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2 ETFs With Outsized Volume on Consumer & Dividend

RCD and DGRW saw massive volumes in yesterday trading session. In the last trading session, Wall Street closed lower due to a decline in the technology sector. Among the top ETFs, SPY lost 0.7% and DIA shed 0.5%, while QQQ moved 1.1% lower on the day.Two more specialized ETFs are worth noting as both saw trading volume that was far outside of normal. In fact, both these funds experienced volume levels that were more than double their average for the most-recent trading session. This could make these ETFs the ones to watch out for in the days ahead to see if this trend of extra-interest continues.RCD: Volume 10.53 Times AverageThis consumer discretionary ETF was in the spotlight as around 394,000 shares moved hands compared with an average of 43,000 shares a day. We also saw some price movement as RCD lost 1.5% in the last session.The move was largely due to earnings releases from retailers that could have a big impact on consumer ETFs like the ones we find in this ETF portfolio. RCD has gained 15.3% over the past month and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.DGRW: Volume 6 Times AverageThis dividend growth ETF was under the microscope as nearly 3 million shares moved hands. This compares with an average trading volume of roughly 540,000 shares and came as DGRW shed 0.4% in the last trading session.The movement can largely be blamed on volatility and uncertainty that has raised the appeal for dividend investing. Dividend ETFs are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation. DGRW has gained 8.7% in a month’s time and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports WisdomTree U.S. Quality Dividend Growth ETF (DGRW): ETF Research Reports Invesco S&P 500 Equal Weight Consumer Discretionary ETF (RCD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksAug 18th, 2022

5 Safe ETFs to Play Amid Recession Fears

Given the myriad of woes, investors should stash their cash in ETFs of some safe investing zones. The U.S. stock market is shaping up for the worst year in decades. This is especially true as the S&P 500 slipped into the bear market on renewed inflation concerns that could push the economy into a recession. Russia’s invasion of Ukraine, tightening monetary policy and surging commodity prices have been weighing on investors’ sentiment.Given the myriad of woes, investors should stash their cash in ETFs of some safe investing zones. These are SPDR Gold Trust ETF GLD, iShares 20+ Year Treasury Bond ETF TLT, iShares Edge MSCI Min Vol USA ETF USMV, Vanguard Dividend Appreciation ETF VIG and AGFiQ US Market Neutral Anti-Beta Fund BTAL.After cooling somewhat in April, U.S. consumer prices accelerated at the fastest rate in May since 1981, as Americans grapple with a surge in the cost of gas, food and shelter. The consumer price index jumped 8.6% year over year to a fresh 40-year high, from an 8.3% annual increase recorded in April. The data has put pressure on Fed to extend an aggressive series of interest rate hikes and has added to political problems for the White House and Democrats. To quell the four-decade high inflation, the Federal Reserve raised interest rates by 75 bps, the biggest interest-rate increase since 1994 (read: Biggest U.S. Rate Hike Since 1994 in June: 4 ETFs to Win).As the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession. The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hurting growth. Additionally, energy and food bills have been rising around the world. The World Bank expects growth in the United States to hit 2.5% in 2022, down from 5.7% in 2021.The S&P 500 is now down 22.4% so far this year. If the year ended with this loss, the S&P 500 would register its worst annual decline since 2008 and its second-worst annual decline since 1974. On a total return basis, the index lost 37% in 2008 and 26.5% in 1974.We have highlighted the five zones and their ETFs in detail below:Gold - SPDR Gold Trust ETF (GLD)Gold is viewed as a safe haven in times of economic or political turmoil. Concerns over global recession have raised the appeal for the bullion as a store of value and hedge against market turmoil. As such, the ultra-popular product tracking this bullion like GLD could be an interesting pick. SPDR Gold Trust ETF tracks the price of gold bullion measured in U.S. dollars, and kept in London under the custody of HSBC Bank USA. It is an ultra-popular gold ETF with AUM of $62.4 billion and a heavy volume of nearly 8 million shares a day. SPDR Gold Trust ETF charges 40 bps in fees per year from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.Long-Dated Treasury - iShares 20+ Year Treasury Bond ETF (TLT)The products tracking the long end of the yield curve often provide a safe haven. TLT provides exposure to long-term Treasury bonds by tracking the ICE U.S. Treasury 20+ Year Bond Index. It holds 33 securities in its basket and charges 15 bps in annual fees. iShares 20+ Year Treasury Bond ETF has an average maturity of 25.87 years and an effective duration of 8.13 years. TLT is one of the most popular and liquid ETFs in the bond space, with AUM of $18.8 billion and an average daily volume of 21 million shares.Low Volatility - iShares Edge MSCI Min Vol USA ETF (USMV)Low volatility products have the potential to outpace the broader market providing significant protection to the portfolio. These include more stable stocks that have experienced the least price movement. Further, these allocate more to defensive sectors that usually have a higher distribution yield than the broader markets. While there are several options, USMV, with AUM of $25 billion and an average daily volume of 3.9 million shares is the most popular ETF. The fund offers exposure to stocks that have lower volatility characteristics relative to the broader U.S. equity market.iShares Edge MSCI Min Vol USA ETF tracks the MSCI USA Minimum Volatility Index, holding 173 stocks in its basket. The product charges 15 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: 5 Defensive ETF Areas to Consider Amid Current Market Meltdown).Dividend - Vanguard Dividend Appreciation ETF (VIG)The dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. This is especially true as these stocks offer the best of both these worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to large swings in stock prices. The companies that offer dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. While the dividend space has been crowded, ETFs with stocks having a strong history of dividend growth like VIG seem to be good picks.Vanguard Dividend Appreciation ETF holds 289 stocks in its basket with AUM of $59.4 million. The fund trades in volume of 1.6 million shares a day on average and charges 6 bps in annual fees. Vanguard Dividend Appreciation ETF has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.Long/Short - AGFiQ US Market Neutral Anti-Beta Fund (BTAL)AGFiQ US Market Neutral Anti-Beta Fund has the potential to generate positive returns regardless of the direction of the stock market as long as low-beta stocks outperform high-beta stocks. It invests primarily in long positions in low-beta U.S. equities and short positions in high-beta U.S. equities on a dollar-neutral basis within sectors. AGFiQ US Market Neutral Anti-Beta Fund has AUM of $175.4 million and an expense ratio of 2.53%. It trades in an average daily volume of 196,000 shares (read: Forget Recession Fears With These ETFs).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares 20 Year Treasury Bond ETF (TLT): ETF Research Reports SPDR Gold Shares (GLD): ETF Research Reports Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports AGFiQ US Market Neutral AntiBeta ETF (BTAL): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 20th, 2022

