dividend

By Aristofanis Papadatos for Sure Dividend

Inflation has soared to a 40-year high this year due to the immense fiscal stimulus packages offered by the government in response to the pandemic. Consequently, income-oriented investors are struggling to protect their portfolios from losing real value.

High-dividend stocks are great candidates for income-oriented investors under the current circumstances, though investors should perform their due diligence to make sure that the dividends of these stocks are safe.

Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM

In this article, we will discuss the prospects of three high-yield stocks that benefit from high oil and gas prices, namely BP (BP), Enbridge (ENB) and ONEOK (OKE).

BP

BP is one of the largest oil and gas corporations in the world, with a market capitalization of $97 billion. It operates in t

Why Investors Should Consider Quality Dividend Stocks

Why Investors Should Consider Quality Dividend Stocks

Sure Dividend Sure Dividend 01.02.2021 08:42
Investors can buy stocks that fall into a wide variety of categories. There are growth stocks, which represent companies that are quickly expanding their businesses and reporting high revenue and/or earnings-per-share growth. Then there are value stocks, typically those with low stock valuations, as measured by various ratios such as price-to-earnings or price-to-sales. Finally, there are dividend stocks, which are companies that distribute cash to shareholders through periodic dividend payments. We believe investors looking for superior long-term returns should focus on the best dividend growth stocks, which are companies that offer the best of both worlds. The best dividend growth stocks, such as the Dividend Aristocrats, pay dividends to shareholders with the added bonus of dividend growth each year. We believe investors looking to generate long-term wealth should consider the Dividend Aristocrats. Dividend Aristocrats Overview The Dividend Aristocrats are a group of 65 stocks that have increased their dividends for at least 25 years in a row. There are additional criteria that must be satisfied in order to become a Dividend Aristocrat. For example, a company must be in the S&P 500 Index, have a market capitalization of at least $3 billion, and its shares must have a daily average volume traded of at least $5 million. The relative scarcity of the Dividend Aristocrats—which total 65 stocks out of more than 500 stocks in the S&P 500 Index—demonstrates the difficulty in raising dividends each year for over 25 consecutive years. Such a long period of time will inevitably include recessions, and a variety of other global issues to deal with. For a company to be able to raise its dividend through so many challenges, it must have a strong business model that generates steady profits year after year. It must also have long-term growth potential, and a shareholder-friendly management team that understands the importance of raising dividends each year. Another advantage of the Dividend Aristocrats is that many of them have significantly higher yields than the broader market average. For instance, the S&P 500 Index as a whole currently has an average dividend yield of 1.5%. Meanwhile, the ProShares S&P 500 Dividend Aristocrats (NOBL), the major exchange-traded fund that tracks the Dividend Aristocrats, currently yields 2.2%. Investors can purchase a basket of all Dividend Aristocrats with NOBL, or purchase the individual stocks, many of which have even higher yields than NOBL. For example, People’s United Financial (PBCT) is a Dividend Aristocrat from the banking industry, with a high dividend yield of 5.2%. AT&T (T) is a Dividend Aristocrat with an even higher yield of 7%. Our top-ranked Dividend Aristocrat has an even higher yield than People’s United or AT&T. Our Top Dividend Aristocrat Today Exxon Mobil (XOM) is our top-ranked Dividend Aristocrat, and it is also the highest-yielding Dividend Aristocrat with a 7.7% yield. While higher-yielding stocks are often accompanied by elevated levels of risk, there are multiple quality Dividend Aristocrats with high dividend yields above 5%. In the case of Exxon Mobil, its abnormally high dividend yield is due to its plunging share price over the past few years alongside the drop in oil prices. The broader energy sector was under duress over the past few years, as a global supply glut put downward pressure on oil prices. Then, the coronavirus pandemic of 2020 had a major impact on global demand for oil, which served as an added headwind for oil stocks. Exxon Mobil has deployed aggressive cost-cutting to preserve its dividend in the short-term. The company announced plans to cut its capital expenses 30% in 2020. It also announced it will cut 15% of its global workforce to further cut costs. Over the long-term, the company expects the global oil price to rebound as the global economy recovers from the coronavirus pandemic. It is also betting its future on growing its production, which will be possible due to the company’s premier assets. The Permian will be a major growth driver, as the oil giant has about 10 billion barrels of oil equivalent in the area and expects to reach production of more than 1.0 million barrels per day in the area by 2025. Guyana, one of the most exciting growth projects in the energy sector, will be the other major growth driver of Exxon. The company has nearly tripled its estimated reserves in the area, from 3.2 billion barrels in early 2018 to nearly 9.0 billion barrels. Overall, Exxon Mobil expects to grow production by 25%, from 4 million barrels per day to 5 million barrels per day by 2025. We expect Exxon Mobil to grow earnings-per-share by 8% per year over the next five years, driven by a higher oil price as well as rising production. Although we view the stock as slightly overvalued at the present time, with a fair value price of $42 versus a current price of $46, we still see the stock as generating strong total returns. In addition to earnings-per-share growth, future returns will be driven by the high dividend yield of 7.7%. Overall, we see the potential for total returns to reach nearly 14% per year over the next five years, a highly attractive expected return for a Dividend Aristocrat. Final Thoughts Investors should not overlook the value of dividends. While growth stocks tend to receive much of the coverage in the financial media, dividend stocks have been proven to build wealth for shareholder over the long run. According to Standard & Poor’s, dividends have accounted for approximately one-third of the stock market’s total return since 1926. We believe the highest-quality dividend growth stocks, such as the Dividend Aristocrats, can generate superior long-term total returns.   By Bob Ciura of Sure Dividend
The profit maze of Silver

The profit maze of Silver

Korbinian Koller Korbinian Koller 07.02.2021 10:35
We took for many months the stands of a Permabull in Silver and still do. Our primary call for acquiring physical Silver might find some hurdles. You might not get any. When we started in March of last year at the price of US$12 to urge for acquiring physical Silver holdings, we already experienced the vast percentage difference between the spot price and the actual acquisition price of Silver. This phenomenon persists to the present day. And what to do if one can’t purchase real Silver anymore?We look at the markets primarily from the perspective of risk. As long as you do not have too dramatic pullbacks (= a homogeneous equity curve), you can always recover from a temporary setback. After all, not every investment idea might work out.If Silver’s physical acquisition should come to a halt, we find mining stock ownership to be an excellent second choice.Here is why. Leveraged positions like ETFs, futures, and options allow special restrictions made by brokers and clearinghouses tied with their firms’ positions. Large players like this can also go belly up, especially in six sigma events. In that case, it is essential to find liquidity, the ability to transfer positions from one broker/clearinghouse to another, and mostly to liquidate positions. An option they may deny you through their regulative powers.Sil, Global Silver Miners ETF, Weekly Chart, ETFs might look good, but they aren’t:SIL Global X FDS Global X Silver Miners ETF in US Dollar, weekly chart as of February 4th, 2021.  Monthly Chart of Silver, Think long term and win:Silver in US Dollar, monthly chart as of February 4th, 2021.While Silver’s smaller time frames can be intimidating at times due to their volatility and recent limelight in the news, the larger monthly time frame clearly shows the health of the trend in motion and the long term opportunity.With this bigger picture in place, mining stocks will follow the uptrend.Daily Chart, Reyna Silver Corp in Canadian Dollar, The profit maze of Silver:Reyna Silver Corp in Canadian Dollar, daily chart as of February 4th, 2021.There is a vast array of choices to participate in mining stocks. You can employ various strategies like buying the market leaders or underdogs, for example. In this field, evaluation can change quickly based on depository discoveries, soil sample quality and many other factors. Another point of consideration is the accessibility of stock depending on the country you are trading from, which exchanges you can access.The above chart depicts the stock price of our sponsor Reyna Silver which we find undervalued and very attractive as a long-term investment. Stocks in this price range have the advantage that not too much of your money is parked long term. And still percentage returns can be substantial. (Disclaimer: Please note that Reyna Silver is the sponsor of our weekly silver chartbook).In this specific case, you can see that there is excellent support at CA$0.98 from a volume analysis perspective, right below where prices trade for a low-risk entry on a long-term time horizon.The profit maze of Silver:While we hold physical Silver in the highest regard to risk-averse wealth preservation (next to Gold and Bitcoin), additional investments in mining stocks are prudent. As a stockholder, you are a part-owner of a company with the acquired rights by law. From all the choices out there to participate in the Silver boom, mining stocks seem to be the ones with the smallest risk potential.With a goal of long term investing and wealth preservation, it is essential to look at investments from a risk perspective rather than leverage.Besides, many mining stocks pay dividends. That additional income flow can be reinvested, and one participates in the 8th miracle of the world: “Compound interest.” Automatisch generierte Beschreibung">Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
Gold & the USDX: Correlations

The profit maze of Silver - 13.02.2021

Korbinian Koller Korbinian Koller 13.02.2021 15:55
We took for many months the stands of a Permabull in Silver and still do. Our primary call for acquiring physical Silver might find some hurdles. You might not get any. When we started in March of last year at the price of US$12 to urge for acquiring physical Silver holdings, we already experienced the vast percentage difference between the spot price and the actual acquisition price of Silver. This phenomenon persists to the present day. And what to do if one can’t purchase real Silver anymore?We look at the markets primarily from the perspective of risk. As long as you do not have too dramatic pullbacks (= a homogeneous equity curve), you can always recover from a temporary setback. After all, not every investment idea might work out.If Silver’s physical acquisition should come to a halt, we find mining stock ownership to be an excellent second choice.Here is why. Leveraged positions like ETFs, futures, and options allow special restrictions made by brokers and clearinghouses tied with their firms’ positions. Large players like this can also go belly up, especially in six sigma events. In that case, it is essential to find liquidity, the ability to transfer positions from one broker/clearinghouse to another, and mostly to liquidate positions. An option they may deny you through their regulative powers.Sil, Global Silver Miners ETF, Weekly Chart, ETFs might look good, but they aren’t:SIL Global X FDS Global X Silver Miners ETF in US Dollar, weekly chart as of February 4th, 2021.  Monthly Chart of Silver, Think long term and win:Silver in US Dollar, monthly chart as of February 4th, 2021.While Silver’s smaller time frames can be intimidating at times due to their volatility and recent limelight in the news, the larger monthly time frame clearly shows the health of the trend in motion and the long term opportunity.With this bigger picture in place, mining stocks will follow the uptrend.Daily Chart, Reyna Silver Corp in Canadian Dollar, The profit maze of Silver:Reyna Silver Corp in Canadian Dollar, daily chart as of February 4th, 2021.There is a vast array of choices to participate in mining stocks. You can employ various strategies like buying the market leaders or underdogs, for example. In this field, evaluation can change quickly based on depository discoveries, soil sample quality and many other factors. Another point of consideration is the accessibility of stock depending on the country you are trading from, which exchanges you can access.The above chart depicts the stock price of our sponsor Reyna Silver which we find undervalued and very attractive as a long-term investment. Stocks in this price range have the advantage that not too much of your money is parked long term. And still percentage returns can be substantial. (Disclaimer: Please note that Reyna Silver is the sponsor of our weekly silver chartbook).In this specific case, you can see that there is excellent support at CA$0.98 from a volume analysis perspective, right below where prices trade for a low-risk entry on a long-term time horizon.The profit maze of Silver:While we hold physical Silver in the highest regard to risk-averse wealth preservation (next to Gold and Bitcoin), additional investments in mining stocks are prudent. As a stockholder, you are a part-owner of a company with the acquired rights by law. From all the choices out there to participate in the Silver boom, mining stocks seem to be the ones with the smallest risk potential.With a goal of long term investing and wealth preservation, it is essential to look at investments from a risk perspective rather than leverage.Besides, many mining stocks pay dividends. That additional income flow can be reinvested, and one participates in the 8th miracle of the world: “Compound interest.” Automatisch generierte Beschreibung">Outstanding abstract reasoning ability and ability to think creatively and originally has led over the last 25 years to extract new principles and a unique way to view the markets resulting in a multitude of various time frame systems, generating high hit rates and outstanding risk reward ratios. Over 20 years of coaching traders with heart & passion, assessing complex situations, troubleshoot and solve problems principle based has led to experience and a professional history of success. Skilled natural teacher and exceptional developer of talent. Avid learner guided by a plan with ability to suppress ego and empower students to share ideas and best practices and to apply principle-based technical/conceptual knowledge to maximize efficiency. 25+ year execution experience (50.000+ trades executed) Trading multiple personal accounts (long and short-and combinations of the two). Amazing market feel complementing mechanical systems discipline for precise and extreme low risk entries while objectively seeing the whole picture. Ability to notice and separate emotional responses from the decision-making process and to stand outside oneself and one’s concerns about images in order to function in terms of larger objectives. Developed exit strategies that compensate both for maximizing profits and psychological ease to allow for continuous flow throughout the whole trading day. In depth knowledge of money management strategies with the experience of multiple 6 sigma events in various markets (futures, stocks, commodities, currencies, bonds) embedded in extreme low risk statistical probability models with smooth equity curves and extensive risk management as well as extensive disaster risk allow for my natural capacity for risk-taking.
The REIT Special - An Inflation Hedge

The REIT Special - An Inflation Hedge

Finance Press Release Finance Press Release 26.03.2021 15:01
In the premium editions of my newsletters, you know that I have been consistently touting the iShares Cohen & Steers REIT ETF (ICF) as a potential hedge against inflation.In this REIT Special Edition, I will break down the WHY. But not, we aren’t going to just talk about the ICF ETF. We will dig into what specific real estate sectors you might want to consider when looking at REITs to invest in.But first and foremost, what is a REIT, and why are they such strong bets right now?Let’s just say, if you want to invest in real estate but do not necessarily have the capital, you will want to read on. If you don’t have the patience for illiquid assets like buildings, you will want to read on. And suppose you want the easiest, most convenient way to diversify your portfolio and add real estate exposure. You will want to read on.A REIT, or real estate investment trust, is a company that owns, operates, or finances income-producing real estate assets. Think of REITs as mutual funds for real estate. REITs pool the capital of numerous investors.For the most part, REITs trade on public exchanges like stocks, which makes them highly liquid, unlike physical real estate assets. But the thing I love most about REITs? They also almost mirror the consistent income streams you can get from real estate assets. REITs pay some of the best and most consistent dividends on the market. All while you as an investor don’t have to get your hands dirty and buy, manage, or finance the property.REITs invest in almost every real estate sector. However, in this edition, we will focus specifically on multifamily, hospitality, industrial, and healthcare. Why? Multifamily and hospitality could see substantial recoveries after 2020. Industrial and healthcare had strong 2020s and could continue to succeed in 2021 and long after.Hopefully, you find my insights enlightening. I welcome your thoughts and questions and wish you the best of luck. MultifamilyFigure 1- iShares Residential Real Estate ETF (REZ)Multifamily or residential REITs own and operate apartment buildings and/or manufactured housing.The most important factors to focus on when researching multifamily REITs are affordability, population growth, and job growth. For example, large cities such as New York and LA have higher living costs and more renters. But their job growth and population growth are severely lagging right now. You want large urban centers that show strong in-migration trends and job growth.Figure 2: Marcus & Millichap Forecast Consider the multifamily market in the Sunbelt and Mountain region. Even before COVID, there was a migration boom and significant employment growth, especially in the Sunbelt region. Plus, this region didn’t lock down as strictly as big cities like New York and LA and saw fewer job losses during the pandemic.The Mountain region is also seeing a rapidly growing population, a strong quality-of-life, and affordable living costs. Do you know the ONLY state that saw year-over-year job growth for total nonfarm payrolls in January 2021 while also leading in year-to-date growth? Idaho .While multifamily growth will be likely be fragmented based on region, there are two ways you can play this:Research individual REITs with the most exposure to growing regions.Add broad-based exposure to multifamily assets through ETFs like the iShares Residential Real Estate ETF (REZ) . While this ETF does not focus EXCLUSIVELY on residential REITs, as it has exposure to healthcare and self-storage, too, this is an easy and convenient way to give yourself multifamily exposure.For more of my thoughts on REITs focusing on hospitality, office, industrial, and healthcare, sign up for my premium analysis today.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Matthew Levy, CFA Stock Trading Strategist Sunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research, and information found above represent analyses and opinions of Matthew Levy, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Matthew Levy, CFA, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Levy is not a Registered Securities Advisor. By reading Matthew Levy, CFA’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading, and speculation in any financial markets may involve high risk of loss. Matthew Levy, CFA, Sunshine Profits' employees, and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Follow PepsiCo’s earnings report

Follow PepsiCo’s earnings report

Kseniya Medik Kseniya Medik 12.04.2021 16:59
PepsiCo will publish its financial results for the first quarter of this year on April 15 at 13:00 MT. Why is it important? PepsiCo’s earnings report will impact hugely the stock price. If the results are better than expected, PepsiCo will increase its value. Otherwise, if earnings are worse than the forecasts, PepsiCo will fall. The good news for FBS traders is that they can make both buy and sell trades while trading stocks –the rules are almost the same as for the currency pairs. So, you don’t need to already have an asset to sell it. How has PepsiCo been doing so far? Not great, but good enough! Its soda sales stayed in positive territory despite the weak demand at restaurants amid the long lockdowns. In comparison, Coca-Cola's sales dropped. Besides, the beverage giant is not just Pepsi – it produces many other products such as snack foods, including well-known brands as Lays, Doritos, ad Cheetos (far more than Coca-Cola). However, sales growth is still relatively flat. Anyway, PepsiCo is viewed as one of the safest companies in its sector and most reliable dividend companies. With almost 50 years of dividend growth history, PepsiCo will soon become a dividend king! Tech analysis PepsiCo has been moving inside the ascending channel since March. If it manages to break the high of March 29 at $145.00, it will rally up further to the all-time high of $148.50, which the company hit in December. On the flip side, if PepsiCo’s earnings are worse than the forecast, it may press the price down below the 100-day moving average of $140.00. If it drops below it, it may even fall to the 50-day moving average of $136.00. You can trade stocks in the FBS Trader app or in MetaTrader 5!
Gold & the USDX: Correlations

Want To Invest In Real Estate But Don’t Have The Down Payment?

