|Bid||0.00 x 800|
|Ask||0.00 x 900|
|Day's Range||155.27 - 160.35|
|52 Week Range||155.27 - 219.75|
|Beta (3Y Monthly)||1.25|
|PE Ratio (TTM)||18.76|
|Forward Dividend & Yield||5.76 (3.70%)|
|1y Target Est||N/A|
This weekend's Barron's offers ways to prepare portfolios to ride out the next decade. "How to Prepare Your Portfolio for the Worst When the Worst Is a Real Possibility" by Reshma Kapadia shows how financial advisors are beginning to prepare for some bad, but not unthinkable, "doomsday" scenarios. Should Microsoft Corporation (NASDAQ: MSFT) be in your doomsday portfolio?
The short history of the new Dow (NYSE:DOW) stock has brought little more than declines. An initial spike after Dow again became a separate company has given away to four months of falling stock prices. Today, it sells near its lowest point since its reintroduction.Source: JHVEPhoto / Shutterstock.com The ongoing trade war with China explains much of the decline. However, the spinoff of the former DowDuPont into Dow, DuPont de Nemours (NYSE:DD) and Corteva (NYSE:CTVA) has left investors with a company structure few seem to understand. Until Dow can simplify the company and resume its previous flow of trade with China, DOW stock will likely continue its descent. DOW Stock Continues to DeclineA little more than a month ago, I turned bullish on DOW stock after having been a bear. While I saw possible headwinds related to the trade war, I figured the low price-to-earnings ratio and the generous dividend made a position in DOW worthwhile.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThen, earnings happened. A revenue miss sent it on a downward journey. The declines continued as two analysts downgraded DOW stock to a sell, both cite weakening global demand as the reason. Today, it trades in the $43 per share range, near its 52-week low. * 10 Undervalued Stocks With Breakout Potential From a certain point of view, this does not change my previous rationale for recommending DOW stock. The forward P/E ratio now stands at 9.6. Moreover, thanks to the lower stock price, the $2.80 per share annual dividend currently yields almost 6.5%. Dow's Problems Go Beyond the Trade WarHowever, other factors have since persuaded me otherwise. As InvestorPlace columnist Bret Kenwell states, free cash flow did not cover the cost of the DOW stock dividend. Furthermore, with the company just having separated itself from DuPont, investors have no dividend history where they can turn.Moreover, investors have struggled with the business model backing up Dow stock since it became separate. Our own Josh Enomoto goes so far as to compare DOW stock to General Electric (NYSE:GE) and 3M (NYSE:MMM). He points out its consumer, industrial and packaging categories as evidence that Dow has become a hodgepodge of different companies without a focused purpose. Between that and the lower revenue tied to the U.S.-China trade war, the selling continues in DOW.In fairness, DOW stock is not the only equity in this industry which has suffered. Peers such as Westlake Chemical (NYSE:WLK) and LyondellBasell Industries (NYSE:LYB) also have fallen to 52-week lows. Furthermore, one has to wonder when the market will finally consider the trade war priced into DOW stock and its peers?For now, DOW continues to fall. Even with a low P/E and a high dividend yield, investors rarely succeed by fighting the herd. Moreover, when it does come time to buy, investors must ponder whether they would prefer DOW stock or one of its peers. For example, LyondellBasell stock sells for only 5.8 times forward earnings. At about 5.8%, it pays a slightly lower but still impressive dividend yield. Also, this dividend has risen for seven straight years, and yes, the company cash flows cover this payout. The Bottom Line on DOW StockDOW stock needs both a cohesive focus and for China trade to begin moving higher. Dow stock has fallen since the company missed revenue for its second quarter. Even a low multiple and a generous dividend yield have not stemmed the decline.To some degree, DOW faces the same issues with China trade as its peers. As a result, these peers also have seen their stocks fall to 52-week lows. However, many investors and analysts struggle to understand how the company works since the spinoff. Moreover, with the lack of a dividend history, investors cannot know whether the payout will remain stable under current market conditions. The fact that it does not generate sufficient cash flows to cover this payout merely casts more doubts.Until investors know DOW stock has priced in trade war concerns, investors should stay away. Also, when it comes time for buyers to return to this industry, the case for buying DOW could appear weak. With LYB stock offering a lower valuation and a more stable dividend, investors may not buy Dow stock at that time either.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Dow Stock Is Cheap for Too Many Reasons appeared first on InvestorPlace.
