Former Vice President Biden has a detailed proposal that involves raising taxes on people with taxable income of more than $400,000—essentially targeting the top 1%. President Trump wants to keep the tax cuts that went into effect in 2018, which largely benefited top earners.
It’s been more than 25 years since Bill Bengen, a financial adviser in southern California, created the so-called “4% rule.” Bengen called his rule “Safemax”—the maximum amount you could withdraw each year and still say “safe.” If you want to make sure you don’t outlive your savings, goes modern financial advice, budget on withdrawing no more than about 4% of your portfolio in your first year of retirement, and then only adjust upward in line with inflation.
Digital payment and fintech companies Paypal Holdings Inc (NASDAQ: PYPL) and Square Inc (NYSE: SQ) are having a solid 2020, but Chantico Global CEO Gina Sanchez is sounding an alarm. Decline In Spending: PayPal and Square’s stock surge in 2020 has resulted in the two stocks becoming “extremely overvalued,” Sanchez said on CNBC’s “Trading Nation.”Square’s stock is trading at 167 times forward earnings, while PayPal’s stock is trading at 46 times.The stocks have expanded from momentum and multiple expansion, but this may overlook the broader decline in spending that is “hitting all of these companies square in the gut,” she said. Some make the argument that fintech and digital-focused companies like PayPal and Square deserve a premium valuation compared to traditional credit cards, Sanchez said.But there is a major flaw in this thesis, she said: both groups are driven by consumption.”You need transactions in order to support all of these plays, and so I would argue that psychologically you can tell yourself that [justification] but I don’t know that it’s going to play out over a period in your portfolio.”Counter Argument: Joule Financial President Quint Tatro offered the other side of the argument and said PayPal and Square’s stocks aren’t as overvalued as they may seem to be.PayPal, for example, continues to show very rapid growth, along with strong free cash flow generation of $3.9 billion in 2019 that is modeled to grow to $5.95 billion in 2020, Tatro said. “And when you do something, again, as traditional as a discounted cash flow from an intrinsic value standpoint, the company’s not that overvalued,” he said.Photo courtesy of Square. See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * BofA Steps To Sidelines On Sonoco, Looks For Results In 2022 * Bob Iger Joins Board Of Animal-Free Dairy Maker Company(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Boeing Co (NYSE: BA) investors got some good news recently when European regulators cleared the 737 Max for takeoff. However, one analyst says Boeing still has a number of major challenges ahead in the near-term.The Boeing Analyst: Bank of America analyst Ronald Epstein reiterated his Neutral rating and $175 price target for Boeing.The Boeing Thesis: Epstein said the unprecedented downturn in the aviation industry, the 737 Max problems and Boeing’s market share loss to Arbus has created a perfect storm for the company and its investors. In addition, Boeing recently terminated a $4.2 billion deal to take a stake in Brazilian aircraft producer Embraer.”Given the prolonged grounding of the 737 MAX and the termination of ERJ deal, we view BA’s narrowbody portfolio as strategically disadvantaged vs. Airbus over the medium-term,” Epstein wrote in a note.In fact, Epstein said Airbus is on track to expand its market share from 51% today to 57% by the mid-2020s.Related Link: Boeing 737 Max Cleared For Takeoff After 19-Month Grounding, European Regulator SaysTo combat all these difficult headwinds, Epstein said Boeing needs to bite the bullet and invest in developing a new Future Single Aisle airplane. Making the decision to invest in a new model today wouldn’t have an impact on Boeing’s financial situation for years, but Epstein said it could help change the trajectory of Boeing’s business in the long-term.For now, the next several quarters will continue to be difficult for the company. In the third quarter, Boeing received 58 net order cancellations and removed another 141 orders from its backlog. Epstein estimates Boeing now has at least 450 737 Max planes and at least 40 787s in excess inventory representing about $20 billion in working capital.Bank of America s projecting Boeing will burn $18.6 billion in free cash flow in 2020 and another $1.1 billion in 2021.Benzinga’s Take: Boeing will certainly participate in any broad market recovery rally once the airline industry starts to improve. Unfortunately, the company has plenty of company-specific problems that may weigh on the stock’s performance in the long-term relative to other aerospace stocks.Latest Ratings for BA DateFirmActionFromTo Oct 2020Credit