49.50 -0.04 (-0.08%)
After hours: 6:28PM EDT
|Bid||49.41 x 1100|
|Ask||49.60 x 1000|
|Day's Range||49.40 - 49.94|
|52 Week Range||42.40 - 66.04|
|Beta (3Y Monthly)||0.34|
|PE Ratio (TTM)||15.10|
|Earnings Date||Jul 30, 2019|
|Forward Dividend & Yield||3.20 (6.46%)|
|1y Target Est||58.73|
Will no one think of the children? Well, Kevin Burns, the CEO of Juul Labs will. Burns recently apologized on behalf of his company, the most popular electronic cigarette on the market, for his product’s popularity with America’s youth. “First of all, I’d tell them that I’m sorry that their child’s using the product,” said Burns. “It’s not intended for them. I hope there was nothing that we did that made it appealing to them....” Run The JUUL JUUL launched in 2015 and quickly began to take over the electronic cigarettes game, controlling 40% of the market. As the popularity of vaping jumped over the past several years, the company has become so big that Altria (which also owns Philip Morris), the top U.S. cigarette company, invested $12.8 billion for a 35% stake. The Teens While those booming numbers are nice for JUUL and their shareholders, they have one big problem. One of the main groups that love to vape is teenagers, as federal data shows that nearly 21% of high school students hit the JUUL (or some other vaping device) last year. It has become so popular that the FDA recently declared teen vaping “an epidemic,” and former FDA Commissioner Scott Gottlieb and health care advocates blame the rise in teen vaping on JUUL, saying that fruit flavors such as mango give the product a youth appeal. The anti-smoking advocacy group Truth found that 15- 17-year-olds are over 16 times likelier odds to be JUUL users compared to those aged 25-34. DIsclosure Some Altria shareholders have been pushing for JUUL to disclose nicotine levels, though a recent proposal was handily voted down. Also, the company has been having difficulties finding scientists willing to research the product on their behalf, which would make issuing any such reports that much more difficult. -Michael Tedder Photo: Mike Segar/Reuters
(Bloomberg Opinion) -- For a company that built its beer-brewing empire on the back of swashbuckling deals, the future for Anheuser-Busch InBev SA looks pretty unexciting.Friday’s decision by the Belgian giant to pull an initial public offering of its Asian unit, which might have raised as much as $10 billion, means it has given up the chance to pay down its $100 billion of debt faster. Perhaps more important, the brewer has lost a valuable source of funding for acquisitions in Asia.AB InBev had set a punchy price range for the listing, as noted by my colleague Chris Hughes. Even so, the decision to pull the IPO – rather than cut the price – is curious. A survey by Bernstein analysts indicated that there was significant interest among investors at HK$38 per share, which was below the HK$40-47 range but not that much lower. This reduced offer would have generated $400 million less than an IPO at the bottom of the price range, Bernstein notes. For the world’s biggest brewer, with a market capitalization of 157 billion euros ($177 billion), that would have seemed a small concession given the IPO’s considerable benefits.Without the prospect of the Asia listing, AB InBev has little choice but to knuckle down and gradually chip away at its mountain of borrowings. Net debt stood at $103 billion on December 31. The IPO would have cut the total by about 10%, according to Bernstein, and allowed the company to hit a key debt reduction target a year early. Now net debt will still be 4.2 times earnings at the end of this year. That’s better than the 4.6 times at the close of 2018, but it’s still too high. It underlines the slow pace of reducing the burden.This doesn’t leave the group much flexibility to do deals. True, the company could gear up further or use AB InBev shares as currency. But neither option is attractive. Investors would be justifiably nervous about borrowings rising even more. The group’s two biggest shareholders, Altria Group Inc. and Colombia’s Santo Domingo family, may not want to be diluted through any deal that was funded by equity.Cutting the dividend again to speed deleveraging is another option. The group should probably have gone further when it halved the payout in October. Still, such a decision wouldn’t be taken lightly.While it’s possible the IPO might return to the agenda, it’s hard to see what might change either the company’s or investors’ contrasting views of the Asian business’s value. With the prospects of the listing gone – at least for now – the king of beers is tasting pretty flat.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Cannabis stocks need to fight their way out of their funk. That's true for names like Canopy Growth (NYSE:CGC) and New Age Beverages (NASDAQ:NBEV), but it's critical for Cronos Group (NASDAQ:CRON). CRON stock is not only down by a third since its March high, but is on the verge of breaking under a crucial technical support level.Source: Shutterstock Some -- perhaps most -- would argue that the shape of a chart is irrelevant. A chart's history shouldn't dictate its future. Rather, a company's results and prospects are reflected in its stock's movement.The fact is, however, the movement of a marijuana stock shapes the rhetoric about that company as much as it's shaped by the rhetoric. If Cronos stock slips any further, it would become alarmingly easy for the masses to view it as a liability.