Chris Vermeulen Chris Vermeulen 28.04.2021 15:51
As an asset class, real estate should be a part of every balanced investment portfolio. That's because real estate investments generally have a low correlation to stocks, can offer lower risk, and provide greater diversification.Today about 65% of Americans own a home, but that means that tens of millions of Americans have no exposure to real estate. Making matters worse, becoming a homeowner today is harder than in previous generations, with 1 in 5 millennials believing they will never be able to afford a home. Is there a way to get exposure to the real estate market for as little as $100?Residential real estate market trendFrom the chart below, we can see that the residential real estate market continues to climb and the median price of houses sold in the US is near recent all-time highs of $347,500. Even though mortgage rates remain near all-time lows, the appreciation of prices in certain pockets of the country are making many cities and areas simply unaffordable for most. Things look much the same for industrial, commercial, agricultural, and most other specialized real estate subsectors.how can you invest in real estate through the stock marketThe stock markets offer three different ways you can invest in real estate, and today we will be looking at three of them: REITs, ETNs, and ETFs.A REIT is a real estate investment trust and it generally owns, manages, and/or finances income-producing real estate assets. REITs are generally highly liquid (trading like stocks) and are known to produce steady income through dividends as opposed to focusing on capital appreciation.There are hundreds of REITs, with the most popular focused on retail, residential, healthcare, office, and mortgages. Having REIT status enables those companies to avoid paying taxes at the corporate level as taxes are paid by the investors when they receive distributions of income in the form of dividends.Sign up for my free trading newsletter so you don’t miss the next opportunity!A real estate ETN is unsecured debt of real estate assets, essentially a type of bond with a maturity date (but without interest payments). ETNs do not provide ownership of the underlying assets, but their performance is directly correlated to the performance of those assets.Investors need to be wary that they can lose all of their ETN investment if the underlying debt goes into default. They also face closure risk if the issuer closes the ETN before maturity by paying the prevailing price in the market (potentially creating a loss for the investor). Despite these risks, some investors prefer ETNs because of the tax treatment for long-term ETN holdings.A real estate ETF is the same as any ETF, being a basket of securities in the real estate sector that can be bought and sold on the stock market. Real estate ETFs often focus on a collection of REITs, offering investors a way to diversify their real estate bets without the torture of researching hundreds of REITs. REIT ETFs offer investors to earn dividend income like REITS while also benefiting from higher diversification and greater market liquidity, which are the hallmarks of all ETFs.  what makes a good reit etf?First, you need to decide if you want a mortgage or equity REITs, as well as if you are looking for an objective-specific REIT (like storage facilities) or something more broad and big-picture (like residential real estate). Your REIT ETF should also have a good amount of assets under management in order to keep expense ratios down, and always check to see if the ETF you are interested in has sufficient liquidity.The charts below show you the performance of the three largest real estate ETFs. Each of these ETFs have over $5 billion of assets, are highly liquid, and a slightly different focus in either the index they track or the real estate assets they are comprised of.Vanguard Real Estate Index Fund (NYSEARCA: VNQ)Vanguard focuses on US equity REITS with a small allocation to specialized REITS and real estate firms.iShares U.S. Real Estate ETF (NYSEARCA: IYR)The iShares REIT, above, follows the Dow Jones U.S. Real Estate Index, whereas Schwab’s REIT ETF (below) follows the smaller Dow Jones U.S. Select REIT Index. Schwab US REIT ETF (NYSEARCA: SCHH)For those of you that get my daily BAN Hotlist, you will know that real estate triggered a signal more than a month ago indicating the sector to be in an uptrend. Real estate continues to be a top-performing sector, with all three of the biggest ETFs gaining more than 15% so far in 2021. In fact, more than 90% of all real estate ETFs have outperformed the S&P500 this year. When you add in the fact that some of the REIT ETFs are also producing annual dividend rates as high as 7-8%, it becomes clear that real estate ETFs should be part of your portfolio.The strongest sectors are going to continue to be the best performers over time.  Being able to identify and trade these sectors is key to being able to efficiently target profits.  You can learn more about the BAN strategy and how to identify and trade better sector setups by registering for our FREE step-by-step guide. For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily market reports, research, and trade alerts.More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers.Happy Trading!
Taper Smoke and Mirrors

Taper Smoke and Mirrors

Monica Kingsley Monica Kingsley 03.05.2021 15:03
Once in a while, stocks closed in red – is that a reversal or the most the bears could hope for these days? Thursday‘s hanging man got its follow through, yet the bulls staged a rebound into the close. Perhaps that‘s as good as the selling pressure gets, for I think the path of least resistance is still higher in S&P 500.If you look at the VIX or the put/call ratio, Friday‘s setback is readily apparent, and stocks seem ripe for an upswing now. Fed‘s Kaplan did its job s with the taper talk, yet I think he played the bad cop part – the Fed will really act ostrich in the face of not so transitory inflation, for as long as the Treasuries market doesn‘t throw a tantrum.And the 10-year yield has been quite well behaved lately, closing at 1.65% only on Friday. The April calm seems to be over, and I‘m looking for the instrument to trade at 1.80% at least at the onset of summer. Then, let‘s see how the September price increases telegraphed by Procter & Gamble influence the offtake – will the price leader be followed by its competitors? That‘s one of the key pieces of the inflation stickiness puzzle – and I think others will follow, and P&G sales and profitability won‘t suffer. The company is on par with Coca Cola when it comes to dividends really.Once there, we would progress further in the reflation cycle when inflation is no longer benign and anchored. We‘re though still quite a way from when the Fed tries to sell rising rates as proof of strengthening economic recovery – once the bond market would get to doubt this story though, it would be game over for its recent tame behavior.Friday‘s retreating Treasuries though didn‘t lift gold, and neither helped miners – it‘s not that inflation expectations would be sending a conflicting signal, as these slightly receded too. Inflation at the moment is probably still too low for the complacent market lulled to sleep by the transitory story, but look for that to change.Once the reality of modern monetary theory driven spending in eternity does result in higher inflation biting into real rates even more, the below quote would need to be updated:(…) It‘s as if the market place didn‘t deem inflation at the moment too high, i.e. as if real rates were actually rising (those believing so are in for a surprise). Personally, I find it odd that the transitory inflation story is still getting some ear, and wonder when last have the lumber, oil, copper, iron, nickel, zinc, corn, soybean (and soon also coffee) prices been checked.The taper story being revealed for a trial baloon that it is, would quickly reverse Friday‘s sharp USDX gains, where particularly the USDJPY segment is worth watching. In the end, the debasement of fiat currencies against real assets would continue, and accelerate as the dollar goes fully onto strategic defensive in 2H 2021 again.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookStocks declined, volume remained elevated – so is this the start of a downswing, or rather its closing stage? In spite of weak smallcaps and emerging markets, it‘s the latter – thanks to the credit markets, including emerging market ones.Credit MarketsIt‘s the high yield corporate bonds intraday recovery that appears key here, for the junk bonds joined the investment grade ones and long-dated Treasuries. The dip is being bought in the credit markets.Technology and FinancialsTechnology recovered from steep intraday losses, and so did $NYFANG. To complete the picture, value stocks were out of the daily favor too.S&P 500 Market BreadthIt‘s not just the advance-decline line or advance-decline volume to pay attention to right now, but the new highs new lows too. All three indicate that we are nearing a local bottom.Gold and Miners Short-TermGold is quite holding up, yet not totally convincingly, especially when miners are examined. This setup screams danger as the retreating nominal yields were ignored on Friday. But...Gold and Miners Long-TermThe copper to 10-year Treasury yield isn‘t breaking lower, and neither is gold. The stage is set for the yellow metal (and silver naturally too) to catch up and start outperforming the commodities, especially in the 2H of 2021. The miners to gold ratio‘s posture is curious to say the least. Is it a fake breakdown along the late Mar lines, or it it attempting to lead lower in earnest? The 2018 and 2019 gyrations are more applicable than the uniquely deflationary corona crash in my view – but the miners need to turn higher and lead relatively shortly to confirm.Crude OilCrude oil quite steeply declined on Friday, but the daily downswing doesn‘t have the characteristics of a reversal. The post-correction pattern of higher highs and higher lows remains intact, and black gold is like to return to scoring gains shortly.BitcoinSuch was the Bitcoin chart on Sunday when I tweeted about this go long opportunity. Since then, prices have risen to almost $59,000 as we speak. The uptrend is reasserting itself, but might take a while longer before the Bollinger Bands‘ upper border is reached.SummaryThe S&P 500 is probably almost done meeting headwinds, and the risk-on trades are likely to return before too long – the top of this bull market is still far away.Gold and miners need to prove themselves – especially the miners. With gold holding $1,760 and miners rebounding, the benefit of the doubt given to the precious metals upswing, would be justified – this precious metals upleg is quite well established already.
SPX Correction Arriving or Not?

SPX Correction Arriving or Not?

Monica Kingsley Monica Kingsley 04.05.2021 16:26
One more day of upside rejection in S&P 500, in what is now quite a long stretch of prices going mostly sideways. As unsteady as VIX seems at the moment, it doesn‘t flash danger of spiking in this data-light week, and neither does the put/call ratio. As I wrote yesterday about the selling pressure, these tight range days accompanied by 30-ish point corrections is as good as it gets when the Fed still has its foot on the accelerate pedal. Yes, you can ignore the Kaplan trial baloon (have you checked when he gets to vote on the FOMC?) that spiked the dollar on Friday but didn‘t put all that a solid floor before long-dated Treasuries as seen in their intraday reversal. Highlighting the key Treasury, inflation and reflation thoughts of yesterday, as these are still here to power stocks higher:(…) the 10-year yield has been quite well behaved lately, closing at 1.65% only on Friday. The April calm seems to be over, and I‘m looking for the instrument to trade at 1.80% at least at the onset of summer. Then, let‘s see how the September price increases telegraphed by Procter & Gamble influence the offtake – will the price leader be followed by its competitors? That‘s one of the key pieces of the inflation stickiness puzzle – and I think others will follow, and P&G sales and profitability won‘t suffer. The company is on par with Coca Cola when it comes to dividends really.Once there, we would progress further in the reflation cycle when inflation is no longer benign and anchored. We‘re though still quite a way from when the Fed tries to sell rising rates as proof of strengthening economic recovery – once the bond market would get to doubt this story though, it would be game over for its recent tame behavior.Gold market enjoyed its fireworks, aided mightily by the silver squeeze run. The inflation theme is getting rightfully increasing attention, and commodities are on the run across the board. Just check yesterday‘s oil analysis or the bullish copper calls of mine. I could just as easily say that copper is the new gold – it has been certainly acting as one over the past many months, yet the yellow metal‘s time in the limelight is about here now. And don‘t forget about silver bring you the best of two worlds – the monetary and industrial applications ones.When it comes to USD/JPY support for the unfolding precious metals upswing, we indeed got the reversal of Friday‘s USD upside:(…) The taper story being revealed for a trial baloon that it is, would quickly reverse Friday‘s sharp USDX gains, where particularly the USDJPY segment is worth watching. Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 OutlookThe declining volume tells a story of not enough conviction to go higher or lower – the market remains vulnerable to brief spikes either way such as those seen and covered in both today‘s intraday Stock Trading Signals.Credit MarketsAs inconclusive intraday the corporate credit markets may seem, the pressure to go up is there, regardless of the high yield corporate bonds reversal. Long-dated Treasuries aren‘t standing in the way but it must be noted that these have given up their intraday upswing completely, and opened with no bullish gap.Technology and FinancialsTechnology lost the advantage of higher open, and wasn‘t helped by the poor daily $NYFANG performance. At the same time, value stocks continued higher but gave away a portion of intraday gains. The markets are on edge, and a bigger move this or more likely next week, shouldn‘t come as a surprise.Smallcaps and Emerging MarketsThe Russell 2000 turned higher on Monday, and emerging markets seem waiting for more signs of dollar weakness. Overall, the U.S. indices still continue outperforming the international markets.Gold and Miners Short-TermVolume returned into the gold market, and so did miners‘ outperformance. While these didn‘t close anywhere near their mid-Apr highs unlike gold, they had extremely undeperformed on Friday – what happens over the next few sessions would provide clue as to whether strength genuinely returned yesterday.Gold and Miners Long-TermThe copper to 10-year Treasury yield is edging higher again, and the miners to gold ratio strongly rebounded, proving my yesterday‘s point that the real parallels are the 2018 and 2019 gyrations, not the uniquely deflationary corona crash.SummaryThe S&P 500 remains vulnerable to short-term spikes in both directions, but the medium-term picture remains positive – the strong gains since late Mar are being worked off here before another upswingGold and miners proved themselves yesterday, and scored strong gains in a universally supportive array of signals across commodities, Treasuries, and also the USD/JPY daily move. Well worth not retiring the benefit of the doubt given to the precious metals bulls – more gains are in sight.
Gold & the USDX: Correlations

FED: What’s Going On Behind the Scenes?

Finance Press Release Finance Press Release 25.06.2021 15:49
The FED allows banks to do much more than what is proper based on the “economy is still bad” narrative. What does this mean for a private investor?Banking on a ComebackWith the U.S. Federal Reserve (FED) releasing its annual bank stress tests on Jun. 24, Vice Chairman for Supervision Randal Quarles said that “the banking system is strongly positioned to support the ongoing recovery." For context, the FED’s stress tests analyze the health of U.S. banks’ balance sheets and reveal how they would fare if hypothetical economic doomsdays were to occur.And while Chairman Jerome Powell told Congress on Jun. 22 that the U.S. economy "is still a ways off," the results of the stress tests are a contradiction. Case in point: the report revealed that since “all 23 large banks tested remained well above their risk-based minimum capital requirements […] the additional restrictions put in place during the COVID event will end .”Translation? The FED will allow U.S. banks – like JPMorgan , Bank of America and Citigroup – to resume share buybacks and standard dividend payments (roughly $130 billion worth) as of next month.Please see below: Source: U.S. FEDOn top of that, the FED considers the following a scary situation:“The severely adverse scenario is characterized by a severe global recession accompanied by a period of heightened stress in CRE and corporate debt markets. The U.S. unemployment rate climbs to a peak of 10-3/4 percent in the third quarter of 2022, a 4 percentage point increase relative to its fourth quarter 2020 level. Real GDP falls 4 percent from the end of the fourth quarter of 2020 to its trough in the third quarter of 2022. The decline in activity is accompanied by a lower headline consumer price index (CPI).”However, even if this hypothetical malaise occurs, the FED believes that all 23 banks will pass the test with flying colors.Please see below: Source: U.S. FEDTo explain, the third column from the left depicts the banks’ regulatory capital ratios under the “severely adverse scenario.” Moreover, if you compare the results with the fourth column from the left, you can see that even if an economic meteor strikes, participants’ ratios will still remain above their regulatory minimums. For context, common equity tier 1 capital (CET1) is the most liquid source of banks’ capital, and the CET1 ratio is used to gauge banks’ ability to absorb losses should an economic shock occur.But why is all of this so important?Well, if the FED was so worried about the U.S. economy, would it allow financial institutions to frivolously spend their collateral on dividends and share buybacks? Remember, U.S. banks supply credit card loans, mortgages, commercial loans and finance the sectors that were hardest hit by COVID-19 (commercial real estate, hospitality, energy, etc.). Thus, with the FED giving banks the ‘all-clear,’ it’s a sign that the U.S. economy is much stronger than the FED lets on.In addition, The White House announced on Jun. 24 that a $1.2 trillion infrastructure deal was reached . And calling the milestone “the largest federal investment in public transit in history and the largest federal investment in passenger rail since the creation of Amtrak,” lawmakers want to cook the U.S. economy until it boils. For context, the agreement includes $579 billion of new spending with the rest being diverted from untapped coronavirus-relief funds.Please see below: Source: The White HouseMore importantly, though, with U.S. lawmakers hell-bent on pushing the limits of inflation and economic growth, the ominous impulse remains bullish for the U.S. 10-Year Treasury yield and the USD Index. Regarding the latter, if U.S. GDP growth outperforms the Eurozone, the EUR/USD – which accounts for nearly 58% of the movement of the USD Index – should suffer in the process. Likewise, with the U.S. 10-Year Treasury yield materially undervalued relative to realized inflation and prospective GDP growth , unprecedented spending should put upward pressure on interest rates. Furthermore, the bullish cocktail should force the FED to taper its asset purchases in September .To explain, while the PMs are allergic to a rising U.S. 10-Year Treasury yield, the latter doesn’t have to move for the metals to suffer. For example, following the FED’s announcement on Jun. 16, the U.S. 2-Year, 3-Year and 5-Year Treasury yields surged. And while the development flattened the U.S. yield curve – meaning that short-term interest rates rose while long-term interest rates stood pat – the PMs still suffered significant drawdowns. Thus, while the U.S. 10-Year Treasury yield remains ripe for an upward re-rating, even if it stays in consolidation mode, short-term interest rate pressures are just as ominous.Will We See Another Inflation Surprise?To that point, with the Personal Consumption Expenditures (PCE) Index scheduled for release today, another inflation ‘surprise’ could rattle the bond market once again. To explain, I wrote on Jun. 22:The FED increased its year-over-year (YoY) headline PCE Index forecast from a rise of 2.40% YoY to a rise of 3.40% YoY on Jun. 16. However, with the Commodity Producer Price Index (PPI) surging by 18.98% YoY – the highest YoY percentage increase since 1974 – the wind still remains at inflation’s back. Moreover, with all signs pointing to a YoY print of roughly 4% to 4.50% on Jun. 25, the “transitory” narrative could suffer another blow on Friday.As further evidence, the Kansas City FED released its Manufacturing Survey on Jun. 24. And with the composite index rising from 26 in May to 27 in June, Chad Wilkerson, vice president and economist at the KC FED, had this to say about the current state of affairs:“Regional factory activity rose again in June and expectations for future activity were the highest in survey history . While the majority of firms continue to face increasing materials prices and labor shortages, many firms have also increased selling prices and capital expenditures for 2021.”To that point, while the KC FED’s prices paid and prices received indexes declined slightly from their all-time highs, both gauges remain above their prior historical peaks.Please see below:To explain, the green line above tracks the KC FED’s prices paid index, while the red line above tracks the KC FED’s prices received index. If you analyze the right side of the chart, you can see that both remain extremely elevated.On top of that, survey respondents provided the following anecdotal evidence: Source: KC FEDAlso supportive of future economic growth, U.S. manufacturers spent $36.218 billion on machinery in May (the data was released on Jun. 24) – only a slight decrease from the all-time high of $36.364 billion set in April. And with machinery representative of long-lived assets that have high breakeven costs, the recent splurge signals that manufacturers remain optimistic about the recovery.Please see below:To explain, the green line above tracks manufacturers’ machinery orders, while the red line above tracks the YoY percentage change in the Private Employment Cost Index (ECI). If you analyze the relationship, you can see that when manufacturers invest in long-term equipment, wage inflation often follows. As a result, if the two lines continue their ascent, it will only increase the odds that the FED tapers in September. Forecasting more hawkish, not more dovish FED seems to be appropriate at this time.Knock Knock? It’s China, We Want More MoneyOn top of that, with the U.S. goods trade balance (exports minus imports) revised to -$88.11 billion on Jun. 24, foreign production is required to stock U.S. shelves. And with the Shanghai Containerized Freight Index (the cost to ship from China) unrelenting in its parabolic rise, it’s another indicator that inflationary pressures are unlikely to abate anytime soon.Finally, with the FED selling another $813 billion worth of reverse repurchase agreements on Jun. 24 (~$53 million below the all-time high set on Jun. 23), the liquidity drain remains on schedule.Please see below: Source: NY FEDTo explain the significance, I wrote previously:A reverse repurchase agreement (repo) occurs when an institution offloads cash to the FED in exchange for a Treasury security (on an overnight or short-term basis). And with U.S. financial institutions currently flooded with excess liquidity, they’re shipping cash to the FED at an alarming rate.More importantly, though, after the $400 billion level was breached in December 2015, the FED’s rate-hike cycle began. On top of that, the liquidity drain is at extreme odds with the FED’s QE program. For example, the FED aims to purchase a combined $120 billion worth of Treasuries and mortgage-backed securities per month. However, with daily reverse repurchase agreements averaging $520 billion since May 21, the FED has essentially negated 4.33 months’ worth of QE in the last month alone.In conclusion, while the PMs should recover a meaningful chunk of last week’s downswing, their medium-term outlook isn’t so sanguine. With FED hawks and doves splintered down the middle, the fundamentals are firmly tilted in the former’s favor. And with inflation and U.S. GDP growth both accelerating concurrently, unemployment is the only card left for the doves to play. However, with enhanced unemployment benefits expiring in early July for roughly 30% of claimants, U.S. nonfarm payrolls should show strength in August and September. Thus, with the FED’s taper talk likely to grow louder over the next few months, the PMs may not like what they will hear.Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.Przemyslaw Radomski, CFA Founder, Editor-in-chiefSunshine Profits: Effective Investment through Diligence & Care* * * * *All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.
Credit Spreads Declined Unprecedentedly. Will Gold Follow?

