51.95 +0.20 (0.39%)
After hours: 5:17PM EDT
|Bid||51.46 x 900|
|Ask||51.72 x 1000|
|Day's Range||51.28 - 52.05|
|52 Week Range||46.75 - 60.52|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||2.80 (5.35%)|
|1y Target Est||59.09|
New York, NY, based Investment company Stralem & Co Inc (Current Portfolio) buys Dow Inc, sells Facebook Inc, Thermo Fisher Scientific Inc during the 3-months ended 2019Q2, according to the most recent filings of the investment company, Stralem & Co Inc. Continue reading...
With some marquee earnings reports out today, it would have been reasonable to expect some more action out of the major U.S. equity benchmarks. By the time the closing bell sounded, though, Tuesday had all the appearances of just another boring summertime trading day.Source: Shutterstock The Nasdaq Composite fell 0.43% while the S&P 500 gave up 0.34%. The Dow Jones Industrial Average was mostly flat, settling down 0.09%.Arguably adding to the disappointment that was Tuesday's broader market action was that there was some encouraging economic data out earlier in the day. Retail sales rose for a fourth consecutive month in June, indicating that one of the primary drivers of the U.S. economy, the consumer, remains sturdy. And that data point does not even include Amazon's (NASDAQ:AMZN) Prime Day, which shattered records.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Prime Day spanned into today and some analysts forecast $5 billion or more in sales for Amazon, easily topping 2018's Prime Day haul of $3.2 billion. Bottom line: the consumer is in good health and that should be meaningful for riskier assets going forward.Now let's get into some of those earnings reports. Boffo BanksDow component JPMorgan Chase (NYSE:JPM), the largest U.S. bank, was one of the blue-chip index's standouts Tuesday, gaining 1.06%, after the company said it earned $2.59 a share on revenue of $29.57 billion. Analysts were expecting earnings of $2.51 per share and revenue of $28.9 billion.As was noted here yesterday, net interest margins could become problematic for banks if interest rates decline. To that end, JPMorgan pared its 2019 net interest margin guidance to $57.5 billion from $58 billion.Goldman Sachs (NYSE:GS) was another Dow leader today, adding 1.87% after the investment bank said it earned $5.81 a share on revenue of $9.46 billion. Analysts expected earnings of $4.89 per share on revenue of $8.83 billion."Institutional client revenue, which includes trading, slipped 3%, while investment banking revenue was down 9%. However, revenue from the bank's investing and lending business rose 16%, its highest quarterly performance in eight years," according to Reuters. A Beat, but DisappointmentPharmaceuticals giant Johnson & Johnson (NYSE:JNJ) slipped 1.64% despite delivering an upbeat second-quarter report. The healthcare company said it earned $2.58 per share on sales of $20.56 billion. Wall Street expected a profit of $2.46 per share on sales of $20.29 billion.More importantly, JNJ boosted its 2019 sales forecast, excluding currency movement, to $82.4 billion to $83.2 billion, from an original range of $82 billion to $82.8 billion and the stock still declined. Credit Suisse resumed coverage of JNJ today with a $156 price target, implying significant upside from current levels. Quick AsideOnce again, Dow Inc (NYSE:DOW) was one of the Dow's best performers today, surging 2.73%. The stock has been on a torrid pace as of late. Investors considering the chemical maker may want to go here to mull over some of the bullish catalysts for the name. Bottom LineToday's earnings reports were mostly solid. It's certainly hard to quibble with JNJ raising revenue guidance, but plenty of tests remain this week and trade is clearly still an issue. President Donald Trump confirmed as much, noting the U.S. and China still have a long way to go on trade.Thursday is potentially significant day on the earnings front with Microsoft (NASDAQ:MSFT) and UnitedHealth (NYSE:UNH) among the Dow components reporting. Investors looking for a particular factor to watch should consider profit margins, regardless of company or sector."Many investors and analysts say a potential decline in profit margins--a measurement of how much a company's sales exceed its costs--is more worrisome than contracting earnings in the second quarter," according to the Wall Street Journal.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Dow Jones Today: Earnings Disappointments appeared first on InvestorPlace.