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Charting CRON StockIt's not difficult to see.After an overheated rally in January and February set the stage for significant profit-taking in March and April, the 200-day moving average line (plotted on the white line on the chart below) began to serve as a technical floor. It's not yet become a pushoff point, though, and it doesn't appear it's going to. Just within the past several days the sellers have tested the pivotal 200-day moving average line as support again, and it's failing to even modestly repel the effort.The 200-day moving average line is regarded by some as the most important of all the trend indicators. It's admittedly simplistic, but still has significant psychological implications because so many traders still see it as a make-or-break level. * 7 Retail Stocks to Buy for the Second Half of 2019 There's modest encouragement in the fact that the weakness since March's high has been on relatively low volume. That suggests there's not necessarily a great deal of conviction behind the selling; investors are just biding their time.Conversely, the fact that the other aforementioned names, like most marijuana stocks of late, are falling is a red flag. Group-wide movement tends to indicate longer-lived, philosophical doubt. Analysts Still in DoubtStill, Cronos Group stock is a standout for all the wrong reasons. Chief among them is the fact that among all cannabis stocks, CRON stock remains one of the analyst community's least favorite.As of the most recent look, analysts collectively rate Cronos at a little less than a Hold … tiptoeing into Sell territory. Rivals New Age Beverages and Canopy Growth, for perspective, are considered a Buy and something that's almost a full Buy, respectively. Hexo (NYSEAMERICAN:HEXO) is also closer to a Buy than a Hold. Click to EnlargeReasons for the pessimism range from lack of clear capital spending plans to a sheer lack of story in an environment where a company's story is a powerful marketing tool. Given that the $1.8 billion investment Altria Group (NYSE:MO) made in CRON stock has now been closed for weeks as well, one would have expected a more definitive direction for a partnership than we've seen yet.More than anything though, analysts still take issue with the stock's crazy valuation.Cronos sports a $4.8 billion market cap, and though revenue of $6.5 million was only a fraction of what the company could be driving in just a few quarters, even the most optimistic of plausible output levels will fall short of justifying that sort of price. It's a reality made even more amazing considering analysts have cared little about other similarly frothy valuations among cannabis stocks. Wait and See on CRON StockIt's certainly possible CRON stock could dig its way out of trouble and use its 200-day moving average line as a launchpad rather than a trigger for more trouble. The stock's yet to break below it. * 10 Stocks to Sell for an Economic Slowdown Those hopes are fading fast though, as the broader realities of the legal marijuana business sink in. The most overvalued names in the business also make for the most susceptible targets. That's Cronos, to be sure.Whatever's in the cards, it's certainly not a time to step into the pot name. Newcomers will want to wait for a little more clarity before doing anything.The world will get a big dose of that clarity in the first half of August, when Cronos will be reporting its Q2 numbers.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Cronos Needs to Show the Market Something to Pull Stock Out of Funk appeared first on InvestorPlace.
On Friday, Goldman Sachs upgraded Altria Group (MO) from a “neutral” to a “buy” while keeping its price target unchanged at $59.
A U.S. federal judge on Friday ordered the Food and Drug Administration to impose a 10-month deadline for the submission of e-cigarette applications, turning the screws on companies like Juul Labs Inc whose products have come under intense scrutiny for their popularity among teenagers. The FDA last month proposed the shorter timeline after the U.S. District Court for Maryland ruled in a lawsuit filed by anti-tobacco groups that the agency had exceeded its authority in allowing e-cigarettes to remain on the market until 2022 before companies applied for regulatory approval. "I will impose a ten-month deadline for submissions and a one-year deadline for approval, as the FDA suggested," U.S. Judge Paul Grimm wrote in a court order on Friday.
Goldman Sachs analyst Judy Hong raised her rating on Altria to Buy from Neutral, leaving her $59 price target unchanged, implying some 20% upside from current levels.
OUTSIDE THE BOX In late June, San Francisco banned e-cigarette sales completely. That means no bricks-and-mortar sales. And no e-cigarette deliveries for online purchases. Many cities already restrict vaping and e-cigarette sales.
Goldman Sachs, seeing value in the tobacco stocks, upgraded Altria to a buy rating from neutral and affirmed Philip Morris International at buy. Altria shares were trading up 1.4% at $49.96, while PMI shares added 0.8% to $81.92. Tobacco valuations are "at a 10-year trough despite a more accommodating market backdrop," analyst Judy Hong wrote in a report.