Credit Spreads Declined Unprecedentedly. Will Gold Follow?

Finance Press Release Finance Press Release 29.06.2021 16:23
When credit spreads narrow, it’s bad for gold. But this time there is a silver lining we can look for, although it’s quite adverse for the economy.There are several important factors affecting gold prices. Many analysts focus mainly on the US dollar and real interest rates . However, what is sometimes even more important is economic confidence. Of course, the level of economic confidence is partially reflected in the strength of the greenback and the bond yields . However, I would like to focus today on credit spreads , an often overlooked indicator of economic confidence.Why such a topic? It’s simple, just take a look at the chart below. As you can see, the ICE BofA US High Yield Index Option-Adjusted Spread, which is a proxy for a spread between the yield on below-investment-grade-rated corporate debt and Treasuries of the same duration, has recently declined to a very low level. To be more precise, the analyzed indicator slid from almost 11 in March 2020 to 3.1 at the end of June (the lowest reading since July 2007 , the time just before the Great Recession started).Implications for GoldOK, great, but what does this mean for the gold market? Well, this is a negative development for gold prices, but with a silver lining . Let me explain. When credit spreads are narrow or in a narrowing trend, it means that economic confidence is high or in a rising trend. In such an environment, risk appetite is strong and demand for safe-haven assets such as gold is low. The fact that credit spreads have reached their multi-decade lows indicates that the economic expansion is doing well. If the boom continues, the Fed will eventually normalize its monetary policy a bit, and the interest rates will increase. Additionally, US banks have cleared the Fed’s recent stress tests, which means that they will no longer face restrictions on how much they can spend buying back stock and paying dividends. This change might strengthen the financial sector, additionally boosting economic confidence among investors. And this is all bad for the yellow metal.However, we can look at very low credit spreads from the other side. After all, they have already decreased profoundly and further significant declines are not very likely. Furthermore, the last time they were so narrow was mid-2007, i.e., just a couple of months before the outbreak of the global financial crisis .Hence, it might be the calm before the storm . The economic crisis , by definition, occurs when confidence is high and almost nobody expects any problems. A related issue here is whether the markets are properly assessing the risk. The low risk premium partially results from the low Treasury yields, which push investors who seek profits into riskier securities.Some analysts point out the risks related to the surge in the public debt or inflation . For example, David Goldman notes that the rising gap between prices paid by the producers and prices received by customers ( June Philadelphia Manufacturing Business Outlook Survey ) could depress output in the future, as companies wouldn’t be able to maintain profit margins in such an environment.The bottom line is that the US economy has recovered and the economic expansion continues undisturbed. Given this trend and high economic confidence, despite the soaring prices and indebtedness, gold may struggle for some time .However, credit spreads may widen abruptly when the next crisis hit, as they did in the aftermath of the collapse of the Lehman Brothers . In other words, although the economic confidence is strong, some important downside risks for the US economy are still present, and they could materialize later in the future . Perhaps investors know this – according to the WGC , we saw inflows to the gold ETFs last week, despite the plunge in gold prices. It shows that investors could have been taking advantage of lower prices to buy gold as a portfolio diversifier and protection against tail risks .If you enjoyed today’s free gold report , we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today . If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
The Rise of Precious Metals and Commodities

The Rise of Precious Metals and Commodities

Monica Kingsley Monica Kingsley 06.07.2021 16:15
S&P 500 closed Friday on a strong note, and as the holiday-shortened week is usually accompanied by positive seasonality, it would be reasonable to expect extension of gains. Is therre any show stopper at the moment? Credit markets are strong and in a risk-on mode – but what about the odd strength in long-dated Treasuries? Are the stock traders getting it right – or the bond ones? Remember that such divergencies can take a long time to resolve, and don‘t require immediate action. It‘s the same with the Industrials and Transports in the Dow theory. So, don‘t jump to S&P 500 bearish conclusions just yet.The stock market advance is characterized by improving market breadth, and a fresh push of reflationary trades. It would have been all too easy to lose one‘s cool post the June FOMC, and declare value to have topped – while tech amply helped by heavyweights powers the S&P 500 advance, value performance ain‘t too shabby. Even financials are weathering relatively well the retreating yields pressure, counterbalanced by the Fed relaxing share buybacks and dividend rules. Real assets including energy are surging again, and the Fed‘s bluff is being called.Little wonder when all the central bank did, was influence inflation expectations, and precisely nothing about current inflation – let alone pressures in the pipeline. I‘ve discussed the cost-push pressures building up, leading to inflation becoming unanchored. Add job market pressures beyond the difficulties in hiring, and the issue grows more persistent. While it‘s not biting overly noticeably for the financial markets to take notice the way they did in Mar and early May, left unattended, inflation would come to bite in the not so distant future. The takeaway is that with the constant redefinitions of what transitory should mean now, the concept of Fed as inflation fighter is subject to well deserved mockery.Look for the lull in Treasury market to continue, it‘s almost goldilocks economy as the monetary and fiscal support rivals wartime footing circumstances. Makes you wonder what would be on the table if we were faced with a recession. Thankfully, that‘s not on the horizon – we‘re in a multi-year economic expansion that won‘t end with the tapering or tightening games this year or next, not in the least.As I wrote on Friday, thinking also about the value strength:(…) accompanied by the Treasury yields‘ inability to retreat further. Near the top of its recent range, the 10-year Treasury yield is trading within the summer bond market calm atmosphere, and so are the beaten down inflation expectations at a time when the dollar is catching a strong bid. Notably, commodities haven‘t been derailed in the least, so pay no attention to lumber – the real assets‘ world is much richer and profitable.Remember the big picture – fiscal stimulus very much on, monetary accomodation aggressive, no worries about the economic expansion slowing down. Pickup in economic activity associated with inventories replenishment is sure to be kicking reliably on. Open long profits in the S&P 500 and Nasdaq can keep growing!Precious metals are duly reacting today to the pressures to go higher, building up for weeks. Look for miners to confirm the upswing that isn‘t going unnoticed in the commodities arena either.Crude oil took off on the absence of OPEC+ deal, but I am looking for it to base in the $70s before we see triple digit crude prices next week. The Brent crude lag looks a bit suspicious to me, so a little breather might be in order here.Crypto bears are getting a beating, with the odds favoring upswing to continue – the Ethereum outperformance of Bitcoin is conducive to the accumulation thesis I had been mentioning for weeks.Let‘s move right into the charts (all courtesy of www.stockcharts.com).S&P 500 and Nasdaq OutlookS&P 500 is going higher, and so is Nasdaq. The decreasing volume might usher in a little consolidation over time but there is no imminent reason to call for one today.Credit MarketsCredit markets performance remains strong across the board, but I am looking for TLT to face headwinds soon.Technology and ValueTech is up, value is up – what else to wish for? Defending the gained ground, that is.Gold, Silver and MinersGold is attempting to go higher, and based on the yield-inflation spread getting ever more compressed and a tad off inflation expectations, I‘m looking for miners to confirm the upcoming gold advance.Silver and copper are also building energy to go higher, and it‘s my view they would surge to recapture a good portion of the post FOMC decline before taking a breather.Bitcoin and EthereumStrong base building in the cryptos continues, and the bulls have the tactical advange at the moment.SummaryS&P 500 keeps trading near its highs, with a bullish bias, characterized by sectoral rotations and improving market breadth including in Nasdaq. A little sideways consolidation appears looming, but I am looking for a positive week.Gold and silver bulls are getting ever more strongly on the move, and Friday‘s upper knot is a preview of things to come – the depressed nominal yields with unrelenting inflation are helping attract buying interest.Crude oil enjoyed more than its fair share of good news, but remains bullish today‘s tremors notwithstanding. Great future ahead for black gold, the Saudi Arabia – UAE spat regardless.Bitcoin and Ethereum bulls are the favored side these days as the weekly charts posture isn‘t yet in jeopardy. The basing pattern looks to be one of accumulation rather than distribution.Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the four publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals and Bitcoin Trading Signals.
S&P 500 Slips at Close, Sector Strength Tells Defensive Story

S&P 500 Slips at Close, Sector Strength Tells Defensive Story

Finance Press Release Finance Press Release 05.08.2021 00:13
As the S&P 500 chugs higher and higher, have you been monitoring the sector strength over the last month? Taking a deeper look into leading sectors paints a different picture.Broader markets have been quiet over the last few days and trading in narrow ranges. While the overall trend in the short term has been higher, albeit, with a sideways tone, one cannot help feeling that this market is a bit on the defensive side.Today, we saw the S&P 500 slip at the close, finishing the day lower by 0.46%, featuring some selling at the close.As we noted on Monday, the $VIX had been rising, even with the S&P 500 up fractionally. Although the $VIX settled down in yesterday’s session, we can certainly take away that protection was being bought during an otherwise quiet session on Monday.Sector StrengthLooking Back at the past 30 days, here is where the sector strength has been:Figure 1 - Leading Sectors July 6, 2021 - August 4, 2021, Source stockcharts.comHealth Care certainly makes sense with the vaccine administration and the overall macro news theme that has been featured over the last month surrounding the delta variant.However, coming in at number two, we see Utilities taking the spotlight, almost up as much as Health Care. Utilities tend to connote highly to a defensive or even overall bearish market stance. Let’s take a look at the XLU (Utilities Sector Fund):Figure 2 - XLU Utilities Select Sector Fund ETF February 15, 2021 - August 4, 2021, Daily Candles Source stockcharts.comAs you most likely know, utility stocks are high dividend-paying (for the most part), defensive plays when more aggressive growth plays become out of favor. It is concerning for the broader markets when utilities catch such a bid that is in place right now.In our July 23rd publication, we covered the price divergence in the Dow Jones Transports. The Transports put in a high on May 10th, and they have been falling ever since. This price action is in sharp contrast to the broader market averages making fresh highs.We were ready when the IYT bounced and traded near the top of its recent downward channel.Figure 3 - IYT iShares Transportation Average ETF February 1, 2021 - August 4, 2021, Daily Candles Source stockcharts.comThe setup in IYT was a nice one and the day after identification rewarded traders with a gap lower. Our initial short entry zone that was identified was between $257.00 and $259.99. Prices traded in this area on the same day and the next day IYT gapped down. Our current price target is $243.01. This level can change over time, so stay tuned for updates.Now, let’s examine the other markets that we are covering for Premium Subscribers.Not a Premium subscriber yet? Go Premium and receive my Stock Trading Alerts that include the full analysis and key price levels.Thank you for reading today’s free analysis. I encourage you to sign up for our daily newsletter - it's absolutely free and if you don't like it, you can unsubscribe with just 2 clicks. If you sign up today, you'll also get 7 days of free access to the premium daily Stock Trading Alerts as well as our other Alerts. Sign up for the free newsletter today!Thank you.Rafael ZorabedianStock Trading StrategistSunshine Profits: Effective Investment through Diligence & Care* * * * *This content is for informational and analytical purposes only. All essays, research, and information found above represent analyses and opinions of Rafael Zorabedian, and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. You should not construe any such information or other material as investment, financial, or other advice. Nothing contained in this article constitutes a recommendation, endorsement to buy or sell any security or futures contract. Any references to any particular securities or futures contracts are for example and informational purposes only. Seek a licensed professional for investment advice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Information is from sources believed to be reliable; but its accuracy, completeness, and interpretation are not guaranteed. Although the information provided above is based on careful research and sources that are believed to be accurate, Rafael Zorabedian, and his associates do not guarantee the accuracy or thoroughness of the data or information reported. Mr. Zorabedian is not a Registered Investment Advisor. By reading Rafael Zorabedian’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Trading, including technical trading, is speculative and high-risk. 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August Starts Illy for Gold. Could September Change Anything?

August Starts Illy for Gold. Could September Change Anything?

Finance Press Release Finance Press Release 12.08.2021 15:14
The WGC believes that gold will shine in September. Given the whole context, I’m not so sure – in fact, not sure at all.Following three previous reports, the WGC revealed two more interesting publications at the turn of July and August. The first one is the report about gold demand trends in Q2 2021. As we can read, the demand for gold was virtually flat in Q2 (y-o-y), but in the first half of the year it decreased 10.4%. Importantly, there were modest inflows into gold ETFs in Q2 and also in July, but they only partially offset the huge outflows of the previous quarter. Hence, investors’ sentiment turned more positive in the second quarter, which helped gold prices rebound somewhat after Q1.Indeed, as the chart below shows, the price of gold plunged 10% in Q1 2021. Then, it rebounded 4.3% in the second quarter, but it was not enough to offset the blow from the first three months of the year. In July, the price of gold jumped 3.6%, although it retraced most of that increase in August (it decreased 2.1% in a single day – Aug. 6). So, gold prices declined more than 6% year-to-date.Unfortunately, there is potential for further declines. After strong July’s nonfarm payrolls, the Fed has no excuses not to start tapering of its quantitative easing. What’s more, the current levels of the real interest rates are very low, so they are likely to normalize somewhat later this year.The second WGC publication is the newest edition of the Gold Market Commentary entitled Equity yields support gold as investors position for historical September strength. The main thesis of the article is that “August could be the opportune time to position for the historically strong September gold performance”. Well, given last week’s plunge in gold prices, this suggestion looks rather amusing, but who knows? There is plenty of time until September, which is historically quite positive for gold.The justification for this thesis is two-fold. First, central banks focus now more on employment than inflation, which could prolong tapering activity. It’s true that the upcoming Fed’s tightening cycle will be very gradual, and the Fed’s balance sheet (as well as the federal funds rate) won’t probably return to the pre-pandemic levels. However, it’s also true that the Fed has already started the tapering clock and will likely tighten its monetary policy somewhat this year. This is what the markets are pricing in, and such expectations boost the real interest rates and create downward pressure on gold prices.Second, the S&P 500’s real yield (i.e., companies’ earnings yield plus the dividend yield minus inflation) has turned negative, which reduces the opportunity costs of holding gold. Well, the equity market looks overbought, but with low interest rates, high inflation and the Fed always ready to reach out a helping hand, investors may continue to flow into this market.Implications for GoldWhat can we learn from the recent World Gold Council reports? Well, just like the WGC, I’m bullish on gold in the long run, but I’m more bearish in the shorter timeframe. In other words, I believe that gold may go down first before it rallies again. September is a historically good month for gold, but this year it might also be the month when the Fed announces the start of the tapering of its asset purchases. The hawkish Fed would push bond yields higher and strengthen the dollar, sending the price of the yellow metal down in the short-to-medium term.Luckily, an abrupt taper tantrum similar to the one from 2013 is not likely to happen again. Moreover, a bit later either the post-tightening recession or inflation running out of control could make gold shine again. After all, inflation is well above the Fed’s target, while the real yields will likely remain negative for a long period. These factors should provide support for gold over a longer horizon, but investors shouldn’t downplay the upcoming tightening cycle and rising interest rates.If you enjoyed today’s free gold report, we invite you to check out our premium services. We provide much more detailed fundamental analyses of the gold market in our monthly Gold Market Overview reports and we provide daily Gold & Silver Trading Alerts with clear buy and sell signals. In order to enjoy our gold analyses in their full scope, we invite you to subscribe today. If you’re not ready to subscribe yet though and are not on our gold mailing list yet, we urge you to sign up. It’s free and if you don’t like it, you can easily unsubscribe. Sign up today!Arkadiusz Sieron, PhDSunshine Profits: Effective Investment through Diligence & Care
Weekly S&P500 ChartStorm - 21 November 2021