(Bloomberg Opinion) -- By all accounts, it was supposed to be a sleepy August for the U.S. corporate bond market. Three weeks ago, the thinking went something like this: Sure, the Federal Reserve would cut its benchmark lending rate on July 31, in what Chair Jerome Powell would call a “mid-cycle adjustment.” But Treasuries were already pricing in such a move on the short end. Further out on the curve, the 30-year yield was about 2.6%, still more than 50 basis points away from its all-time low. Ten-year yields were about 2%, which seemed like a comfortable range for both buyers and sellers. For company finance officers, it had the makings of a sellers’ market but one that would be around once summer drew to a close.Then things got crazy. The 30-year yield lurched lower by 8 basis points on Aug. 1, then 13 basis points on Aug. 5, then another 13 basis points on Aug. 12. After a one-day reprieve near its all-time low of 2.0882%, it cruised through that level, tumbling to as low as 1.914%. The rally was so intense that the U.S. Treasury Department made an unusual, unscheduled announcement that it was again exploring issuing 50- or 100-year bonds. Companies clearly felt they couldn’t afford to pass up this opportunity. In the first full week of August, CVS Health Corp., Humana Inc. and Welltower Inc. headlined $35 billion of debt sales among investment-grade firms, easily surpassing estimates. Then in the week through Aug. 16, more than $22 billion went through, including a rarely seen offering from Exxon Mobil to the tune of $7 billion. Market watchers expected that would just about wrap things up until after Labor Day on Sept. 2.Some finance officers had other ideas. 3M Co. borrowed $3.25 billion on Monday to help finance its acquisition of medical-products maker Acelity Inc. In total, issuers sold $6.65 billion of investment-grade debt on Aug. 19, already topping some predictions for $5 billion this week. Then on Tuesday, Bank of New York Mellon Corp. priced $1 billion at the lower end of its expected yield range, along with a handful of other borrowers with multimillion-dollar deals.All this is to say, companies are simple: They see staggering low yields, and they issue bonds. Investors, for their part, can’t get enough of them. The Bloomberg Barclays U.S. Corporate Bond Index has returned 13.3% so far in 2019. Over the past 12 months, the index is up 12.5%, compared with just 1.5% for the S&P 500 Index. The average spread on corporate bonds has widened to 122 basis points, from 107 basis points at the end of July, but that’s just because they couldn’t keep up with the relentless rally in Treasuries, not because of a lack of buyers. If Bank of America Corp. strategists led by Hans Mikkelsen are correct, the demand in credit markets has lasting power. They say the $16 trillion of negative-yielding debt globally has left investors — and particularly those outside the U.S. — with few alternatives besides purchasing companies’ debt. “There is a wall of new money being forced into the global corporate bond market,” they wrote on Aug. 16. “Given the near extinction of non-USD IG yield, foreign investors are forced to take more risk.”Of course, buying investment-grade bonds hardly qualifies as a speculative endeavor. Exxon Mobil, in fact, has the same credit rating as the U.S. government from both Moody’s Investors Service and S&P Global Ratings. On the other hand, Bloomberg News’s Jeannine Amodeo and Davide Scigliuzzo reported this week that three leveraged-loan sales that had been languishing in the U.S. market for weeks were pulled as investors sought higher-quality assets. Vewd Software became the fourth on Tuesday, scrapping a $125 million term loan due to market conditions. Leveraged loans, it should be noted, are floating-rate securities and so face weaker demand when the Fed appears poised to cut rates, as it does now. But for large, highly rated companies, their behavior in recent weeks is exactly what should be expected. Exxon Mobil issued 30-year bonds to yield 3.095%. In November, five-year Treasuries offered the same amount. 3M, rated a few steps below triple-A, priced 30-year debt to yield 3.37%, less than the going rate on long Treasury bonds just nine months ago. No matter how you slice it, they’re getting borrowing costs that seemed unthinkable around this time last year.Interestingly, these low yields should be encouraging governments to borrow more, too. I wrote last week that the bond markets were begging for infrastructure spending. However, it seems neither Germany nor the U.S. has any appetite for that sort of initiative. The German government is reportedly preparing fiscal stimulus that could be triggered by a deep recession, while President Donald Trump hasn’t ruled out a payroll tax cut to stave off any economic weakness.It’s certainly possible that U.S. yields will only fall further from here, and other companies can also borrow or refinance at rock-bottom interest rates. But the move in global bond markets in recent weeks could was extreme, to say the least. The weak demand for Germany’s 30-year bond auction on Wednesday, which offered a coupon of 0% at a yield of -0.11%, suggests there are at least some lines that investors won’t cross.For prudent companies, it was well worth delaying summer vacations to get their deals done.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The Dow Jones Industrial Average - that elite group of 30 industry-leading dividend payers - is having a very good year. True, the blue-chip average has lost about 1,350 points since hitting an all-time closing high on July 15, but all told, the collection of Dow stocks still is up a healthy 12% for the year-to-date.That's just on a price basis alone. Factor in dividends (the industrial average yields a decent-though-not-spectacular 2.1%), and the Dow has delivered a total return of 13% so far this year.But not all Dow stocks are created equal. Although all these names have solid pedigrees, their short-to-intermediate term prospects diverge widely - at least as far as Wall Street analysts are concerned.For investors who want to pick and choose among the bluest of blue chips, we sorted the Dow 30 by analysts' average recommendation. S&P; Global Market Intelligence surveys analysts' stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Any score lower than 3.0 (Hold) means that analysts, on average, rate the stock as being buy-worthy. The closer a score gets to 1.0, the better.Here's a look at how analysts rate all 30 Dow stocks right now - and why. SEE ALSO: 57 Dividend Stocks You Can Count On in 2019
Investing.com - Stocks rallied Friday, finishing near their highs for the day, as trade tensions appeared to ease and reports suggested Germany might consider ideas to stimulate its faltering economy.
