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Companies returning cash to shareholders can win the favor of current and potential investors.
Morgan Stanley (MS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Berkshire Hathaway (BRK.B, $198.31) Chairman and CEO Warren Buffett hasn't found much to his liking in 2019.The Oracle of Omaha bought and sold left and right at the end of 2018. He used the fourth quarter's near-bear market to snap up bargains and exit a few underperforming investments, amassing a total of 17 common-stock trades. But thanks to significantly higher prices across 2019, Buffett has dialed things down, making 10 such moves in Q1 and just six in the three months ended June 30.Nonetheless, we can gleam a few things from what Buffett is doing, so today we will take a look at the most recent changes to Berkshire Hathaway's equity portfolio.The U.S. Securities and Exchange Commission's own rules require Buffett to open up about these moves. All investment managers with more than $100 million in assets must file a Form 13F every quarter to disclose every change in stock ownership. That's an important level of transparency for anyone well-funded enough to significantly impact a stock with their investment. And in this case, it helps people who appreciate Buffett's insights track what he's doing - some investors view a Berkshire buy as an important seal of approval. (Just remember: A few of Berkshire's holdings are influenced or even outright decided by lieutenants Ted Weschler and Todd Combs.)Here's what Warren Buffett's Berkshire Hathaway was buying and selling during the second quarter of 2019, based on the most recent 13F that was filed on Aug. 14. The list includes six changes to the equity portfolio, and a notable seventh investment. SEE ALSO: The Berkshire Hathaway Portfolio: All 47 Buffett Stocks
Boeing is delaying development of its 777-8 as the other member of the new 777X family, the larger 777-9, has seen its first flight-target date slip into early next year.
Delta Airlines (NYSE: DAL) and Virgin Atlantic are both increasing flights between the two continents beginning in the summer of 2020, and Delta will have a presence at Gatwick Airport for the first time in over five years. "Delta's return to Gatwick will mark the first time the airlines have both served the airport since their partnership began in 2014," according to the media release.
Hoover, a 12-year veteran at Spirit, now holds one of the highest-profile positions in her industry. And she's using the platform to help other women succeed in engineering.
The Dow Jones Industrial Average rallied more than 1%. At 25,892, the blue chip index is still poised to fall for a third week in a row.
It's hard to find a bargain stock with dividends growing quickly. Often they are overvalued and not worth buying. Another problem is these kind of stocks can't sustain the dividend growth. The trick to uncovering the best stocks to buy now is to search for fast-growing dividend stocks with low earnings-payout ratios. Even better if they're cheap.For example, fast growing tech companies reinvest their earnings in their business. They can't afford to pay dividends without sacrificing growth. Amazon (NASDAQ:AMZN) has never paid out a dividend but is growing very fast. The stock is not cheap as investors rely on steady growth, but its investors are willing to forgo dividends.Among the best stocks to buy now for value and income are business development companies (BDC). BDCs often raise their dividends at high rates, borrowing money or continually selling equity to finance dividend growth. Their payout ratios are high and the companies tend to be highly leveraged as a result.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBelow are five stocks selling below 10x earnings whose dividends have been rising 15% or more per year. The companies pay out less than 30% of their earnings in dividends. They reinvest the rest to maintain consistent growth. * 10 Cheap Dividend Stocks to Load Up On None of these stocks are turnarounds. They have been growing consistently for the past several years. You can rely on them to continue to increase their dividends at these rates. Best Value Stocks: CIT Group (CIT)2-Year Dividend Growth: +133%CIT Group (NYSE:CIT) is a bank holding company that has transformed itself into a vibrant, growing commercial lender after its demise in 2009. Earnings have been growing nicely as the company has divested itself of loss making divisions.In Q2 2018, CIT's dividends were at an annual rate of 64 cents. Three quarters later in Q1 2019, CIT raised the rate 56% to $1.00. And just recently in July CIT did it again - hiking the dividend to $1.40, up 40%.Analysts expect CIT to earn $4.96 this year. Its dividend represents just 28% of expected earnings. The stock