Weekly S&P500 ChartStorm - 21 November 2021

Callum Thomas Callum Thomas 22.11.2021 09:40
The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts. The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective. Hope you enjoy! p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!) Subscribe Now 1. S&P 500 Seasonality Chart: It’s everyone’s favorite chart updated again (maybe for the last time this year?). The S&P500 has been sticking to the seasonality script through most of this year… makes me think about Murphy’s Law tho - maybe the market will start to improvise and go off-script? Either way, the next few weeks seasonally look like sideways action. Source: @topdowncharts 2. Volatility Seasonality: A twist on the previous chart — same concept, but this time with implied volatility. I find it interesting to note that the VIX has actually been a bit lower than usual for this time of the year (and trending up short-term…). One last VIX spike before year-end? Source: @topdowncharts 3. Stockmarket Statistics: What happens after the market goes up a “crazy overheated” 20%+ over the course of a year? More Gains. Historically most of the time if the market closed up 20%+ for the year, the next year was also positive (84% of the time). As of writing, the market is up some 27% YTD (albeit, this year ain't over yet!). Source: @RyanDetrick 4. Bad Breadth? Fully 1/3rd of stocks are in a downtrend. (defined as trading below their respective 200dma) Will this bearish divergence be a problem? Source: Index Indicators 5. GAARP vs GAAAP: On this metric, growth stocks are the most expensive ever vs value stocks. So it begs the question… Growth at a reasonable price? or Growth at *any* price? (but then again, who defines what "reasonable" is in a market like this!) Source: @TheOneDave 6. Low Energy: Energy stocks are attempting to turn the corner vs the rest of the market, but face high hurdles from the raging tech bull market, rise of ESG investing and regulatory/political hurdles, not to mention commodity market volatility. What comes down must go up? (or something else?) Source: @dissectmarkets 7. Buybacks Back: New all-time high for buybacks in Q3 (with 95% reported). Always makes me wonder these trends — you see the majority of buybacks occurring near market peaks… i.e. when valuations are extreme expensive. The opposite of value investing: buy more when its expensive, buy less when it’s cheap — seems like upside-down logic to me, but then again I am a simple man. Source: @hsilverb 8. Payout Ratio: As an interesting follow-on to the ATH in buybacks/dividends, it’s interesting to note that the dividend payout ratio is actually below average... Scope to return more cash to investors? Source: @ChrisDagnes 9. Buffett Indicator: Looks like this indicator has reached a permanently higher plateau! (kidding of course - echoing the famous last words of Irving Fisher back in 1929) Interesting stat to note: to make this indicator as cheap as where it got to during the financial crisis lows the market would need to fall over 70%. Definitely not a prediction, but interesting nonetheless. I would say I have multiple quibbles with this indicator, I think CAPE and ERP are better valuation metrics, but that’s a topic for another day. Source: @KailashConcepts 10. Buffett the Compounder: Speaking of Buffett, a lesson in compounding. Source: @DividendGrowth Thanks for following, I appreciate your interest! !! BONUS CHART: total stockmarket leverage >> Click through to the ChartStorm Substack to see the bonus chart section https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-21-november                   Follow us on: Substack https://topdowncharts.substack.com/ LinkedIn https://www.linkedin.com/company/topdown-charts Twitter http://www.twitter.com/topdowncharts
Why Consider Dividend Growth Investing?

Why Consider Dividend Growth Investing?

Dividend Power Dividend Power 22.11.2021 08:31
Why Consider Dividend Growth Investing? Dividend growth investing is increasingly popular in the US and worldwide. The concept is simple and easy to understand. An investor buys a basket of stocks that annually increases the dividend. This strategy is a long-term buy-and-hold strategy. In contrast, it is the opposite of a trading strategy where an investor rapidly buys and sells stocks. Some investors think of dividend stocks as something that only retirees buy for income. However, some of the largest tech companies pay dividends, including Apple (APPL) and Microsoft (MSFT). Hence, investors can buy growth stocks that also pay a growing dividend. Why Dividends? Do dividends matter to investors? The short answer is yes for a few reasons. First, over time, stocks that pay dividends tend to outperform ones that don't pay dividends with lower volatility as measured by beta. The difference in total return is even more significant for comparing stocks that pay growing dividends and stocks that don’t pay dividends. Furthermore, research has shown that dividend and dividend growth stocks significantly outperform stocks that cut or eliminate dividends. The reason for this is that companies that cut or eliminate dividends are often performing poorly. In some cases, this poor performance is due to changing economic conditions. For instance, energy companies performed poorly in 2020 due to the COVID-19 pandemic. Lower revenue and earnings caused many energy companies to stop paying a dividend. However, in many cases, it is because the company is facing increasing competition or changing technology. For example, Kodak's core technology was film, and digital cameras and smartphones made film obsolete. Another reason why dividends matter is dividends can be used to determine valuation. An estimate of a fair value can be calculated using the dividend per share and the expected constant growth rate. Dividends also indicate if the company is doing poorly or well since cash must be used to pay the dividend. Research has also shown that dividend stocks perform better than non-dividend-paying stocks in down markets. Types of Companies Not all companies pay a dividend or a growing dividend. In the US, there are over 6,000 stocks listed on stock market exchanges. Of these, more than 3,500 pay a dividend, and only about several hundred pay a growing dividend for 5+ years. The fact points to the difficulty a company has for growing the dividend over a more extended period. There are lists of companies that pay a dividend for extended periods. One group of stocks that are well known as dividend growth stocks are the Dividend Aristocrats. The stocks on this list have raised the dividend for 25+ years. In addition, the stocks must meet other criteria, including being a member of the S&P 500 Index and having a market capitalization of $3 billion or more. Currently, there are 65 stocks on the Dividend Aristocrats list. Investors can buy the individual stocks or buy an exchange-traded fund (ETF) that owns the entire list. A Top Dividend King Today An even more exclusive club of dividend growth stocks is the Dividend Kings 2021 list. These are stocks that have paid a growing dividend for 50+ years. There are only 32 stocks on this list. It is challenging for a company to raise the dividend for 50 or more years. Typically, a company must have a substantial competitive advantage to overcome economic cycles and competition. One top Dividend King today is Johnson & Johnson (JNJ). The company is a global healthcare company with three primary business segments: Consumer Health, Pharmaceutical, and Medical Devices. Most investors know the company through its consumer health business. Major brands include Band-Aid, Neosporin, Tylenol, Zyrtec, Sudafed, Motrin, Benadryl, Pepcid, Listerine, Aveeno, Neutrogena, Stayfree, Carefree, o.b., and Clean & Clear. However, Johnson & Johnson's other two segments are much larger. For example, some of the drugs that Johnson & Johnson sells are blockbusters, with over $1 billion annually in sales. Johnson & Johnson’s stock price is relatively flat for the year, with a gain of ~3.5% year-to-date. However, results impacted by COVID-19 have pressured the stock price. In addition, Johnson & Johnson is faced with lawsuit risks from opioids and talcum powder that are also pressuring the stock price. The current quarterly dividend rate is $1.06 per share for an annual rate of $4.24 per share. The forward dividend yield is about 2.6%. The company’s dividend is relatively safe. The forward payout ratio is approximately 43%, a good value. Furthermore, Johnson & Johnson is one of two triple-AAA-rated companies from credit agencies. For this reason, Johnson & Johnson is often considered one of the best dividend growth stocks. Johnson & Johnson recently announced that it would split into two companies. The Consumer Health business will be divested, leaving the Pharmaceutical and Medical Device business. Johnson & Johnson will continue to grow organically through R&D and approvals for new medications and indications. The company will also probably buy smaller companies adding to its growing portfolio of products. Market Capitalization: $428.82 billion Stock Price: $162.89 Dividend Yield: 2.6% Payout Ratio: 43.3% Summary Dividend growth stocks should be considered by all investors, not just those in retirement. The reason is that they can provide excellent long-term returns with lower volatility. There are hundreds of stocks to pick from using this investment strategy, including many well-known ones. Author Bio: Dividend Power is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 3% out of over 8,116 financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 
Oil prices hold steady despite Biden announcement

Oil prices hold steady despite Biden announcement

Walid Koudmani Walid Koudmani 25.11.2021 09:23
Oil prices hold steady despite Biden announcement Oil prices have returned to their recent range despite the announcement from president Biden that the United States would be releasing some of its strategic petroleum reserves, a move which was meant to cool oil prices after many expressed concerns for the serious effects they are having on consumers and ultimately, the post pandemic economic recovery. While OPEC maintains its narrative and continues to expect a fall in demand towards the end of the year, the US along with a group of other countries are attempting to ease the pressure by tapping into their strategic reserves. As stated in the past, this move was unlikely to have a long term effect on prices since it would not be able to make a significant impact on total demand, and after a brief pullback which saw prices drop by around 4,5%, the move was reversed. Furthermore, we are seeing a faster than expected recovery in oil prices as Brent is trading above $80 once again and WTI hovers in the $78 range, this may worry markets once again as governments begin to run out of options to control the ongoing situation on the oil market. VirginMoney annual report paints optimistic picture Annual results from Virgin money continued to offer investors reassurance as they outlined the growing strength of the company which managed to increase its market share while reducing costs and ensuring expansion of the brand. The report also highlighted the ongoing effort to continue investing in different sectors of the business while also aiming to return to a sustainable dividend in the medium term and keeping up with technological advances. Despite some questions relating to the logistics and practical implementation of strategies, today’s report could be seen as an overall positive and may reaffirm confidence in the board as it managed to deliver on many of its promises and could continue to do so moving forward.  
The stock market switches to a new idea

The stock market switches to a new idea

Alex Kuptsikevich Alex Kuptsikevich 07.12.2021 16:20
About 13 months ago, in early November 2020, we saw a shift in the previous months’ investment idea thanks to Biden’s presidential election victory and the emergence of effective and affordable vaccines. Then we saw a investors’ shift from so-called “work from home” companies to the broader market and a strong recovery in energy and financial sector stocks. But the technology sector, which had initially stalled, did not find itself on the margins of the markets either. The trade wore off early this November, and the leading sectors retreated from their peaks. Initially, news of the new omicron strain scared the markets. Still, in recent days some of the fear has dissipated, and there are hopes that the new variant is acting as a light at the end of the tunnel, offering hope that the mutation of the virus has made it less deadly, though many times more infectious. Most importantly, existing vaccines mainly protect people, if not from the disease, then from the severe course of the disease. If the first observations are confirmed, this could prove to be a welcome sigh of relief for the tourism industry, as it dramatically reduces fears of stricter lockdowns. As early as next spring, the coronavirus will not restrict people’s travel and leisure activities in the most optimistic scenario. If so, the following investment idea for the markets could be airline and tourism stocks, which have been at annual lows recently, as the surge of optimism from November last year to March this year quickly deflated. In addition, the markets could finally switch from outperforming growth stocks to value stocks due to the monetary policy reversal in response to inflation. Growth equities have been pulling the market up in all recent years when the Fed has been in a position to stimulate inflation rather than suppress it. Investors favour stocks of companies with a sustainable business model and regular dividends during such periods. These could be the Consumer Staples and Utilities. These sectors lagged last year, adding 2% and 7%, respectively. Possibly, the ‘switch’ we suggest will not be harmful to the Financial sector, which is benefiting from increased lending and rising interest rates. In terms of indices, we see an increased chance that the Nasdaq/Dow ratio, which repeated the highs of the 2000 peak at 0.47, will correct in the coming months. We are not saying that the ratio will return to 0.11, meaning it will lose ¾ of its current values. More sensible at the moment is to expect this ratio to correct to 0.30 in 2022-2023, assuming a 35% fall in the Nasdaq with the Dow Jones unchanged.
High-Yield Dividend King: Altria Group, Inc. (MO)

High-Yield Dividend King: Altria Group, Inc. (MO)

Sure Dividend Sure Dividend 16.12.2021 15:19
The 3 Highest-Yielding Dividend Kings Now By Josh Arnold for Sure Dividend Income investors are faced with many choices when it comes to selecting the stocks they wish to hold in their portfolio. These choices include high current yield, dividend growth potential, dividend safety, dividend longevity, and more. However, there are certain stocks that possess more than one of these qualities. It is the intersection of these characteristics where we believe we find the best dividend stocks. One place we like to start is with the Dividend Kings, a group of just 35 stocks that have increased their dividends for at least 50 consecutive years. This longevity implies these companies all have sustainable competitive advantages, as well as exemplary recession resistance. These 3 Dividend Kings have each raised their dividends for over 50 consecutive years, and are currently the highest-yielding Dividend Kings today. Our first stock is Altria, a manufacturer and distributor of cigarettes, oral tobacco, and more. The company sells the very famous Marlboro brand of cigarettes, Black & Mild cigars, and chew tobacco under the Copenhagen, Skoal, Red Seal, and Husky brands. Altria was founded in 1822, employs about 7,000 people, generates $21 billion in annual revenue net of excise taxes, and trades with a market capitalization of $83 billion. The company’s dividend increase streak stands at 52 years. Altria’s dividend yield is currently 7.9%. Altria reported its most recent earnings for the third quarter on October 29th, 2021, and results were weaker than expected on both the top and bottom lines. Total revenue was off 4.7% from the year-ago period, coming to $6.8 billion before excise taxes, which was entirely due to smokeable product revenue declining 5.4%. Earnings-per-share came to $1.22 on an adjusted basis, which was actually slightly higher than the $1.19 from last year’s comparable period. Management announced it repurchased 6.7 million shares during the quarter, and boosted its existing buyback authorization to try and offset declining volumes. Our estimate for this year now stands at $4.62 for earnings-per-share. Altria’s recession resistance is outstanding given its products are literally addicting to the company’s customers. Tobacco products in general hold up very well during recessions because even consumers on the margin prioritize tobacco. This affords Altria stable and predictable cash flows irrespective of economic conditions, which it has used over the past five decades to consistently increase its dividend payment. We expect a 78% dividend payout ratio for this year, which is quite comfortable for a tobacco company. More cyclical companies would like see a dividend cut during a recession with that kind of payout ratio, but tobacco stocks – including Altria – see minor impacts to earnings during tough economic periods. Therefore, we see that payout as safe under any reasonable recession scenario. High-Yield Dividend King: Universal Corporation (UVV) Our next stock is Universal, a company that processes and supplies leaf tobacco and plant-based ingredients to manufacturers worldwide. Unlike Altria, Universal doesn’t actually sell finished product to wholesalers; it is further down the supply chain and produces what amount to ingredients to create final products. This still ties Universal’s fortunes very closely with those that do sell the final products, but Universal isn’t beholden to a single brand name or product succeeding for this reason. Universal was founded in 1886, employs 9,000 people, generates $2 billion in annual revenue, and trades with a market capitalization of $1.2 billion. Universal’s dividend increase streak is currently 50 years. In addition, its dividend yield stands at 6.1%. Universal’s most recent earnings were reported on November 3rd, 2021, and results were strong compared to the same period a year ago. Total revenue came to $450 million, which was 22% higher than last year’s Q2, and gained 16% for the first half of the year. Last year’s comparable period was heavily impacted by the pandemic, but those conditions have normalized, resulting in what is certainly an unsustainable level of sales growth. Earnings-per-share came to 66 cents on an adjusted basis in Q2, which puts first half earnings at 96 cents per share. We currently expect $4.40 in earnings-per-share in fiscal 2022. Universal doesn’t face a huge amount of competition given its industry has been in decline for many years. As the demand for cigarettes and other tobacco products continues to wane, the need for tobacco leaf wanes as well. That means new entrants aren’t attracted to compete with Universal, and that means the need for constant investment doesn’t exist. Universal, therefore, has strong cash flows it can return to shareholders. The payout ratio stands at 71% for this year, which we find to be quite safe given the company’s stable earnings. We don’t see a huge amount of payout growth on the horizon given the structural challenges a tobacco leaf provider faces, but for the foreseeable future, we think Universal’s dividend will be reliable. High-Yield Dividend King: Northwest Natural Holding Company (NWN) Our final stock is Northwest Natural, a regulated natural gas utility based in Oregon. The company serves 2.5 million natural gas customers in 140 communities. It was founded in 1859, employs 1,200 people, generates about $830 million in annual revenue, and its market capitalization is $1.4 billion. Northwest’s dividend increase streak stands at 66 years, and its current yield is 4.2%. The company reported its most recent results on November 5th, 2021, and results were well ahead of expectations on both the top and bottom lines. Northwest reported revenue that grew 8.7% year-over-year to $101 million during the seasonally weak quarter. Northwest also added 12,000 new metered connections, and reaffirmed guidance for $2.40 to $2.60 in earnings-per-share for this year. Like other regulated utilities, Northwest enjoys what amounts to a monopoly in its service area. This allows it pricing power and high margins, as well outstanding recession resilience. That helps dividend safety, which we give the highest marks to Northwest for given its 66-year dividend increase streak. The payout ratio stands under 80% for this year, and we see that as plenty safe given the utility’s very stable and predictable earnings profile. Final Thoughts Investors with capital to invest today would do well to start with the Dividend Kings when making a dividend stock investment. We like the Dividend Kings for their inherent recession resistance, and dividend longevity. However, Altria, Universal, and Northwest Natural offer those benefits in addition to very strong current dividend yields.
Apple’s Near a $3 Trillion Market Cap: Is it Right for You?

Apple’s Near a $3 Trillion Market Cap: Is it Right for You?