The former co-CEO of Canopy Growth (NYSE:CGC) has had a lot to say about the cannabis industry since his sudden departure July 8. One of his comments could ultimately benefit Quebec-based Hexo (NYSEAMERICAN:HEXO) and HEXO stock. Here's why.Source: Shutterstock Bruce Linton wasn't shy about his outing from his role of co-CEO at Canada's largest cannabis company. While the company's board attempted to spin the move as a mutual decision, Linton told CNBC that he was in fact fired from the company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips"I think stepping down might not be the right phrase," he told CNBC, referring to the language in the company press release. "I was terminated."Constellation Brands (NYSE:STZ) CEO Bill Newlands suggested that Linton wasn't the right guy to take Canopy Growth to the next phase. Linton's an entrepreneur at heart, so he's probably not wrong to want more of an operational, globally trained business executive, who can take the company to the next level. "Our board was uniform," Newlands said. "We needed a different leader to take us to the next phase of growth."Although Constellation wasn't happy about Canopy's $39 million loss in its most recent quarter, it denies that had anything to do with Linton's ouster. Whatever the reasons, semantics aside, Linton had something interesting to say about the future direction of the global cannabis industry that could really help HEXO stock. * 7 of The Best Schwab ETFs for Low Fees It starts with "United" and ends with "America." Go South Young ManThe fact that Linton quarterbacked the tentative acquisition of Acreage Holdings (OTCMKTS:ACRGF) before he was summarily turfed says all you need to know about where he thinks the big money is in the cannabis industry. He wouldn't have agreed to spend $3.4 billion on a deal for Acreage if he didn't think the U.S. government would legalize cannabis on a federal level within the seven-year limit required by the proposed tie-up between the two companies. Already, Acreage is making plans to buy other U.S. companies in preparation for the eventual merger. Big money lies south of the border and Linton knows it. "Anybody who's dumb enough to launch a new cannabis company in Canada, I don't know what they're doing, they should have been at it six years ago. Canada is done," he told Bloomberg TV. "You're going to end up with a few winners and a whole bunch of people who wonder why they started."You might wonder what this has to do with Hexo and the U.S. market? Cannabis-Infused Drinks a Big Growth AreaThere is absolutely no possible way that Molson Coors (NYSE:TAP) didn't have a plan for south of the border when it entered into a 50/50 joint-venture with Hexo to make cannabis-infused drinks for the Canadian market last August. Hexo's VP of Strategic Development, Jay McMillan, recently stated that Truss, the name of the joint venture, is going to be ready to sell cannabis-infused drinks on Dec. 17, the first day they can be legally sold in Canada. "We'll have a very large supply so we'll be in a good position to be able to meet the demand of the marketplace and at the same time also ensure that we're meeting the variety that the marketplace wants," McMillan said in an interview at the World Cannabis Congress in Saint John, New Brunswick, in June. The joint venture can move production from one type of product to another based on consumer preference. Think of it as the beverage version of "Fast Fashion."More importantly, it's going to give Molson Coors an understanding of consumer preferences in a smaller market before jumping into a much bigger one south of the border. It plans to have CBD-infused beverages in eight states by 2020. However, I wouldn't be surprised if it was readying for the launch of cannabis-infused products the minute the federal government legalizes cannabis. Having worked with Hexo north of the border, I'd be surprised if the joint venture didn't extend to the U.S. over time. * 10 Best ETFs for 2019: The Race for 1 Intensifies With America being a much bigger market, Hexo could be on the precipice of a serious value-enhancement to HEXO stock. The Bottom Line on HEXO StockIf you're unsure about whether HEXO will follow Molson Coors into the U.S. market, you could always buy both stocks to ensure you're capturing any gains both stocks achieve as a result of their participation in cannabis-infused drinks. As an aside, both Canopy Growth and Cronos Group (NASDAQ:CRON) are ideally positioned for the U.S. market given their significant investments from Constellation Brands and Altria (NYSE:MO).Who knows? Molson Coors could end up owning a big piece of Hexo in the future. Only time will tell.At the time of this writing, Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Why Hexo Stock Is a Promising Buy Now appeared first on InvestorPlace.
Philip Morris' (PM) Q2 performance to gain from pricing and advancements in RRPs. However, low cigarette sales volumes are a worry.