now yields 3.1% and has a price-to-earnings ratio of 9.2x.CIT has been simplifying its commercial lending business, selling off non-core units, and strengthening its capital ratios. Its recent stock buybacks and dividends increases show that this is a very shareholder friendly company.Expect the company to continue to reward shareholders with consistent earnings and dividend increases. Bank of America (BAC)2-Year Dividend Growth: +50%Bank of America (NYSE:BAC), the U.S. bank holding company, has increased its quarterly dividends over the past two years from an annual rate of 48 cents to 72 cents, paid in July. In addition, BAC has been showing good operational growth, despite interest rate headwinds.BAC sports a 2.54% dividend yield and trades for just 10 times earnings per share. BAC reported Q2 earnings of 74 cents per share, which was up 17% over the past year.BAC can comfortably afford its dividend. The 72 cents annual dividend rate represents just 28% of its expected earnings per share of $2.84 for this year.BAC has a large and stable asset base with its consumer deposits and high earnings quality. It is well diversified with its Merrill Lynch brokerage arm, and an asset management business with $220 billion in assets under management. Their stable fees strengthen its lending business. * 10 Best Stocks to Buy and Hold Forever BAC has consistently grown its dividends. They rose 25% in 2018 and 20% in 2019. Expect the stock to continue to increase its earnings and dividends over the next year at a similar rate. Boyd Gaming (BYD)2-Year Dividend Growth Rate: +40%Boyd Gaming (NYSE:BYD) is a casino operator mainly focused on niche markets such as the local, non-Strip gambler in Las Vegas. Its revenue and earnings have picked up nicely over the past several years as U.S. economic growth, and disposable income, has grown.BYD has increased its dividend 40% over the past two years. This includes a 20% increase in 2018 and recently 17% increase to 28 cents on an annual basis. This represents just 16% of its expected earnings this year of $1.78 per share.BYD's dividend yield is 1.15%. There is plenty of room for the dividends to grow as Wall Street expects that the company will continue to show consistent earnings growth. As sports betting picks up speed across new states, now that the Supreme Court has OK'd it, BYD expects to participate in the growth in that arena.BYD is play on the economy continuing to steam ahead and the regional consumer's willingness to dispose of income at BYD's casinos. Expect the dividend to rise substantially over the next several years. Delta Air Lines (DAL)2-Year Dividend Growth: +32%Delta Air Lines (NYSE:DAL) has increased its dividend by over 32% over the past two years. In 2018 the dividend rose 14.8% and recently DAL set the annual rate at $1.61, up 15.1%. The stock is a general play on economic growth as well as its moves to diversity earnings.Delta's recent Q2 revenues were up 9% year-over-year. Earnings shot up an incredible 32%. Analysts are especially optimistic about the new credit card that DAL is going to co-brand in partnership with American Express (NYSE:AXP).The stock is still cheap, though. It trades at just 8.4x earnings which are expected to reach $7.10 for the year.Given that its dividend rate is $1.61, the pay-out ratio is 22%. So there is plenty of room for the company to continue to increase the dividend. Moreover, the stock sports a very attractive dividend yield of 2.71%. * 7 Great No-Load Mutual Funds for Retirement Portfolios Investors can expect DAL to consistently raise the dividend over the next several years. Citigroup (C)2-Year Dividend Growth: +59.4%Citigroup (NYSE:C) has raised its dividend almost 60% in the past two years. The dividend was up 41% in 2018 and this year Citigroup has hiked it another 13.3%.Citigroup is a play on strong economic growth in the U.S. The company has consistently produced solid revenue and earnings growth in the past 5 years.The company is well positioned to withstand any interest rate headwinds, should rates continue to fall. Deposits and loans have continued to grow despite interest rate cuts. Revenue was up 4% in the first half of 2019 and net income rose 13%.Citigroup's stock trades for less than 9x earnings per share. The dividend yield is very attractive at 3.1%. This is more than investors can make in their money market accounts.With the dividend set at $2.04, and earnings expected to be $7.64 this year, the payout ratio is only 26.7%. So there is still plenty of room for Citigroup to raise the dividend as earnings grows.Investors can expect Citigroup to raise its dividend over the next several years at a similar rate in 2019.As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 5 Value Stocks With Fast-Growing Dividends appeared first on InvestorPlace.
