massive amount of room to run if and when the last hurdle area is cleared. Click to Enlarge * The subtle hints are not just the bullish crosses of most of the moving average lines on the daily chart. Since the end of last month, the 20-, 50- and 100-day moving average lines are acting as support. * The inflection point, or final potential resistance, is the 200-day moving average line at $51, plotted in white on both stock charts. In the meantime, there's horizontal resistance around $48.80. * The weekly chart puts the potential rebound in perspective. It also better identifies the fact that we've already seen a higher low.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post 3 Big Stock Charts for Friday: HollyFrontier, Activision Blizzard and Vertex Pharmaceuticals appeared first on InvestorPlace.
The Trump administration announced Thursday that it's deciding to withdraw its proposal to eliminate rebates from government drug plans.
The drug companies provide rebates to PBMs in exchange for distributing their products.
Nasdaq closed 6 points lower, even as Federal Reserve Chairman Jerome Powell reinforced expectations for an interest rate cut later this month.
The Trump administration dropped a drug rebate rule to squeeze profits of pharmacy benefit managers. Cigna, CVS, United Health and others soared. Some drugmakers rallied.
It's not terribly easy out there for income investors at the moment. Dividend stocks to buy are tough to find. Equity markets are at all-time highs, meaning valuations are stretched -- and dividend yields are lower. Treasury yields have fallen amid expectations for a Fed rate cut: getting income from bonds is no easy task, either.Many longtime dividend growth stalwarts -- think McDonald's (NYSE:MCD) or Procter & Gamble (NYSE:PG) -- trade at all time highs. Those that aren't seem to be struggling, with the likes of General Electric (NYSE:GE), Kraft Heinz (NASDAQ:KHC), and Anheuser-Busch (NYSE:BUD) all cutting their dividends in recent years. Finding the middle ground -- an attractive valuation combined with a solid business -- is exceedingly difficult right now.Given lower commissions, investors can sell off small parts of their holdings for income -- most of which should have appreciated nicely in this decade-long bull market. But income investors usually are looking for "set it and forget it" dividend stocks to buy, not constant portfolio trading.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell for an Economic Slowdown These 10 stocks don't quite qualify as "set it and forget it" plays. All have some degree of risk. But the risks seem worth taking for the potential rewards, which include near-term income, longer-term growth, and potential capital appreciation. As such, investors should take at least a long look at these 10 dividend plays. Broadcom (AVGO)Dividend Yield: 3.8%Broadcom (NASDAQ:AVGO) requires quite a bit of trust in management. The semiconductor giant has been built through acquisitions. As of late, AVGO has started moving away from chips and into software.Last year, the company acquired CA Technologies, an enterprise software play with a big presence in mainframe applications. Broadcom is now reportedly in talks to take over security play Symantec (NASDAQ:SYMC).Investors haven't particularly liked either deal. AVGO stock fell on the news of the CA deal. It has slipped again as reports of the Symantec acquisition leaked. But CEO Hock Tan certainly deserves the benefit of the doubt at this point. And the decline after the CA announcement, in particular, proved a buying opportunity: before the recent pullback, AVGO shares had risen some 50% in roughly a year.AVGO may not provide that type of return over the next year -- but there's still a nice bull case here on another merger-related dip. AVGO yields 3.8%. The Symantec deal will add to the company's significant free cash flow, which keeps that yield secure. Diversification in the existing chip business limits the cyclical impact on earnings -- and AVGO shares. Investors do have to trust Hock Tan at this point -- but history shows they probably should. Kellogg (K)Dividend Yield: 4%On its face, Kellogg (NYSE:K) seems like a safe value play for income investors. Shares of the iconic American company trade for just 13x 2020 EPS estimates. Kellogg's dividend yields just over 4%. K historically has been a defensive stock, providing protection if the broader economy stumbles.But K stock is actually dangerous at this point. It's one of many consumer stocks struggling to adapt to a new reality, as I detailed last year. Grocers like Kroger (NYSE:KR) are looking to private-label and own brands to protect their thin margins. Cereal demand is falling. As a result, Kellogg's earnings are heading in the wrong direction.Revenue is guided to increase just 1-2% this year excluding the impact of currency and the company's divestiture of several smaller brands. Adjusted operating income, on the same basis, is expected to be roughly flat. Guidance suggests overall non-GAAP earnings per share will decline more than 10% year-over-year.In other words, Kellogg isn't a defensive stock at this point. It's a turnaround play. And like with KHC and BUD, that creates downside risk if the turnaround stumbles.For investors who understand the risks, however, K stock is intriguing. As Barron's detailed just last week, the company's Morningstar Farms business seems notably undervalued. It's larger by revenue than