Cronos Group (NASDAQ:CRON) shares have struggled of late. Since early March highs, Cronos stock is down about 35%.Source: Shutterstock Cronos stock managed to put together a modest rally last month, but it has faded. CRON sits at a one-month low at the moment.To be sure, CRON stock isn't alone. Other cannabis majors are scuffling. Canopy Growth (NYSE:CGC) has dropped steadily since late April, losing about a quarter of its value.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAurora Cannabis (NYSE:ACB) is off almost 30% since mid-March. Tilray (NASDAQ:TLRY) has stabilized, but after a long, steep decline. Hexo (NYSEAMERICAN:HEXO) has slid 41%. * 10 Best ETFs for 2019: The Race for 1 Intensifies For the biggest cannabis stocks, investor patience is drying up. Why that is remains unclear. Valuation could be a concern. It's likely that there's a "OK, what's next?" response after Canadian legalization in October.The problem for Cronos Group stock, however, is that even when sentiment returns, it's not clear what the company can do to spark investor enthusiasm.The near- to mid-term worry is that if cannabis stocks continue following, CRON stock will too. And if they rise, Cronos stock may well underperform peers until the wisdom of its plans become more clear - and Cronos starts showing real success. The Canada Problem for Cronos StockIt's become increasingly clear that the Canadian market isn't big enough and that there are real worries about too much supply in cannabis flower more broadly. As I've noted before, prices have crashed in U.S. regulated markets due to oversupply.In March, Tilray's CEO predicted similar issues in Canada as soon as next year. Aurora's strategy clearly is predicated on the idea that Canada alone isn't enough.Cronos seems to be operating on similar principles. Despite its US$1.8 billion investment from Altria (NYSE:MO), its production capacity might not even make the top ten in Canada, as the Motley Fool has noted. Even with that cash on the books, Cronos isn't racing to build out its production capabilities.That strategy makes some sense, particularly if as feared the Canadian market simply isn't big enough. Oversupply in dried flower is a real concern. But as far as CRON stock goes, it raises the question of what catalyst might arrive any time soon.Cronos might be right in playing the long game. Investors - and particularly cannabis stock investors - haven't shown that same patience in recent months. The StrategyAs CEO Mike Gorenstein put it on the Q1 conference call, "Like Altria, we believe that the best way to create value through the supply chain is by working with contract farmers and not being farmers ourselves."Cronos simply isn't all that interested in producing dried cannabis flower. It would rather let others spend the money to create that supply, assuming it can then buy flower at cheaper rates down the line.Instead, the company is focused on derivatives and R&D. It's working with Ginkgo Biosciences to create new strains of cannabis that can yield purer and easier-to-extract THC and CBD.Its new Cronos Device Labs in Israel will focus on fine-tuning vaporizers for varying customer demands. Production in Colombia is focusing on hemp over cannabis, with Gorenstein predicting on the Q1 call that CBD would outpace THC in terms of growth in the coming years.The Altria partnership should give Cronos an edge in these areas, given that tobacco company's long history with regulators. But there's risk here as well.The efforts with Ginkgo may not pan out. Even if they do, the new strains may not be all that valuable, if 'natural' strains are abundant and cheap as other companies build out capacity. Vaporizer demand may be lower than expected.There's certainly a risk that while Cronos plays around the edges of the market, rivals like Canopy and Aurora simply overpower the market. Canopy has more cash thanks to its deal with Constellation Brands (NYSE:STZ,NYSE:STZ.B).Aurora will give its stock to any company that will take it. If an investor believes that cannabis production will be big business globally, it's tough to believe that Cronos will be the big winner. The Long-Term Case for Cronos StockFrom a long-term standpoint, Cronos' strategy does seem wise. It's a good idea to keep US$1 billion or so in the bank in an industry in upheaval.Canadian suppliers are going to go bust; that's simply the nature of any growing market. Unexpected new markets may emerge elsewhere. Keeping capital on hand enhances flexibility, which seems like a compelling attribute to have as cannabis legalization (both recreational and medical) expands.Similarly, focusing on higher-value-add and higher-margin products makes sense. One need only look at the difference in valuation between Altria and Pyxus International (NYSE:PYX), an Altria grower, to understand what that will be the case in cannabis as well.The issue over the next 1-3 years, however, is that the strategy appeals to those of us (myself included) who think cannabis stocks are too expensive to begin with.Again, Cronos is set up for a future where oversupply hits prices and/or the global cannabis market moves slower than bullish investors expect. In both scenarios, cannabis stocks come down - and it's unlikely, though not impossible, that CRON stock emerges unscathed.In a sense, Cronos stock is the pot stock for investors who question whether pot stocks have rallied too far. If those investors are right, they're betting off staying as patient as Cronos is willing to be. As such, even with CRON stock cheaper, there's seemingly little need to rush in.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Cronos Isn't in a Rush. Investors in Cronos Stock Shouldn't Be Either appeared first on InvestorPlace.