5 Recession-Proof ETFs for Your Portfolio

As the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession and slashed its global growth forecast. As the global economy is struggling with skyrocketing inflation and low growth, the World Bank has warned of a recession and slashed its global growth forecast. The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hurting growth. Additionally, energy and food bills have been rising around the world.Against such a backdrop, investors should stash their cash in some conventionally secure and recession-proof corners of the broad market. Utilities Select Sector SPDR XLU, iShares U.S. Healthcare Providers ETF IHF, Invesco Dynamic Food & Beverage ETF PBJ, Vanguard Dividend Appreciation ETF VIG and iShares Edge MSCI USA Quality Factor ETF QUAL look like excellent choices amid recession warnings.The World Bank now expects the global economy to expand 2.9% for this year, down from 5.7% growth in 2021 and lower than the 401% expectation projected in January.The agency cautioned that many countries could fall into recession as the economy slips into a period of stagflation reminiscent of the 1970s. This is because the Russian invasion of Ukraine has magnified the slowdown in the global economy and intensified the damage from the COVID-19 pandemic as many countries now face recession. In particular, less developed countries in Europe and east Asia will face a "major recession” and higher risk of strong inflation and low growth (so-called "stagflation") (read: 5 Sector ETFs to Win from an 8%+ U.S. Inflation).Growth in advanced economies is expected to decelerate sharply to 2.6% in 2022 from 5.1% in 2021 before moderating to 2.2% in 2023. Meanwhile, expansion in emerging markets and developing economies is projected to fall to 3.4% in 2022 from 6.6% in 2021, well below the annual average of 4.8% from 2011 to 2019. Notably, growth in the United States is likely to hit 2.5% in 2022, down from 5.7% in 2021, while the eurozone is expected to see growth of 2.5% after 5.4% last year. China’s economy will likely expand 4.3% after growing 8.1% in 2021.We have profiled the above-mentioned ETFs below:Utilities Select Sector SPDR (XLU)Being a low-beta sector, utility is relatively protected from large swings (ups and downs) in the stock market and is thus, considered a defensive investment or a safe haven amid economic or political turmoil. While there are several options in the space, the ultra-popular XLU seems a good bet. With AUM of $16.6 billion, Utilities Select Sector SPDR seeks to provide exposure to companies from the electric utility, water utility, multi-utility, independent power and renewable electricity producers, and gas utility industries. It follows the Utilities Select Sector Index, holding 29 stocks in its basket. Electric utilities takes the top spot in terms of sectors at 63.5%, closely followed by multi utilities (30.9%).Utilities Select Sector SPDR charges 10 bps in annual fees and sees a heavy volume of around 19.3 million shares, on average. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.iShares U.S. Healthcare Providers ETF (IHF)Healthcare, which generally outperforms during periods of low growth and high uncertainty, will see huge investor interest due its non-cyclical nature. The demand for healthcare services remains intact even in the deteriorating economic fundamentals. iShares U.S. Healthcare Providers ETF provides exposure to companies that provide health insurance, diagnostics and specialized treatment. It follows the Dow Jones U.S. Select Healthcare Providers Index.iShares U.S. Healthcare Providers ETF holds 71 securities in its basket and has amassed $1.5 billion in its asset base. Volume is good at about 76,000 shares per day, on average. The product charges 42 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.Invesco Dynamic Food & Beverage ETF (PBJ)The consumer staples sector is viewed as defensive as it includes a variety of items like food & beverages, non-durable household goods, hypermarkets and consumer supercenters that are essential for daily needs. These products see steady demand even during an economic downturn due to their low level of correlation with economic cycles. Invesco Dynamic Food & Beverage ETF offers exposure to 31 stocks engaged in the manufacture, sale, or distribution of food and beverage products, agricultural products and products related to the development of new food technologies by tracking the Dynamic Food & Beverage Intellidex Index (read: Tap Rising Grocery Prices With These ETFs).With AUM of $294.9 million, Invesco Dynamic Food & Beverage ETF charges 63 bps in annual fees from investors and sees a moderate average daily volume of 213,000 shares. PBJ has a Zacks ETF Rank #3 with a Medium risk outlook.Vanguard Dividend Appreciation ETF (VIG)Dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. Dividend-focused products offer safety in the form of payouts while at the same time providing stability as mature companies are less volatile to large swings in stock prices. This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Vanguard Dividend Appreciation ETF is the largest and the most popular ETF in the dividend space, with AUM of $63.7 billion and an average daily volume of 1.5 million shares.Vanguard Dividend Appreciation ETF follows the S&P U.S. Dividend Growers Index, which is composed of companies that have a record of increasing dividends over time. It holds 289 securities in the basket and charges 6 bps in annual fees. The product has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook (read: 5 Safe Investing Zones &Their ETFs to Escape Market Rout).iShares MSCI USA Quality Factor ETF (QUAL)Quality stocks are rich in value characteristics with a healthy balance sheet, high return on capital, low volatility, elevated margins, and a track record of stable or rising sales and earnings growth. These products thus reduce volatility when compared to plain vanilla funds and hold up rather well during market swings. iShares MSCI USA Quality Factor ETF provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index.iShares MSCI USA Quality Factor ETF holds 125 securities in its basket and trade in an average daily volume of 1.6 million shares. The ETF has AUM of $21.2 billion and charges 15 bps in annual fees. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Utilities Select Sector SPDR ETF (XLU): ETF Research Reports iShares U.S. Healthcare Providers ETF (IHF): ETF Research Reports Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports Invesco Dynamic Food & Beverage ETF (PBJ): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJun 8th, 2022

5 Safe Investing Zones &Their ETFs to Escape Market Rout

The events have led to risk-off trading, with lower-risk securities being in vogue. We have highlighted an ETF from five such zones in which investors could stash their money amid the market turmoil. Soaring yields and tightening Fed policy have been playing foul on the stock market, pushing the stocks in deep red from a year-to-date look. The S&P 500 Index is down about 18% so far in 2022 and the Nasdaq Composite Index has dropped about 27%, hit by plunging growth stocks. Almost two-thirds of S&P 500 stocks are down 20% or more from their 52-week highs, according to Refinitiv data.Inside the TurmoilThe Federal Reserve has started raising interest rates more aggressively to fight inflation that will hit consumers and businesses. Fed Chair Jerome Powell has raised interest rates by 50 bps in the latest FOMC meeting. This marks the biggest interest-rate hike since 2000. Inflation is not showing any sign of a slowdown, jumping 8.3% year over year in April. Though it is down from an 8.5% year-over-year increase in March, it still represents the second-highest inflation in four decades.The war in Ukraine worsened disruptions in the flow of goods across borders, resulting in skyrocketing food and energy prices. The higher prices have started to take a hit on corporate profits. Consumer sentiment reached the lowest level since 2011 in May, according to the latest reading of the University of Michigan Sentiment index. Manufacturing activity also grew at its slowest pace in more than one and a half years in April. Notably, the U.S. economy shrank for the first time since the outbreak of the pandemic. GDP dropped 1.4% annually in the first quarter of 2022, marking a sharp reversal from 6.9% annual growth in the fourth quarter (read: U.S. Economy Shrinks in Q1: ETFs to Win/Lose).Additionally, COVID-19 variant concerns and the resultant lockdown measures in China have sparked worries over global economic expansion that continued to weigh on investors’ sentiment.The events have led to risk-off trading, with lower-risk securities being in vogue. Below, we have highlighted an ETF from five such zones in which investors could stash their money amid the market turmoil:Low-BetaLow-beta ETFs exhibit greater levels of stability and usually lose less when the market is crumbling. Though these have lesser risks and lower returns, the stocks are considered safe and resilient.Invesco S&P 500 Downside Hedged ETF PHDG is an actively managed fund and seeks to deliver positive returns in rising or falling markets that are not directly correlated to broad equity or fixed-income market returns. Invesco S&P 500 Downside Hedged ETF tries to follow the S&P 500 Dynamic VEQTOR Index, which provides broad equity market exposure with an implied volatility hedge by dynamically allocating between different asset classes: equity, volatility and cash. The index allows investors to receive exposure to the equity and volatility of the S&P 500 Index in a dynamic framework (read: 5 ETFs to Protect Your Portfolio Amid Market Sell-Off).Invesco S&P 500 Downside Hedged ETF has accumulated $317.8 million in its asset base and charges 40 bps in fees per year from its investors. It has a beta of 0.33. Volume is good, exchanging 156,000 shares a day on average.Low VolatilityThese products have the potential to outpace the broader market providing significant protection to the portfolio. These funds include more stable stocks that have experienced the least price movement. Further, these allocate more to defensive sectors with a higher distribution yield than the broader markets.While there are several options, iShares Edge MSCI Min Vol USA ETF USMV, with AUM of $26.9 billion and an average daily volume of 3.4 million shares, is the most popular ETF. The fund offers exposure to stocks that have lower volatility characteristics relative to the broader U.S. equity market. iShares Edge MSCI Min Vol USA ETF tracks the MSCI USA Minimum Volatility Index, holding 173 stocks in its basket. The product charges 15 bps in annual fees and has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.ValueValue stocks have proven to be outperformers over the long term and are less susceptible to the trending markets. These stocks have strong fundamentals — earnings, dividends, book value and cash flow — that trade below their intrinsic value. These have the potential to deliver higher returns and exhibit lower volatility compared with their growth and blend counterparts.iShares Core S&P U.S. Value ETF IUSV offers exposure to large- and mid-cap U.S. equities that exhibit value characteristics by tracking the S&P 900 Value Index. It holds 742 stocks in its basket, with each accounting for no more than a 3.1% share. iShares Core S&P U.S. Value ETF is widely spread across sectors with health care, financials, industrials, information technology and consumer staples occupying double-digit exposure each (read: 4 ETFs to Ride on Fed's 50 Bps Rate Hike).iShares Core S&P U.S. Value ETF has AUM of $11.5 billion and trades in an average daily volume of 643,000 shares. It charges 4 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.QualityQuality investing also seeks safety and protection against volatility. Quality stocks tend to outperform as these are rich in value characteristics, with healthy balance sheets, high return on capital, low volatility, elevated margins and a track of stable or rising sales and earnings growth.iShares MSCI USA Quality Factor ETF QUAL provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index. iShares MSCI USA Quality Factor ETF holds 124 securities in its basket and trade in an average daily volume of 1.5 million shares. The ETF has AUM of $20.7 billion and charges 15 bps in annual fees.DividendThe dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. This is especially true as these stocks offer the best of both worlds — safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices. The companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Vanguard Dividend Appreciation ETF VIG is the largest and the most popular ETF in the dividend space, with AUM of $62.4 billion and an average daily volume of 1.5 million shares.Vanguard Dividend Appreciation ETF follows the S&P U.S. Dividend Growers Index, which is composed of companies that have a record of increasing dividends over time. It holds 289 securities in the basket and charges 6 bps in annual fees. The product has a Zacks ETF Rank #1 with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports iShares MSCI USA Min Vol Factor ETF (USMV): ETF Research Reports iShares Core S&P U.S. Value ETF (IUSV): ETF Research Reports Invesco S&P 500 Downside Hedged ETF (PHDG): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 20th, 2022