[Editor's note: "10 Best Stocks to Buy and Hold Forever" was previously published in July 2019. It has since been updated to include the most relevant information available.]In a market environment that overwhelmingly encourages constant activity by investors who seemingly want to double their money every week, a discussion of stocks to buy and hold forever seems comically out of place.And yet, for better or worse, that's the mindset all of us should adopt when deploying most of our investing capital. More often than not, the more you trade, the worse you end up doing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt has been said (and verified) that 95% of true "day traders" -- the most aggressive and active of all market participants -- end up losing money by being too active for their own good. Conversely, the fact that Warren Buffett's favorite holding period is "forever" and how he's got a track record most investors would envy is just as telling. * 10 Cheap Dividend Stocks to Load Up On With that as the backdrop, here's a rundown of 10 stocks to buy and hold forever … or at least until something significant changes with your life plans or the companies themselves. AT&T (T)Dividend Yield: 5.% Year-to-date gain: 20%Calling a spade a spade, shares of telecom giant AT&T Inc. (NYSE:T) haven't been easy to own in a while. The stock is down from its mid-2016 peak, while most other stocks are well up for the timeframe.Source: Shutterstock The impasse has been an increasingly-tougher wireless and broadband market. But now that it's acquired media outfit Time Warner Inc (NYSE:TWX), a turnaround might have begun.If your intended timeframe really is "forever" though, a tough couple of years is nothing … particularly considering you're collecting a healthy dividend yield on your position's current value.More than that though, this is a telco name with a lot of clout, and a little more than $50 billion in the bank. Alphabet (GOOGL, GOOG)Dividend Yield: N/A Year-to-date gain: 12.7%Fans and followers of the company will likely know that Google parent company Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) beat Q4's earnings estimate, posting $12.77 per share.Source: Shutterstock What got lost in the shuffle is how operating margins fell to 21 % from last quarter's 24%.Appreciated or not, Alphabet is a profit and revenue growth machine that has earned its spot on a list of "forever" stocks to buy. It may not always beat estimates, but it does always increase its numbers. * 10 Cheap Dividend Stocks to Load Up On That's because it keeps finding a way to serve as the middleman for about 70% of web searches done on desktops, and boasts being the preferred search engine for about 90% of the queries made via a mobile device.If it was going to be toppled, we'd see evidence of it by now. 3M (MMM)Dividend Yield: 3.67% Year-to-date gain: -18%In an era where complicated companies are shedding disparate parts of themselves so each arm can be hyper-focused on doing one thing exceedingly well, 3M Co (NYSE:MMM) is something of an outlier.Source: Shutterstock It offers everything from office supplies to healthcare products to the power transformers you see perched on top of power-line poles.It's wild mix that seems to work for 3M though, giving the company something to sell regardless of the economic environment.The clincher: 3M has managed to pay and increase its dividend every year going all the way back to 1977. Walmart (WMT)Dividend Yield: 1.88% Year-to-date gain: 21%Yes, the advent of Amazon.com, Inc. (NASDAQ:AMZN) has proven problematic for the world's biggest retailer, Walmart Inc (NYSE:WMT).Source: Shutterstock Rumors of Walmart's death at the hands of Amazon, however, have been greatly exaggerated.After being knocked over a few years ago, the company has regrouped, having figured out a way to fight the ever-growing reach of its online rival. The evidence? Last quarter's revenue, excluding currency fluctuations, jumped 2.9%. * 10 Cheap Dividend Stocks to Load Up On While it has been an ugly battle at times, Walmart has finally learned how to compete with Amazon.com. The fact that it can leverage its stores to do so only bolsters the bullish case. Southern Co (SO)Dividend Yield: 4.49% Year-to-date gain: 30%No list of stocks to buy and hold forever would be complete without a utility stock. In good times and bad, consumers almost always pay their electricity bill.Source: Shutterstock And, even though margins are thin and power providers don't have a ton of pricing power, they have little competition in most markets. Most requests for rate hikes are also approved without question.To that end, Southern Co (NYSE:SO) is one of the top picks of the litter.Southern serves nine million customers, mostly in the south, although it's represented in most of the major regions of the United States. More important, Southern Co has dished out stunningly consistent (even if tiny) profit growth, setting the stage for equally consistent dividends. It has not failed to increase its annual payout since the late 90's. Johnson & Johnson (JNJ)Dividend Yield: 2.9% Year-to-date gain: 1.15%As advanced