At first glance, the dividend yield of CSX (NYSE:CSX) is miserable at just 1.24%. However, when you consider the capital appreciation that has come along with the dividend income paid out over the years to shareholders of CSX stock, it's not nearly as awful as you might think.Source: Shutterstock In fact, it's downright excellent, but not every dividend investor is interested in both income and capital appreciation. Some buy dividend stocks purely for the income. Consider an equity like Altria Group (NYSE:MO), which yields 6.6% and generates a significant amount of free cash flow. MO is far more attractive to someone looking to park their money in a relatively safe place other than bonds.That said, I think most dividend investors ought to consider owning CSX stock. Here's why.InvestorPlace - Stock Market News, Stock Advice & Trading Tips It's Not the Yield That CountsIf all you invest in are dividend aristocrats, you would have missed out on CSX stock. Although the company has paid a dividend since 1922, it has only increased its dividend for 14 consecutive years. That makes it ineligible for aristocrat status, which require 25 years of increases to qualify. * 10 Best Stocks for 2019: A Volatile First Half Investors get caught up in the yield when it is the growth of the dividend payment that truly matters. Consider CSX's dividend history over the past 14 years.In 2005, it paid out $0.43 in dividends. Based on its midpoint share price between its high ($51.60) and low ($36.90) that year, it averaged a 0.97% yield. In 2005, management increased the dividend by 7.5%.In 2018, CSX paid out $0.88 in dividends, 12.8% higher than in 2017. Based on its midpoint share price between its high ($76.24) and low ($48.43), it averaged a yield of 1.4%. That was 44% higher than 14 years earlier.Overall, CSX has increased its annual dividend between 2005 and 2018 by 5.7% compounded annually.And what about earnings growth?In 2005, CSX's continuing operations earned $3.17 a share. In 2018, it earned $3.84 a share from its continuing operations. That's an earnings growth rate of 1.5%, less than a third the growth of its dividend.I must admit, as I look at these numbers, I get a little concerned about recommending CSX stock. After all, it's generally preferable for the earnings growth rate to exceed the dividend growth rate.In this case, one can look to the payout ratio for part of the answer.This past year, CSX paid out 23% of its earnings for dividends. In 2005, it paid out just 14% for dividends. Those are incredibly conservative payout ratios, especially considering how much free cash flow it generates. Free Cash Flow Is GrowingIn the past three fiscal years, CSX has grown its adjusted free cash flow from $847 million in 2016 to $1.7 billion in 2017 and $3.2 billion in 2018. That's good for a compound annual growth rate of 94%.In these three years, CSX's conversion ratio (free cash flow divided by revenue) went from 7.7% in 2016 to 14.9% in 2017. Then, in 2018, the ratio increased to 26.1%. As the company grows its conversion rate, it has more money to reward shareholders through dividends and share repurchases. Additionally, CSX can make acquisitions, repay debt, and invest in the existing business.That should drive the CSX stock price higher.In 2005, CSX converted 12% of its revenue ($8.6 billion) to free cash flow ($1 billion). Over the past 14 years, the railroad has continued to be a strong generator of cash. This is a big reason why its equity has delivered a total return of 569% over the past 10 years. For comparison, that's almost double the S&P 500.Yes, railroads in general have done well over the past decade, but CSX stock has led that pack. The Bottom Line on CSX StockInvestorPlace contributor Thomas Niel recently wrote that a combination of a slowing economy and an excessive valuation makes CSX stock a bad buy for those looking for a quick return.However, he did concede that it's likely still a buy for long-term investors. I couldn't agree more.As long as CSX management continues to control expenses and allocate free cash flow, slower growth shouldn't be as big a problem as you might think.It might not yield a lot, but it sure has delivered for shareholders over the past decade. I expect it to do the same over the next 10 years.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Best Stocks for 2019: A Volatile First Half * 7 Simple Ways for Young Investors to Invest Their First $1,000 * 6 Stocks to Buy Based on Insider Buying The post Should Dividend Investors Pass on CSX Stock?Â appeared first on InvestorPlace.
Altria and Philip Morris look poised for gains despite headwinds for the tobacco industry, Stife analyst Christopher Growe says.
Altria Group Inc NYSE:MOView full report here! Summary * Perception of the company's creditworthiness is neutral * Bearish sentiment is low * Economic output for the sector is expanding but at a slower rate Bearish sentimentShort interest | PositiveShort interest is extremely low for MO with fewer than 1% of shares on loan. This could indicate that investors who seek to profit from falling equity prices are not currently targeting MO. Money flowETF/Index ownership | NeutralETF activity is neutral. ETFs that hold MO had net inflows of $10.00 billion over the last one-month. While these are not among the highest inflows of the last year, the rate of inflow is increasing. Economic sentimentPMI by IHS Markit | NegativeAccording to the latest IHS Markit Purchasing Managers' Index (PMI) data, output in the Consumer Goods sector is rising. The rate of growth is weak relative to the trend shown over the past year, however, and is easing. Credit worthinessCredit default swap | NeutralThe current level displays a neutral indicator. MO credit default swap spreads are near their highest levels of the last 3 years, which indicates the market's more negative perception of the company's credit worthiness.Please send all inquiries related to the report to firstname.lastname@example.org.Charts and report PDFs will only be available for 30 days after publishing.This document has been produced for information purposes only and is not to be relied upon or as construed as investment advice. To the fullest extent permitted by law, IHS Markit disclaims any responsibility or liability, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. Please view the full legal disclaimer and methodology information on pages 2-3 of the full report.
Today we'll take a closer look at Altria Group, Inc. (NYSE:MO) from a dividend investor's perspective. Owning a strong...