5 Dividend ETFs Crushing the Market This Year

The dividend-focused products offer safety through payouts and stability in the form of mature companies that are less volatile amid large swings in stock prices. Dividend investing has been in vogue amid bouts of volatility and uncertainty over sky-high inflation, rising interest rates and a dull economic outlook. This is especially true as these are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation.As such, many dividend ETFs have been on the rise. Morningstar Dividend Leaders Index Fund FDL, WisdomTree U.S. High Dividend Fund DHS, iShares Core High Dividend ETF HDV, Pacer Global Cash Cows Dividend ETF GCOW and Invesco S&P 500 High Dividend Low Volatility ETF SPHD are leading the space this year and will continue to move higher given the prevailing market uncertainty (read: A Guide to the 10 Most-Popular Dividend ETFs).The dividend-focused products offer safety through payouts and stability in the form of mature companies that are less volatile amid large swings in stock prices. This is because the companies that pay out dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Market TrendsThe S&P 500 logged in the longest weekly losing streak since 2011 and the Dow Jones registering the first seven-week losing streak since 2001. The tech-heavy Nasdaq Composite saw the sixth consecutive weekly decline. Notably, the S&P 500 saw the worst start to a year since 1939 and is on the brink of bear territory (read: 5 Beaten-Down ETFs to Buy at Attractive Prices).The Fed has started raising interest rates more aggressively to fight inflation that will hit consumers and businesses. However, consumer spending remains strong given the elevated wage growth and lower unemployment rate. The central bank has raised interest rates by 50 bps, marking the biggest interest-rate hike since 2000.The COVID-19 variant concerns and the resultant lockdown measures in China have sparked worries over global economic expansion that will continue to weigh on investors’ sentiment. Additionally, a war in Ukraine worsened disruptions in the flow of goods across borders, resulting in skyrocketing food and energy prices and threatening corporate profits. Corporate results have turned out weaker than expected for the first quarter.Let’s delve deeper into the above-mentioned ETFs:First Trust Morningstar Dividend Leaders Index Fund (FDL) – Up 6.6%First Trust Morningstar Dividend Leaders Index Fund offers exposure to stocks that have shown the highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. It holds 98 stocks in its basket, with key holdings in healthcare, consumer staples, communication services and utilities.With AUM of $2.5 billion, First Trust Morningstar Dividend Leaders Index Fund charges 45 bps in annual fees from investors and trades in a solid volume of about 910,000 shares a day. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.WisdomTree U.S. High Dividend Fund (DHS) – Up 6.5%WisdomTree U.S. High Dividend Fund offers exposure to U.S. equity from high dividend-yielding companies by tracking the WisdomTree U.S. High Dividend Index. It holds 314 stocks in its basket, with key holdings in energy, healthcare, consumer staples, financials, and utilities that account for double-digit exposure each.WisdomTree U.S. High Dividend Fund has amassed $1 billion in its asset base and trades in a solid volume of around 86,000 shares a day. It charges 8 bps in fees per year and has a Zacks ETF Rank #3 with a Medium risk outlook (read: 6 Dividend ETFs Up At Least 6% YTD & Yielding At Least 3%).iShares Core High Dividend ETF (HDV) - Up 5.9%iShares Core High Dividend ETF offers exposure to 75 high-quality and high-dividend stocks. It tracks the Morningstar Dividend Yield Focus Index and is slightly concentrated on the top firms, with each making up for no more than 8.2% share.iShares Core High Dividend ETF has AUM of $10.1 billion and trades in a solid volume of around 1.3 million shares a day. It charges 8 bps in fees per year and has a Zacks ETF Rank #3 with a Medium risk outlook.Pacer Global Cash Cows Dividend ETF (GCOW) – Up 5.3%Pacer Global Cash Cows Dividend ETF attempts to provide a continuous stream of income and capital appreciation over time by screening for companies with a high free cash flow yield and a high dividend yield. It holds 101 stocks in its basket and charges 60 bps in fees per year from investors.Pacer Global Cash Cows Dividend ETF has been able to manage $389.2 million in its asset base and trades in an average daily volume 164,000 shares.Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) – Up 4.8%Invesco S&P 500 High Dividend Low Volatility ETF offers exposure to 51 stocks traded on the S&P 500 Index that historically have provided high-dividend yields and low volatility. It follows the S&P 500 Low Volatility High Dividend Index. Invesco S&P 500 High Dividend Low Volatility ETF is widely spread across sectors, with utilities, consumer staples, healthcare and real estate receiving double-digit exposure each.Invesco S&P 500 High Dividend Low Volatility ETF has amassed $3.8 billion and charges 30 bps in annual fees. The fund trades in an average daily volume of 2 million shares.  Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Trust Morningstar Dividend Leaders ETF (FDL): ETF Research Reports iShares Core High Dividend ETF (HDV): ETF Research Reports WisdomTree U.S. High Dividend ETF (DHS): ETF Research Reports Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports Pacer Global Cash Cows Dividend ETF (GCOW): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMay 17th, 2022

5 ETFs to Add As Yield Curve Signals Recession

The U.S. Treasury bond yield curve inverted for the first time in three years, signaling U.S. recession. Wall Street staged strong comeback lately after a few weeks of tumultuous trading. Meanwhile, the U.S. Treasury bond yield curve inverted for the first time in three years, signaling U.S. recession. This means that the yield on the two-year Treasury note was higher than that of the 10-year note.Against such a backdrop, investors should stash their cash in some conventionally secure and recession-proof corners of the broad market. Utilities Select Sector SPDR XLU, iShares U.S. Healthcare Providers ETF IHF, Vanguard Consumer Staples ETF VDC, Vanguard Dividend Appreciation ETF VIG and iShares Edge MSCI USA Quality Factor ETF QUAL look like excellent choices amid recession warnings.The curve is flattening as investors are betting on faster and deeper Federal Reserve rate hikes while at the same time worrying about near-term growth prospects in the world's biggest economy. After raising rates by 25 bps in the latest FOMC meeting, the Fed is expected to follow a more aggressive path in raising rates to fight the 10-year high inflation. The current pricing suggests a 0.5% bps hike in May and a cumulative boost of 2.5% to benchmark rates through the end of the year, from the near-zero level at the start of 2022 (read: ETFs to Buy on Latest Fed Rate Hike and More Hereafter).Fed funds futures traders expect the Fed's benchmark rate to rise to 2.60% by February from the current 0.33% According to the CME Group's FedWatch, traders are betting on half-point moves higher in the Fed Funds rate at the next three Fed meetings in May, June and July.On the other hand, the war in Ukraine and new coronavirus restrictions in China have raised the risk of a prolonged global supply chain trouble, thereby leading to slower economic growth.We have profiled the above-mentioned ETFs below:Utilities Select Sector SPDR (XLU)Being the low-beta sector, utility is relatively protected from large swings (ups and downs) in the stock market and is thus, considered a defensive investment or safe haven amid economic or political turmoil. While there are several options in the space, the ultra-popular XLU seems a good bet. With AUM of $14.4 billion, Utilities Select Sector SPDR seeks to provide exposure to companies from the electric utility, water utility, multi-utility, independent power and renewable electricity producers, and gas utility industries. It follows the Utilities Select Sector Index, holding 29 stocks in its basket. Electric utilities takes the top spot in terms of sectors at 63.1%, closely followed by multi utilities (29.3%).Utilities Select Sector SPDR charges 10 bps in annual fees and sees a heavy volume of around 19.3 million shares on average. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Sector ETFs to Play if Russia-Ukraine Geopolitics Rule).iShares U.S. Healthcare Providers ETF (IHF)Healthcare, which generally outperforms during periods of low growth and high uncertainty, will see huge investor interest due its non-cyclical nature. The demand for healthcare services remains intact even in the deteriorating economic fundamentals. iShares U.S. Healthcare Providers ETF follows the Dow Jones U.S. Select Healthcare Providers Index with exposure to companies that provide health insurance, diagnostics and specialized treatment.In total, iShares U.S. Healthcare Providers ETF holds 71 securities in its basket and has amassed $1.3 billion in its asset base. Volume is good at about 27,000 shares per day on average. The product charges 42 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.Vanguard Consumer Staples ETF (VDC)The consumer staples sector is viewed as defensive as it includes a variety of items like food & beverages, non-durable household goods, hypermarkets and consumer supercenters that are essential for daily needs. These products see steady demand even during an economic downturn due to their low level of correlation with economic cycles. Vanguard Consumer Staples ETF targets the broad consumer staples by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 99 stocks in its basket and is widely spread across household products, soft drinks, packaged foods & meats and hypermarkets & supercenters that make up for a double-digit allocation each (read: 5 Defensive ETF Bets to Tackle the Current Market Carnage).Vanguard Consumer Staples ETF manages a $6.7 billion asset base and charges a fee of 10 bps per year. VDC trades in a good volume of around 205,000 shares per day on average and has a Zacks ETF Rank #3 with a Medium risk outlook.Vanguard Dividend Appreciation ETF (VIG)Dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. Dividend-focused products offer safety in the form of payouts while at the same time providing stability as mature companies are less volatile to large swings in stock prices. This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Vanguard Dividend Appreciation ETF is the largest and the most popular ETF in the dividend space, with AUM of $66.9 billion and an average daily volume of 2 million shares.Vanguard Dividend Appreciation ETF follows the S&P U.S. Dividend Growers Index, which is composed of companies that have a record of increasing dividends over time. It holds 267 securities in the basket and charges 6 bps in annual fees. The product has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.iShares MSCI USA Quality Factor ETF (QUAL)Quality stocks are rich in value characteristics with a healthy balance sheet, high return on capital, low volatility, elevated margins, and a track record of stable or rising sales and earnings growth. These products thus reduce volatility when compared to plain vanilla funds and hold up rather well during market swings. iShares MSCI USA Quality Factor ETF provides exposure to large and mid-cap stocks exhibiting positive fundamentals (high return on equity, stable year-over-year earnings growth and low financial leverage) by tracking the MSCI USA Sector Neutral Quality Index (read: Can Quality ETFs be Good Bets as Russia-Ukraine Tensions Rise?).iShares MSCI USA Quality Factor ETF holds 124 securities in its basket and trade in an average daily volume of 1.7 million shares. The ETF charges 15 bps in annual fees. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Utilities Select Sector SPDR ETF (XLU): ETF Research Reports iShares U.S. Healthcare Providers ETF (IHF): ETF Research Reports Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares MSCI USA Quality Factor ETF (QUAL): ETF Research Reports Vanguard Consumer Staples ETF (VDC): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMar 30th, 2022