Dow Inc (NYSE:DOW) has seen mixed analyst reaction after the spinoff of its material science division. Even amidst global economic slowdown concerns, I am of the opinion that Dow stock is worth accumulating at current levels. Importantly, the company is likely to remain a quality dividend stock.Source: Shutterstock This article will discuss the factors that make DOW stock attractive for dividend investors. As an overview, shares of Dow Inc currently have an annualized dividend of $2.80. This translates into an attractive dividend yield of 5.5% considering Dow's current perch. Dividends Will SustainSince I am talking about Dow Inc as a dividend stock, it is important to underline the reasons to believe that dividends will sustain in a relatively sluggish economic environment.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip For 1Q19, Dow Inc reported EBITDA of $1.9 billion and according to the company's latest call transcript, the sell side EBITDA estimate is approximately $8.0 billion. Further, the company has provides estimate of $2.0 billion for interest and taxes.With $2.5 billion in capital expenditure for 2019 and $2.1 billion in projected dividends, the company is likely to have a cash buffer of $1.4 to $1.5 billion even after dividend payments. Therefore, even in a weak year in terms of sales and EBITDA, DOW stock holders shouldn't worry about the company's ability to use cash flow to pay dividends.It is worth noting that Dow plans moderate capital expenditure in the next few years and free cash flow will therefore remain robust even if sales and EBITDA remain largely stagnant. Business Growth VisibilityThere is little doubt that Dow Inc faces two headwinds in the medium-term. However, I believe that these headwinds have largely been discounted. The first headwind relates to global GDP growth and the impact of trade wars on GDP growth. The second headwind relates to a company-specific impact of the trade war on sales and EBITDA.According to Dow, the impact of trade wars on EBITDA is likely to be around $100 million. Further, according to the IMF, global economic growth is likely to decline in 2019 and accelerate again in 2020. While trade wars can imply that growth estimates are revised lower for 2020, it is important to note that emerging markets are among the key growth drivers for Dow.Just as an example, the demand for polyethylene is growing at 1.4 times the global GDP. APAC will remain a net importer of polyethylene and Dow Inc can cater to the sustained demand. Similarly, the demand for siloxanes and silicones, of which Dow is the largest global producer, will remain robust with China's consumption expected to grow at a CAGR of 7.5% between 2016 and 2021. There is also revenue growth visibility in the silicones hybrid segment with silicones and acrylics being increasingly used in the personal care market.Polyurethanes and CAV have significant application in the healthcare and wellness market, cold chain systems and various infrastructure solutions. The global polyurethanes market is expected to grow at a CAGR of 5.75% for the period 2018-2023.The bottom line is that Dow has a significant addressable market that is likely to grow at a steady pace in the coming years and emerging market sales (including Latin America and Africa) are likely to be the revenue, EBITDA and cash flow growth drivers. ConclusionFor 1Q19, Dow Inc reported margin compression in polyethylene, isocyanates and siloxane. If global GDP growth remains anemic well into 2020, EBITDA margin compression is likely to sustain.However, the risk of EBITDA margin compression is partially offset by the fact that Dow reported $125 million in cost synergy savings for 1Q19. Dow estimates total cost synergies of $800 million in 2019 through streamlined operations.In conclusion, DOW stock trades at attractive levels and, considering the point that dividends look sustainable, the stock is attractive. Even with relatively weak global economic growth, Dow has what it takes to deliver healthy cash flows that cover both capital investments and dividends.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 2 Reasons to Buy and Hold Dow Stock appeared first on InvestorPlace.
Friday market action in the summer months can be somewhat lethargic, but investors got a respite from that scenario today. One of the driving forces behind the Friday rally was the lingering belief that the Federal Reserve will cut interest rates later this month.Source: Shutterstock That was enough to power the Nasdaq Composite higher by 0.59% while the S&P 500 rallied above 3,000, gaining 0.39%. The Dow Jones Industrial Average continued its move above 27,000, adding 0.82% to finish the week."Market expectations for lower rates currently sit at 100%, according to the CME Group's FedWatch tool. Traders are also pricing in a 20% chance of the Fed cutting by 50 basis points," reports CNBC.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn late trading, close to 25 of the Dow's 30 components were higher, but Friday was another troublesome day for the index's healthcare constituents, as all three of the Dow's pharmaceuticals names traded lower.Johnson & Johnson (NYSE:JNJ) was the first offender. JNJ slid 4.15% on more than double the average daily volume on its way to shedding about $15 billion in market value. This was after news broke that the Justice Department is pursuing a criminal probe into the company possibly covering up health risks associated with its popular talcum powder. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond "J&J disclosed in its annual report in February that it had received subpoenas from the Justice Department and Securities and Exchange Commission related to the ongoing baby powder litigation but did not give more details," according to Reuters. Better News Here With GS, DOW, and CATGoldman Sachs Group (NYSEARCA:GS) added 1.23% after research firm IHS Markit said it is likely the investment bank will reveal a dividend increase next week. Goldman recently forecast an almost 50% bump to its quarterly dividend to $1.25 a share from 85 cents, which is what Markit is expecting, too.On a light news day and below-average volume, chemicals maker Dow Inc. (NYSE:DOW) was the Dow's biggest winner, surging 4.04%. The one news item that possibly sparked the rally in shares of Dow was a report from FactSet. The report highlighted the stock as the member of the Dow Jones Industrial Average with the most potential upside over the next 12 months.The research firm sees Dow stock climbing more than 22% over the next year, a move that would take the shares over $60.Caterpillar (NYSE:CAT) jumped 3.28% today. The industrial machinery maker joined DOW on the list of Dow components expected to generate big returns over the next year. FactSet is forecasting almost 12% for shares of Caterpillar over the next year. As it is, the stock is up 8% over the past month and could offer investors a compelling mix of growth and income. Bottom Line: Fun Starts Next WeekSecond-quarter earnings season starts in earnest next week. Financial services, the S&P 500's third-largest sector weight, is the sector that will dominate earnings headlines next week. But due to that group's domestic focus, those reports will not provide much in the way of tariff-related guidance.However, bank earnings could present their own set of challenges for investors."Kenneth Leon, CFRA Research's bank analyst, says the capital markets, while improved, are likely to be a wild card for big bank earnings this quarter, with year-over-year comparisons challenging for debt underwriting and trading operations," according to CNBC.Bottom line: prepare for some excitement -- maybe even some volatility -- over the next several weeks, particularly if cyclical sectors like industrials and technology deliver earnings disappointments.Todd Shriber does not own any of the aforementioned securities. 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 Dow Jones Today: A Fantastic Friday appeared first on InvestorPlace.