Sometimes in investing it truly does stand to reason that you should buy what you use. And right now Disney (NYSE:DIS) is a shinning example of this. I've said it before, and it bears repeating today, there's a lot to like about Disney stock.Source: Baron Valium via FlickrAnd off the price chart, analysts at Goldman Sachs agree. According to Goldman, Disney stock is one of five "superstar stocks" to buy now.The other names currying favor as superstar stocks include Ford (NYSE:F), Procter & Gamble (NYSE:PG), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Altria (NYSE:MO).InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe firm's enthusiasm for DIS and these other companies is based on their ability to dominate their respective industries. In turn, this allows for stronger bargaining power and higher profitability. Not surprisingly, much of what's supporting Goldman's view for DIS stock comes from people like you and I who enjoy a whole lot of what Disney offers. * 10 Stocks That Should Be Every Young Investor's First Choice From the entertainment giant's box-office breaking Avengers: Endgame release this summer, to its dominant theme park business and latest hit attraction Star Wars: Galaxy Edge, to the company's upcoming Disney+ streaming platform, there's something for everyone it seems.Still, Disney's business wherewithal and our enthusiasm to buy its products and services doesn't mean buying shares of DIS stock will necessarily be gratifying, let alone in the immediate future. But right now off and on the price chart, Disney is looking like one of those opportune times. Disney Stock Weekly Chart Click to EnlargeIt has been a solid year for DIS stock investors. Shares are up 30% compared to the S&P 500's gains of around 18%. But there's good reason to see this friendly trend as continuing in 2019's second half.As the weekly chart in Disney reflects, after consolidating for more than three years, 2019 has literally and figuratively been a breakout year for Disney stock. If we're to believe long periods of price congestion like the one in DIS lead to outsized rewards once shares finally break free of those patterns, then shares may only be half way home.Conservatively, I'd put a price target on my optimism for DIS stock at $175. And with shares now consolidating for the past couple of weeks in a small base on either side of the April all-time-high, there's sufficient evidence Disney is about to reassert its forceful trend.For investors agreeable with our outlook, my suggestion is to buy shares above $144. That's marginally above the mid-June pattern and all-time-high.To guard against bearish risks, I'd place a stop below $137. This exit is just beneath the current low of the price consolidation. It also keeps risk smartly contained to less than 5%. And in the event we're right about Disney's price trajectory, the strategy looks like an even more compelling way to enjoy the ride.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Retail Stocks to Buy That Are Down in 2019 * 7 of the Best SPDR ETFs -- Besides SPY and GLD * 5 Dividend Stocks to Buy From Across the Globe The post This Classic Buying Strategy Will Work Wonders With Disney Stock appeared first on InvestorPlace.
Editor's note: This story was previously published in February 2019. It has since been updated and republished.In many respects, the top tobacco stocks defy logic. The Surgeon General's Office released its warning about the dangers of tobacco in 1964. Despite a sustained anti-smoking crusade, tobacco stocks continued marching higher. As the climate at home became more hostile, these firms also found new customers overseas.These firms also found other sources of revenue. The latest new source for tobacco stocks? The cannabis industry. Long illegal throughout the world, marijuana continues to gain both acceptance and legal status. Moreover, anyone who pays even scant attention to business news knows marijuana stocks continue to rise. This industry could easily become a new profit center for tobacco companies. Furthermore, tobacco companies know how to navigate the hostile regulatory climate cannabis will face, particularly in the United States.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Dividend Stocks to Buy From Across the Globe Whatever direction the tobacco industry takes, I would not bet on its decline despite the negative public image of cigarettes. With new product lines and creative marketing, I think the following top tobacco stocks should continue to perform well.Source: Peyri Herrera via Flickr (Modified)[/ipm_caption] Altria Group, Inc. (MO)Perhaps no large company defines the top tobacco stocks more than Altria (NYSE:MO). Altria manages to keep profits moving higher, despite its core product's falling popularity. The parent company for brands like Marlboro (in the U.S.) and Parliaments has also emphasized so-called "reduced risk products" such as smokeless tobacco. Moreover, it could profit further if the FDA approves IQOS, a smoke-free cigarette popular in other countries. And, like its counterparts in the beverage industry, Altria has also explored investing in cannabis.All of this will serve to benefit those who want the generous levels of dividend income that MO produces. This track record of payouts goes back decades. Investors who bought in the fall of 1985 and held now make their original investment back every year in dividends alone. For those who reinvest dividends, investors who bought in the spring of 2003 now have achieved the same feat.The company will occasionally pay an outsized payout followed by a dividend reduction. Still, the dividend has risen annually for the last 10 years. Investors buying today will still enjoy a yield of 6.6%.Continuing to pay this dividend should not be an issue in the future either. Analysts predict profits will increase by 5% this year. They also project an average of 7% annual growth over the next five years. Current