Dividend ETFs Scaling New Highs

Dividend investing has been in vogue amid bouts of volatility and uncertainty, pushing dividend ETFs to new highs. Dividend investing has been in vogue amid bouts of volatility and uncertainty. This is especially true as these are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation.As such, many dividend ETFs have been on the rise, reaching new peaks. These include iShares Select Dividend ETF DVY, iShares Core High Dividend ETF HDV, Morningstar Dividend Leaders Index Fund FDL, Invesco S&P 500 High Dividend Low Volatility ETF SPHD and Fidelity High Dividend ETF FDVV. The funds also have the potential to move higher given the prevailing market uncertainty.The dividend-focused products offer safety through payouts and stability in the form of mature companies that are less volatile amid large swings in stock prices. This is because the companies that pay out dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Current Market TrendsWall Street staged a strong comeback over the past two weeks. The S&P 500 and the Nasdaq Composite logged in the gains for two consecutive weeks, marking their strongest performances since November 2020 (read: Wall Street Had the Best Week Since Nov 2020: 5 ETF Winners).The gains came following the Fed’s decision to raise interest rates for the first time since 2018, with more to come. The central bank hiked rates by 25 basis points (bps) to 0.25-0.50% and signaled hikes in all the six remaining meetings this year to tackle the fastest inflation in four decades even as risks to economic growth mount. Additionally, consumer spending remains strong given the elevated wage growth and lower unemployment rate.However, the persistent rise in commodity prices and the aftermath of the Russia-Ukraine war have led to concerns about a global economic slowdown. A resurgence of virus cases in China and the another wave of lockdown added to the chaos (read: 5 Sector ETFs That Crushed the Market in Q1).Let’s delve deeper into the above-mentioned ETFs:iShares Select Dividend ETF (DVY)iShares Select Dividend ETF provides exposure to the high dividend-paying U.S. equities with a five-year history of dividend growth. It follows the Dow Jones U.S. Select Dividend Index and holds 100 securities in its basket, with each accounting for less than 2.4% of assets.iShares Select Dividend ETF has AUM of $21.7 billion and an average daily volume of around 1.4 million shares. It charges 38 bps in fees per year from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Dividend ETF Hits New 52-Week High).First Trust Morningstar Dividend Leaders Index Fund (FDL)First Trust Morningstar Dividend Leaders Index Fund offers exposure to stocks that have shown the highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks in its basket with key holdings in healthcare, consumer staples, communication services and utilities.With AUM of $2 billion, First Trust Morningstar Dividend Leaders Index Fund charges 45 bps in annual fees from investors and trades in a solid volume of about 454,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.iShares Core High Dividend ETF (HDV)iShares Core High Dividend ETF offers exposure to 75 high-quality and high dividend stocks. It tracks the Morningstar Dividend Yield Focus Index and is slightly concentrated on the top firms, with each making up for no more than 8% share.iShares Core High Dividend ETF has AUM of $9 billion and trades in a solid volume of around 1 million shares a day. It charges 8 bps in fees per year and has a Zacks ETF Rank #3 with a Medium risk outlook.Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)Invesco S&P 500 High Dividend Low Volatility ETF offers exposure to 52 stocks traded on the S&P 500 Index that historically have provided high dividend yields and low volatility. It follows the S&P 500 Low Volatility High Dividend Index. Invesco S&P 500 High Dividend Low Volatility ETF is widely spread across sectors, with utilities, consumer staples, real estate and healthcare receiving double-digit exposure each.Invesco S&P 500 High Dividend Low Volatility ETF has amassed $3.3 billion and charges 30 bps in annual fees. The fund trades in an average daily volume of 2 million shares.Fidelity High Dividend ETF (FDVV)Fidelity High Dividend ETF offers exposure to large and mid-cap high-dividend-paying companies that are expected to continue paying and growing their dividends. This is easily done by Fidelity High Dividend Index. The fund holds 115 stocks in its basket, with each making up for not more than 5.5% of assets. Sector-wise, information technology takes the largest share at 21.3%, while financials, energy, real estate, utilities and materials receive double-digit exposure each (read: 5 Top-Ranked ETFs on Sale).Fidelity High Dividend ETF has gathered $1.2 billion in its asset base while it trades in an average daily volume of 234,000 shares. It charges 29 bps in annual fees and has a Zacks ETF Rank #2 (Buy). Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Select Dividend ETF (DVY): ETF Research Reports First Trust Morningstar Dividend Leaders ETF (FDL): ETF Research Reports iShares Core High Dividend ETF (HDV): ETF Research Reports Invesco S&P 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports Fidelity High Dividend ETF (FDVV): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksMar 29th, 2022

Dividend ETFs At New Peaks Amid Volatility

The appeal for dividend-focused ETFs is high at the start of 2022, given bouts of volatility triggered by a hawkish Fed, rising yields, skyrocketing inflation and of course a spike in the Omicron COVID-19 variant cases. The appeal for dividend-focused ETFs is high at the start of 2022, given bouts of volatility triggered by a hawkish Fed, rising yields, skyrocketing inflation and of course a spike in the Omicron COVID-19 variant cases. This is especially true as dividend-focused ETFs are major sources of consistent income for investors in any type of market though they do not offer dramatic price appreciation.As such, many dividend ETFs have been on the rise, reaching new peaks. These include iShares Select Dividend ETF DVY, Morningstar Dividend Leaders Index Fund FDL, iShares Core High Dividend ETF HDV, SPDR Portfolio S&P 500 High Dividend ETF SPYD and Vanguard High Dividend Yield ETF VYM. These funds also have the potential to move higher given the prevailing market uncertainty (read: Buy These Dividend ETFs to Beat Inflation & Omicron in 2022).The dividend-focused products offer safety through payouts, and stability in the form of mature companies that are less volatile amid large swings in stock prices. This is because the companies that pay out dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.Current Market TrendsOmicron cases are surging in the United States with more than a million new cases in a single-day and hospitalizations hitting new highs.The 10-year Treasury yield hit a two-year high on bets that the Federal Reserve could raise interest rates as soon as in March. The latest Fed minutes revealed policymakers’ concerns about worsening inflation and early interest rate hikes to combat rising inflation. The policymakers signaled three rate increases this year and three in the following year as inflation concerns deepened. The probabilities of a March interest rate hike of 0.25% surged to 72%, according to fed futures trading contracts.However, higher yields indicate investors’ optimism in the economy. A still-improving economy backed by job growth and higher consumer confidence will likely bolster risk-on trade. Increased U.S. consumer confidence, suggests that the economy would continue to expand in 2022. Additionally, President Biden’s administration took steps to eliminate supply-chain bottlenecks, indicating that higher inflation will not last very long. Further, the wider spread of vaccinations, new vaccines as well as solid corporate earnings bode well for the economy and thus the stock market (read: Higher Yields Raise Appeal for Inverse Treasury ETFs).Let’s delve deeper into the above-mentioned ETFs:iShares Select Dividend ETF (DVY)iShares Select Dividend ETF provides exposure to the high dividend-paying U.S. equities with a five-year history of dividend growth. It follows the Dow Jones U.S. Select Dividend Index and holds 101 securities in its basket with each accounting for less than 2.6% of assets.iShares Select Dividend ETF has AUM of $20.6 billion and an average daily volume of around 798,000 shares. It charges 38 bps in fees per year from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Dividend ETF Hits New 52-Week High).First Trust Morningstar Dividend Leaders Index Fund (FDL)First Trust Morningstar Dividend Leaders Index Fund offers exposure to stocks that have shown the highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks in its basket with key holdings in healthcare, communication services, consumer staples and utilities.With AUM of $1.8 billion, First Trust Morningstar Dividend Leaders Index Fund charges 45 bps in annual fees from investors and trades in a solid volume of about 180,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.iShares Core High Dividend ETF (HDV)iShares Core High Dividend ETF offers exposure to 75 high quality and high dividend stocks. It tracks the Morningstar Dividend Yield Focus Index and is slightly concentrated on the top firms with each making up for no more than 9% share.iShares Core High Dividend ETF has AUM of $7.7 billion and trades in a solid volume of around 465,000 shares a day. It charges 8 bps in fees per year and has a Zacks ETF Rank #3 with a Medium risk outlook.SPDR Portfolio S&P 500 High Dividend ETF (SPYD)SPDR Portfolio S&P 500 High Dividend ETF provides exposure to stocks with a high level of dividend income and the opportunity for capital appreciation by tracking the S&P 500 High Dividend Index. Holding 76 stocks in its basket, the fund is well diversified across securities with each making up for less than 1.8% of assets. Financials, utilities, real estate and energy are the top four sectors with double-digit exposure each.SPDR Portfolio S&P 500 High Dividend ETF has AUM of $5.5 billion and trades in volume of about 1.4 million shares. It charges 7 bps in annual fees and has a Zacks ETF Rank of #1 (Strong Buy) with a Medium risk outlook.Vanguard High Dividend Yield ETF (VYM)Vanguard High Dividend Yield ETF provides exposure to the high-yielding dividend stocks by tracking the FTSE High Dividend Yield Index. Holding 410 securities, the product is pretty well spread out across components as each holds no more than 4% of the assets. Vanguard High Dividend Yield ETF has key holdings in financials, consumer staples and healthcare with double-digit exposure each.  Vanguard High Dividend Yield ETF has amassed $43.7 billion in its asset base while trading in volume of 1.6 million shares a day on average. Expense ratio is 0.06%. VYM has a Zacks ETF Rank #1 with a Medium risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares Select Dividend ETF (DVY): ETF Research Reports First Trust Morningstar Dividend Leaders ETF (FDL): ETF Research Reports iShares Core High Dividend ETF (HDV): ETF Research Reports SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research Reports Vanguard High Dividend Yield ETF (VYM): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksJan 14th, 2022