Beyond Meat (NASDAQ:BYND), which has soared to a $10 billion market cap. Kellogg (including debt) is valued at just $28 billion; a sale or IPO of Morningstar could unlock significant value. * 7 Retail Stocks to Buy for the Second Half of 2019 Again, this is not the traditional, low-risk, dividend stock it used to be. But if Kellogg can jumpstart growth and monetize Morningstar, K stock could have enormous upside ahead. Gap (GPS)Dividend Yield: 5.4%The case for Gap (NYSE:GPS), particularly with the stock threatening a seven-year low, is that investors are missing the real story here. As I wrote back in November, Gap stock isn't about its Gap brand; it's about Old Navy, which likely generates somewhere in the range of three-quarters of operating profit.With Gap planning to spin off Old Navy later this year, that value might be unlocked. In the meantime, GPS stock yields 5.4%, a figure that might rise after the split.There are risks here, to be sure. Luke Lango called GPS stock one of the six worst in the S&P 500 in the first half -- and he's not wrong. GPS shares have plunged.Old Navy's sales performance in the last two quarters have not been particularly impressive. Sales for the Gap brand continue to decline. In fact, analysts asked repeatedly on the Q1 conference call if the spin-off would still move forward: there's a risk that Gap and Banana Republic might not be enough to support a standalone company, even with growth from athleisure concept Athleta.Even a weaker-than-expected Old Navy still likely supports the entire valuation of GPS stock at the moment. The balance sheet is in good shape, and free cash flow continues to be impressive. Income investors can get yield now -- and if all goes well, by next year own growth at Old Navy and income from the company's other brands. SL Green (SLG)Dividend Yield: 4.2%REITs (real estate investment trusts) like SL Green (NYSE:SLG) long have been income investors favorites. REITs allow for diversified exposure to real estate. They offer tax benefits as well: as long as they pay out 90% of taxable income, they pay no tax at the corporate level.In an environment where 10-year Treasury bonds are yielding barely 2%, however, investors looking for dividend stocks to buy have the same difficulty in REITs as in the rest of the market. High-yield REITs generally have some flaws; most notably, even the best retail REITs like Simon Property Group (NYSE:SPG) and Macerich (NYSE:MAC) have struggled amid long-term concerns about demand. The more attractive plays, meanwhile, have been bid up as investors look for lower-risk yield.SL Green might be a nice middle ground. The stock has struggled for years now; in fact, it touched a five-year low late last year. Worries about the health of New York City real estate seem to be the culprit. Weakness in the company's suburban assets hasn't helped, either. * 10 Best Stocks for 2019: A Volatile First Half But SL Green largely has exited the suburban business, refocusing on Manhattan. The dividend continues to rise. And longer-term, NYC still seems an attractive real estate market. With a 4.2% dividend, SLG provides attractive income. At 12x FFO (funds from operations, a typical REIT metric), it could provide upside as well if sentiment toward Manhattan real estate improves. Avista (AVA)Dividend Yield: 3.48%Utility stocks like Avista (NYSE:AVA) are another common area of focus for income investors. And like REITs, valuation is a question mark: the Utilities SPDR (NYSEARCA:XLU) is up 16% over the past year, a big move for a traditionally low-volatility sector.But AVA looks like one of the more attractive picks in the industry at the moment. The stock plunged late last year after a potential acquisition by Canada's Hydro One (OTCMKTS:HRNNF) was called off. Slowly but surely, however, dip-buyers have entered -- and there could be more buying ahead.Avista provides a solid 3.48% dividend yield. Its markets in Washington State, Idaho, and Montana are seeing strong population growth. Valuation is reasonable, and AVA still sits back at 2016 levels.It's likely the Hydro One deal -- announced in 2017 -- led to some dislocation among Hydro One's investor base. If that's the case, there's an opportunity for AVA to catch up to the rest of its sector as income investors return to the story. International Game Technology (IGT)Dividend Yield: 6%The risks facing International Game Technology (NYSE:IGT) are almost self-evident. Gaming stocks traditionally struggle in recessions. Suppliers like IGT generally aren't hit quite as hard, and the company's lottery business should provide support if the economy turns. But there is a decent amount of cyclical risk here.A good chunk of the company's profit comes from Italy, where economic growth has been stagnant and political risk seems high. The U.S. slot business has lost market share to smaller operators like Aristocrat Leisure (OTCMKTS:ARLUF) and PlayAGS (NYSE:AGS). On top of all that, IGT has nearly $7 billion in debt. The 6% yield here is attractive -- but on its own not reason enough to buy IGT stock.That said, there are reasons to buy, and in fact I personally own IGT shares. Free cash flow should ramp in the next two years, as the company moves past upfront payments required to maintain its concessions in Italy. The lottery business throws off cash as well. Debt should come down, and the U.S. slot business is showing signs of improvement. * 7 A-Rated Stocks to Buy for the Rest of 