earnings also place the forward price-to-earnings (P/E) ratio at 10.0.That allows investors to buy into this generous dividend stream at a discount. Given MO's ability to mitigate the negative sentiment surrounding tobacco, and its potential in the cannabis industry, I think these benefits will accrue for years to come.Source: Shutterstock [/ipm_caption] Philip Morris International, Inc. (PM)Philip Morris International (NYSE:PM) spun off from Altria in 2008. As the name implies, it operates primarily outside of the U.S., despite the Manhattan address of its headquarters. Among top tobacco stocks, it remains best known for retaining the right to market Marlboro cigarettes outside of the U.S. (Altria holds the U.S. rights).While it remains a similar company to Altria in many respects, the non-U.S. focus gives it the advantage of not having to deal directly with federal regulation. As a result, it has led the way in IQOS in other countries. Its non-U.S. focus also gives this company an advantage over Altria if it wants to make deals with cannabis companies.Due to its offshore focus, Phillip Morris International now exceeds the size of its original parent company. It holds a market cap of about $125 billion, slightly larger than Altria's market cap of about $92 billion. The forward P/E of 14.5 comes in somewhat higher than Altria. However, it usually trades at a slight premium to its former parent.On the dividend front, it lags the long-term history of Altria, but little else. This payout has risen every year since the company's 2008 spinoff. The recent increase takes the annual dividend to the equivalent of $4.56 per share, a yield of 6.7%. * 5 Dividend Stocks to Buy From Across the Globe Despite the accolades, the PM stock price has fallen steadily since achieving a high of $122.90 per share in June 2017. It now trades almost 33% below this level. However, with its generous dividend, I think it presents a buying opportunity. If Phillip Morris International enters the marijuana business, investors can profit from both a high payout and hopefully, a rising stock price.Source: Shutterstock [/ipm_caption] Universal Corp. (UVV)Universal Corporation (NYSE:UVV) operates in a different segment than other top tobacco stocks. The company processes tobacco. It buys the plant directly from producers, refines it, and then sells it to product manufacturers.Given the overall decline of tobacco use throughout the world, I would typically take a cautious view on such a company. However, the company processes other products besides tobacco.Potentially, Universal could revive its fortunes by making a modest pivot into cannabis. Since it already processes other products, shifting into weed should not create any major operational shifts. Moreover, it also controls a supply chain useful for both procuring and distributing its product. This supply chain extends to over 30 countries on five different continents.Although the company has yet to announce such a move, investors may already have noticed this potential. UVV stock shot higher in the middle of last year as its operating income rose despite its falling sales. The stock subsequently lost most of its mid-2018 gains.The company remains small, as UVV's market cap is around $1.57 billion.Its current P/E is about 15, while its dividend stands at $3 per share. This amounts to a yield of 5%. It has raised its dividend for 46 consecutive years.As a smaller company that processes tobacco, Universal might seem like a strange pick at first glance. However, its varied product base, small size and large dividend make UVV stock an intriguing play among top tobacco stocks.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 Stocks That Should Be Every Young Investor's First Choice * 5 IPO Stocks to Buy -- According to Wall Street Analysts * The Top 10 Best Sectors in the Market for 2019 The post 3 Top Tobacco Stocks Still Burning Strong appeared first on InvestorPlace.
Financial markets are starting to show some warning signs of a coming slowdown: housing starts are slowing, higher tariffs are stifling expansion, and estimates of 2019 growth have fallen from near-3% to 1%. While most economists are not saying a recession is on – yet – the investing landscape is growing ominous.Which means, it’s a good time to find reliable dividends. These are the stocks that will ensure an income for you when markets go south. Let’s look at some of the best dividend stocks available, see what makes their payouts so great, and find out Wall Street’s top analysts and financial bloggers think of them. Macy’s, Inc. (M)Like the rest of the US department store segment, Macy’s has seen hard times of late. Starting in 2015, the company closed more than 150 under-performing locations, and reported six consecutive quarters of declining sales.Those dark days may be behind the retail giant, however, which still operates nearly 600 suburban stores, primarily under the Macy’s and Bloomingdales names. Macy’s ended its last fiscal year in February with its first comp-store sales growth in five years, a deep reduction in debt load, and a free cash flow that remains over $1 billion annually. It’s an impressive turnaround for the chain.The turnaround assures the company’s near- to mid-term future, but for investors its most important aspect may be that it also assures the company’s dividend. While the payout is only $1.51 per share annualized, the share price of $21.27 puts the yield at an impressive 7.1%. In fact, M’s dividend yield is the fourth highest among S&P 500 companies. And remember that $1 billion free cash flow? It’s more than double the amount needed to cover the annual payout, which in fiscal 2019 totaled $463 million.With a high yield, safe payout, and low share price, Macy’s is a swing and a hit for dividend investors. Five-star financial blogger Bill Zettler lays out the supports for Macy’s case clearly: “Macy’s is successfully addressing threats to their retail