Real Estate ETFs Scaling New Highs: Here"s Why

Many real estate ETFs have hit new highs in the latest trading session and are exhibiting strong momentum. The real estate sector has been on a tear this year, buoyed by lower interest rates and improving economic conditions, pushing many ETFs to new highs.Vanguard Real Estate ETF VNQ, iShares U.S. Real Estate ETF IYR, Real Estate Select Sector SPDR Fund XLRE, iShares Residential and Multisector Real Estate ETF REZ and Invesco S&P 500 Equal Weight Real Estate ETF EWRE have hit new highs in the latest trading session and are exhibiting strong momentum. Any of these could be excellent picks for investors seeking to benefit from the current market environment (see: all the Real Estate ETFs here).Though the Fed is planning to accelerate the withdrawal of its bond-buying program at its December meeting to combat a surge in inflation, still lower rates are driving up the sector. Lower rates have made buying real estate and refinancing mortgages more affordable. This, in turn, is boosting activity in the market and real estate stocks.Meanwhile, the U.S. economy is in good shape with a pick-up in hiring, increase in wages and rise in consumer confidence. Confidence among the large U.S. companies also jumped to an all-time high as indicated by the solid manufacturing data. Manufacturing activity grew at a faster pace in November with producers trying to keep up with demand amid ongoing supply shortages and delays. The manufacturing sector recorded 18 straight months of growth going back to the spring of 2020 when the pandemic broke.Growth in the economy translates into greater demand for real estate, higher occupancy levels and landlords’ greater power to ask for higher rents. An uptick in home prices is also driving the real estate sector higher as more consumers are moving toward rental. Additionally, REITs have benefited from inflation concerns as it is often considered a hedge against inflation (read: 5 Top-Ranked ETFs to Buy At Bargain Prices).Further, the new strain of COVID-19 cases has raised the appeal for these assets. This is because these often act as a safe haven in times of market turbulence and concurrently offer higher returns due to their outsized yields. REITs own and operate income-producing real estate. They are required to distribute at least 90% of taxable income to shareholders annually in the form of dividends and, in turn, can deduct those dividends paid from their corporate taxable income. Thus, REITs offer juicy dividend yields. Further, REITs have a low correlation with other stocks and bonds, thereby providing huge diversification benefits to the portfolio.We have profiled the five ETFs in detail below:Vanguard Real Estate ETF (VNQ)Vanguard Real Estate ETF follows the MSCI US Investable Market Real Estate 25/50 Index and holds 170 stocks in its basket. Specialized REITs take the largest share at 26.9%, while residential REITs and industrial REITs round off the top three with double-digit exposure each. Vanguard Real Estate ETF has an expense ratio of 0.12%.Vanguard Real Estate ETF is the most popular and liquid ETF with AUM of $46.7 billion and an average daily volume of around 4 million shares a day. It has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.iShares U.S. Real Estate ETF (IYR)iShares U.S. Real Estate ETF offers exposure to U.S. real estate companies and REITs, which invest in real estate directly and trade like stocks. It follows the Dow Jones U.S. Real Estate Capped Index. iShares U.S. Real Estate ETF holds a basket of 88 securities with specialized REITs dominating the portfolio at 37.4%, followed by residential REITs (15.2%) and industrial REITs (12.2%).iShares U.S. Real Estate ETF has amassed $6.1 billion in its asset base while trading in a heavy volume of 7 million shares a day on average. It charges 41 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook (read: 5 ETFs Trading At New Highs).Real Estate Select Sector SPDR Fund (XLRE)Real Estate Select Sector SPDR Fund provides exposure to companies from real estate management and development and REITs, excluding mortgage REITs by tracking the Real Estate Select Sector Index. With AUM of $5.3 billion, Real Estate Select Sector SPDR Fund holds 29 stocks in its basket with some concentration on the top two firms.Real Estate Select Sector SPDR Fund charges 12 bps in annual fees and trades in an average daily volume of 6.4 million shares. XLRE has a Zacks ETF Rank #1 with a High-risk outlook.iShares Residential and Multisector Real Estate ETF (REZ)iShares Residential and Multisector Real Estate ETF offers exposure to the U.S. residential real estate sector and follows the FTSE Nareit All Residential Capped Index. It has AUM of $1.2 billion and holds 42 stocks in its basket with a double-digit concentration on the top firm.iShares Residential and Multisector Real Estate ETF has 0.48% in expense ratio and an average daily volume of 107,000 shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.Invesco S&P 500 Equal Weight Real Estate ETF (EWRE)Invesco S&P 500 Equal Weight Real Estate ETF equally weighs stocks in the real estate sector of the S&P 500 Index by tracking the S&P 500 Equal Weight Real Estate Index. It holds 30 stocks in its basket with none accounting for more than 4% of the assets.With AUM of $80.6 million, Invesco S&P 500 Equal Weight Real Estate ETF charges 40 bps in annual fees and trades in an average daily volume of 37,000 shares. EWRE has a Zacks ETF Rank #3 with a High-risk outlook. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vanguard Real Estate ETF (VNQ): ETF Research Reports Real Estate Select Sector SPDR ETF (XLRE): ETF Research Reports iShares U.S. Real Estate ETF (IYR): ETF Research Reports Invesco S&P 500 Equal Weight Real Estate ETF (EWRE): ETF Research Reports iShares Residential and Multisector Real Estate ETF (REZ): ETF Research Reports To read this article on Zacks.com click here......»»