SuisseMaintainsNeutral Sep 2020Alembic GlobalUpgradesNeutralOverweight Sep 2020Morgan StanleyInitiates Coverage OnUnderweight View More Analyst Ratings for BA View the Latest Analyst Ratings See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * How Large Option Traders Are Playing GE’s Stock After Regulators Clear 737 Max * How Large Option Traders Are Playing Boeing As Order Backlog Shrinks Further(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Just two weeks ago, the markets were factoring in an all-but-certain Biden victory in the upcoming presidential election as well as a “Blue Wave” of democrats taking control of the Senate and Congress as well as the presidency. This would mean a path of least resistance for a new stimulus bill. But, now not all is as it seems; market participants are taking a more thorough, deeper second look at the polling numbers. JPMorgan strategist Nikolaos Panigirtzoglou believes that election odds are narrowing making a contested result that could hamper stimulus and hurt stocks more likely. A mixed bag of election results would mean a difficult time passing a stimulus package and betting markets are beginning to price in a more narrow election result. A tighter, more contentious election result could hurt the bank’s expectations for their market outlook. Despite all of that potential malaise, JPMorgan stock analysts are holding steady on their calls for these three dividend stocks, yielding some 4% or more, and potentially more if price targets are met. We ran them through TipRanks database to see what other Wall Street’s analysts have to say about them.Hemlerich & Payne (HP)We’ll start with a company that engages in oil well drilling and gas exploration. Hemlerich & Payne’s fortunes have been adversely affected from COVID-induced selling and low demand for oil products. The company has been idling rigs over the past quarter in response to the demand for their products. As a result, HP’s dividend has dropped from 71 cents per quarter to an expected 25 cents per quarter for Q3 and Q4, respectively, giving FY 2020 a total dividend of $1.91 per share. The dividend is expected to remain at 25 cents per quarter providing $1.00 per share throughout 2021. On the current reference price of $14.90 this gives a yield of 6.71%.Covering the stock for JPM, analyst Sean Meakim remains cautiously positive. The analyst rates HP an Overweight (i.e. Buy) along with an $18.00 price target. This figure implies a 22% upside from current levels. (To watch Meakim’s track record, click here)”Our modeling still suggests that generating positive FCF in FY2020 is far from guaranteed (JPMe -$30mm v. -$35mm prior), but we think HP has the balance sheet strength to remain patient and execute on its strategic priorities, particularly surrounding technology adoption and value capture from performance-based contracts,” Meakim opined.What does the rest of the Street think? Looking at the consensus breakdown, opinions from other analysts are more spread out. 3 Buys, 3 Holds and 2 Sells add up to a Moderate Buy consensus. Shares are priced at $14.80, and the $17.92 average price target is in-line with JPM’s. (See HP stock analysis on TipRanks)Kraft-Heinz (KHC)Kraft-Heinz, and its subsidiaries manufacture and market food and beverage products in the United States and throughout the world. With revenue of some $25B annually, the company has a market capitalization of $40B. The current dividend on the company has a quarterly payout of 40 cents with an annual payout of $1.60. Given the stock price of $31.44, with the annual dividend at $1.60, this gives a yield of 5.0%. It should be noted that currently, KHC has a 9.9% FCF yield and therefore with the current revenue rate will be able to maintain their current dividend payout. Writing for JPM, analyst Ken Goldman points out five key factors in determining his bullish stance on KHC. The analyst believes that: First, EBITDA is reasonable and can be achieved; Second, the focused strategy to grow internationally is an important aspect of the KHC’s strategy; Third, that KHC’s high dividend should perform well; Fourth, that the 9.9% FCF yield remains attractive vs. 6.5% large-cap median; and fifth that the company should buy back shares. Backing his optimistic stance on KHC, Goldman gives the stock an Overweight (i.e. Buy) rating, and his $39.00 price target implies a 25% upside from current levels. (To watch Goldman’s track record, click here)Wall Street is moderately bullish on the stock. Of the 13 reviews, 6 are for a Buy, 6 are for a Hold and one is for a Sell. The stock’s current price of $31.14 is a 16% increase for the average price target. (See KHC stock analysis on TipRanks)To find good ideas for dividend stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