as we've become as a society, the need for medicines, surgical products and simple healthcare solutions like Band-Aids and Tylenol is never going to go away.Source: Shutterstock That means Johnson & Johnson (NYSE:JNJ) -- which maintains a bigger product portfolio than most investors realize -- will always have something to sell to someone.That being said, don't think for a minute that a play on J&J is capitulation in the search for respectable growth. The company isn't just about treating tummy troubles and selling no-tears baby shampoo. * 10 Cheap Dividend Stocks to Load Up On It still operates a pharmaceutical arm as well, with its pharma operational revenue jumping 4.4% year-over-year last quarter, Berkshire Hathaway (BRK.B, BRK.A)Dividend Yield: N/A Year-to-date gain: -2%If the Warren Buffett mindset is the underlying philosophy in play here, why not go straight to the source and buy a piece of the fund he built from the ground up? That's Berkshire Hathaway Inc. (NYSE:BRK.B, NYSE:BRK.A).Source: Shutterstock Sure, in his most recent letter to shareholders, the Oracle of Omaha said he's struggling to find new companies at a "sensible purchase price," which is the life-blood of the organization's growth. There's also the stark reality that the 87-year-old Buffett is increasingly less involved with Berkshire Hathaway. That separation is only going to widen as time marches on.Still, he has more than proven his way works for the long haul. Over the course of the past half-century, Berkshire stock has performed about twice as well as the S&P 500 has. Waste Management (WM)Dividend Yield: 1.73% Year-to-date gain: 33%There's an old adage … the only two sure things in life are death and taxes.Source: Shutterstock It's a humorous point about the limited nature of human life and the far-reaching power of the IRS. But, it's not necessarily a complete cliche. There's a third certainty. That is, as long as people are living on the planet earth, they'll be creating garbage to shuttle to their nearby landfill. Some of the best stocks to buy and hold are companies that haul that garbage away.Enter Waste Management, Inc. (NYSE:WM), which runs garbage-pickup services for 21 million North American customers. Although its top and bottom lines ebb and flow, the bigger trend for both is pointed upward. * 10 Cheap Dividend Stocks to Load Up On Look for more of the same too. As CEO Jim Fish pointed out last year, "The babyboomers are coming into a period of heavy medical spend. All of our parents are aging and spending more on medical spend. There is medical waste generated from that, we are in that business. The industrial economy is important to us.Whether it's through repatriation from the new tax law, or just through the fact the U.S. and Canada are great places to do business and the industrial economy is showing some signs of life, we are a big industrial player on the back-end of the cycle." American Water Works (AWK)Dividend Yield: 1.61% Year-to-date gain: 37.4%Perhaps just as certain as death, taxes and the creation of trash, as long as people are alive they're going to need water to survive. That puts a water utility name like American Water Works Company Inc (NYSE:AWK) in the catbird seat. Reliability and demand make water utilities safe stocks to buy when others seem sketchy.Source: Shutterstock Much like electricity providers Southern Company, American Water Works Company -- which offers water and sewer services to 15 million people in the United States -- is rarely told no when it wants to raise rates.Water service prices have risen at above-inflation rates for the past several years, and American Water Works Company has benefited from that industry-wide trend. It's not apt to change anytime soon. Colgate-Palmolive (CL)Dividend Yield: 2.40% Year-to-date gain: 21%Last but not least, while the purchase of things like cars are cyclical, and the automobile industry itself is subject to constant reinvention, there are some consumer goods people just buy over and over again without a second thought. When it comes to the best stocks to buy and hold, you just can't forget consumer staples.Source: Shutterstock Among those often-repurchased items are Colgate toothpaste, Palmolive dish soap, Speed Stick deodorant and Cuddly fabric conditioner.Yep, they're all made by Colgate-Palmolive Company (NYSE:CL), though they're only a small sampling of the brands you'll find under the company's umbrella. * 10 Cheap Dividend Stocks to Load Up On Those who know the Colgate-Palmolive story well will know the company has gotten into some sloppy spending habits, crimping margins more than most shareholders would like. That's starting to change, however, with a serious and rather impressive cost-cutting initiative. The benefits of that work could last years, if not decades.As of this writing, James Brumley hold a long position in AT&T. You can follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for June * 7 Stocks to Buy From One of America's Best Pension Funds * 4 Consumer Staples Stocks for Both Income and Growth The post 10 Best Stocks to Buy and Hold Forever appeared first on InvestorPlace.