Dividend Power Dividend Power 22.12.2021 12:55
Apple’s Near a $3 Trillion Market Cap: Is it Right for You?   Apple (AAPL) is one of the best innovative tech companies around. However, its market cap is getting close to the $3 Trillion mark, and people must wonder if this is the right stock to invest in for your future.   Having a slice of the Apple company may do wonders to you. A couple of days ago, Warren Buffett’s stock holdings hit a record of $152 Billion in Apple stock. His investment of $31 billion continues to grow and surpass all his other companies.   Right now, Apple has the largest company by market cap in the world. When Apple’s stock price (AAPL) hits $182.86 per share, the company will have a market cap of $3 trillion. The next largest company would be Microsoft (MSFT), with a market cap of $2.43 billion.   Why Would Investors invest with Apple?   Since November 11th, Apple’s stock price has soared, and investors are trying to get a piece of the pie. This company is no ordinary company. It is a company that runs on innovation and excellence.   During the 4th Quarter, iPhone has increased in revenue 47% year over year to almost $39 Billion. The revenue has increased 29%, up to $83.9 billion. In addition, sales of the services Apple offers like Apple Music, Apple Pay, Apple TV+, and others have increased by over 25%.   For yearly revenue, Apple has reported combined sales of $365.8 billion, which is 33% higher than they took in 2020 at $274.5 Billion with gross margins up to 45%.   Most people think Apple is a company that has the iPhone and Macbook computers. However, this company always creates excellent products for its users that surpass most other companies.   A couple of years ago, Apple created the AirPods. AirPods are a simple Bluetooth earbud that can connect with your device. As of 2020, AirPods brought over $10 billion of revenue. That amount of revenue is more considerable than most tech companies. If you compare this with companies like Twitter (TWTR) or even Netflix (NFLX), you will see AirPods itself can bring in more sales. For instance, Twitter had revenue of $3.74 billion in 2020.   AirPods could be its own stand-alone sound company that brings in more revenue than Bose and JBL combined. That speaks volumes to Apple's products and how each product could be divested as its own company.   Apple is innovating, and you can see this through the new products they are getting ready to launch, such as the Apple Car and an augmented reality/VR set. These innovations give investors confidence that Apple is not just a phone company or computer software. Instead, they create and make more products that will dominate the new sectors.   Is Apple a Risky Investment?   With an almost $3 Trillion market cap and being the largest company in the world, you must wonder if it could all fall apart. That is not something you should worry about. Go to a coffee shop, gym, or mall and look at which devices people use.   Consumers usually use iPhones; they have AirPods in their ears and use MacBooks for business and work. So, it is hard not to see why the company brings in more revenue each year.   In the 4th Quarter of 2021, earnings have gone from $0.73 to $1.24 per share compared to the prior year. This company is working to bring in more revenue while creating value for its customers and shareholders.   If you think Apple is a bit riskier, there are ways to minimize the risk. You could invest in Microsoft (MSFT) as a less risky company. They have a stable subscription style business bringing them up as the second-largest company in the world. It is hard not to put these two companies together.   The other option is to find a nice index fund you can invest in, like VTSAX or VFIAX or another suitable Vanguard Index Fund. They can capture the stock market with less risk associated with owning a more significant portion of a single stock. Often, Apple stock is the number one investment for these index funds since they invest based on market capitalization. In this way, an investor can own Apple as part of a more diversified portfolio.   Is Apple Right for You?   Looking at the finances, you must wonder, is Apple right for me? The company continues to innovate and grow. Apple’s market cap is nearing $3 Trillion, and no one could have thought this was possible even a few years ago. Apple stock is not just a 10 bagger meaning that it is increased ten times but a rare 100 bagger twice over. If an investor had bought Apple stock in 2001 and reinvested the dividends, $10,000 would have turned into over $3.6 million.   In 2018, Apple hit a $1 Trillion market cap. It took two more years to double it. So far this year, the stock price has risen over 30% on top of the 80% the stock price rose in 2020. Now compare that to the S&P500, which has only increased 25%. In 2021.   Apple is a company to invest in at the right price. The company is innovative, has a solid balance sheet, and grows the top and bottom lines. Apple continues to grow behind a brand that means excellence and perfection. People may not always enjoy the price of the products, but you cannot deny they are built with quality and are in high demand.   Author Bio: Dividend Power is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 1.7% out of over 8,182 financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.   Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.   
Estimating Future Stock Returns, June 2021 Update

Estimating Future Stock Returns, June 2021 Update

David Merkel David Merkel 26.09.2021 04:43
Image Credit: All images courtesy of Aleph Blog || Lookout below! I’ll keep this brief, as I’ve said it so many times before. This market is on borrowed time. The only comparable period for this market is from the fourth quarter of 1999 to the third quarter of 2000 — the dot-com bubble, which was another period of speculation fueled by loose monetary policy. Here’s a picture of what price returns were like from that era over the next ten years (but with a 2% dividend yield). And we are touching the sky at present. Though at the end of the quarter, the S&P 500 was priced to return -0.91%/year over the next ten years, at present that value is -1.41%/year. None of these figures are adjusted for inflation. At the recent high of 4,536.95 on September 2nd, the expected return was -1.73%/year for the next ten years. This graph shows how we are touching the sky: The actual line is touching the maximum line. The future line gives an idea of how valuations could normalize over ten years. The Dow 36,000 crowd will get their day in the sun, maybe even this year, or it might not happen until 2035. But even if it hits the level, it’s unlikely that it will stay above that level for most of the rest of the next 10 years. I’ll close with a quote from something I wrote recently: Though interest rates are low, they are not negative. 10-year investment grade bonds are competitive against domestic stocks at this point. Even if you are losing against inflation, you are losing less against inflation than the market as a whole. Same for cash. I don’t think that there is no alternative. Here are the alternatives: Investment grade bonds (market duration)CashValue stocksCyclical stocksForeign stocksEmerging market stocks and bonds So consider the alternatives, and consider hedging. I can’t nuance this anymore, as we are in uncharted waters. We are touching the sky. And I think even as the market falls, value should do well, as it did in 2000-2001. This piece from Bob Arnott at Research Affiliates makes a good case for it. So play it safe; it’s a messy speculative world out there. It wouldn’t take much for it to turn ugly.
GOLD might be boosted with some factors

GOLD might be boosted with some factors

Alex Kuptsikevich Alex Kuptsikevich 11.01.2022 09:56
An active reassessment of the outlook for monetary policy continues in the financial markets, but these changes have so far not moved gold from its position near $1800. The latest gold performance shows that it remains a portfolio diversification instrument, with little correlation to stock indices. Gold has gained for the third consecutive day, almost hitting the $1810 level. Last week the price came under pressure along with stocks, as US government bond yields rose as investors preferred them over precious metals paying no dividends or coupons. Gold also decreased intraday on Monday on a sharp fall in equities. However, buying on declines towards $1785 is well notable in gold. This is another jump around sustained buying. Previously, the areas of notable buying were $1760 in November and December and $1720 in August and September. Even earlier, in March 2021, gold got strong demand on dips to $1680. It is important to note that the higher support levels in gold at the end of last year occurred at the same time as the bond yields were rising, so the correlation between these assets is not direct. Historically, gold is vulnerable to rising long-term government bond yields only in case of a massive risk-off in the markets, which we witnessed in the epicentre of the last two global crises in 2008 right after the Lehman bankruptcy and in 2020 in the first weeks of the official pandemic. If the Fed and other central bankers manage to rein in inflation without causing major market turbulence during the policy normalization period, it could be a good springboard for gold. We have seen a similar example in the last tightening cycle. The first rate hike at the end of 2015 ended a corrective pullback in gold, becoming the starting point for a new six-month-long growth wave. Now the approach of a rate hike could draw attention to gold as a hedge against declines in growth stocks, which have a high sensitivity to interest rate movements. On the technical analysis side, if a new upside momentum in gold forms, it will lead the path to the $2500-2600 area after a 61.8% Fibonacci retracement from the August 2018 to August 2020 growth wave.
Leggett & Platt, Incorporated (LEG) - One Of The Top 3 Dividend Aristocrats Right Now

Leggett & Platt, Incorporated (LEG) - One Of The Top 3 Dividend Aristocrats Right Now

Sure Dividend Sure Dividend 13.01.2022 18:15
Our Top 3 Dividend Aristocrats Right Now Investors looking for dividend longevity and safety could begin their search with the Dividend Aristocrats. This is a select group of just 65 stocks that are components of the S&P 500, and have increased their dividends for at least 25 consecutive years. The Dividend Aristocrats have proven their ability to reward shareholders with excess cash through good times and lean times, but not all are created equal. In this article, we’ll examine our three favorite Dividend Aristocrats right now, based on their strong business models, growth catalysts, and high expected returns. Our first Dividend Aristocrat is Leggett & Platt, a manufacturer of engineered components worldwide. The company specializes in products such as bedding, furniture, flooring, and textiles. It was founded in 1883, generates about $5 billion in annual revenue, trades with a $5.6 billion market capitalization, and recently joined the list of Dividend Kings. Leggett’s competitive advantage is one of scale, mostly, given it operates in a somewhat commoditized business. Leggett has been able to grow its product portfolio into a deep and wide assortment of niche components that have little competition, and it has acquired its way to even more scale over the years. The company grew its earnings-per-share by a very robust 14% annually from 2009 to 2019, but that was on a very low base coming out of the Great Recession. We see the long-run growth rate at 5% annually, which we believe it can achieve through a combination of organic sales gains, acquisitions, and share repurchases. We note that Leggett’s earnings are cyclical and can suffer during recessions, so an economic downturn would likely derail that growth story, at least temporarily. That said, the company has managed to increase its dividend for 50 consecutive years, even during recessions, which indicates its high dividend safety. Leggett’s total expected returns come in at 9.3%, which is comprised of 5% estimated earnings growth, the current 4% dividend yield, and a small change from the valuation. The stock trades at 15.3 times earnings, which is just below our estimate of fair value at 16 times earnings. The stock has pulled back in recent weeks, which has improved the value proposition for buyers today. Archer-Daniels-Midland Company (ADM) Our next Dividend Aristocrat is Archer-Daniels-Midland, a company that procures, transports, stores, processes, and sells agricultural commodities globally. The company sells feed, oilseeds, grains, food ingredients, oils, and much more. Archer-Daniels-Midland was founded in 1902, generates about $82 billion in annual revenue, and trades with a market capitalization of $39 billion. The company’s dividend increase streak is nearly as long as Leggett & Platt’s at 46 years. The company’s primary competitive advantage stems from its very long operating history – which has built industry-leading brand recognition and expertise – but also in scale. Archer-Daniels-Midland sells commodities, so scale is everything, and the company has it. Because it sells commodities that are generally non-discretionary in nature, its recession resistance is quite good. We currently expect the company’s earnings to grow at 6% annually in the coming years, which would be attributable to a combination of slightly higher revenue, better profit margins, and a small measure of share repurchases. We note that Archer-Daniels-Midland has chosen acquisitions over share repurchases, and that’s certainly a possibility in the near future as well. Total returns are expected to be 8.7% annually for the foreseeable future. We see a combination of 6% expected growth, the 2.1% dividend yield, and a small tailwind from the valuation to drive returns to shareholders. Shares are reasonably priced today, going for 14.3 times earnings against our estimate of fair value at 15 times earnings. This, despite the fact that the stock has rallied strongly in the current environment of inflationary worries, and the stock having hit a new all-time high. Becton, Dickinson and Company (BDX) Our final stock is Becton, Dickinson and Company, which manufactures and sells medical supplies, medical devices, lab equipment, diagnostic products, and other related products. It sells to healthcare institutions, physician offices, researchers, laboratories, pharmaceutical companies, and consumers globally. Becton was founded in 1897, generates just under $20 billion in annual revenue, and trades with a market capitalization of $75 billion. The company also has a 50-year streak of dividend increases. Competitive advantages are tough to come by in the sector where Becton competes, mostly because the one-time-use products and other equipment the company sells are highly commoditized. However, the company helps differentiate itself with its more specialized diagnostic products and medical devices. Still, investors should be aware competitive advantages in this sector are more difficult to achieve. The company has shown impressive earnings growth in the past, and we expect that to continue. We see 10% annual earnings-per-share growth accruing in the coming years, stemming from a combination of organic sales growth, acquisition-driven top line gains, and modest share repurchases. Becton is definitely more of a revenue growth story, which it produces on its own, but it has also proven willing and able to acquire its way to growth. The company’s diagnostic business saw a sizable spike from COVID-19, but that has begun to wane. Still, we see its strong portfolio of diagnostic products as helping to drive growth in 2022 and beyond, after COVID-19 conditions have somewhat normalized. Total projected returns are 8.5%, which we see as being driven by a combination of strong 10% earnings-per-share growth, the relatively modest 1.3% dividend yield, and a headwind from the valuation. Shares go for 21 times earnings against a fair value estimate that is below 19 times earnings, so we see the stock as having gotten ahead of earnings growth slightly. Final Thoughts The Dividend Aristocrats offer a terrific starting point for an income investor looking for a high-quality dividend stock. All Dividend Aristocrats have proven their ability to generate reliable cash flows and return them to shareholders in growing amounts every year, irrespective of economic conditions. However, the three we’ve identified here – Leggett & Platt, Archer-Daniels-Midland, and Becton, Dickinson – have superior fundamentals to the rest of the group. All three Dividend Aristocrats offer strong total annual returns, dividend increase streaks of at least 46 years, reasonable valuations, and favorable growth outlooks.
Tech Stocks: (MSFT) Microsoft Stock, Facts About Microsoft

Tech Stocks: (MSFT) Microsoft Stock, Facts About Microsoft

Dividend Power Dividend Power 24.01.2022 15:51
As stocks have trended higher, especially the tech stocks, soared in 2021, we must be reminded that Microsoft is once again one of the top companies in the world by market cap. Apple is number one in the world by market cap, and Microsoft continues to be right behind them. In October of 2021, Microsoft had bypassed Apple as the largest company by market cap globally, but Apple soon passed them once again. Microsoft is not the same old company we had known back when Bill Gates was in charge. They have changed and have created a more diverse brand and product portfolio leading that change. Bill Gates stepped down as CEO in 2000 and officially left his full-time role in Microsoft in 2008. Since then, Microsoft has diversified its portfolio to include many more products, including gaming, cloud services, and making Office more business-friendly. Microsoft under Gates was known for two big things: Microsoft Office and Windows; that was the entire portfolio. Satya Nadella, the current CEO of Microsoft, has revolutionized the software company and has made it a software company with a vision of working with businesses, making gaming a priority, and expanding Azure, its cloud network. How Does Microsoft Make Money? A diverse portfolio of many more products allowed Microsoft to branch out from only MS Office and Windows software and adapt to software technology's future. Microsoft has adapted to the world of sales in its subscription-based software model. They sell their Microsoft Office products to businesses and consumers, creating a pay-as-you-go subscription-based business model. Productivity and Business In 2020, Microsoft Office made a significant amount of their revenue from subscription-based software compared to 0% in 2000. MS Office at one point brought close to half of the revenue in 2000, but Office is not even 25% of the revenue that Microsoft takes in now, having over $35 billion in revenue each year. The new software has been revolutionizing businesses. First, they pay for Microsoft Office, and with that, they get Microsoft OneDrive, Teams, and Dynamics. Teams is just a fancy business video chat software like Zoom Video Communications (ZM), but you can only have Teams with Microsoft business accounts. Dynamics is another software that helps with business computing. It helps with business efficiency and works with customer relationship management or CRM, but it is not one of the top competitors to Salesforce (CRM). However, it has over $3 billion in revenue. Windows continues to be one of the most widely used software globally. That domination is starting to penetrate other parts of their customers giving them opportunities to dominate other businesses. With the subscription-based model, they will continue to bring in significant revenue, earnings, and cash flow. Before the proposed acquisition of Activision Blizzard (ATVI), LinkedIn was Microsoft's largest acquisition. It came in at $26 billion in 2016. Today, LinkedIn makes over $8 billion annually in revenue, up from the $3 billion pre-acquisition. LinkedIn has no major competitors and creates most of its money from job offer advertisements, other advertisements, and cash for LinkedIn premium. The Cloud Cloud software has become a bigger space for companies. It has led Microsoft to enter the space and business opportunities through the Azure Cloud system. Microsoft has thus gained a foothold in the cloud space. Azure Cloud system by Microsoft came out in 2009, and in 2021 the platform had become the second-largest cloud-based service in the world behind Amazon Web Services (AWS). With the cloud service, Microsoft's revenue grew by 48% in quarter 3 of 2021. It has reached a 21% market share and continues to gain more traction in the cloud space.   Azure consists of public, private, and hybrid cloud service products that help to power modern businesses. Dynamics and Azure are contributing to over 31% of Microsoft's revenue. In addition, customers are reaping many benefits through the cloud as it enhances the user experience with Microsoft products. The Gaming Industry Microsoft is becoming one of the leaders in the gaming industry. The Xbox is leading the charge with gaming, and Microsoft just made a deal to acquire Activision Blizzard for $69 Billion; if government regulators approve the sale, this acquisition will occur in 2023. The purchase would make Microsoft one of the largest gaming companies in the world. They would then own games like Call of Duty, War of Warcraft, and Candy Crush. In addition, making the deal would put them behind Sony and China's Tencent as a top-three gaming company globally. Microsoft is putting their company in a position to take on the Metaverse. Apple (APPL), Google (GOOG), Meta (FB), and Microsoft are creating technologies for the Metaverse. Satya Nadalla has emphasized that gaming technologies are part of the Metaverse. Is Microsoft a Good Stock to Buy? If we look at the price-to-earnings (P/E) ratio, we end up with an overvalued stock compared to Apple and Google. The P/E ratio is 32.0X, making it a bit more overvalued than Apple, which is trading at a valuation of 28.5X, as of this writing. They are close in the P/E ratio, but you would like to see the P/E ratio lower as an investor. Microsoft is a dividend growth stock that has raised the dividend for 19 consecutive years. The most recent quarterly dividend increase was $0.62 per share from $0.56 per share. The forward annual payout is now $2.48 per share with a conservative payout ratio of about 27%. The question is whether the hype of Microsoft is worth a buy as this company continues to create a diverse portfolio moving from one business to another. You can see the company dominating competitive markets like gaming and cloud systems. It has also innovated different types of software to help other businesses. Microsoft's future looks excellent if you are an investor, but the stock is likely overvalued based on the P/E ratio. In addition, the dividend yield is low at 0.84%. This value is less than the average dividend yield of the S&P 500 Index. Suppose individual stocks are too risky for you. In that case, an alternative is to try an excellent ETF or even a tech ETF to gain exposure to Microsoft and other overvalued tech companies. In many cases, ETFs are market cap-weighted, and Microsoft is one of the top holdings. You can always own a piece of Microsoft, Apple, Google, and Meta through an excellent ETF like an S&P 500 ETF. Microsoft is also a top 10 holding in some of the best dividend growth ETFs. These index funds will help you own a selection of some of the most profitable and most prominent companies in the US. Author Bio: Dividend Power is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, Entrepreneur, FXMag, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 1.5% (126 out of over 8,212) of financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 
The Synthetic Dividend Option To Generate Profits