On Monday, BASF, the world’s largest chemical company, wreaked havoc on investors by providing a disappointing profit outlook.
Rating Action: Moody's assigns Ba1 ratings to Olin's proposed notes and credit facilities. Global Credit Research- 11 Jul 2019. New York, July 11, 2019-- Moody's Investors Service assigned Ba1 ratings ...
Global corporate M&A activity dropped 11% to $1.8 trillion in year’s first half versus the same period of 2018, according to a new Mergermarket report.
The old Wall Street saying "buy the rumor, sell the news" was in full effect Monday. Following news released over the weekend that the U.S. and China are willing to restart trade talks, accompanied by some encouraging tweets from President Donald Trump to that effect, the major U.S. equity benchmarks opened significantly higher Monday.Source: Shutterstock Holding those big gains was a different story as the Nasdaq Composite and the S&P 500 closed higher by 1.06% and 0.77%. The Dow Jones Industrial Average started the week to the upside by 0.44%.In late trading, about two-thirds of the Dow's 30 members were higher, but that group did not include, perhaps surprisingly, all of the Dow's technology components. Technology, the largest sector weight in the S&P 500, has been an epicenter for tariff talks. It is widely expected the group will rally if US-China trade hostilities ease.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPresident Trump cleared the way for Huawei, the controversial Chinese telecommunications company, to resume purchases of products from U.S. technology firms, as long as those goods are not related to national security. Even with that news, however, Dow semiconductor name Intel (NADSAQ:INTC) closed up just 0.38% today. Trade Talk Winners in the Dow Jones TodayWhile there were some obvious disappointments today-we're looking at you, Intel-many of the Dow's best performers were names with high tariff sensitivity. Prime example: Apple (NASDAQ:AAPL), which added 1.83% to rank as one of the Dow's best-performing components today. That's a good start to the third quarter, a period in which the iPhone maker historically delivers for investors, but some analysts are cautious. * 7 F-Rated Stocks to Sell for Summer "Bank of America Merrill Lynch analyst Wamsi Mohan on Monday reiterated his Buy rating for Apple stock, but he's becoming more cautious over the smartphone maker's app store sales in China," reports Barron's. "Mohan cited third-party data on app store sales which implied Apple China app store sales growth went from 23% year-over-year in April, to 19% in May, and 5% in June."Another Dow winner on Monday was Coca-Cola (NYSE:KO), which added 1.34% after an arbitrator ruled the world's largest soft drink maker can sell its own energy drink. That ruling could jeopardize Coca-Cola's partnership with Monster Beverage (NASDAQ:MNST), a stock that found a way to close higher today, too."An arbitration tribunal ruled on June 28 that Coca-Cola Energy did not violate the non-compete clause in the company's contract with Monster," reports The Atlanta Business Chronicle. "According to the ruling, Coke can continue to sell the drink in the markets it has already launched in and can expand to other markets as it sees fit."JPMorgan Chase (NYSE:JPM) was another Dow leader today, likely a symptom of what we noted here last Friday. The bank has impressive plans to return major amounts of capital to shareholders via an increased dividend and bigger-than-expected share buyback effort.Dow (NYSE:DOW), the only chemicals name in the Dow Jones Industrial Average (and a somewhat tariff-sensitive name at that), added 1.72% today and has recently been showing some signs of life. Read an article from last week about why the stock is inexpensive and may not be that way for long. Bottom Line: Shifting Focus?Following the G-20 summit, it is important for all investors to realize what happened. Simply put, two bickering sides said they are going to talk on cordial terms. What comes of those negotiations remains to be seen. The U.S.-China relationship is one with long-term implications and the U.S. deficit with China of $420 billion (in 2018) will not be erased overnight.Trade issues with China are not put to bed, but with the trade meeting over, market participants will be looking elsewhere for catalysts. Second-quarter earnings will be one of the catalysts, but how negative or positive is yet to be determined."Heading into the end of the second quarter, 113 S&P 500 companies have issued EPS guidance for the quarter," said FactSet. "Of these 113 companies, 87 have issued negative EPS guidance and 26 companies have issued positive EPS guidance. The number of companies issuing negative EPS for Q2 is above the five-year average of 74."Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks Compare Brokers The post Dow Jones Today: Trade News Was Certainly Sold appeared first on InvestorPlace.