(Bloomberg Opinion) -- The 30-year Treasury yield has been spending some time below 2% this week, territory it has never before explored. That says scary things about expectations for future inflation and economic growth. But it also means lower mortgage rates, which in turn means refinancings and house purchases and other economically stimulative things.And yes, a lot of people are refinancing, with the latest edition of the Mortgage Bankers Association Refinance Index, released Wednesday, up 196% over a year before. Some are buying, too, with MBA’s Purchase Index up 12%. Those numbers represent conditions as of August 9, and things may have continued to heat up since then. But overall mortgage activity has a long way to go before it approaches the heights it has reached multiple times over the past two-and-a-half decades.The explanation for the relatively modest mortgage rebound so far is simple. As economists David Berger, Konstantin Milbradt, Fabrice Tourre and Joseph Vavra put it in a December 2018 paper:Suppose that the current interest rate is cut from 3% to 2%. If rates were previously 3% for a long period of time, then many households will have an incentive to refinance their mortgage debt, which can then lead to increases in spending. In contrast, if rates were previously below 2% for a long period of time, then many households would have already locked in a low rate and will have no incentive to refinance in response to today’s rate cut.Mortgage rates are very low now in the U.S., but they were similarly low in 2012, 2013, 2015 and 2016. Since about 2011, the long downtrend in rates that began in the early 1980s seems to have been replaced with a rough approximation of a flat line.As the 30-year Treasury toys with 2%, mortgage rates could follow it lower, of course. But it will take quite the drop to replicate the kind of stimulus that falling rates brought in the early 2000s and early 2010s. From 2000 to 2003, the 30-year mortgage rate fell by 3.1 percentage points. From 2008 to 2013 it fell by 3.2. That big a drop from the peak of December 2018 would entail a 30-year mortgage rate of 1.6%. These days I wouldn’t say anything having to do with falling interest rates is unimaginable, but it does seem quite unlikely. As University of Chicago economist Austan Goolsbee outlined in a New York Times column earlier this month, similar scenes are playing out in other debt markets, severely limiting the Federal Reserve’s ability to stimulate the economy by cutting interest rates. And hey, maybe it doesn’t need to: Unemployment is low, consumers are buying, the economy is still growing. But those record-low 30-year Treasury yields do seem to imply worry that this growth won’t continue.To contact the author of this story: Justin Fox at firstname.lastname@example.orgTo contact the editor responsible for this story: Sarah Green Carmichael at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
As Huntington Ingalls Industries, Inc. (NYSE:HII) released its latest earnings announcement on 30 June 2019, analyst...
- In his most extensive comments on the months of unrest in Hong Kong, U.S. President Donald Trump said on Wednesday that China should "humanely" settle the situation before a trade deal is reached. - The New York state attorney general has begun issuing subpoenas to 33 financial institutions and investment advisers with ties to the Sackler family, part of an aggressive effort to track billions of dollars that prosecutors claim the family siphoned out of Purdue Pharma to hide profits gained from the company's opioid painkillers, according to court documents.
George Wells, Chairman, Principal & Co-Founder of Wells Group of New York By John Jannarone Many young companies have almost all the right ingredients for success. But without a capable Chief Financial Officer or Chief Operating Officer in place, there is a serious risk a business will experience a failure in corporate governance and even […]
(Bloomberg) -- Cloudflare Inc., a firm that helps websites protect and distribute content, warned potential investors in its initial public offering that risks to its business go beyond the boilerplate Silicon Valley advisory that it may never become profitable.The San Francisco-based company said in its IPO filing Thursday that the risks include negative publicity from the use of its network by 8chan, a website favored by white supremacists and used by gunmen before mass shootings in El Paso, Texas and Christchurch, New Zealand, this year. It also cited the use of its services by neo-Nazi website The Daily Stormer around the time of the 2017 protests in Charlottesville, Virginia.Activities of such groups have had “significant adverse political, business, and reputational consequences” for the company, Cloudflare said in the filing. Terminating those accounts, though, has raised censorship concerns, it said.“We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our platform, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this,” according to the filing.Cloudflare co-founder and Chief Executive Officer Matthew Prince has publicly struggled with decisions balancing freedom of speech on the internet with the need to limit hateful, racist online posts and potentially dangerous calls for violence.Risky PrecedentAfter deciding to cut services to The Daily Stormer, Prince said the move could set a dangerous precedent.