Theoretically, an industrial giant like Dow Inc. (NYSE:DOW) should perform better than your typical growth company. As a supporting piece of evidence, DOW stock features a generous dividend yield of 6.4%. That's getting into speculative high-yield territory, yet the company has a rich heritage extending back to the early 20th century.Source: Shutterstock And right now, investors are placing a premium on defensive names. Many folks are avoiding your typical "risk-on" opportunities like Advanced Micro Devices (NASDAQ:AMD) or Nvidia (NASDAQ:NVDA). Instead, they're moving into safe-haven assets, such as precious metals. In this environment, a dividend-bearing company levered toward secular industries should appeal to the markets. Yet Dow stock hasn't benefited from this dynamic in the slightest.In fact, shares closed lower on a percentage basis during the midweek massacre than either AMD or NVDA, and that's a confusing proposition if you think about it. One of the factors that sparked the selloff was the yield curve inversion, as the payout for 10-year Treasuries slipped underneath the yield for 2-year Treasuries. Stated differently, investors are getting less reward for more time risk on the benchmark 10-year bonds.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut such a circumstance absolutely favors an investment like DOW stock. Why? It has everything to do with implications.The "2-10" yield-curve inversion doesn't make economic sense. To correct this, the Federal Reserve essentially has no choice but to pull levers to reduce the 2-year yield. But that creates demand for high-yielding assets like Dow Inc stock, especially in this period of geopolitical uncertainties. * 15 Growth Stocks to Buy for the Long Haul So, that being the case, why hasn't DOW stock acted rationally? Confusing DOW Stock has no Standout ProductsWhen I wrote about Dow stock a few months back, I noted that while the shares will always attract eyeballs for their yield, one factors bother me: the underlying company is too complicated:"Despite the much-covered DowDuPont breakup, 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."Having broad coverage across multiple industries doesn't guarantee solid performances. In fact, it doesn't even guarantee mitigation of volatility. Just look at the longer-term charts for General Electric (NYSE:GE) and 3M (NYSE:MMM) for proof.Aside from the confusing structures, DOW stock also lacks a driving catalyst. I visited their website and browsed through their products across consumer, industrial, and packaging categories. Here's the takeaway: DOW makes very useful products. However, none of them really stand out.In a sea of sameness, Dow Inc stock risks death by a thousand cuts.Furthermore, DOW stock is a different proposition than GE or 3M. For instance, GE has a viable aviation business. It's also under new management and a fresh vision. As for 3M, I like that they found an innovative product in their "Flex & Seal Shipping Roll." This packaging invention could change the supply chain narrative for the ever burgeoning e-commerce industry.Admittedly, both GE and MMM are risky investments. But they both have at least one compelling product to offer. And both performed notably better than Dow Inc stock in Wednesday's carnage. Dow Inc Stock Needs Geopolitical ClarityAnother problem for DOW is the present geopolitical madness. Sure, this affects everybody else, too. However, management was especially worried about the turmoil.For example, in their most recent second quarter of 2019 earnings report, DOW reported a 3% decline in volume. In response management cut guidance for full-year capital expenditures from $2.5 billion to $2 billion. * 7 Safe Dividend Stocks for Investors to Buy Right Now That was in late July. After the company disclosed its financials, DOW stock dropped nearly 4%. In mere weeks, the situation has drastically worsened. That doesn't give me confidence in these shares.Of course, we can't ignore the dividend yield, as my InvestorPlace colleague Will Ashworth pointed out. But after how recent events unfolded, I'm very hesitant.Even during the height of the bull market when people viewed China more as a culinary muse than a harbinger, investors eschewed complicated companies for streamlined, agile ones. With a possible bear market on the horizon, I'm not sure if Dow stock is any more attractive.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post Geopolitics Push a Confusing Dow Inc Stock from Bad to Worse appeared first on InvestorPlace.
General Electric is making major changes after a brutal couple of years. Here is what the fundamentals and technical analysis say about buying GE stock now.