Owners of chemical giant Dow Inc (NYSE:DOW) expecting the recent three-way split to immediately "unlock value" are likely to be disappointed. DOW stock is down -- again -- since its late-March separation from parent company DuPont de Nemours (NYSE:DD) and fellow spinoff sibling Corteva (NYSE:CTVA). Even more worrisome, the technical chart suggests more pain to follow.Source: Roy Luck via Flickr (modified)However, you may want to catch this falling knife for a few reasons.First, we don't know much about the true fundamentals driving Dow Inc stock. Thus, current investors are somewhat acting on blind faith. The other reason? Chemical stocks have performed relatively poorly. Therefore, mere association keeps a lid on DOW.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDon't let either impasse deter you though. Following the HerdIt was a curious if not confusing saga. Dow and DuPont completed their merger in 2017, but with the ultimate intent of splitting into the three companies. For management to implement greater fiscal efficiencies and more effective groupings, they consolidated the various pieces and acquisitions. * The 7 Top Small-Cap Stocks Of 2019 With the improvements and restructuring finally falling into place last year, management spun off DOW in March. Shares of Dow Inc stock began trading independently on March 20th. Agricultural chemical outfit Corteva became a fully independent company with its own stock on May 24th.Investors weren't particularly kind to either name, initially. They've also been notably wary of DuPont, superficially suggesting the split may have been a mistake. Some value exists in levering expertise in a specific area. But perhaps in this instance it wasn't necessary.Or, the market was simply dragging all three names lower.That is largely what happened, by the way. The S&P 500 rolled over in early May, accelerating the selloff Dow stock was already working on. Chemicals as a group fared no better. The market-wide (and industry-wide) tide also lifted DOW in early June; Corteva shares finally caught up in the latter half of June. Click to EnlargeNone of the early weaknesses properly represents their true fundamental value. Instead, mere technical factors drove them down. Hidden ValueThat said, it's difficult to blame investors for letting Dow Inc stock roll with the tide. While the spinoff was completed in March, critical fundamental data about Dow remains elusive.However, elusive doesn't mean that it's impossible to obtain. Thomson Reuters can supply it to those who are willing to dig. And what various analysts have dug up so far is compelling. Namely, experts predict Dow -- the new and improved standalone Dow -- to remain profitable, and grow. Click to EnlargeValue exists here too. The expected earnings of $4.37 per share this year translates into a price-earnings ratio of 11.5. Next year's projected bottom line of $5.28 per share of DOW stock becomes a price-earnings of 9.5.Those profit projections leave plenty of room for dividends too, which Dow has already been readily willing to pay. It dished out 70 cents worth of per-share dividend in June. Annualizing that figure to $2.80 is still only a little over half the company's likely income. It also represents an above-average yield of 5.6% for investors that step into a position at today's prices.Investors are struggling to see it though, mostly because there's no recorded history for this particular version of Dow Inc. Looking Ahead for Dow StockAdmittedly, it's not a black-and-white matter. While the average retail investor may not see it, the institutional investors are likely at least moderately aware of the reliable growth narrative here. After all, they largely control the market, and individual stock prices. The smart-money crowd clearly didn't keep Dow stock propped up against the market's bearish tide when they arguably should have.That's still a rather tall order just three months out from the spinoff though. Even the professionals are still struggling to gather and digest all the relevant data. At the same time, they're adjusting their guesses to reflect the impact of the U.S.-China tariff war.As time passes and the fog lifts though, look for the value play for Dow stock to conspicuously emerge.As of this writing, James Brumley held no position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Top Small-Cap Stocks Of 2019 * Critical Levels to Watch in 7 Marijuana Stocks * 5 Smaller Cloud Stocks That Have Plenty of Potential Compare Brokers The post Dow Stock Is a Misjudged, Undervalued Dividend Play Worth a Shot appeared first on InvestorPlace.
(DD) announced a quarterly dividend on Thursday, the first time it has done so since splitting off from DowDuPont. The others are (CTVA) (ticker: CTVA), which focuses on seeds and agricultural chemicals, and (DOW) (DOW), a commodity chemicals business. The board of DuPont (DD), a producer of specialty chemicals, declared a quarterly disbursement of 30 cents a share.