Category: topSource: zacksDec 10th, 2021

10 Best Stocks to Buy Before Recession Begins

In this article, we discuss 10 best stocks to buy before recession begins. If you want to see more stocks in this selection, click 5 Best Stocks to Buy Before Recession Begins.  Between 1929 and 1939, the period famously dubbed the Great Depression, global economies suffered from stock market crashes, sharp declines in output, high […] In this article, we discuss 10 best stocks to buy before recession begins. If you want to see more stocks in this selection, click 5 Best Stocks to Buy Before Recession Begins.  Between 1929 and 1939, the period famously dubbed the Great Depression, global economies suffered from stock market crashes, sharp declines in output, high unemployment, greater poverty, personal and corporate bankruptcies, and falling international trade. The US economy is spiraling towards yet another slowdown. The latest calls of “Poison” Ivy Zelman, the analyst who predicted the 2008 housing crash and the founder of Zelman & Associates, suggest that she expects an 8.8% drop in U.S. home prices between 2022 and 2024. History indicates that this would potentially be one of the three steepest housing price declines on record. The other two sharpest price drops were registered during the Great Depression and the Great Recession. Steve Hanke, a professor of applied economics at Johns Hopkins University, told CNBC at the end of August that the US economy is expected to fall into a recession next year, and the rake hikes will not necessarily be the primary catalyst. He further explained:  “We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it.”  M2 is an indicator of overall money supply and future inflation, consisting of cash, checking and savings deposits, and money market securities. The money supply has become stagnant in the last few months, which will result in a slowing economy, according to Hanke. He expects “one whopper of a recession in 2023”. He attributed the currently raging inflation to the “unprecedented growth” in money supply during the peak COVID period.  Nouriel Roubini, a New York University professor and the CEO of Roubini Macro Associates, who is also known as Dr. Doom due to his foresight of the 2007 and 2008 housing market crash, is of the view that the US will experience a recession by the end of 2022. He believes that the recession will continue throughout 2023. In 2020, Dr. Doom forecasted that a new “great depression” was set to hit the U.S. during the 2020s, given the increasing debt levels. In July 2022, he predicted a “severe recession and a severe debt and financial crisis” for the US economy.  Some of the best stocks to buy before the next recession starts include Costco Wholesale Corporation (NASDAQ:COST), Walmart Inc. (NYSE:WMT), and ConocoPhillips (NYSE:COP).  Niloo / Shutterstock.com Our Methodology  We selected defensive stocks operating in sectors that have historically survived extreme economic downturns. These sectors include energy, home goods, food, pharma, and alcoholic beverages. Strong business fundamentals and positive analyst coverage were important classifiers for shortlisting the following stocks.  We have arranged the list according to the hedge fund sentiment around the securities, which was assessed from Insider Monkey’s Q2 2022 database of about 900 elite hedge funds.  10. Anheuser-Busch InBev SA/NV (NYSE:BUD)   Number of Hedge Fund Holders: 14 Anheuser-Busch InBev SA/NV (NYSE:BUD) is headquartered in Leuven, Belgium, selling alcoholic beverages and soft drinks worldwide. The company primarily distributes beer under the Budweiser, Corona, Stella Artois, Bud Light, Castle, and Skol brands, among others. The company beat market estimates on earnings and revenue in the second quarter of 2022, and total sales volume also increased. Anheuser-Busch InBev SA/NV (NYSE:BUD) is one of the best stocks to buy before recession starts, as consumers increase their alcohol and tobacco intake amid stressful unemployment, monetary, and overall macro pressures.  On September 12, Deutsche Bank analyst Mitch Collett raised the price target on Anheuser-Busch InBev SA/NV (NYSE:BUD) to EUR 74 from EUR 73 and maintained a Buy rating on the shares. Similarly, HSBC analyst Carlos Laboy on September 6 upgraded Anheuser-Busch InBev SA/NV (NYSE:BUD) to Buy from Hold with a price target of EUR 65, up from EUR 64, citing valuation for the upgrade. The analyst believes Anheuser-Busch InBev SA/NV (NYSE:BUD)’s revenue and margin pressures will ease into the end of 2022 due to normalizing input prices. According to Insider Monkey’s data, 14 hedge funds were bullish on Anheuser-Busch InBev SA/NV (NYSE:BUD) at the end of June 2022, compared to 20 funds in the last quarter. Ken Fisher’s Fisher Asset Management featured as the leading stakeholder of the company, with more than 9 million shares worth roughly $487 million.  In addition to Costco Wholesale Corporation (NASDAQ:COST), Walmart Inc. (NYSE:WMT), and ConocoPhillips (NYSE:COP), Anheuser-Busch InBev SA/NV (NYSE:BUD) is one of the best defensive plays for the upcoming recession. Here is what ClearBridge Investments Large Cap Growth Strategy has to say about Anheuser-Busch InBev SA/NV (NYSE:BUD) in its Q4 2021 investor letter: “To make room for these new names and optimize the growth profile of the Strategy, we exited two additional positions during the quarter. We sold out of Anheuser-Busch InBev as we see too much work ahead for the world’s largest beer maker to re-ignite sales growth post COVID-19. While the company should benefit from a recovery in the on-premise channel, individual country complexities, the hedging of raw materials, and senior management turnover leave us more confident in the Strategy’s other reopening-related holdings.” 9. Unilever PLC (NYSE:UL)   Number of Hedge Fund Holders: 21 Unilever PLC (NYSE:UL) is a London-based fast moving consumer goods company, operating through Beauty & Personal Care, Foods & Refreshment, and Home Care segments. Unilever PLC (NYSE:UL) is one of the best stocks to invest in before the next recession starts, given its defensive nature. Consumers will not stop buying personal care products and food items despite dire economic conditions impacting household budgets.  On August 3, Unilever PLC (NYSE:UL) declared a $0.4343 per share quarterly dividend. The dividend was paid to shareholders on September 1. The company delivers a dividend yield of 4.10% as of September 22, way ahead of the average consumer staples yield of 1.89%.  Deutsche Bank analyst Tom Sykes on July 26 upgraded Unilever PLC (NYSE:UL) to Buy from Hold with an unchanged price target of 4,600 GBp, noting that “commodity headwinds are now turning to tailwinds for 2023”. The analyst believes Unilever PLC (NYSE:UL) has the potential for expanding margins in 2023, while “many companies in the market will be seeing margin declines”. Although he is cautious on the overall consumer outlook, the analyst categorized Unilever PLC (NYSE:UL) as “at least a relative outperformer”. Among the hedge funds tracked by Insider Monkey, Unilever PLC (NYSE:UL) was part of 21 public stock portfolios at the end of Q2 2022, compared to 23 in the last quarter. Tom Russo’s Gardner Russo & Gardner is the biggest position holder in the company, with approximately 7 million shares valued at $319 million.  Here is what Mayar Capital specifically said about Unilever PLC (NYSE:UL) in its second quarter investor letter: “In 1895 the Lever brothers created a new brand of hand soap. Inspired by the growing demand for hygiene products, the Lifebuoy brand of soaps was launched to ‘make health infectious’. 128 years later the Lifebuoy brand continues as a leading soap brand – albeit without the coal tar-derived ingredients list. In fact, the market research firm Kantar ranked Lifebuoy as the global #3 most chosen FMCG brand in 2020, just below Coca-Cola (KO) and Colgate (CL) – an astonishing fact given the age of the brand. While the brand is largely absent from shelves here in the UK, it is a juggernaut in Asian markets, and is the #1 brand in India. There are two observations about the Lifebuoy story which tell us a lot about Unilever PLC (NYSE:UL), which is currently our largest holding in the Fund. The first is the enduring power of brands in the consumer goods market. According to Kantar’s list of most chosen brands, the top 20 global marques have an average age of 116 years, with over half being founded in the 19th century. Fashions come and go, but there is something special about low-cost consumable goods that advantages strong, time-worn brand names…” (Click here to view full text) 8. Shell plc (NYSE:SHEL)   Number of Hedge Fund Holders: 39 Shell plc (NYSE:SHEL) is a London-based energy and petrochemical company, with presence in Europe, Asia, Oceania, Africa, the United States, and the Americas. The company operates through Integrated Gas, Upstream, Marketing, Chemicals and Products, and Renewables and Energy Solutions segments. Energy stocks are great to load up on before the next recession starts, and while industrial demand may be weaker, the residential demand for gas, electricity, renewables, and petroleum remains robust even when the economy slows.  On September 12, Piper Sandler analyst Ryan Todd raised the price target on Shell plc (NYSE:SHEL) to $80 from $75 and maintained an Overweight rating on the shares. The analyst remains constructive on the integrated oils, noting that almost record-level distillate margins are generating upside in refining estimates and this will likely continue through the winter and into an “equally tight” 2023.  Among the hedge funds tracked by Insider Monkey, 39 funds reported owning stakes in Shell plc (NYSE:SHEL) at the end of the second quarter of 2022, compared to 37 funds in the last quarter. William B. Gray’s Orbis Investment Management is one of the leading position holders in the company, with 9.13 million shares worth about $478 million.  Here is what Harding Loevner International Equity Fund has to say about Shell plc (NYSE:SHEL) in its Q1 2022 investor letter: “While risks of unforeseen consequences arising from the Ukraine conflict are high, on this front we are cautiously optimistic that China will work hard to maintain its neutrality in a credible way, as it is a huge beneficiary of trade with the rest of the world, especially the rich developed nations. We think it likely that China, along with India, will continue to buy oil and gas from Russia (just as Europe, at least for now, plans to keep its gas pipelines open), and do not expect that fact to alter China’s trade relations with the West much. Nevertheless, we must contemplate that our optimism is misplaced on the importance of membership in the global network of exchange. If our central and optimistic case—admittedly an educated guess—is wrong, then we’d need to greatly modify our views of which companies in our opportunity set will face new barriers to profitable growth, and which might stand to benefit, relatively, from a further receding of globalization. (Global trade, after all, has never matched the peak share of GDP it reached in 2008, before the Global Financial Crisis.) We’d expect such a world to be less efficient, as the cold logic of comparative advantage is demoted as a determinant of which goods or services are produced and where. That would lead to a less prosperous world, since exploiting comparative advantage is a cornerstone of wealth creation. If regional blocs began to raise limits on the movement of capital as well as goods, we’d need to parse which of our multinational companies were at risk of declining sales from increasingly hostile, siloed countries. Royal Dutch Shell (NYSE:SHEL) has found its Siberian oil and gas joint venture assets stranded by the combination of sanctions and the public opprobrium of Russia’s actions.” 7. The Kraft Heinz Company (NASDAQ:KHC)   Number of Hedge Fund Holders: 41 The Kraft Heinz Company (NASDAQ:KHC) is a Pennsylvania-based company that manufactures and markets food and beverage products in the United States, Canada, the United Kingdom, and internationally. On September 21, the packaged food sector got a boost from a solid beat-and-raise earnings report from General Mills, Inc. (NYSE:GIS). The Kraft Heinz Company (NASDAQ:KHC) was one of the gainers as well, with the stock rising 3.33%. The company will pay a per share quarterly dividend of $0.40 on September 23.  Stifel analyst Christopher Growe said in a research note on September 19 that The Kraft Heinz Company (NASDAQ:KHC) highlighted the path to higher growth and it is “harnessing the significant improvement in the business operations to support its faster growth”. The analyst, who upgraded the stock recently to factor in a discounted valuation and an appreciation for the expanding growth potential in the company’s portfolio, reiterated a Buy rating and a $43 target price target. The analyst is confident about The Kraft Heinz Company (NASDAQ:KHC) stock moving forward.  According to the second quarter database of Insider Monkey, 41 hedge funds were bullish on The Kraft Heinz Company (NASDAQ:KHC), up from 35 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the leading stakeholder of the company, with 325.6 million shares worth $12.4 billion.  6. Constellation Brands, Inc. (NYSE:STZ)   Number of Hedge Fund Holders: 44 Constellation Brands, Inc. (NYSE:STZ) is a New York-based company that produces, imports, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. Constellation Brands, Inc. (NYSE:STZ)’s beer brands include the Corona Extra, Corona Premier, Corona Familiar, Corona Light, Corona Refresca, and Corona Hard Seltzer, among others. The demand for alcohol historically increases in periods of economic turmoil, which makes Constellation Brands, Inc. (NYSE:STZ) one of the best stocks to buy before recession starts.  JPMorgan analyst Andrea Teixeira on September 15 raised the price target on Constellation Brands, Inc. (NYSE:STZ) to $287 from $263 and reaffirmed an Overweight rating on the shares ahead of the company’s Q2 results on October 6. The analyst believes the overall beer setup was “largely favorable” in Q2 and that the tailwinds should continue in the future.  According to Insider Monkey’s data, 44 hedge funds reported owning stakes worth $1.3 billion in Constellation Brands, Inc. (NYSE:STZ) at the end of June 2022, compared to 41 funds in the last quarter worth $982.3 million. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the largest stakeholder of the company, with 1.4 million worth $326 million.  Like Costco Wholesale Corporation (NASDAQ:COST), Walmart Inc. (NYSE:WMT), and ConocoPhillips (NYSE:COP), elite hedge funds are piling into Constellation Brands, Inc. (NYSE:STZ) ahead of the next recession.   Click to continue reading and see 5 Best Stocks to Buy Before Recession Begins.    Suggested articles: 10 Monthly Dividend Stocks with Highest Yields 10 Penny Stocks with High Growth Potential 10 Best ESG Stocks To Buy   Disclosure: None. 10 Best Stocks to Buy Before Recession Begins is originally published on Insider Monkey......»»