“After today, make no mistake, it will be a little bit harder for us to argue against a government somewhere pressuring us into taking down a site they don’t like,” Prince wrote.In its filing with the U.S. Securities and Exchange Commission, the company listed the amount of its offering as $100 million, a placeholder that will change when terms of the share sale are set later.Customers, LossesCloudflare said about 10% of Fortune 1,000 companies are paying customers. Its security services blocked an average of 44 billion cyber threats a day during the second quarter, it said.For the first six months of the year, Cloudflare lost $37 million on revenue of $129 million, compared with a loss of $32 million on revenue of $87 million for the same period last year, it said in its filing.Prince currently controls 16.6% of Cloudflare’s shares, according to the filing. Its largest investor is the venture capital firm New Enterprise Associates Inc., with a 20.4% stake, followed by Pelion Ventures with a 18.8% share and Venrock Associates with 16.2%.After going public, the company will have a dual-class stock structure that will give its Class B stockholders 10 votes per share, according to the filing.The offering is being led by Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. Cloudflare is applying to list the shares on the New York Stock Exchange under the symbol NET.(Updates with details of risks starting in second paragraph)To contact the reporter on this story: Michael Hytha in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Liana Baker at email@example.com, Michael Hytha, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Daseke, Inc. (NASDAQ: DSKE) announced today, August 15, 2019, that its founder, Chairman of the Board and Chief Executive Officer Don Daseke will retire effective immediately. The largest flatbed, specialized transportation and logistics company in North America announced that current Chief Operating Officer Chris Easter will act as the interim Chief Executive Officer. Easter has been Daseke's COO since January.
The trucking industry is already in a recession. The question for investors is, however, does freight industry weakness presage a full-blown economic downturn?
Eaton's (ETN) alliance with KPIT will enable it to benefit from the expanding pure battery electric vehicle market, which is expected to grow to 15 million by 2030.
(Bloomberg) -- Cisco Systems Inc. shares sank on Thursday, after the company gave a first-quarter outlook that was below expectations, pressured by macroeconomic headwinds, including the U.S.-China trade war.The Chinese market was seen as a major factor behind weakness in service-provider orders, and Morgan Stanley wrote that “outsized” macro headwinds “were too much to provide much opportunity for upside.” The firm was one of at least six to trim its price target on the stock.Shares fell as much as 8% in its biggest one-day percentage loss since May 2017. Closing with a decline of that magnitude would represent Cisco’s worst session since November 2013, according to historical data compiled by Bloomberg. At current levels, Cisco is trading at its lowest level since February, and it has dropped more than 18% from a peak in July.Here’s what analysts are saying about the results:Morgan Stanley, James Faucette“The outsized headwinds” in service-provider orders, along with weakness in China and other emerging markets, “were too much to provide much opportunity for upside” to the quarter.The current valuation is “appropriate.” While the macroeconomic environment is worsening, Cisco’s cash flow gives it flexibility to make acquisitions or return cash to shareholders.Equal-weight rating, price target trimmed to $49 from $51.Jefferies, George NotterInvestors are likely “over-estimating the size of the negative top line growth inflection.”“Cisco has traditionally been very conservative when they’ve reduced expectations,” and historically, “upsets relative to consensus have been followed by several quarters of outperformance.”The outlook “likely contains a healthy dose of conservativism,” but there isn’t much “octane” in the stock right now.Buy rating, price target lowered to $54 from $62.JMP Securities, Erik Suppiger“Orders were flat Y/Y, the worst performance in two years.”About 70% of the company’s software revenue was generated from subscriptions, “suggesting that the company is executing on its strategy of becoming a provider of software and services.”Market-perform rating.Piper Jaffray, James FishThe results were “fine overall,” although the softness should extend into the first quarter.“Cisco is executing better than other vendors in this current macro-downturn,” and Piper is “cautiously optimistic Cisco can manage the macro.”The post-earnings sell-off looks “slightly overdone.”Overweight rating, target trimmed to $55 from $58.UBS, John RoyThe company’s fundamentals are strong despite the weak first-quarter outlook.Buy rating, price target lowered to $58 from $61.What Bloomberg Intelligence Says:“The company’s global IT exposure can’t dodge weakening macroeconomics, despite solidly carrying out its business-model transformation toward a healthier mix of software and recurring sales.”\-- Analyst Woo Jin Ho\-- Click here for the research(Updates stock and chart to market open)To contact the reporter on this story: Ryan Vlastelica in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Steven Fromm, Courtney DentchFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.