2019 The rewards here are enormous as well. As I wrote last month, Wall Street sees huge upside for IGT. The average target price near $21 is 56% higher than IGT's current price. If IGT can get the U.S. business back on track and use the cash flow from Italy to pay down debt, its stock could have a big move ahead. State Street (STT)Dividend Yield: 4%State Street (NYSE:STT) is a clear "value trap or value play?" argument at the moment. For the last 18 months, investors have made their thoughts clear: STT stock has dropped by roughly 50%.And State Street is fighting headwinds. The company rolled out the first ETF -- the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) -- but has since been passed by Vanguard and BlackRock (NYSE:BLK) in that key business. The same shift to passive investing driving ETF growth has pressured the company's asset management business. In Q1, fee revenue declined 4% year-over-year; earnings per share declined 27%.Cost-cutting simply hasn't done quite enough to protect margins, leading to the recent pressure on STT stock. But at this point, there's a question as to whether the sell-off simply has gone too far. STT stock is quite cheap, at less than 8x 2020 EPS estimates. Price-to-book has dipped below 1x for the first time in over five years.Meanwhile, a recent dividend hike moves the yield near 4%, and STT will repurchase $2 billion worth of stock as well. State Street has to find a way to manage pressure on its custody and management businesses -- but if it can, there's potential for a big reversal in STT stock. CVS Health (CVS)Dividend Yield: 3.6%Source: Shutterstock CVS Health (NYSE:CVS) has had a rough go of it in recent years. In March, CVS stock touched its lowest level in almost six years, and it has re-tested those lows several times since. The acquisition of Aetna is under review even after it closed. Lower reimbursement rates and reduced savings on generic drugs are pressuring the entire pharmacy sector: rivals Walgreens (NASDAQ:WBA) and Rite Aid (NYSE:RAD) are struggling as well.But as I wrote this week, to at least some extent all of those headwinds seem priced in. CVS stock trades at historically low multiples. There are still benefits to come from the company's efforts to change healthcare, and the integration of Aetna with its existing pharmacy business. * 7 Retail Stocks to Buy That Are Down in 2019 The headwinds are real, and the sell-off in CVS stock does make some sense. But this remains an attractive business that is now priced for steady declines going forward. It will take little in the way of an upside surprise for CVS to outperform expectations -- and for CVS stock to claw back at least some of its recent losses. BP (BP)Dividend Yield: 6%For BP (NYSE:BP), the case is reasonably simple. BP is the integrated energy company with the best dividend yield, which currently nears 6%. With liabilities relating to the Deepwater Horizon tragedy finally behind the company, cash flow and earnings will improve as BP gets back to "normal."That's a case I've made for some eighteen months now -- and it still holds. Oil price movements might seem a risk -- but BP's downstream businesses benefit from lower crude prices, which mitigates that effect somewhat. In this market, BP stock might even be considered among the safer plays out there, as counterintuitive as that sounds. For a 6% yield the modest risks here seem worth taking. Bristol-Myers Squibb (BMY)Dividend Yield: 3.6%Pharmaceutical companies, too, used to be a safe haven for income investors. They generally offered dividend yields of at least 2% -- and protection from market and economic downturns. That's no longer the case, however -- which highlights the potential risk in Bristol-Myers Squibb (NYSE:BMY).U.S. companies, in particular, have struggled to find blockbusters. As a result, patent expirations on key product lead companies to search for growth however it can be found. For Bristol-Myers Squibb, products like Orencia (which treats rheumatoid arthritis) and blood thinner Eliquis are losing their protection shortly. And so the company went and acquired biotechnology major Celgene (NASDAQ:CELG).Unfortunately for BMY stock, investors hated the deal. BMY shares dropped 13%. They liked it less when Bristol-Myers announced last month that it would divest psoriasis treatment Otezla as required by regulators. BMY once again threatened a six-year low.But at this point, BMY is starting to look attractive. Even if the company overpaid for Celgene, to some extent that's baked into the stock price. The dividend yield now sits at 3.6% -- and could rise once the acquisition is completed. A 10x forward P/E multiple will come down as well.Pharma stocks are riskier than they used to be -- especially for those using debt to drive growth. Mallinckrodt (NYSE:MNK) is a good example of how pharmaceutical M&A can go terribly wrong. But Bristol-Myers Squibb's diversified base and long history suggest the downside shouldn't be that steep. And as Celgene comes on board and growth returns, investors might again start focusing on the potential rewards.As of this writing, Vince Martin is long shares of Gap Inc. and International Game Technology. He has no positions in any other securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond appeared first on InvestorPlace.
CVS Health stock is getting a lift Thursday thanks to a likely White House decision. Here's the level it needs to hold to keep the rally alive.