It's been a rough run for 3M (NYSE:MMM) stock over the past two years. During that stretch, slowing global growth trends have coupled with rising geopolitical and trade tensions to create significant revenue and margin headwinds for the global industrial giant.Source: Shutterstock As a result, its revenue growth is flat, its margins have retreated, and its profits, as well as 3M stock price, have dropped.Back in 2018, MMM was a $250 stock. Today, MMM stock trades hands around $160. That is a 35% shellacking over the past 18 months. MMM hasn't dropped that much since the 2008 financial crisis.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, 3M stock is acting like the global economy is sprinting straight into a recession.It's not. Instead, multiple data points suggest that the global economy is actually starting to stabilize and even improve after it suffered a setback in early 2019. One of those data points is 3M's second-quarter results.In Q2, the company's revenue growth and margins rose versus Q1, Moreover, its top line and margins look poised to continue to rise for the rest of the year. * 15 Growth Stocks to Buy for the Long Haul As a result, the present selloff of MMM stock seems overdone. Over the next several quarters, the global economy will pick up steam. As it does so, 3M's revenue and margin trends will continue to improve, causing MMM stock to bounce back. 3M's Numbers Will Continue to ImproveThe first part of the bull thesis on 3M stock is that this company's underlying trends and fundamentals will improve meaningfully over the next few quarters.There's a big debate right now as to whether the 2019 economic slowdown is just another bump in the road or the final straw that will break the camel's back. I think it's the former.For starters, the Fed and Trump are trying to boost the economy and the stock market. For better or for worse, U.S. President Donald Trump has tied his success to the success of the stock market. Because of that, he doesn't want to enter the 2020 election cycle with stocks in a tailspin or the U.S. economy in trouble. Thus, all his trade-war talk is just chest-puffing; Trump won't do anything that will meaningfully harm the U.S. economy before the 2020 election.At the same time, the Fed has also somewhat married itself to the idea that its job is to prolong the current economic expansion. Thus, the central bank has shown a willingness to inject stimulus into the economy.This combination of proactive stimulus and a president who is inclined to put the trade war on hold for the foreseeable future indicates that global economic activity should re-accelerate over the next few quarters.As it does, 3M's growth trajectory - which mirrors global economic growth - should re-accelerate, too. That's already happening.In Q2, its organic revenues dropped just 0.9% year-over-year, better than Q1's 1.1% drop. Further, its underlying core margins improved from Q1 to Q2. For Q3, its organic revenues are expected to be flat to up, while its margins are expected to continue to improve. 3M Stock Will Bounce BackAssuming that 3M's growth trajectory does meaningfully improve in the back half of 2019, then 3M stock is attractively positioned for a gigantic rally heading into the end of the year.Here are the numbers. MMM's organic revenue growth was negative in Q1 and Q2. Management thinks it will be flat to up in Q3, and the full-year guidance implies that the company expects its organic revenue growth to be solidly positive by Q4.Meanwhile, MMM said on its conference call that its underlying margin trends are improving, and that the rebound will persist into the back half of 2019, implying that its Q4 margins could rise YoY.So 3M could go from negative revenue growth and margin compression today to positive revenue growth and margin expansion by Q4. That is the sort of turnaround that will force the analysts to raise their estimates.At the same time, such a turnaround would get investors to once again believe in the long-term growth outlook of 3M. As investor sentiment improves, the valuation of MMM stock will normalize, from today's forward price-earnings multiple of 17.5 back to the five-year-average forward P/E multiple of nearly 20.All in all, then, MMM stock has the potential to benefit from both rising estimates and multiple expansion in the back half of 2019. If all that materializes as expected, then MMM stock could have a huge second-half rally. The Bottom Line on MMM StockThe last 20 months have been ugly for MMM stock. But there's reason to believe that the worst is now in the rear-view mirror for 3M, and that, going forward, its fundamental growth trends will meaningfully improve. If they do, then 3M stock is poised for a huge rally over the next few quarters.As of this writing, Luke Lango was long MMM. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post Why the Turnaround Thesis on 3M Stock Is Gaining Credibility appeared first on InvestorPlace.
Thanks to the trade war, numerous S&P 500 stocks could arguably deserve a place on a "stocks to avoid" list. Over the last few years, much of the growth in the most-established United States equities has come from China. With almost four times the population as the U.S., many saw the country's potential when it began to turn away from communist doctrine.Now, many of these have become stocks to avoid in today's market. With a trade war that has lasted more than 18 months, many equities have sold off due to dimming earnings prospects. * 15 Growth Stocks to Buy for the Long Haul However, investors should also remember that China has built its emergence in large part on the American consumer. Their need for access to U.S. markets should lead to an eventual trade deal.