It's been a good year for the Dow Jones Industrial Average. The index has gained over 12% so far in 2019, reversing a 5.6% decline seen last year. 25 of the 30 Dow Jones stocks have risen so far this year. * 6 Stocks Ready to Bounce on a Trade Deal That admittedly makes it a bit tougher to find value in the index's components. But there are still a few Dow Jones stocks to buy left. Valuations for several components are reasonable -- and maybe too reasonable. And given that nearly all of the Dow Jones stocks promise ownership of quality businesses with long-term track records of creating value, there are still good stocks to buy.InvestorPlace - Stock Market News, Stock Advice & Trading Tips UnitedHealth Group (UNH)Source: Shutterstock UnitedHealth Group (NYSE:UNH) has been one of the Dow's losers this year, dropping about 1.5% YTD. That comes after UNH was one of the index's best stocks, rising from a little over $100 at the beginning of 2015 to $287 late last year.In the context of those gains, the recent pause makes some sense. Stock chart aside, there are some risks here. A Democratic win in the 2020 U.S. presidential election could augur more government intervention into healthcare -- and at the very least create some uncertainty for the stock. An increasing focus on drug rebates could pressure profits at the company's Optum unit, a key source of growth. Investors sold off UNH after a first quarter that was solid, but not quite up to the high bar UnitedHealth has set with recent performance.Still, I recommended UNH stock back in February, at a higher price -- and this still looks like an attractive long-term play. Valuation is reasonable, at less than 17x 2019 EPS estimates. Optum still is growing. UnitedHealth's market lead seems secure. Even more government involvement in healthcare seems likely to strengthen UnitedHealth's position rather than weaken it. Indeed, UNH stock did quite well in the wake of the passage of the Affordable Care Act.UNH almost certainly isn't going to come close to tripling over the next four-plus years, but there's still reason to see 10%+ total returns annually, at least. Chevron (CVX)Source: swong95765 via Flickr (Modified)Shares of energy giant Chevron (NYSE:CVX) fell back in April when the company announced a plan to buy out shale play Anadarko Petroleum (NYSE:APC). And CVX stock now trades at pretty much the same price it did after the decline.But, of course, Chevron isn't buying Anadarko. It dropped out after Occidental Petroleum (NYSE:OXY) made a higher offer for Anadarko. Chevron not only dumped a deal investors didn't like, but it received a cool $1 billion termination fee in the process.And yet CVX stock trades where it did after the deal was announced. Lower crude prices might be a factor, but Chevron's integrated model limits its exposure to oil prices (which is either good or bad news, depending on crude's trend).That alone suggests that CVX should be able to re-test recent highs around $126. And while that's only ~4% upside, admittedly, there's a nearly 4% dividend yield as well. Dividend aside, Chevron stock remains cheap, at less than 14x 2020 EPS estimates. And there might be another, better-liked, acquisition out there for Chevron to make. * Check Out These 5 Fast-Growing Stocks to Buy Today CVX stock probably isn't going to be a huge gainer over the next six months -- or even the next few years. But there's a nice combination here of value, income and a company with options to improve shareholder returns going forward, no matter where oil prices go. Exxon Mobil (XOM)Source: Shutterstock Chevron's fellow energy component, Exxon Mobil (NYSE:XOM), looks attractive here as well. XOM stock trades at a similar valuation on an earnings basis, but its 4.7% dividend yield is higher than that of CVX. For the world's largest energy company -- and like Chevron, one with impressive upstream/downstream diversification -- that type of yield is rare, and attractive.That said, there are some concerns. Most notably, XOM stock has been a terrible investment for basically this entire decade. The stock has risen 10%, total since the beginning of 2010. Investors have received healthy dividends, but Exxon stock still has badly underperformed the broader markets. More recent performance has been even worse: XOM stock touched its lowest levels in almost eight years back in December. And it's fallen over 25% from 2014 highs; even with dividends, shareholders are in the red over that period.That said, XOM stock is about as cheap as it ever gets. Its dividend yield hasn't been this high in over 20 years. Meanwhile, even amid weak trading the past few years, investors who have tried to time the bottom -- and sell at the top -- generally have been able to take some profits. Longer-term investors can get in cheap.It's not a perfect bull case, and as I wrote just a few months ago, XOM stock is not the play for those betting on higher oil prices. Those who are looking for stocks to buy for income and value, however, should look closely at both XOM and CVX. Visa (V)Source: Shutterstock There are a number of stocks like Visa (NYSE:V) in the current market. The argument isn't over the health of the business, but rather the price investors are willing to pay. On a forward basis, Visa stock is second-most expensive of the Dow Jones stocks, just modestly behind Nike (NYSE:NKE). * 5 Undervalued Stocks to Buy But as I wrote this week, Visa stock still seems worth paying up for. The staggering returns of the last decade -- nearly 1,000% including dividends -- aren't going to be replicated over the next ten years. But Visa still is growing earnings at a double-digit clip, with B2B (business-to-business), international, and domestic opportunities for more gains ahead. Visa stock isn't cheap, but a "set it and forget it" long-term play rarely is. Goldman Sachs (GS)Source: Shutterstock On the other side of the Dow's valuation spectrum is Goldman Sachs (NYSE:GS). Goldman Sachs stock is the cheapest in the Dow in terms of earnings, with its 7.4x forward multiple barely a quarter that of Visa and Nike.And there are reasons why GS stock is cheap. Trading revenue has been uneven. The company's investment banking business is losing share to Morgan Stanley (NYSE:MS). Investors on the whole aren't giving much credit to financials, with more traditional banks too trading at cheap multiples.That said, GS stock is not just cheap, but close to ridiculously so. Indeed, the stock trades below its tangible book value -- the net value of its assets. That implies essentially zero value for the