Category: topSource: insidermonkeySep 23rd, 2022

Here"s Why SBA Communications (SBAC) is an Apt Portfolio Pick

Demand for SBA Communications' (SBAC) towers is likely to increase as wireless service providers seek to lease more antenna space to meet the rising consumer demand amid data-volume growth. SBA Communications SBAC is well-poised to witness healthy demand for its tower assets as wireless service providers continue to expand their networks amid data-volume growth and accelerated deployment of 5G networks.Additionally, with the increased innovation and adoption of data-driven mobile devices and applications, such as machine-to-machine connections, social networking and streaming of video, wireless consumer demand is expected to escalate considerably in the years to follow. This gives SBA Communications great scope to capitalize on the upbeat trend.It has a resilient and stable site-leasing business model as it generates most of its revenues from long-term (typically 5-10 year) tower leases that have built-in rent escalators.Moreover, with wireless service providers continuing to lease additional antenna space on the company’s towers amid the increase in network use, data transfer, network expansion and network coverage requirements, SBAC’s site-leasing revenue growth is likely to remain robust.SBA Communications has been focusing on enhancing and expanding its tower portfolio through the extension of its business into select international markets with high growth characteristics. In the second quarter, it acquired 210 communication sites and one data center in Brazil for total cash consideration of $127.3 million and built 100 towers. It is also under contract to acquire roughly 2,600 sites from Grupo TorreSur in Brazil for $725 million.Thus, portfolio expansion positions the company well to take advantage of the secular trends in mobile data usage and wireless spending growth across the globe.SBA Communications maintains a healthy balance-sheet position with ample liquidity. As of Aug 1, 2022, the company had $480 million outstanding under its $1.5 billion revolving credit facility. This gives it ample financial flexibility to pursue its growth endeavors.Moreover, SBAC carries out share buybacks and announces dividend hikes from time to time. This demonstrates the company’s commitment to driving shareholder value alongside boosting shareholders’ confidence in the stock.Analysts seem bullish about the Zacks Rank #2 (Buy) stock. The Zacks Consensus Estimate for the company’s 2022 funds from operations (FFO) per share indicates a favorable outlook for the company as it has been revised marginally upward in the past week to $12.17.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Shares of SBAC have declined 9.3% in the past six months compared with the industry’s fall of 18.0%.Image Source: Zacks Investment ResearchHowever, SBA Communications has a high customer concentration, with Verizon VZ, AT&T T and T-Mobile TMUS accounting for the majority of its domestic site-leasing revenues. Notably, in the second quarter of 2022, T-Mobile, AT&T and Verizon accounted for 40.8%, 29.0% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.Therefore, the loss of any of these customers, consolidation among them or a reduction in network spending is likely to hurt the company’s top line significantly.SBA Communications has a substantially leveraged balance sheet with a high debt-to-capital ratio compared with the industry average. This limits its strength to withstand any credit crisis and unexpected negative externalities in the future.Also, a hike in interest rates is likely to increase borrowing costs, affecting its ability to purchase or develop real estate.Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report SBA Communications Corporation (SBAC): Free Stock Analysis Report TMobile US, Inc. (TMUS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 23rd, 2022

Guide to Interest Rates Hike and ETFs

The central bank raised interest rates by another three-quarters of a percentage point. The Federal Reserve has been on an aggressive tightening policy to fight skyrocketing inflation, which is running near its highest levels since the early 1980s. Fed Chair Jerome Powell raised interest rates by another three-quarters of a percentage point in the meeting concluded yesterday. This marks the third consecutive interest-rate hike of 0.75%.Against this backdrop, investors should be well prepared to protect themselves from higher rates. While there are number of ways that could prove extremely beneficial in a rising-rate environment, ETFs like SPDR S&P Insurance ETF KIE, SPDR S&P Regional Banking ETF KRE, Vanguard Value ETF VTV, JPMorgan Ultra-Short Income ETF JPST and iShares Floating Rate Bond ETF FLOT from different corners of the market seem compelling picks.The rate hike brings the benchmark interest rate, the federal funds rate, to a 3.0-3.25%, the highest level since 2008, from 2.25-2.5%. The increase in interest rates will make borrowing expensive, driving up the cost of buying a new car or house, or increase the cost of carrying credit card debt and thus slow down economic growth.The central bank also signaled that additional large rate hikes were likely at the upcoming meetings as it combats inflation that remains near a 40-year high. Fed officials now expect the federal funds rate at a range of 4.25% to 4.5%, a full percentage point above 3.25% to 3.5% to end 2022, projected in June. This suggests the central bank could approve another three-quarter point hike at its November meeting and then a half-point rate rise in December.Any Reason to Worry?Higher rates would attract more capital to the country, thereby boosting the U.S. dollar against the basket of other currencies. However, since a strong dollar should have a huge impact on commodity-linked investments, a rising-rate environment will also hurt a number of segments (read: Floating Rate ETFs to Manage Higher Rates).In particular, high dividend paying sectors such as utilities and real estate would be the worst hit given their higher sensitivity to rising interest rates. Additionally, securities in capital-intensive sectors like telecom would also be impacted by higher rates. Further, the increase in interest rates will make borrowing expensive, driving up the cost of buying a new car or house, or carrying credit card debt and thus curtail economic growth.InsuranceInsurance stocks are one of the prime beneficiaries of a rate hike, as these are able to earn higher returns on their investment portfolio of longer-duration bonds. But at the same time, these firms incur loss as the value of longer-duration bonds goes down with rising interest rates. Nevertheless, since insurance companies have long-term investment horizons, they can hold investments until maturity and hence, no actual losses will be realized.SPDR S&P Insurance ETF follows the S&P Insurance Select Industry Index, holding 51 stocks in its basket, with each firm accounting for no more than 2.3% share. About 44.8% of the portfolio is allocated to property and casualty insurance, while life & health insurance and insurance brokers round off the next two spots with double-digit exposure. SPDR S&P Insurance ETF has managed $413.8 million in its asset base and trades in a good average daily volume of about 874,000 shares. The product has an expense ratio of 0.35% and a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.BanksAs banks seek to borrow money at short-term rates and lend at long-term rates, the rise in interest rates will help them earn more on lending and pay less on deposits, leading to a wider spread. This will expand net margins and increase banks’ profits.SPDR S&P Regional Banking ETF provides exposure to the regional banks’ segment by tracking the S&P Regional Banks Select Industry Index. It holds 144 stocks in its basket, with each accounting for no more than 2.1% of the assets. SPDR S&P Regional Banking ETF has AUM of $3.2 billion and charges 35 bps in annual fees. It trades in an average daily volume of 5.6 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook (read: Bet on Bank ETFs on Fed Rate Hike).ValueHigher yields indicate optimism in the economy backed by increased consumer confidence, rising wages and higher spending. This combination of factors will result in increased industrial activity and a pickup in consumer demand, thereby lifting value stocks.Vanguard Value ETF targets the value segment of the broad U.S. stock market and follows the CRSP US Large Cap Value Index. It holds 344 stocks in its basket, with each accounting for less than 3% of assets. Vanguard Value ETF has AUM of $98.2 billion and charges 4 bps in annual fees. The product trades in a volume of 2.2 million shares per day on average and has a Zacks ETF Rank #1 with a Medium risk outlook.Short-Duration BondHigher rates have been cruel to bond investors, especially the longer-term ones, as an increase in rates has led to rising yields and lower bond prices. This is because price and yields are inversely related to each other and might lead to huge losses for investors who do not hold bonds until maturity. As a result, short-duration bonds are less vulnerable and a better hedge to rising rates (read: Time to Buy Cash-Like ETFs?).JPMorgan Ultra-Short Income ETF invests primarily in a diversified portfolio of short-term, investment grade fixed-and floating-rate corporate and structured debt while actively managing credit and duration exposure. It holds 620 bonds in its basket with an average duration of 0.29 years. JPMorgan Ultra-Short Income ETF has accumulated $21.8 billion in its asset base while trading in a good volume of around 4 million shares a day. It charges 18 bps in annual fees.Floating Rate BondsFloating rate bonds are investment grade and do not pay a fixed rate to investors but have variable coupon rates that are often tied to an underlying index (such as LIBOR) plus a variable spread depending on the credit risk of issuers. Since the coupons of these bonds are adjusted periodically, these are less sensitive to an increase in rates compared to the traditional bonds. Unlike fixed coupon bonds, these do not lose value when the rates go up, making the bonds ideal for protecting investors against capital erosion in a rising-rate environment.iShares Floating Rate Bond ETF follows the Bloomberg Barclays US Floating Rate Note < 5 Years Index and holds 399 securities in its basket. The fund has an average maturity of 1.70 years and an effective duration of 0.08 years. iShares Floating Rate Bond ETF has amassed $9.3 billion in its asset base while trading in a volume of 1.3 million shares per day on average. It charges 15 bps in annual fees. Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR S&P Regional Banking ETF (KRE): ETF Research Reports Vanguard Value ETF (VTV): ETF Research Reports SPDR S&P Insurance ETF (KIE): ETF Research Reports iShares Floating Rate Bond ETF (FLOT): ETF Research Reports JPMorgan UltraShort Income ETF (JPST): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 22nd, 2022