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut until the U.S. and China sign such an agreement, the following companies should remain stocks to avoid. Stock to Avoid: 3M (MMM)Source: Shutterstock As an applied science and manufacturing powerhouse, 3M's (NYSE:MMM) dependence on China should not surprise anyone. In 2018, 31.3% of the company's revenues came from the Asia-Pacific region, of which China is a dominate influence. It comes as somewhat of a shock that in what many consider the "century of Asia," revenues from that region have fallen over the last year, helping to make MMM stock one of these five stocks to avoid.Moreover, the firm once known as Minnesota Mining and Manufacturing Company faces issues of its own. It remains a conglomerate in an era when such business groupings make less sense. Also, although it continues to innovate, e-commerce has made it easier for small companies to invent competing products and bring them to market.MMM stock has lost 37% of its value since the trade war began. Despite this loss, investors will likely not rush in at a forward price-to-earnings ratio of almost 16. Nor will they want to buy 3M stock with a predicted long-term growth average of 3.4%. They might react to the dividend yield that has moved near 3.5%. However, with a payout ratio above 56%, even the dividend faces some dangers.While investors should not write this company off, MMM's profit growth will struggle to gain traction without help from Chinese consumers and businesses. General Motors (GM)Source: Shutterstock Arguably, all U.S. car companies could make the stocks to avoid list due to the trade war alone. However, General Motors (NYSE:GM) likely faces the most pain. GM stock has seen little price growth since it resumed trading in 2010. In 2018, GM sold almost 700,000 more vehicles in China than in the U.S.GM has long faced struggles with sales growth in other regions. This includes North America, where it would struggle to earn a profit it not for strong truck and SUV sales. Hence, General Motors' overall sales growth depends on China. Due to tariffs, investors do not seem optimistic that this growth will materialize.On the surface, GM stock looks like a bargain. It trades at around six times forward earnings and its dividend yields almost 4%. Still, with no average profit growth expected over the next five years, investors should see little reason to buy. * 7 Safe Dividend Stocks for Investors to Buy Right Now Even without tariffs, GM and its peers would struggle in China amid intense competition. However, GM's P/E ratio likely prices in these troubles. If it can escape the tariffs, GM stock may finally sustain a move higher. Still, with the specter of these import duties, GM will remain cheap for a reason. Las Vegas Sands (LVS)Source: Shutterstock Despite the company name, the growth of Las Vegas Sands (NYSE:LVS) depends on mainland China. Five of the company's nine casinos operate in Macao, a special administrative region of China.Because China has banned gambling outside of Macao, the company's significant presence in this region would seemingly guarantee LVS stock billions in revenue. However, as the Chinese spend less amid the tariffs, they have also gambled less in Macao's casinos.This has devastated LVS stock. Las Vegas Sands peaked at over $81 per share in June 2018. Thanks to reduced revenue related to the tariffs, the stock has fallen by more than 35% to the $52 per share range. Over the last year, it has tested the high-$40's per share range more than once only to bounce back.That said, LVS maintains a forward P/E of about 15.6, and analysts expect meager long-term growth. This does not make Las Vegas Sands cheap. Still, a trade deal, or even the hint of one, could take it off of the stocks to avoid list. As late as July, LVS stock traded in the mid-$60's per share range simply due to the earlier optimism of a trade agreement. Unless such confidence leads to an actual deal, investors should stay away. Qualcomm (QCOM)Source: Shutterstock By most measures, Qualcomm (NASDAQ:QCOM) stock should not find itself on a stocks to avoid list. The world's smartphones depend on its chipsets to operate. The U.S. Department of Justice recently filed an amicus brief asking that Qualcomm be granted reprieve in a ruling that labeled the company a monopoly. These chipsets will help lead the 5G revolution, and even Chinese smartphone users cannot afford for tariffs to block Qualcomm's technology.Moreover, QCOM stock trades at a low valuation given its growth prospects. The forward P/E ratio is close to 16.7 as of the time of this writing. However, this buys average annual growth of an estimated 27.03% per year over the next five years.Still, the company depends on China for about two-thirds of Qualcomm's revenue. Despite its headquarters in San Diego, this makes the company a de facto Chinese equity. If tariffs further hurt QCOM stock, it will struggle to meet analyst growth targets. Even a resolution with the government or a better-than-expected 5G rollout may not save Qualcomm stock in that instance. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Qualcomm will wield tremendous power as 5G rolls out. For this reason alone, I would recommend buying QCOM stock in most cases. However, without a resolution to the trade dispute, stockholders will struggle to benefit from the 5G technological revolution. Starbucks (SBUX)Source: Shutterstock Strangely, Starbucks (NASDAQ:SBUX) stock has become one of the stocks to avoid due to the company's success. SBUX stock has risen by more than 80% over the last year. It also increased following its latest earnings report as comparable-store sales across the world rose by 6%.Still, saturation in both the U.S. and Canada has forced the company to look abroad for growth. Over the last few years, it has made expansion across China a primary growth goal. As of January, the company had established 3,684 stores in China, its second-highest store count behind the U.S.Moreover, Starbucks faces an emerging competitor in Luckin Coffee (NASDAQ:LK). Luckin has existed for less than two years. However, the Beijing-based coffee house opens a new store every 15 hours on average. Such a threat would constitute a challenge to Starbucks under the best of circumstances. However, a brutal tariff war could further undermine the Seattle-based coffee chain.China has helped keep earnings increases for Starbucks in the double digits. However, one has to question if investors will continue to pay more than 30 times forward earnings should the trade war end the growth of Starbucks China. This uncertainty, coupled with the multiple, should make SBUX one of the stocks to avoid.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post 5 Stocks to Avoid Amid the Ongoing Trade War appeared first on InvestorPlace.