company's franchise, which remains a Wall Street leader. (To be fair, investors simply could believe that the net value of the assets is going to come down if and when the economy turns.)Meanwhile, Goldman Sachs continues to invest in newer efforts. CEO David Solomon has noted that its Marcus online banking effort has received "absolutely no credit" from investors. The same is true of the new credit card venture with Apple (NASDAQ:AAPL). There are worries here with a market near all-time highs and an economy heading into year eleven of expansion. But Goldman Sachs stock seems to be pricing in much of the risk -- and little of the upside. JPMorgan Chase (JPM)Source: Shutterstock Shares of JPMorgan Chase (NYSE:JPM) hardly look expensive, either. JPM trades at 10.3x 2020 consensus earnings per share estimates. Like GS, the low multiple comes in part due to worries about the economic cycle, but JPM still receives a nearly three-turn premium to its rival on an earnings basis.Of course, there's a strong case that JPM deserves that premium. I still think this is the premier big bank stock to own, along with Bank of America (NYSE:BAC). And after the last 2-3 quarters, JPMorgan Chase probably has pulled ahead of BofA.There's simply a lot to like here. The combination of retail and investment banking is a plus. Growth continues to be solid: Q1 numbers crushed expectations as the company posted double-digit EPS growth. The company's delinquency rate, meanwhile, continues to decline and remains among the best in the industry. * 6 Stocks Ready to Bounce on a Trade Deal Again, near- to mid-term economic risks are a factor. Lower interest rates could pressure earnings in 2020. But I see this as a stock to buy and owned for decades, not just years, and the price at the moment remains attractive. Dow (DOW)Source: Roy Luck via Flickr (modified)This week, I called out Dow (NYSE:DOW) as one of the DJIA's 5 worst stocks so far this year, but as I wrote, that was a bit of stretch. DOW stock actually has risen 2.7% in its few weeks on the public markets, but in terms of the broader story, it's been a disappointment.That broader story was the breakup of the former DowDuPont into DOW, Corteva (NYSE:CTVA), and DuPont (NYSE:DD). Many savvy value investors saw the three-way split driving significant value, with many estimates topping $80 of value per DowDuPont share. The figure, at the moment, is under $50.There have been external pressures, to be sure. Adjusted earnings declined sharply in the first quarter. Trade battles between the U.S. and China aren't helping. Neither are concerns about the global automotive industry. Cyclical worries are a factor here, too: other chemical stocks like LyondellBasell Industries (NYSE:LYB) and Westlake Chemical (NYSE:WLK) are similarly cheap as investors discount potentially falling earnings.That said, there's a case to try and time the bottom here. DOW offers an attractive 5.5% dividend yield. It's still a leader in many of its end markets. Global demand may be choppy, but it should rise over time.This might be the most aggressive play in the index right now. DOW stock can take a beating if economic sentiment worsens. But personally, I'm not yet convinced that the smart money backing the DowDuPont split was necessarily wrong.As of this writing, Vince Martin has no positions in any securities mentioned.Compare Brokers The post The 7 Best Dow Jones Stocks to Buy for the Rest of 2019 appeared first on InvestorPlace.
Dow Inc (NYSE:DOW) is one of the companies formed as a result of the recent split of DowDuPont (NYSE:DWDP) into three separate companies. Since then it has been an interesting few months for Dow stock. Let's review:Source: Roy Luck via Flickr (modified)DowDuPont, one of the world's largest industrial chemical conglomerates, had originally been formed as a result of the merger of Dow Chemical and E.I. du Pont de Nemours that was announced in 2015 and completed in 2017.On April 2, DOW shares started trading on the New York Stock Exchange. The same day, it replaced DowDuPont in the Dow Jones Industrial Average as one of the 30 stocks in the index. It has also been added to the S&P 500.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Stocks Ready to Bounce on a Trade Deal On June 1, DowDuPont further spun Corteva (NYSE:CTVA), which later started trading on NYSE on June 3. The remaining DowDuPont also got listed under the name DuPont (NYSE:DD).Hence it has been a somewhat confusing several weeks for the past owners of DWDP stock. Although the separation of the three companies is now complete on paper, there are likely to be more questions as it all shakes out. Dow is expected to report Q2 earnings on July 25. A Closer look at DOW StockFollowing the three-way spin-off, Dow is now concentrating on its business as a commodities chemical producer. With over 100 manufacturing sites in 31 countries, DOW offers science-based products and solutions for a wide range of customers in packaging, infrastructure and consumer care. It has a market cap of $38 billion.Dow's Q1 earnings released on May 2 showed that net sales decreased 10% year-over-year (YoY) to $10.8 billion. In the quarterly statement, investors paid attention to the results from Dow's three main divisions: * Performance Materials & Coatings (net sales were $2.3 billion, down 2% YoY); * Industrial Intermediates & Infrastructure (net sales were $3.4 billion, down 8% YoY); and * Packaging & Specialty Plastics (net sales were $5.1 billion, down 15% YoY).Performance materials include paints, coatings and silicones; industrials include chemicals, solvents and lubricants; packaging includes food packaging products, specialty polymers and hydrocarbons.The company highlighted that both Industrial Intermediates & Infrastructure and Packaging & Specialty Plastics witnessed margin declines, contributing to the decrease in profits and earnings in the first three months of 2019.In the earnings call, management emphasized the group's commitment to cost savings, which stood at $125 million for the quarter.CEO Jim Fitterling said that following the separation from DowDuPont, Dow is now "well positioned to operate more productively, invest more prudently, grow more profitably and deliver higher returns to shareholders."The Board of Directors also declared a dividend of $0.70 per share to be paid on June 14 to stockholders of record as of May 31. The current dividend yield stands at a respectable 5.5%.The company finally said that it expects some seasonal headwinds, especially regarding increased seasonal maintenance