On Thursday, AT&T (NYSE: T) showed just how much it was pinched by cord-cutting and closed theaters. However, it managed to beat lowered Q3 analyst estimates, causing its shares to rise 1% in premarket trading. Verizon Communications (NYSE: VZ) also managed to beat estimates on Wednesday due to strong demand for its phone and internet services. As offices and schools continued to operate in a digital framework to surf their way through the pandemic, this trend fuelled Verizon’s growth. It seems Comms are doing better than expected.AT&T Q3 During the quarter that ended on September 30, total revenue was $42.3 billion, exceeding the average analyst expectation of $41.59 billion. Big media bets, namely DirecTV and Warner Bros dragged the results down due to movie theatre closures and pay-television customer losses, but HBO Max streaming service told a different story. Offers for HBO Max streaming service for free on certain phone plans are what helped the company beat revenue expectations.The company added 645,000 net new phone subscribers who pay a recurring monthly bill whereas FactSet reported analysts had expected AT&T to lose a net 9,000 customers over the quarter. It also gained 357,000 net new fiber internet customers, as demand for home internet increased with home offices.AT&T has spent the past few years investing in media businesses. It reached its 2021 goal a year early by acquiring 38 million subscribers in the US for both its HBO and HBO Max during the quarter. It now has 57 million subscribers across the globe compared to 36.3 million in the previous quarter. AT&T is trying to catch up its larger streaming rivals. Netflix, Inc. (NASDAQ: NFLX) currently has about 68 million U.S. customers and nearly 200 million across the globe. Disney from Walt Disney Co (NYSE: DIS) has more than 60 million subscribers already as it reached its goal four years early.But the pandemic had taken a heavy toll on its media business. WarnerMedia which contains both HBO as well as the company’s movie and TV studio saw its revenue drop from $8.4 billion in the year-ago quarter to $7.5 billion, as movie theaters largely remained shut.As for earnings, adjusted earnings per share dropped from last year’s 94 cents to 76 cents, matching analyst expectations.Verizon Q3 With lockdowns measures being eased, Verizon gradually reopened all of its company-operated retail stores during the quarter. It successfully implemented touch-less retail appointments and curbside pickups.As a result, it added 283,000 postpaid phone subscribers, exceeding FactSet’s average estimate of 268,000.Total operating revenue dropped 4.1% due to lower customer activity as well as the timing of launches. One of its key partners, Apple, Inc. (NASDAQ: AAPL), has delayed the launch of its new iPhone for approximately a month. Such delays resulted in operating revenue of $31.54 billion.Verizon’s media revenue that covers Yahoo, HuffPost and TechCrunch was hit with as companies reduced their ad spending. It dropped 7.4% compared to the same quarter last year to $1.7 billionNet income also fell from last year’s $5.34 billion $4.50 billion, or $1.05 per share in the quarter. The company estimated that pandemic-related costs amounted to approximately 5 cents per share.Excluding items, Verizon earned $1.25 per share, exceeding analysts’ average estimate of $1.22.But full-year 2020 guidance was improved as adjusted EPS growth is expected in the range between 0% to 2%, as opposed to -2% to 2%.Takeaway The health crisis has brought global economies to a halt, but the Communication sector has been relatively less affected. Verizon benefited from people staying and working from home, and so did AT&T, mostly due to its streaming star.This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: email@example.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: firstname.lastname@example.orgThe post AT&T and Verizon Beat Estimates appeared first on IAM Newswire.See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Procter & Gamble Benefits From The Cleaning Boom * Tesla Has Another Profitable Quarter(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
With less than two weeks to go before the U.S. presidential election, investors may be placing too much confidence in a decisive win by Democratic challenger Joe Biden as his lead in opinion polls narrows. Market participants have in recent weeks pulled back from bets that would benefit from election-related volatility while piling into assets that would benefit from a Biden win, including alternative energy shares and cannabis stocks. As Biden’s lead has narrowed in recent days, some market watchers worry that an unexpected victory by President Donald Trump, a Republican, or an uncertain election outcome could force the type of violent positioning unwinds that occurred in 2016, when investors were overwhelmingly positioned for a Hillary Clinton presidency.