The Synthetic Dividend Option To Generate Profits

Chris Vermeulen Chris Vermeulen 24.01.2022 23:01
Many companies regularly distribute a portion of their profits in the form of a dividend to attract investors and incentivize them to remain long-term shareholders. But most companies, ETFs, and commodities don’t pay a dividend at all. When there’s no dividend, the only opportunity for income or a profit comes from a capital gain (or loss) from selling the position.Wouldn’t it be nice to get regular payouts from “no dividend” investments? As a dividend, these payouts could be used for income. Or, if left invested, our cost-basis could be further reduced with every payout.A Commodity ETF ExampleWhile the strategy presented here can work on any stock or ETF that has options, it works best with relatively lower-priced products under about $25. A commodity ETF such as SLV – currently trading around $22 a share -- is an ideal candidate.Like gold, silver has historically been used as a physical store of wealth and a hedge against inflation. But long-term charts on gold and silver show that these products often go sideways for a long time before having a significant move. Historically such investments have required buying, holding, and waiting – sometimes for a very long time.One way to compensate for the lack of a dividend on silver is to purchase shares of SLV and write Call options against those shares.  This is a relatively simple options strategy of writing “Covered Calls”.   Two Ways to Open the TradeWe want to buy low and sell high by purchasing shares on weakness and selling Calls on strength. We can also sell Puts on weakness as an alternative to purchasing shares. The Profit and Loss graph of selling a Put is the same as for selling a Covered Call.If we sell Puts, we’ll likely have shares “Put” to us at some point and will then own the shares at the strike price we sold minus the premiums collected. Having shares put to us at a reduced cost basis is part of the plan. When we sell an Out-of-the-Money (OTM) Put, we’re methodically nudging the statistics in our favor by “buying low” when there is a pull-back in the underlying. We can alternately think of selling a Put as a Limit Order to buy shares with the limit price equal to the strike price we sold.When shares are “Put” to us, we then sell Calls against the shares we now own. And the cost (or basis) of the shares we purchased will have been reduced by the cumulative option premium collected by selling Puts.Trade ManagementWe may not have a great opportunity to sell option premium in every possible cycle. There will likely be times where the underlying will be in a pullback, and we may want to wait for the price to recover before selling Calls. Actual expiration cycle outcomes are likely to be a mix of having Calls expire worthless in some cycles and having shares called away in other cycles.Writing Covered Calls is a relatively low-maintenance strategy that doesn’t have to be watched continuously. Once we write Calls, the shares will either be called away or not. But we do have to be patient and let time decay in the options we sold work for us.Sign up for my free trading newsletter so you don’t miss the next opportunity! If the Calls we sold expire worthless, we still own the shares. In this case, we sell Calls again for some future expiration cycle and collect more option premium.If our Calls expire In-the-Money (ITM), the Calls will be exercised, and the shares will be called away. The shares are purchased by our counterparty at the strike price we sold, and we no longer own the shares. As the Call seller, we keep the premium and any gain on the shares. In this case, we start the process again by buying shares or selling Puts.Upside and Downside RisksWriting Covered Calls (and selling Puts) is a neutral to bullish strategy. There can be sustained downtrends, price shocks, and changes in volatility that can affect strategy performance. As with any strategy, it’s important to ask and understand “What could possibly go wrong?” before getting involved.There’s always a tradeoff when selling Covered Calls. In exchange for collecting option premium, profit is limited to the amount of premium collected plus any appreciation in shares up to the strike price. For that reason, I tend to sell Out-of-the-Money (OTM) Calls.Keeping probability in our favor and letting time decay work for us are benefits of selling a Covered Call (or Put). As option sellers, we don’t need large up moves to make a profit. We have the statistical odds in our favor and option time decay working for us. The underlying share price can go up, sideways, or even down a bit, and we can still profit. The “Synthetic Dividend” is one of my favorite ways to generate repeatable profits.What Else Is There To Know About Options Trading?Every day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
5 Interesting Energy Stocks added to our Watchlist this Quarter

5 Interesting Energy Stocks added to our Watchlist this Quarter

Invest Macro Invest Macro 02.12.2021 10:12
December 1, 2021 The fourth quarter of 2021 is approximately two-thirds over and we wanted to highlight some of the Top Energy Companies that have been analyzed by our QuantStock system so far. Our QuantStock system is a proprietary algorithm that takes into account key company fundamentals, earnings trends and other strength components to find quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. The QuantStock system does not take into consideration the stock price or technical price trends so one must compare each company idea against the current stock prices. There are a plethora of professional studies that continue to show stock markets are overvalued and this is always a key component to consider when researching any stock market idea. As with all investment ideas, past performance does not guarantee future results. Suncor Energy Energy Stock | Medium Cap | 5.42 percent dividend | 15.22 P/E | Our Grade = C+ Suncor Energy Inc. (NYSE: SU) is one of Canada’s biggest energy stocks. It is an integrated energy company engaged in producing synthetic crude from oil sands. Suncor last announced its financial results for the third quarter on October 27. It came up with earnings of 56 cents per share and revenue of $8.11 billion for the three months ended September 30. The results showed significant improvement from the comparable quarter of 2020 but missed the consensus forecast of 58 cents per share for profit and $8.5 billion for revenue. Despite missing expectations, Suncor Energy stock climbed to a new high of $26.97 earlier this month. Matador Resources Co. Energy Stock | Small Cap | 0.51 percent dividend | 16.78 P/E | Our Grade = C- Matador Resources Co. (NYSE: MTDR) is an energy company based in Texas, United States. The company last month announced impressive financial results for the third quarter. Matador earned $1.25 per share during the three months ended September 30, beating the consensus forecast of 96 cents per share. Moreover, it generated revenue of $472.351 million during the quarter, ahead of analysts’ average estimate of $387.950 million. In addition, Matador stock has also performed exceptionally well so far in 2021. The company’s share price has skyrocketed more than 200 percent on a year-to-date basis. The 52-week range of the stock is $10.16 – $47.23, while its total market value stands close to $4.5 billion. Magnolia Oil & Gas Corp. Energy Stock | Small Cap | 0.84 percent dividend | 11.29 P/E | Our Grade = C- Magnolia Oil & Gas Corp. (NYSE: MGY) is another Texas-based oil producer. The company posted solid financial results for the third quarter earlier this month. Magnolia reported adjusted earnings of 67 cents per share on revenue of $283.58 million. The results easily surpassed analysts’ average estimate of 61 cents per share for earnings and $274 million for revenue. If we quickly look at its key financial metrics, Magnolia stock is currently trading around $18.82, against its 52-week range of $18.38 – $19.07. Moreover, the company’s market value is just over $3.4 billion, while its P/E ratio stands at 11.03. China Petroleum & Chemical Corp. Energy Stock | Medium Cap | 10.26 percent dividend | 3.71 P/E | Our Grade = C China Petroleum & Chemical Corporation (NYSE: SNP), commonly known as Sinopec, is a leading oil and gas company based in China. Besides its listing in the New York Stock Exchange, it also trades in Hong Kong and Shanghai. Sinopec last month announced mixed results for the third quarter. Its reported earnings of $2.64 per share, representing a sharp decline from $5.54 per share in the comparable period of 2020. On the positive side, its revenue for the third quarter grew over 52 percent to $114.58 million. If we look at its share price, Sinopec stock has struggled to gain value so far in 2021. The stock has only increased nearly one percent on a year-to-date basis. Petróleo Brasileiro S.A. Energy Stock | Medium Cap | 19.49 percent dividend | 2.71 P/E | Our Grade = C Petróleo Brasileiro S.A. (NYSE: PBR) is one of the leading energy stocks based in Rio de Janeiro, Brazil. The company, also called Petrobras, is engaged in the exploration and production of oil and natural gas. Petrobras last released its quarterly financial results on October 28. The company reported earnings of $5.9 billion for the third quarter, down 26.9 percent from Q2 but significantly higher than the comparable period of 2020. In addition, its quarterly revenue of $23.3 billion was also well above $13.15 billion in the year-ago period. If we talk about its share price movement, Petrobras stock hasn’t performed well this year. The stock is still down nearly six percent on a year-to-date basis. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list.
STX, RJF and BX were added to our Stock Market Watchlist in January

STX, RJF and BX were added to our Stock Market Watchlist in January

Invest Macro Invest Macro 09.02.2022 22:39
The first quarter of 2022 is underway and it is time to highlight some of the top companies that have been analyzed by our QuantStock Fundamental system so far. Topping the list are three well-known companies, one in technology and two from the financial services side of the market with all three companies paying out dividends to investors. Our QuantStock Fundamental system is a proprietary algorithm that examines each company’s fundamental metrics, trends and overall strength to pinpoint quality companies. We use it as a stock market ideas generator and to update our stock watchlist every quarter. However, be aware the QuantStock Fundamental system does not take into consideration the stock price or technical price trends so one must compare each idea with their current stock prices. Many studies are consistently showing overvalued markets and that always has to be taken into consideration with any stock market idea. As with all investment ideas, past performance does not guarantee future results. Be sure to join our email newsletter for our system updates. Here we go with our 3 of our Top Stocks we added to our Watchlist from January 1st through January 31st of 2022: Seagate Technology Information Technology, Medium Cap, 13.8 P/E, 2.50+ Percent Dividend, Our Grade = B Seagate Technology (STX) has ascended our grading threshold to be included on the watchlist for the second consecutive quarter. STX is an information technology company headquartered in Ireland that specializes in technology hardware, storage devices and other cloud storage services. Highlighting their fundamental case over the past two quarters has been a rising earning per share (beating expectations three quarters in a row) as well as a rising dividend that is currently above 2.50 percent. On a technical basis, the STX price has been volatile since the beginning of the year like most other tech stocks. STX hit a low share price under $92.00 on January 25th but has rallied since to over $110.00 per share at time of writing. Raymond James Financial Inc Financials, Medium Cap, 15.84 P/E, 1.15+ Percent Dividend, Our Grade = B- Raymond James Financial INC (RJF) is next up and a well known financial company that has also made our watchlist for the second straight quarter. RJF, a medium-cap company ($28+ billion) is headquartered in Florida and provides financial services to investors and corporations throughout the US, Canada and Europe. RJF currently trades at an approximate 15.5 PE-Ratio and has had higher earnings per share for three straight quarters, beating earnings per share expectations in all three quarters as well. The dividend has continued on a growth path with the current quarterly dividend at approximately 1.15 percent at time of writing. Technically, the RJF share price has been surging higher recently and currently trading around the $115.00 price point at time of writing. In the short term, the stock is on the higher side of its trading range as evidenced by the ZScore of the 50-day moving average (2.38 standard deviations above the 50-day moving average currently). Blackstone Inc Financials, Large Cap, 15.8 P/E, 3.80+ Percent Dividend, Our Grade = C Blackstone Inc (BX) was added to our watchlist for the first time in January and is a financial large cap company ($154+ billion) located in New York, New York. BX provides global asset management services to investors, pension funds and institutional clients across a broad range of markets including real estate, bonds, equities and various credits. Blackstone’s stock is currently trading at a 15.8 Price/Earnings Ratio and the company has had earnings per share growth each of the past three quarters, beating expectations each time. The dividend has been on an upward trajectory with the current yield surpassing the 3.80 percent threshold at current prices. Technically, the BX share price has been on the rebound recently after dropping in late January to a low of $101.65. The stock has bounced back strong to a current price of above $130.00 per share and trading right above a support level. Article by InvestMacro – Be sure to join our stock market newsletter to get our updates and to see more top companies we add to our stock watch list. Disclaimer: I currently own STX, RJF and BX stock at this time in ETFs and/or Closed-End Funds. I do not own direct shares of these companies at time of writing. This article and our system grading are for informational and educational purposes only, not a recommendation to buy, sell or hold shares of any particular stock, ETF, company or security. All investors are always strongly advised to conduct their own independent research into any stock, ETF, closed-end fund or any other financial instrument before making an investment decision. Investmacro.com authors are not registered investment advisors, do not make stock market recommendations, do not offer legal advice, do not offer tax advice and cannot be held liable for any losses occurred. All data is thought to be accurate as of time of writing but can and will change over time due to changes in the underlying securities price and data.   
Alphabet (GOOGL) To Split Its Stocks (20:1) The Simplest Question Is... Why?

Alphabet (GOOGL) To Split Its Stocks (20:1) The Simplest Question Is... Why?

Dividend Power Dividend Power 14.02.2022 15:34
Recently, Google (GOOGL) announced that it would conduct a stock split. Inspired by an excellent 4th quarter earnings report and a high share price, Google has decided to split the stock to help more new investors acquire shares. The split would be a 20-for-1 stock split. How Has Google Grown Over the Years? In 2015, Google rebranded itself into the Tech giant Alphabet. Larry Page sought to make Google something more than a search engine. The company had ambitions of working on healthcare, hardware, and drones, which was a bit different from having a search engine-focused business. It would help create something more than the internet. So, Google changed its name and vision to the holding company Alphabet, allowing them to create, experiment, and invest in new opportunities. People continue to see the growth in a stock like Alphabet. After the 4th quarter, Alphabet announced their earnings, which grew over 32%. This revenue growth sent the stock soaring another 7.5% in after-hours trading. Due to the continued growth of Alphabet, their stock has become too pricey for everyday retail investors. A split can solve the problem. For instance, both Apple (AAPL) and Telsa (TSLA) split their stock allowing more investors to buy at lower prices. In addition, splitting their stock to lower the cost enables new investors to jump on board and become owners of the company. Alphabet has three classes of stock, class A, B, and C. Class A gives each shareholder one vote. Class B is for some of the founders and early investors into the company, and they have ten votes per share. Lastly, Class C has no votes. Each of these classes will conduct a stock split. One of the great things about Alphabet is that it continues to grow. Since May of 2020, Alphabet's value has doubled. Earlier this year, Alphabet posted a 62% revenue growth for the 2nd quarter. Right now, the company is worth just shy of $2 trillion, making it one of the world's largest companies by market cap. So naturally, investors want to be a part of a growing company. A stock split allows more people to be invested for the long term with Alphabet. What Exactly is a Stock Split? A stock split is when a company splits a stock dividing it up and giving the shareholder additional shares. For instance, if a share of stock was worth $1,000, a company could do a 10-for-1 split. This split would give each shareholder ten shares for every share they currently own. Each share would now be worth $100 apiece. However, the total market capitalization does not change before or after the split. Companies may split the stock when the share price rises too quickly, making it unattainable for new customers to hold that share. The price gets too high. Why is Alphabet Splitting Its Stock? Alphabet is the most expensive stock on a per share basis in Silicon Valley, and there are other opportunities to explore as an investor. Alphabet's stock is nearly $3,000 per share. At this stock price, many new investors cannot own a part of Alphabet unless they go the route of fractional shares or do index investing. Other authors have speculated that Alphabet is seeking to join the Dow Jones Industrial Average. The Dow Jones is a price-weighted index, and with the high price of Alphabet stock, the Index would not want to bring them on board. In August of 2020, Apple did a 4-for-1 split of their stock, and it lowered their weight by about 3% in the Dow 30. Companies like Alphabet and Amazon are too large to be added into the Dow. Their stock prices would have an uneven weight due to the high cost. If those companies split their stock to lower prices, it gives them more advantages, and they can join the Dow 30. As Alphabet wants to continue to grow, it will want to add new investors and reach broader audiences. By potentially joining the Dow 30, Alphabet can make this happen by going through the various index funds and mutual funds that track the Dow Jones. Will the Split Affect the Value of the Stock? What happens when a split is announced? The total value of the shares will not drop. Instead, the new stock price will fall by 1/20th of the old stock price. Typically, shares increase in aftermarket trading like we saw the day after Alphabet announced the split. The total value will not be reduced in any way after the stock split. Each Class A and Class B shareholder will now have more votes but in the same proportion as before the split, and the Class C shares will continue to be the cheapest avenue to owning a piece of Google. When Will This Stock Split Take Place? Alphabet has announced that everyone that owns sarees on July 1st will receive their new shares on Friday, July 15th. That price should be around $150 per share, which is 1/20th of the cost of $3,000. The trading at the new stock price will take place on July 18th. What Does This Mean for the Regular Investor? Typically, a stock split is neither good nor bad. The stock will usually rise with the new interest from investors, and eventually, the buzz will fade away. However, if this is a worry for you as an individual shareowner, then maybe owning an index fund or ETF is the way to go for you to improve diversification. As Alphabet grows, it will continue to grow its revenue streams and bring more value to the shareholder. Growth is an excellent thing for an investor. We see many companies declining, like GE (GE) or even AT&T (T). For instance, AT&T (T) cut its dividend due to continued weakness and a change in strategy. As companies like Apple, Microsoft, and Alphabet continue to innovate and create, investors will want to be a part of the journey as shareholders. Should you worry about Google's stock split? Again, there is nothing to worry about; just keep to your investing strategy and keep investing. Author Bio: Dividend Power is a self-taught investor and blogger on dividend growth stocks and financial independence. Some of his writings can be found on Seeking Alpha, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, Entrepreneur, FXMag, and leading financial blogs. He also works as a part-time freelance equity analyst with a leading newsletter on dividend stocks. He was recently in the top 1.5% (126 out of over 8,212) of financial bloggers as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha. Disclaimer: Dividend Power is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money. 
Bullish momentum remains strong