costs. Understanding the DOW Stock Price NowFollowing its listing, Dow initially went up about 10% in three trading days. Yet since then, it has gone down from an intraday high of 60.52 on April 4 to an intraday low of $46.75 on May 31. It is currently hovering around $48.The selling pressure has increased especially after the Q1 earnings report of May 2.Thus over the past two months stock has suffered from a damaging technical picture. Its short-term technical chart still looks weak, and it is pointing to the possibility for more downside around the corner.Although DOW's momentum indicators, which describe the speed at which prices move over a given time period, are currently in oversold territory, they can stay oversold for quite a long time, especially when the overall trend is down.Therefore, more buy signals based on momentum indicators need to be conﬁrmed with further chart analysis before the stock is a buy from a technical standpoint.In short, at this point, bears are in control. Therefore Dow shares will need a catalyst to make them attractive in the eyes of long-term investors, who are possibly still skeptical about the near-term prospects for the company.If you still believe in the bull case for Dow stock, you might consider waiting for a better time to get long, such as around mid $40 levels. The Bottom Line on Dow StockGoing forward, investors would like to see concrete evidence in the results that considerable value can be achieved post-separation. Some questions that remain yet to be answered are the levels of operating margin as well as the free cash flow.Wall Street does not expect Dow to be a high growth company. However, analysts want to see that it will remain a stable cash cow with strong dividends and manageable debt levels.In the next earnings report, investors will also want to get a feel for any potential economic slowdown in the U.S. or globally as they could affect DOW stock's revenues. As a commodity-based business, the group is understandably is prone to earnings declines during economic downturns.Dow also relies on crude oil as a basic resource used in manufacturing. Therefore DOW stock is exposed to price fluctuations in crude, too. Thus management's guidance, especially regarding the global economy and commodity prices, may indeed become quite an important section of the quarterly report.In short, up until and around the Q2 earnings release, there is likely to be further volatility in the price of DOW stock with a downward bias.However, in the long run, the group's strong position in the industry, as well as the robust dividend yield, should support the price of Dow shares.If you are not yet a shareholder of DOW stock, you may want to wait on the sidelines until you have had a chance to analyze the results. If you already own Dow shares, you may consider hedging your position with at-the-money (ATM) covered calls with July 19 expiry.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities.Compare Brokers The post Dow Stock Is Just Too Bumpy to Consider Buying Right Now appeared first on InvestorPlace.
The new Dow Inc (NYSE:DOW) stock and company is the result of a two-stage spinoff of Corteva (NYSE:CTVA) and DOW stock by DowDupont (NYSE:DD) that started on Apr. 1. The split came about because of agitation from an activist shareholder, Third Point's Dan Loeb. No doubt, the main objective was to benefit the owners of DowDupont stock and DOW stock.Source: Roy Luck via Flickr (modified)And of course, the CEO of DOW, Jim Fitterling, boasted about the restructuring. In a press release, he said:"The changes we have made to Dow's portfolio, cost structure and mindset are significant. The new Dow is a more focused and streamlined company with a clear playbook to deliver long-term earnings growth and value creation for all stakeholders.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut unfortunately, Wall Street hasn't been so kind to Dow Inc stock. Since early April, DOW stock has gone from $58 to $49. * 7 Value Stocks to Buy for the Second Half The Issues With Dow Inc StockSpinoffs can be disruptive. There is often a large turnover in the shareholder base, which can put pressure on the shares.Yet that overhang will dissipate in the longer term. So could DOW stock now be an interesting value play? Is it time to consider buying Dow Inc stock?Well, I'd still be cautious. DOW is still a complex organization. As seen with other companies like GE (NYSE:GE) and 3M (NYSE:MMM), complexity has become a big drawback on Wall Street. Investors nowadays want agile companies that can focus on growth opportunities and be nimble enough to stave off rivals.InvestorPlace.com columnist Josh Enomoto aptly described the complexity of DOW and how that could be a hindrance:"Dow Inc stock doesn't provide a clean, linear path. Instead, the underlying company is stretched wide, featuring businesses in consumer products, packaging, industrial materials, large-scale infrastructures and technology. From a topical perspective, the separation into three entities streamlined operations for the individual cogs. Somewhat left out in the equation was that the individual cogs also have non-intuitive structures."However, complexity may not be the biggest risk facing DOW stock. Rather, the slowing of the global economy looks to be the main problem.For now, there is little clarity on a resolution to the dispute between the U.S. and China. In the meantime, there is also the potential for trade disputes between the U.S. and Europe.The World Bank has reported that global growth will come in at 2.6% versus its January forecast of 2.9%. That would be the weakest global growth in three years.As for DOW, the company is definitely sensitive to the swings of the economy. When the economy slows, it's easy to put off a decision to purchase new raw materials and commodities. The Bottom Line on DOW StockDOW has positive attributes. Keep in mind that the company continues to streamline its operations and cut costs. DOW plans to eliminate $700 million of costs this year. It is also being more disciplined when it comes to capital investments.As for the valuation of Dow Inc, stock it is fairly cheap. Consider that its forward price-earnings multiple is nine and its dividend yield is a hefty 5.7%.Yet such factors likely mean that DOW stock has some downside protection. However, because of the macro weakness across the world, it could be tough for Dow Inc stock to advance meaningfully.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Has DOW Stock Reached an Attractive Entry Point? appeared first on InvestorPlace.