business, paying down debt every year, and posses real estate holdings worth more than 3 times [the company’s] market value.”Analyst Robert Drbul, of Guggenheim, set a ‘buy’ rating on the stock, and noted, “We think annual comp gains of ~1% are achievable as initiatives such as Backstage continue to perform well, positively impacting brick and mortar sales… The company’s strategic initiatives continue to fuel growth, while digital remained strong and benefitted from online sales and mobile growth…” Drbul gives the stock a price target of $30, suggesting an upside of 41% in the next 12 months.Macy’s overall has a ‘Hold’ from the analyst consensus, based on 1 buy, 2 holds, and 1 sell given in the past three months. Shares are trading at $21 with an average price target of $24, indicative of a 12% upside potential. The company’s name recognition, established market niche, and recent financial stabilization are all supportive factors.View M Price Target & Analyst Ratings Detail McDonald’s Corporation (MCD)The fast food leader has benefitted from smart leadership and an effective business plan in recent years, as it recovered from declining sales and income losses early this decade. New initiatives, including store remodeling, menu streamlining, improvements to ingredients, and automated ordering kiosks all had the desired effects, and since the end of 2015 years McDonald’s has seen a consistent upward trend in share price.The rising share price has brought MCD’s dividend up to $4.64, or $1.16 per share in quarterly payouts, despite a modest yield of only 2.18%. And the company has maintained that regular payout while also implementing a $6 billion infrastructure improvement effort in its stores. It’s a measure of the company’s strong cash flow and profitable business model that it has managed both.Market watchers have been attracted to McDonald’s in recent quarters, impressed by the company’s ability to adapt to a changing fast food environment while maintaining its image and reputation. The five-star blogger Luke Lango wrote, in recommending MCD as one of his favorite food stocks, “McDonald’s has continued to improve its menu and service over the past the several months and years. These improvements put the company in a favorable position to grow for the foreseeable future...”Jefferies analyst Andy Barish is also bullish on MCD. He says, “…fresh beef Quarter Pounders, bundling promotions, delivery, and kiosks are all aiding McDonald's check growth,” while describing that check growth as “remaining robust.” Barish sets a ‘buy’ rating on the stock, along with a $230 price target. His price target represents a 2% increase, and suggests an 8% upside to the stock.With 16 buys and 5 holds assigned in the last quarter, MCD stock has a ‘Strong Buy’ analyst consensus rating. Shares are trading for $212, which gives it a modest 2.44% upside based on the average price target of $218. The reliable dividend, high in absolute dollars despite a low yield, makes this stock a winner for income investors.View MCD Price Target & Analyst Ratings Detail Altria Group, Inc. (MO)Altria is a classic “sin stock.” The company is the parent of the famous Marlboro cigarette brand, and is moving into the legal cannabis industry with an ambitious $1.8 billion investment in Canada’s Cronos Group (TSE:CRON). The Cronos investment gives Altria a 45% stake in the marijuana company, North America’s fourth largest cannabis producer. In addition to cannabis, Altria has a 10% stake in the Anheuser-Busch Inbev (BUD) brewery company, and owns 35% of JUUL, a growing brand of e-cigarette.Cigarettes are still the core of Altria’s business, even with the company’s various related investments, and increasing social pressures toward non-smoking have pushed MO shares down in recent years. Share price has fallen from near $70 in June to 2017 to just under $50 today. At the same time, due to the addictive nature of Altria’s products, the company has been able to maintain cash flow by increasing prices. And Altria keeps investors happy by sharing that cash flow through a generous dividend.Altria pays out a notable $3.20 per share, in four quarterly payments of 80 cents each. The stock’s yield is an impressive 6.51%, putting Altria right behind Macy’s among the S&P 500’s top dividend payers, and the company has made increases to its dividend 53 times over the last 49 years. The last increase was made in October of 2018. Staying power counts in the financial world, as is clear from Warren Buffett’s dictum, “Our favorite holding period is forever.” In terms of longevity, yield, and absolute dollars, Altria’s dividend is a true champion.Altria’s longevity and dividend have attracted attention from financial blogger David Pinsen, who describes the stock as a core around which to build a “bulletproof” portfolio. He chose the stock for its combination of high returns, especially the dividend.Reviewing Altria for Wells Fargo, analyst Bonnie Herzog also sees the stock as a compelling choice. She gives it a ‘buy’ rating, noting the pricing increase on Marlboro but more importantly noting the increased in EPS forecast to $5.05 by 2020. Stating the case for MO, she says, “We increasingly believe MO has multiple levers to pull to offset decelerating cigarette volumes and drive increased profitability including; strong pricing power, cost savings and JUUL service agreement payments.” Her price target, $65, show her confidence in the stock; it suggests a 32% upside potential.Altria gets a ‘Moderate Buy’ from the analyst consensus, based on 2 buys, 1 hold, and 1 sell set during the last three months. Shares are trading for $49.19, and the average price target is $55.33. This gives the stock a potential for 12% upside in the next year.View MO Price Target & Analyst Ratings DetailLearn more about these dividend champs with TipRanks’ Stock Comparison tool. You can lay them out side-by-side, to see which is best for your investment portfolio.