Deere & Company (DE) closed up a slight 0.08% Tuesday; shares were likely positively affected after the Trump administration pushed back a new wave of tariffs from September to December 15, raising hopes of a trade deal.
John Lam's safety equipment shop has been spared the global downdraft shaking Hong Kong's economy. In times of crisis, businesses providing basic necessities tend to fare better. In Lam's case, that means hard hats, filtered masks, goggles and other gear that millions of anti-government protesters taking to the streets in the past two months bought to protect themselves as clashes with police turned increasingly violent.
Tiburon, CA, based Investment company Brouwer & Janachowski, LLC (Current Portfolio) buys Amazon.com Inc, sells iShares MSCI EMU ETF, 3M Co during the 3-months ended 2019Q2, according to the most recent filings of the investment company, Brouwer & Janachowski, LLC. Continue reading...
The stock initially popped in reaction to an earnings beat, but negative news on the trade war with China resulted in a quick reversal.
Forty-six large companies account for 22% of the office space in Austin. This means that Austin’s fate is more vulnerable to the national economy than ever before, and to the whims of tech behemoths such as Google, Apple, Dell Technologies and IBM.
The decline in 3M (NYSE:MMM) continues. Despite an earnings beat, the quarterly report initiated another selloff in 3M stock.Source: Shutterstock Thankfully for longs, it did not happen in the dramatic fashion that affected the company in the first quarter.Nonetheless, it indicates MMM stock has not stopped falling. With stagnant growth forecasted and an ongoing trade war with no end in sight, I do not think investors should buy 3M at this time.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 Dividend Aristocrat Stocks to Buy Now No Matter What 3M Wins and Still DisappointsIn a previous article, I proposed that 3M stock would not recover until the trade war ended. Since Asia makes up more than 30% of company revenues, I still do not see how the company prospers with uncertainty clouding such a large percentage of its revenue.So far, this theory held up through second-quarter earnings. Even beating on both revenue and profits could not rescue the stock. Consequently, it has stagnated in the low-$160s per share level, near a point where it turned around in early June.I agree with my colleague James Brumley who stated that conglomerates in today's business world make much less sense. However, unlike Brumley, I do not think the time has come to start comparing 3M to General Electric (NYSE:GE). I need to see more bad news before I will start believing that it will fall that far.While I disagree with InvestorPlace contributor Josh Enomoto overall on 3M, I find myself almost as impressed with the packaging material called the "Flex and Seal Shipping Roll." It might even become their most popular creation in decades. MMM Isn't CheapUnfortunately for traders, cool products do not necessarily beget hot stocks. Even with the stock trading at bargain prices compared to this winter, I do not see the 2019 drop in MMM as enough.The forward price-to-earnings (PE) ratio of 17.2 stands well below S&P 500 averages. However, with profit growth expected to average 3.43% per year over the next five years, I would not call that multiple "cheap."Moreover, the current dividend yield of about 3.5% significantly exceeds the S&P 500 average yield of 1.91%. The six decades of annual payout hikes build further confidence in both the dividend and the company itself.Still, that payout now costs the company 67.55% of its net income, up from just 37% in 2011. While I do not think the company would end dividend hikes unless it was unavoidable, the payout has become a tremendous burden.However, as I implied earlier, any doomsday prediction is premature at this stage. Perhaps the company will spin off divisions to improve their focus. Maybe their packaging material or other product will bring investors back to 3M.Still, investors looking for a beleaguered stock in an established company with a decades-long history of dividend increases have more choices than 3M stock.Companies such as AT&T (NYSE:T) and AbbVie (NYSE:ABBV) offer forward multiples in the single digits and payouts which rise every year and offer a yield exceeding 5%. Moreover, the path to recovery for both equities appears more evident than that of MMM stock. The Bottom Line on 3M Stock3M faces too much uncertainty to buy at current levels. One might think an earnings beat would send MMM stock higher, particularly after the massive selloff that followed its first-quarter report.However, with its business in China facing uncertainty and its profit growth modest, investors have shown little inclination to pay 17.2 times forward earnings.Moreover, a dividend payout ratio approaching 70% should create concerns about its six-decade streak of payout hikes.3M is no GE. Company management still has time to turn this ship around. However, investors can find cheaper stocks which pay higher dividend yields and have a clearer path to recovery.As of this writing, Will Healy is long ABBV stock. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 8 Dividend Aristocrat Stocks to Buy Now No Matter What * 7 Stocks to Buy to Ride the Vegan Wave * 4 Safe Stocks to Buy Amid Trade War Turbulence The post 3M Stock Isnat Crumbling, but Itas No Bargain Either appeared first on InvestorPlace.