Bullish momentum remains strong

Florian Grummes Florian Grummes 20.02.2022 17:36
Even at the last important low (US$$1,750) on December 15th, 2021, the sentiment was still awful as the sector had become the most hated asset class. Now fast-forward, gold has been successfully breaking out of its multi month triangle and keeps sprinting higher. The bulls currently are bending the daily and weekly Bollinger Bands to the upside, and seasonality is still supportive.Gold in US-Dollar, weekly chart as of February 20th, 2022.Gold in US-Dollar, weekly chart as of February 20th, 2022.Looking at the weekly chart, it appears that gold not only broke out of a triangle consolidation pattern, but also out of a large inverse head and shoulder pattern. It’s not a textbook head and shoulder, but worthwhile noting. A measured move projection could theoretically take gold towards US$2,125! However, the monthly Bollinger Band, sitting at around US$ 1,975, might be a much more realistic target for the ongoing move. As you might remember, the zone between US$1,950 to US$1,975 is very strong resistance. We would not rule out a short-lived overshoot towards US$,2000, though.Overall, the weekly chart is not yet overbought and looks bullish. Hence, the rally has very good chances to continue for a few more weeks.Gold in US-Dollar, daily chart as of February 20th, 2022.Gold in US-Dollar, daily chart as of February 20th, 2022.As expected, the breakout above US$1,840 to US$1,850 has unleashed enough energy to quickly push gold prices towards the round psychological number of US$1,900. Fortunately, the daily stochastic has transformed its overboughtness into the rare “embedded status”, where both signal lines are sitting above 80 for more than three days in a row. Hence, the uptrend is locked-in and shorting this market would be fighting the uptrend.Of course, given the uncertain and complex geopolitical situation, events can and likely will strongly influence gold over the coming days and weeks. Speaking from a technical point of you, any pullback towards the breakout zone around US$1,845 would be a buying opportunity. However, prices below US$1,875 would already be a surprise in the short-term. On the contrary, it’s much more likely that gold will continue its run to at least US$1,930 over the coming days.In summary, the daily chart is bullish. Especially the bullish embedded stochastic oscillator likely will not allow any larger pullback, but rather a consolidation around US$1,900. Watch those two signal lines. Only if one of them would be dropping below 80on a daily close, the bull run might be over!GDX (VanEck Gold Miners ETF) in US-Dollar, daily chart as of February 20th, 2022.GDX, daily chart as of February 20th, 2022.Gold & gold related mining stocks often stabilize your portfolio during uncertain times and do act as a hedge. While the stock market continued its dive due to the crisis in Ukraine and the potential interest rate turnaround in the US, the GDX VanEck Gold Miners ETF is up more than 21.5% since its low in mid of December. Over the last two weeks, the leading gold mining stocks recorded some of their best days in the last 12 months. Last week, Barrick Gold ($GOLD) jumped up more than 7% due to good earnings, a dividend increase, and a new share repurchase program. Some smaller gold stocks like Sabina Gold & Silver ($SGSVF) went up even more (+15% Friday, 11th).Now that gold is on the rise, it’s time for the beaten down and undervalued mining stocks to catch up. Usually, it starts with the big senior produces like Barrick Gold, Agnico Eagle Mines ($AEM) and Newmont Corporation ($NEM), then the juniors like for example Victoria Gold Corp. ($VITFF) join and finally, the explorer and developers literally explode higher.However, the GDX has nearly reached its downtrend line as well as the 38.2% retracement of the whole corrective wave since August 2020. Hence, the big miners are running into string resistance and might need to consolidate soon.At the same time, note, that silver has been lagging. Silver always lags most of the time, but in the final stage of sector wide rally it suddenly passes all the other metals and shots up nearly vertically. That also typically is the sign that the rally in the sector is coming to an end. Obviously, we have not yet seen any strong silver days. Therefore, silver actually confirms that the sector has more room and time to run higher!Conclusion: Bullish momentum remains strongOverall, gold continues to look promising here as the bullish momentum remains strong. Hence, Gold is probably on the way towards US$1,950 and US$1,975, with a slight chance for an overshot to US$2,000. But of course, given the rather overbought daily chart, the risk/reward is not that good anymore. Silver and many of the smaller mining stocks, however, might still offer a chance to play the ongoing rally over the next few weeks. Once gold tops out in spring, expect a big pullback. Maybe even back towards the higher trending 200-day moving average (currently at US$1,808) at some point in midsummer. But that is all somewhere in the future. For now, the bullish momentum remains strong.Feel free to join us in our free Telegram channel for daily real time data and a great community. If you like to get regular updates on our gold model, precious metals and cryptocurrencies you can also subscribe to our free newsletter.Disclosure: Midas Touch Consulting and members of our team are invested in Reyna Gold Corp. These statements are intended to disclose any conflict of interest. They should not be misconstrued as a recommendation to purchase any share. This article and the content are for informational purposes only and do not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. The views, thoughts and opinions expressed here are the author’s alone. They do not necessarily reflect or represent the views and opinions of Midas Touch Consulting.By Florian Grummes|February 20th, 2022|Tags: $GDXJ, Barrick Gold, GDX, Gold, Gold Analysis, Gold bullish, gold chartbook, gold fundamentals, Newmont Corporation, precious metals, Reyna Gold, Sabina Gold & Silver, Silver, silver bull, US-Dollar, Victoria Gold|0 CommentsAbout the Author: Florian GrummesFlorian Grummes is an independent financial analyst, advisor, consultant, trader & investor as well as an international speaker with more than 20 years of experience in financial markets. He is specialized in precious metals, cryptocurrencies and technical analysis. He is publishing weekly gold, silver & cryptocurrency analysis for his numerous international readers. He is also running a large telegram Channel and a Crypto Signal Service. Florian is well known for combining technical, fundamental and sentiment analysis into one accurate conclusion about the markets. Since April 2019 he is chief editor of the cashkurs-gold newsletter focusing on gold and silver mining stocks. Besides all that, Florian is a music producer and composer. Since more than 25 years he has been professionally creating, writing & producing more than 300 songs. He is also running his own record label Cryon Music & Art Productions. His artist name is Florzinho.
3M Stock (MMM), ABM Industries Incorporated (ABM) And Stanley Black And Decker, Inc. (SWK) Are In Focus In Monthly Top 3 Dividend Kings

3M Stock (MMM), ABM Industries Incorporated (ABM) And Stanley Black And Decker, Inc. (SWK) Are In Focus In Monthly Top 3 Dividend Kings

Sure Dividend Sure Dividend 24.02.2022 07:23
The Top 3 Dividend Kings Now Investors looking for the best place to put their hard-earned capital would do well to consider those companies that have the longest dividend increase streaks. There are plenty of lists and groups to categorize companies with dividend increase streaks, but the best of the best in terms of dividend longevity is certainly the Dividend Kings. This is a group of just 40 stocks that have all increased their dividends for at least 50 consecutive years, making them truly in a class of their own on that measure. These companies have stood the test of time in terms of economic conditions and competitive threats to produce reliable earnings growth. Importantly, that earnings growth is shared with shareholders via rising dividends over time. In this article, we’ll take a look at three Dividend Kings we like today for their dividends and long-term total return potential. Our first stock is ABM Industries, a company that provides integrated facility solutions primarily in the US, but it operates internationally as well. The company operates a number of segments, and through those it provides janitorial, facilities engineering, parking, custodial, landscaping, vehicle maintenance, and mechanical and electrical services. ABM was founded in 1985, employs 124,000 people globally, generates $7.5 billion in annual revenue, and trades with a market cap of $2.9 billion. ABM’s dividend streak stands at 54 years, but the combination of strong earnings growth and relatively smaller dividend increases has produced a payout ratio of just 23% for this year. That gives ABM exceptional dividend safety, particularly since it’s actually fairly recession resistant. ABM operates mostly essential services, so recessions have some impact on earnings, but for instance, the 2020 recession actually saw higher earnings year-over-year. The current yield is 1.8%, about 0.5% better than that of the S&P 500. We expect 5% earnings-per-share growth in the coming years, which we see as driven mostly by revenue growth, with the small potential for margin gains. ABM doesn’t buy back stock in any sort of meaningful quantity. The stock trades for just 12.5 times this year’s earnings estimates, which is nearly the lowest valuation the stock has had at any point in the past decade. It is also well under our fair value estimate of 17.5 times earnings. That could provide a nearly-7% tailwind to total returns in the coming years should it revert to that valuation. That puts total return potential at a very impressive 13.5% for ABM, which is why we rate it a buy. 3M Company (MMM) 3M is an engineering company that operates globally, providing consumers and businesses with an enormous variety of thousands of largely disposable products. 3M offers abrasives, autobody repair solutions, hygiene products, masks, packaging materials, respiratory, hearing, eye and fall protection, and much more. The company was founded in 1902, employs 95,000 people worldwide, generates $37 billion in annual revenue, and trades for a market cap of $84 billion. 3M’s dividend streak is world-beating at 63 years, putting it in rare company even among the Dividend Kings. The company’s payout ratio has climbed in recent years, but still remains below 60%. Given 3M’s recession resistance and reliable earnings, that is plenty safe in our view. The current yield of just over 4% is exemplary as well, more than tripling that of the S&P 500. Combined with the safety of the dividend, 3M is truly an outstanding income stock. We see 5% earnings growth in the years to come, which we see as attributable to higher revenue, roughly flat margins, and a small tailwind from share repurchases. The stock trades for 14.4 times this year’s earnings, which is well below our fair value estimate of 19 times earnings, which could provide a total return tailwind of almost 6% annually. In concert with the yield and earnings growth, that could see 3M producing 13.8% total annual returns in the coming years. Stanley Black & Decker, Inc. (SWK) Our final stock is Stanley Black & Decker, a company that designs, manufactures and sells a wide variety of products in the power tools, storage, and security businesses worldwide. The company’s brands include its namesake Stanley and BLACK + DECKER marques, as well as a wide variety of others. It offers products such as power tools, pneumatic tools, fasteners, lawn and garden products, commercial and residential security systems, and more. Stanley Black & Decker was founded in 1843, but has undergone major transformations since then through mergers and acquisitions. Today, it employs 60,000 people, generates $19.5 billion in annual revenue, and trades for a market cap of $26 billion. The dividend streak stands at 54 years, and terrific earnings growth in recent years has put the payout ratio at just 26%. Like the others on this list, the dividend is exceptionally safe and provides a very long runway for dividend increases in the years to come. The current yield is 2%, so Stanley Black & Decker remains a solid income stock when compared to the S&P 500’s yield of 1.3%. In addition, we see 8% earnings growth in the years to come, which will mostly be driven by revenue increases. The company has proven its ability over time to produce strong organic sales growth, in addition to its periodic acquisitions. We also expect a small measure of share repurchases to help boost earnings on a per-share basis. We see fair value at 16.5 times earnings, but shares trade today at just 13 times this year’s earnings. That means we could see a nearly-5% annualized return from the valuation alone. Combined with 8% earnings-per-share growth and the 2% yield, we see total returns at a very robust 14.8% in the years ahead. Final Thoughts We see the Dividend Kings as one of the best places to start a search for one’s next dividend stock purchase. The group has exceptional dividend reliability and longevity, but not all are created equal. The three we’ve highlighted here – ABM, 3M, and Stanley Black & Decker – all offer very low valuations, good yields, and long growth runways. Because of these characteristics, we see total return potential well into the double-digits for all three, and rate all of them a buy.
Rise Of Natural Gas Price (Dutch TTF) Is Incredible

Rise Of Natural Gas Price (Dutch TTF) Is Incredible

Alex Kuptsikevich Alex Kuptsikevich 02.03.2022 15:44
The energy market is very sensitive to fluctuations in supply and demand. For example, a 20% drop in demand in March-May 2020 took away 70% of the oil price at some point. Next, we saw the inverse relationship: a moderate production deficit (even with significant reserves in previous months) was enough to send oil prices to 8-year highs. The same applies to exchange prices for gas. At some point last year, they were approaching $2000 per 1,000 cubic meters, quickly falling back to 800. Today, its value exceeds $2200, and this is hardly the limit. With such sensitive energy prices, it is difficult to imagine a reliable model of how much prices can rise at a critical moment because Russia provides about 20% of oil supplies and 30% of gas to Europe. If we see a political decision (by the EU & US or Russia) or a business decision (if foreign partners refuse to buy energy from Russian companies due to the threat of sanctions), then we may see a complete cessation of oil and gas purchases and prices may repeatedly skyrocket, as was the case in 1973 with the OPEC oil embargo. However, under these conditions, a grey market will emerge, as in the case of Iran, which sold its oil at a deep discount to Asia, mostly to China. It is more likely that the West is set to phase out Russian energy, indirectly holding back investment in the industry and blocking access to technology. As a result, this will lead to a reduction in the share of the Russian Federation on the world stage. The current situation is accelerating long-term plans to redirect energy exports from Europe to China. However, these are projects that will begin to pay dividends only in a few years. Here and now, politics could turn into a price shock on a much larger scale than we have seen in the last 30 years. The scale of the current state of affairs is comparable to that of the 1970s.
Technical Analysis: Moving Averages - Did You Know This Tool?

Apple Stock News and Forecast: AAPL remains subject to geopolitical whims

FXStreet News FXStreet News 02.03.2022 16:19
Apple stock remains above its 200-day moving average as geopolitical turmoil remains. AAPL stock is unlikely to break higher until the Russia-Ukraine conflict ends. Apple is likely to fall further as no catalyst in sight and sanctions hurt all global businesses. Apple (AAPL) stock remains in recovery mode along with most US indices as last week's shock and awe sell-off remain the low mark for now. Stocks have entered a changed landscape for 2022, and the situation is worsening from both a macroeconomic and geopolitical viewpoint. Investors were just about coming to accept the inflation and interest rate environment for 2022 and had adjusted portfolios accordingly. High-risk growth stocks were avoided, and the focus returned to those stocks with strong balance sheets and low valuations. Value versus growth had already seen strong outperformance for value. Now things are worse. Sanctions will hit global growth and Europe especially hard. Energy costs are out of control, European gas prices are nearly ten times higher than a year ago. Oil prices we know all about. What we are left with then is higher inflation and now for longer likely reaching into 2024. Interest rates will have to rise, despite slowing growth, leading to stagflation. High-risk assets will struggle. Equities are viewed as a high-risk asset so expect bond inflows to outweigh equity fund inflows for the remainder of this crisis and beyond. Likely sector winners in the short term are defense stocks and oil stocks should have earnings well underpinned now for the remainder of the year. Apple (AAPL) stock is a harder one to quantify in this new environment. The stock certainly has defensive qualities, it has piles of cash which it can use for dividends, buybacks, or acquisitions. It has some pricing power that it can pass on to customers. However, rising commodity prices lead to higher semiconductor prices. Higher energy costs lead to higher shipping costs for inputs and outputs. Rising inflation and possible slowing growth will lead customers to scale back on purchases of luxury goods. Sanctions will hit globalized businesses. Apple Stock News With perfect timing, the EU has just come out and said EU countries must turn off the stimulus tap sharply and take a neutral fiscal stance. This means less free money and a focus on debt reduction, as well as echoes of the dreaded tight monetary policy that prevailed after the Great Financial Crash. This will mean less consumer spending. Apple Stock Forecast We cannot avoid the overall bearish macro and geopolitical background. We would rate Apple as outperforming, but that is an outperform in a bearish market. We note the potential and hope for a swift end to the conflict as Russia and Ukraine meet again for talks. This will lead to a sharp relief rally, so short-term traders take note. The risk-reward is probably skewed to the upside. Wednesday is likely to see a slow gradual move lower or a swift rally on positive developments. Longer-term though the situation is clouded. Unless the conflict ends soon and sanctions are lifted quickly, we fail to see how equities can return to any form of bullishness. The situation from one month ago has not changed apart from lower economic growth. For now, Apple has found support at the 200-day moving average, which is set at $152 today. This is massive support. Break that and it is likely onto $138. The Relative Strength Index (RSI) and Moving Average Convergence Divergernce (MACD) remain bearish, confirming the price move. Apple stock chart, daily
How To Use A 'Collar' To Protect Your Portfolio Against Losses

How To Use A 'Collar' To Protect Your Portfolio Against Losses

Chris Vermeulen Chris Vermeulen 17.03.2022 15:55
How can we protect our portfolio against losses when stocks are in a correction?  Or even if stocks are not currently in a correction?   There are many schools of thought on that. One way is to close positions and wait for more bullish times on the sidelines.  But that may not be the best choice for any number of reasons.Perhaps you are bullish on a stock position long-term and don’t want to sell it.  Maybe you already have a nice gain on your shares but are worried about a further decline.  Or perhaps there’s a dividend that you would like to continue to collect.  Simple Portfolio “Insurance”One relatively straightforward way to protect open stock positions is to buy Put protection.  Puts are option contracts that have an inverse correlation to price.   If the shares go down in price, the value of the Put will increase, thereby providing some offset to losses in the underlying stock.   The tradeoff is that Puts come at an out-of-pocket cost, and they expire.  There’s a cost to carry to have that “insurance” in place.Taking it a Step Further with a “Collar”A Collar can be an effective strategy to ensure against significant losses.  A common way to offset the cost of purchasing protective Puts is to implement a Collar strategy using options.Calls are option contracts that increase in value when the underlying shares go up in value.  We can sell Calls against our long stock and collect a premium.   That’s a simple Covered Call strategy.  But in itself, we get no downside protection on our shares other than the amount of the premium collected for selling the Calls.We can take that a step further by using the premium collected from selling the Calls to purchase protective Puts.  That’s known as a Collar.   And depending on the option strike prices and duration, we may be able to do that for a net credit and put a little extra profit in our pocket.Putting on a CollarSince options contracts control 100 shares per contract, the number of shares you want to protect determines the number of contracts.  Say you have 1,000 shares.  In that case, the Collar position would consist of 10 short Calls and 10 long Puts.  Here’s a P/L graph of a Collar on AAPL.  In this example, the stock is at $160.  A $170 Call is sold for $1.25, and a $140 Put is purchased at $1.00.  A Net credit of $0.25 is collected when the position is put on. Both options are 30 days to expiration (DTE). The TradeoffsWhile it’s tempting to think of the Collar as a way to get “free” Put protection, there are some tradeoffs.   By selling Calls, we are limiting our upside.  In the example above, we could have a $10 gain to the upside.  We’d also get to keep any net premiums collected, another $0.25 per share.  But because we’re obligated to provide shares at $170, we have capped our profit potential.The Collar also only gives us partial protection to the downside.  Options also have a limited life and expire. What Happens at Expiration?If the share price is above our Call strike price at expiration, we’re likely to have our shares “called away” – meaning we’ll be obligated to sell our shares at the strike price, $170 in this example.  But we could also extend the duration by rolling that Call out for additional credit.  As long as there are more than a few cents of time value in our short Call, we’re less likely to have it exercised even if it is in-the-money (ITM).   If our counterparty wanted to close their position, as long as there’s time value left in the option, they would be better off to sell their long Call rather than exercise it against us.Sign up for my free trading newsletter so you don’t miss the next opportunity! If the share price is between our Call and Put strike prices at expiration, those options expire worthlessly, and we’re left with our stock as before.If the share price has dropped below our Put strike, we would want to either sell the Put or exercise it.  We could “put” the stock to our counterparty at $140 per share.  Alternately, we could sell the Put and continue to hold onto our shares.The best case is for the options to expire with the share price just below the Call strike price.  In that case, both the Puts and the Calls expire worthlessly, and we get to keep our shares.  We are then free to sell shares at a profit or keep them and apply another Collar further out in time.SummaryIf you own shares that you don’t want to sell, consider putting on a Collar using options to give you some downside protection.  A Collar entails selling calls against your shares and using the premium collected to purchase puts for downside protection.  The tradeoff is your upside is limited.  But you get to hold onto your shares to continue to collect dividends (if any), all while having long Puts in place for downside protection.Read On To Learn More About Options TradingEvery day on Options Trading Signals, we do defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs, which are always on once you own.   If you are new to trading or have been trading stock but are interested in options, you can find more information at The Technical Traders – Options Trading Signals Service. The head Options Trading Specialist Brian Benson, who has been trading options for almost 20 years, sends out real live trade alerts on actual trades, such as TSLA and NVDA, with real money. Ready to subscribe, click here:  TheTechnicalTraders.com.Enjoy your day!
EM currencies: growing polarisation