Although Dow Inc (NYSE: DOW ) is among the most diversified pure-play commodity companies, most of its businesses have come under pressure in 2019 due to persistent global trade issues — and a meaningful ...
fell more than 4% on Monday after receiving a downgrade from BMO Capital Markets analyst John McNulty to market perform from outperform. McNulty initiated coverage of the new Dow back in April with the outperform rating and a $64 target price. Dow, a highly diversified materials company that is an industry leader in plastics and ethylene, has told investors and analysts the new company's focus will be on cost-cutting, capital discipline and returning significant cash to shareholders, the analyst said at the time.
There are 11 sectors represented in the S&P 500 with weights ranging from 2.81% at the bottom to 21.45% at the top. Guess which group resides at the bottom? Materials.That is not the only point underscoring the materials sector's diminutive status. The Materials Select Sector SPDR ETF (NYSEARCA:XLB), the largest materials exchange-traded fund, holds just 28 stocks and the Dow Jones Industrial Average is home to just one materials stock -- Dow Inc. (NYSE:DOW).XLB "seeks to provide precise exposure to companies in the chemical, construction material, containers and packaging, metals and mining, and paper and forest products industries," according to State Street.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSize aside, there are plenty of opportunities to be had with materials ETFs and investors may want to consider getting in while the getting is good because the sector is on fire in the first half of June."In fact, the materials group, the sector that tends to be the most sensitive to global economic growth expectations, is on track for its best monthly gain since October of 2015, when it soared 13.45%, according to Dow Jones Market Data," reports MarketWatch. * 7 Top-Rated Biotech Stocks to Invest In Today For investors looking to embrace a small sector with big potential, here are some materials ETFs to consider. VanEck Vectors Junior Gold Miners ETF (GDXJ)Source: Shutterstock Expense Ratio: 0.53%, or $53 annually per $10,000 investedThe VanEck Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) is one of the largest gold miners funds, meaning it is also a materials ETF and a volatile one at that. GDXJ has a three-year standard deviation of 30.50%, roughly triple the comparable metric on the S&P 500. Indeed, this materials ETF is not for the faint of heart and it has a tendency to overshoot gold's price action in either direction.Fortunately, the current climate sets up well for gold, as highlighted by GDXJ's month-to-date gain of nearly 9%."If you look at the GDXJ [VanEck Vectors Junior Gold Miners ETF] and go back to 2010, the adjusted return in Canadian dollars is down about 85%. Then if you look deeper … at the really junior juniors, which aren't even in these ETFs, it's even more so. We have an industry where you've lost 80% to 90% of the value -- plus," said Jonathan Goodman, executive chairman of Dundee Corp., in an interview with Kitco News.Another catalyst could boost this materials ETF in the second half of the 2019: the Federal Reserve. If the Fed lowers interest rates, gold almost certainly rallies in response, likely sending GDXJ and miners ETFs higher along the way. Invesco MSCI Global Timber ETF (CUT)Source: Shutterstock Expense Ratio: 0.55%Among materials ETFs, timber funds -- all two of them -- often go overlooked. The Invesco MSCI Global Timber ETF (NYSEARCA:CUT), which tracks the MSCI ACWI IMI Timber Select Capped Index, gives investors nuanced materials exposure with a decent yield.CUT's underlying index "measures the performance of securities engaged in the ownership and management of forests, timberlands and production of products using timber as raw materials," according to Invesco.CUT holds 77 stocks, giving it a significantly larger roster than many traditional materials ETFs and some of that size is attributable to the fund being a global materials ETF. Eleven countries are represented in this materials ETF with the U.S. commanding a weight of 42%. Of the other 10 countries found in this materials ETF, eight are developed markets. * The 10 Best Index Funds to Buy and Hold Nearly 56% of CUT's components are classified as value stocks and the materials ETF reflects that value proposition with a price-to-earnings ratio of just 12.82x, a healthy discount relative to broader domestic equity benchmarks. SPDR S&P Mining & Materials ETF (XME)Source: Shutterstock Expense Ratio: 0.35%The SPDR S&P Mining & Materials ETF (NYSEARCA:XME) is an equal-weight materials ETF with diverse exposure to miners of several industrial and precious metals.XME's underlying index provides exposure to "the following sub-industries: Aluminum, Coal & Consumable Fuels, Copper, Diversified Metals & Mining, Gold, Precious Metals & Minerals, Silver, and Steel," according to State Street.In other words, XME is exactly the type of fund that can be stung by tariffs. That is exactly what has happened to this materials ETF. XME is down 11.41% in the second quarter and resides more than 31% below its 52-week high, putting the fund deeply into a bear market.XME is also volatile as far as materials ETFs are concerned. Over the past three years, XME's annualized volatility is 26.20% compared to 15.60% for the aforementioned XLB. Problem is, XME often does not justify that increased volatility because it can trail traditional materials ETFs by wide margins.As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post 3 Materials ETFs to Help Build Your Portfolio appeared first on InvestorPlace.