EM currencies: growing polarisation

Alex Kuptsikevich Alex Kuptsikevich 22.03.2022 13:04
Since the start of the year, the performance of emerging market currencies mirrors what we saw in 2021, but with more polarisation. The Brazilian real has been the growth leader against the dollar since the start of the year, gaining around 13%. It is followed by the South African rand and Colombian peso, gaining just over 7%. Among the hardest hit is the Russian Rouble (-33%), but also the Egyptian Pound (-14%) and the Turkish Lira (-10%). In our view, this polarisation only promises to increase in the coming months.Commodity-exporting countries have benefited amid a global jump in energy and agricultural commodity prices. Brazil gets a chance to seriously boost its oil sales to the US amid a supply embargo from Russia. Though net oil exporters, the states must buy significant amounts of heavy crude to run their refineries. Until 2019, oil from Venezuela was used for the right blend, subsequently replaced by Russian crude. Now it is being replaced by oil from Brazil, which promises a significant increase in exports and supports the exchange rate of the Brazilian real.The South African rand is in demand, receiving dividends from last year's monetary tightening and a surge in metal prices since the start of the year. As most global markets look for alternatives to the Russian metal, the ZAR is enjoying demand from speculators in anticipation of increased exports from South Africa for political reasons.We may well be seeing a global reversal in the attitude towards commodity exporters' currencies, as even in the event of a military settlement, there is no expectation of a quick recovery of previous economic ties.At the other end of the spectrum are countries' currencies that depend on imports of oil and agricultural products. Egypt buys most of its wheat consumption from Russia and Ukraine, and rising prices severely damage the balance of payments. Egypt's central bank has responded by tightening monetary policy to suppress inflation. But such steps tend to hurt economic growth. Turkey imported almost all its gas from Russia and Azerbaijan and bought its wheat from Ukraine and Russia. Price jumps and supply-chain disruptions will be costly for the economy and cause increased pressure on the Turkish lira.In addition to the prospect of inflated import volumes, Turkey and Egypt face a severe drop in revenues from the tourism industry, as Russia and Ukraine have provided a significant flow of tourists.
Tesla Stock News and Forecast: Shareholders to vote on TSLA stock split

Tesla Stock News and Forecast: Shareholders to vote on TSLA stock split

FXStreet News FXStreet News 28.03.2022 16:34
Tesla stock surges on news of a potential stock split dividend.TSLA is up at $1,066 of +5.6% in Monday premarket trading.Tesla stock has rallied sharply from early March lows.Tesla stock (TSLA) is back to the top of the social media chatter on Monday, usurping GameStop and AMC in the process. The stock is surging this morning on news of a potential stock split dividend. Tesla previously did a 5-for-1 stock split back in August 2020, and other companies have followed suit, notably Amazon. This makes it easier for retail investors to own the stock when it has a more affordable share price.Tesla Stock News: Stock split imminent?Tesla's board of directors has already approved the plan to split the shares for a stock dividend and will put it to a vote of the shareholders. The news was well-received by retail shareholders who tend to be more active in the premarket than other holders. A stock dividend is exactly what it sounds like. Instead of receiving cash, shareholders receive new shares in the company. This means companies do not use up cash to fund the dividend. Stock dividends are usually dilutive to earnings per share (EPS) as more shares are in issue after the event. Tesla is up nearly 6% before the open. It is not all plain sailing though for the EV giant as more Chinese covid lockdowns are announced. Tesla will close its Shanghai giga plant for at least a day on the back of lockdowns in the city. Tesla Stock ForecastA powerful rally with the next target now set at $1,210. This would set up Tesla's (TSLA) stock to break to all-time highs. Currently, on the longer-term time horizon, the narrative is still bearish with a series of lower highs and lower lows. So breaking $1,210 turns Tesla bullish on all time horizons. Naturally, it is already bullish in the short term after last week's strong rally. Holding above $945 is the key pivot for medium and long-term traders. TSLA 20-hour chartThere is a short-term pivot at $1,000, with high volume at this level. Below sees a volume gap to $945, the key as mentioned above. Tesla chart, 15-minute
FX Daily: Talking up the euro

Monthly Dividend Stocks You Should Check Out! ORC Stock, AGNC Stock And AVAL

Sure Dividend Sure Dividend 01.04.2022 17:44
Many investors own equities in order to generate reliable income in an environment where treasuries and other fixed-income investments do not offer attractive yields. Stocks that offer monthly dividends can be especially attractive for income generation purposes, as that allows for more regular reinvesting for those that do not need the income now. Those that want to live off their dividends benefit from very regular, non-fluctuating proceeds on a month-to-month basis. In this article, we'll highlight the top three of the monthly dividend stocks from our coverage universe. 1: Orchid Island Capital Orchid Island Capital (ORC) is a mortgage real estate investment trust (mREIT). The company is valued at $600 million today, trading for slightly above $3 per share. Orchid Island Capital is externally managed, by Bimini Advisors. Generally, externally managed REITs are somewhat inferior compared to internally managed REITs due to a less competitive cost structure. But at the right price, externally managed REITs can still be a strong investment. Orchid Island Capital primarily invests in residential mortgage-backed securities, or RMBSs. This business has been quite profitable for Orchid Island in the recent past. During the most recent quarter, ORC generated net profits of $26 million, or more than $100 million on an annualized level. The company is sharing these strong profits with its owners. The current dividend stands at $0.045 per share per quarter. This makes for a dividend yield of 16% at the current share price. It should be noted that the dividend was reduced by 18% in March, prior to that, the dividend stood at $0.055 per month. Dividend reductions generally aren't positive, but since the yield is still very high, investors buying at current prices will likely still be happy with the result. In fact, even if Orchid Island Capital were to cut its dividend by another 18%, the dividend yield would still be pretty high, at 13%. We do not expect meaningful earnings growth from Orchid Island Capital. A flattening yield curve generally puts pressure on the earnings growth of mREITs, and in 2022 yield curves have compressed meaningfully so far. But even without any earnings growth, Orchid Island Capital could generate compelling total returns, thanks to its high dividend yield. Between some book value growth, some multiple compression, and its 16% dividend yield, we believe that Orchid Island Capital could easily deliver double-digit returns going forward. 2: AGNC Investment Corp. AGNC Investment (AGNC) is another mortgage REIT. With a market capitalization of $7 billion, it is considerably larger than ORC, however. AGNC Investment primarily owns agency mortgage-backed securities. Agency MBS are those created by Ginnie Mae, Fannie Mae, and Freddie Mac. Most of the MBSs AGNC Investment owns are comprised of mortgages with a 30-year maturity period, while counterparties for AGNC primarily are located in the US, with some exposure to European counterparties on top of that. Compared with some other mREITs, the long maturity period and agency nature of most of AGNC's MBSs makes AGNC Investment's portfolio less risky. Like Orchid Island Capital and other mREITs, AGNC will likely feel some headwinds from a flattening yield curve. The spread between the short-term rate at which AGNC borrows and the longer-term rate at which it lends compresses when the yield curve flattens, which leads to lower profitability, all else equal. Due to portfolio growth, AGNC could be able to offset these headwinds, however. We nevertheless calculate with a growth rate of zero. Even in that scenario, AGNC Investment looks like a solid income pick. The company currently yields 10.8%, based on a dividend of $0.12 per share per month. The dividend has been at that level for around two years, following a dividend reduction in early 2020. We do not believe that the dividend will grow going forward, as earnings growth will not be meaningful, and since AGNC Investment has not increased its dividend in a long period of time. Even without any dividend growth, payouts to investors will be attractive, thanks to a high initial yield. Between the yield of close to 11% and some multiple expansion potential, we believe that returns could easily be in the double-digit range going forward. 3: Grupo Aval Acciones y Valores S.A. Grupo Aval Acciones y Valores S.A. (AVAL) is a Colombian holding company. Its main assets include equity stakes in several banks, such as Banco de Bogota or Banco Popular. The holding company is majority-owned by one of Colombia's richest persons, Louis C. Sarmiento, who owns around 80% of AVAL. Being a Colombian company, AVAL makes its dividend payments in Colombian Pesos. For US-based investors, the size of the dividend thus fluctuates to some degree, as the COP/USD exchange rate impacts dividends once translated to US Dollars (the same holds true for other non-Colombian shareholders). AVAL has been making monthly dividend payments since 2014, i.e. for about eight years. Grupo Aval has not been able to grow its earnings-per-share reliably in the past. Instead, earnings-per-share moved up in some years, and down in other years. To some degree, this can be explained by the ups and downs in the Colombian economy over the last decade. The Colombian economy is quite exposed to commodity pricing around the world, as Colombia is an oil-exporting country. Other commodities that are exported from Colombia include agricultural products such as coffee and fruits, and metals and steel. With commodity prices rising rapidly in 2021 and early 2022, the Colombian economy should be in a good position this year. This should have a positive impact on the business environment for the banks that AVAL owns equity stakes in. In turn, this should lead to improving profitability for AVAL, which is why we believe that profits over the next couple of years will be higher compared to what we saw over the last couple of years. We forecast that AVAL's earnings-per-share will rise at a low-to-mid-single digits rate going forward. On top of that, investors should also benefit from some multiple expansion in the coming years, as AVAL is rather inexpensive today, trading for just 5x-6x its expected net profits. Add a dividend yield of around 6%, and it seems likely that AVAL will offer total returns of at least 10% annually going forward.
Check Out These Oil Stocks! BP, (ENB) Enbridge, ONEOK (OKE) - 3 Dividend Oil Stocks With High Yields | Sure Dividend

Check Out These Oil Stocks! BP, (ENB) Enbridge, ONEOK (OKE) - 3 Dividend Oil Stocks With High Yields | Sure Dividend

Sure Dividend Sure Dividend 12.05.2022 17:46
By Aristofanis Papadatos for Sure Dividend Inflation has soared to a 40-year high this year due to the immense fiscal stimulus packages offered by the government in response to the pandemic. Consequently, income-oriented investors are struggling to protect their portfolios from losing real value. High-dividend stocks are great candidates for income-oriented investors under the current circumstances, though investors should perform their due diligence to make sure that the dividends of these stocks are safe. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM In this article, we will discuss the prospects of three high-yield stocks that benefit from high oil and gas prices, namely BP (BP), Enbridge (ENB) and ONEOK (OKE). BP BP is one of the largest oil and gas corporations in the world, with a market capitalization of $97 billion. It operates in two segments: upstream and downstream (mostly refining). BP has accumulated an excessive debt load, mostly due to its catastrophic accident in the Gulf of Mexico in 2010, which has cost the company approximately $70 billion so far. As this amount is 72% of the market capitalization of the stock, it is easy to understand its impact on the company. The high debt load of BP has also resulted from the extremely generous dividends of BP, which has maintained its shareholder-friendly character even under the most adverse business conditions. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM Fortunately, BP is thriving right now. The price of oil has rallied to a 13-year high this year thanks to the recovery of global demand from the pandemic and the sanctions of western countries on Russia for its invasion in Ukraine. As Russia produces 10% of global oil output, the oil market has become extremely tight. A similar situation is evident in the natural gas market. European gas prices have skyrocketed to all-time highs in recent months due to tight supply from Russia, which provides approximately 40% of natural gas consumed in Europe. In addition, Europe has begun to import LNG cargos from the U.S. aggressively in an effort to shift away from Russia and thus the U.S. natural gas market has become extremely tight. As a result, the U.S. natural gas price has surged to a 13-year high. The above conditions are ideal for BP, which is highly leveraged to the prices of oil and gas, especially given its high debt load. Thanks to its excessive profits in the current environment, BP has been reducing its debt load at a fast pace in recent quarters and thus it has added another growth driver, namely lower interest expense. In the most recent quarter, BP more than doubled its earnings per share, from $0.78 in last year’s quarter to $1.92, and exceeded the analysts’ consensus by an impressive $0.55 (40%). The earnings per share of BP were the highest of the company in the last decade. Moreover, as the sanctions are not likely to be removed anytime soon, BP is expected to post 10-year high earnings this year. BP cut its dividend by 50% in 2020 due to the impact of the pandemic on its business but it is still offering an attractive 4.4% dividend yield. The company has a payout ratio of only 27%, which provides a wide margin of safety to the dividend. BP raised its dividend by 4% last year and stated that it can continue raising its dividend by 4% per year until 2025 as long as the price of oil remains above or around $60. BP also expects to be able to repurchase approximately $1.0 billion of shares per quarter. As this buyback rate corresponds to a 4% annual reduction of the share count, it provides a meaningful boost to the bottom line. Read next: (TSLA) Tesla Stock Prices Facing Trouble Amidst Rising Prices| FXMAG.COM Overall, as long as oil prices remain above $60, BP will continue offering excessive shareholder distributions, namely a 4.4% dividend that will grow by 4% per year, and meaningful share repurchases. On the other hand, investors should be aware that the stock of BP is likely to come under pressure whenever the war in Ukraine comes to an end. Enbridge Enbridge is a midstream oil and gas company, which is headquartered in Canada and operates in four segments: Liquids Pipelines, Gas Transmission, Gas Distribution and Green Power. These segments generate 53%, 29%, 13% and 5%, respectively, of the total EBITDA of the company. Enbridge is an immense midstream company. Through its vast pipeline networks, the company transports approximately 25% of North America’s crude oil and 20% of the natural gas consumed in the U.S. It is also the largest distributor of natural gas in the U.S. by annual volumes. Most companies in the energy sector are highly cyclical due to the wild swings of the prices of oil and gas. This is not the case for Enbridge, which has one of the most resilient business models in the sector. Enbridge has a toll-like, fee-based model, which involves charging fees to customers for the products they transport through the pipeline networks of Enbridge. The contracts have minimum-volume requirements and hence Enbridge enjoys reliable cash flows even during downturns, when its customers transport lower volumes than usual. Enbridge greatly benefits from the aforementioned favorable prices of oil and gas. The company expects to grow its distributable cash flow per share by about 8% this year, from $3.91 to a new all-time high of $4.21. On the other hand, due to its defensive business model, Enbridge benefits less than most oil companies during boom times. Overall, Enbridge is one of the most resilient energy companies during downturns but it has less upside than most of its peers during boom times. Enbridge has grown its dividend (in CAD) for 27 consecutive years, at a 10% average annual rate. It is also offering an attractive 6.3% dividend yield. The company has a healthy payout ratio of 64% and is likely to continue growing its distributable cash flow thanks to a series of growth projects, which are related to the expansion of its network. Therefore, the stock is offering an above-average 6.3% dividend, which is likely to keep rising for many more years. ONEOK ONEOK engages in the gathering and processing of natural gas, it provides services in the business of natural gas liquids (NGLs) and owns natural gas pipelines (interstate and intrastate). ONEOK has a 40,000-mile network of NGLs and natural gas pipelines and provides midstream services to producers, processors and customers. Its assets are ideally positioned in the major shale basins, Permian and Bakken. More than 10% of the total U.S. natural gas production goes through the network of ONEOK. ONEOK has a volatile performance record but it has greatly improved its performance in the last four years thanks to the completion of a series of growth projects, such as pipelines and fractionation services in the Permian Basin, and the significant contribution of these projects to the cash flows of the company. ONEOK is currently offering a 6.1% dividend yield. The company had a high payout ratio in 2020 due to the impact of the pandemic on its business but it is on track to post record distributable cash flow per share this year thanks to the favorable commodity prices and the recovery of the U.S. gas production. As a result, ONEOK currently covers its dividend with a wide margin of safety, with a healthy payout ratio of 68%. It is also worth noting that a significant portion of the cash flows of ONEOK are fee-based or hedged. This means that ONEOK is more defensive during downturns than most energy companies. On the other hand, the business model of ONEOK is less resilient than the model of Enbridge. Final Thoughts The energy sector is by far the best-performing sector of the stock market this year, mostly thanks to the 13-year high prices of oil and gas, which have resulted from the sanctions of western countries on Russia. Despite the breathtaking rally of the energy sector, there are still energy stocks that offer markedly high dividend yields. The above three stocks offer exceptionally high yields with a wide margin of safety. Nevertheless, investors should be aware of the material downside risk of the entire energy sector whenever its next downcycle begins.