2 ETFs to Watch for Outsized Volume on Short-Term Treasury & Large-Cap Dividend

SHY and DLN two ETFs traded with an outsized volume in the last trading session. In the last trading session, Wall Street was extremely downbeat. Among the top ETFs, SPY declined 1.2%, DIA retreated about 1% while QQQ moved 0.8% lower on the day.Two more specialized ETFs are worth noting as both saw trading volume that was far outside of normal. In fact, both these funds experienced volume levels that were more than double their average for the most-recent trading session. This could make these ETFs the ones to watch out for in the days ahead to see if this trend of extra-interest continues.SHY: Volume 2.57 Times AverageThis short-term U.S. treasury bond ETF was under the microscope as about 15.97 million shares moved hands. This compares with an average trading volume of roughly 6.21 million shares and came as SHY lost about 0.1% in the last trading session. SHY is down 1.2% in a month’s time.DLN: Volume 3.88 Times AverageThis large-cap dividend ETF was in the spotlight as around 837,507 shares moved hands compared with an average of 216,000 shares a day. We also saw some price movement as DLN lost 1.1% in the last session. DLN has slumped 7.2% over the past month.  Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iShares 13 Year Treasury Bond ETF (SHY): ETF Research Reports WisdomTree U.S. LargeCap Dividend ETF (DLN): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 21st, 2022

Guide to Dividend Aristocrat ETFs

The year 2022 has been marked by huge volatility and uncertainty, which have raised the appeal of dividend investing. The year 2022 has been marked by huge volatility and uncertainty, which have raised the appeal of dividend investing. Though this does not offer dramatic price appreciation, the strategy is a major source of consistent income for investors in any market.This is especially true as dividend-focused products offer safety in the form of payouts and stability through mature companies that are less volatile to the large swings in stock prices. The dividend-paying securities are major sources of consistent income for investors when returns from equity markets are at risk. Further, these products are proven outperformers over the long term.While there are plenty of options in the dividend ETF world, zeroing in on the dividend aristocrats could be a wise move in the current market environment, which has been ruffled by higher inflation, aggressive Fed rate hikes and geopolitical issues (read: Invest in Quality ETFs to Fight Volatility).Why Dividend Aristocrats?Dividend aristocrats are blue-chip dividend-paying companies with a long history of increasing dividend payments year over year. These generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis. Additionally, aristocrats tend to skew the portfolio to less-volatile sectors and mature companies.Additionally, these stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. Further, a history of strong dividend growth indicates a likely hike in the future.Investors should note that the dividend aristocrat funds offer more dividend growth opportunities compared to the other products in the space but might not necessarily have the highest yields. Further, these products lead to a healthy portfolio with a greater scope of capital appreciation as opposed to the simple dividend-paying stocks or those with high yields.As a result, these products provide a nice combination of annual dividend growth and capital appreciation opportunity, and are mainly suitable for risk-averse, long-term investors. For them, we have highlighted some popular ETFs that could be excellent choices:Vanguard Dividend Appreciation ETF VIGVanguard Dividend Appreciation ETF is the largest and the most popular ETF in the dividend space, with AUM of $61.8 billion and an average daily volume of 1.3 million shares. The fund follows the S&P U.S. Dividend Growers Index, which is composed of large-cap stocks that have a record of raising dividends every year. Vanguard Dividend Appreciation ETF holds 289 securities in the basket, with none accounting for more than 4.2% share. The fund charges 6 bps in annual fees and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.SPDR S&P Dividend ETF SDYWith AUM of $22.1 billion, SPDR S&P Dividend ETF provides well-diversified exposure to 119 U.S. stocks that have consistently increased their dividend for at least 20 consecutive years. This can be done by tracking the S&P High Yield Dividend Aristocrats Index. Each firm accounts for no more than 1.7% of the assets. SPDR S&P Dividend ETF charges 35 bps in fees and trades in an average daily of 515,000 shares. It has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: Fearing a September Lull? Buy These 5 ETFs).iShares Select Dividend ETF DVYiShares Select Dividend ETF provides exposure to the companies with a consistent five-year history of dividend payments. It follows the Dow Jones U.S. Select Dividend Index and holds 99 securities in its basket with each accounting for less than 2.2% of the assets. iShares Select Dividend ETF has AUM of $22.5 billion and charges 38 bps in fees per year from investors. It trades in average daily volume of 652,000 shares and has a Zacks ETF Rank #2 with a Medium risk outlook.Schwab U.S. Dividend Equity ETF SCHDWith AUM of $37.2 billion, Schwab U.S. Dividend Equity ETF offers exposure to 105 high-dividend yielding U.S. companies that have a record of consistent dividend payments supported by fundamental strength based on financial ratios and ample liquidity. This can be easily done by tracking the Dow Jones U.S. Dividend 100 Index. Schwab U.S. Dividend Equity ETF charges 6 bps in annual fees and trades in an average daily volume of 3 million shares. It has a Zacks ETF Rank #3 with a Medium risk outlook (read: 5 Most-Loved Dividend ETFs of This Year).iShares Core Dividend Growth ETF DGROiShares Core Dividend Growth ETF provides exposure to companies having a history of consistently growing dividends by tracking the Morningstar US Dividend Growth Index. It holds 414 stocks in its basket, with each accounting for less than 3.1% share. iShares Core Dividend Growth ETF has accumulated $24 billion in its asset base and charges 8 bps in fees per year. It trades in an average daily volume of 1.5 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a Medium risk outlook.ProShares S&P 500 Aristocrats ETF NOBLProShares S&P 500 Aristocrats ETF provides exposure exclusively to the high-quality companies that have not just paid dividends but have raised them in at least 25 consecutive years, with most doing so for 40 years or more. It follows the S&P 500 Dividend Aristocrats Index and holds 64 securities in its basket, with each accounting for less than 2.2% share. ProShares S&P 500 Aristocrats ETF has amassed $10.1 billion in its asset base and trades in an average daily volume of 392,000 shares. It has an expense ratio of 0.35% and has a Zacks ETF Rank #3 with a Medium risk outlook.WisdomTree U.S. Quality Dividend Growth Fund DGRWWisdomTree U.S. Quality Dividend Growth Fund tracks the WisdomTree U.S. Quality Dividend Growth Index and offers diversified exposure to U.S. dividend-paying stocks with both growth and quality characteristics like long-term earnings growth expectations and three-year historical averages for return on equity and return on assets. It has gathered $6.8 billion in its asset base and charges 28 bps in fees per year from its investors. WisdomTree U.S. Quality Dividend Growth Fund holds 297 securities in its basket, with each accounting for no more than 5.2% share. It trades in volume of 538,000 per share on average and has a Zacks ETF Rank #2 with a Medium risk outlook.  Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WisdomTree U.S. Quality Dividend Growth ETF (DGRW): ETF Research Reports SPDR S&P Dividend ETF (SDY): ETF Research Reports Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports ProShares S&P 500 Dividend Aristocrats ETF (NOBL): ETF Research Reports iShares Select Dividend ETF (DVY): ETF Research Reports iShares Core Dividend Growth ETF (DGRO): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 20th, 2022

2 ETFs to Watch for Outsized Volume on Gold and Dividend

SGOL and DVY ETFs traded with an outsized trading volume yesterday. In the last trading session, Wall Street was extremely downbeat. Among the top ETFs, SPY declined 1.1%, DIA retreated about 0.5% while QQQ moved 1.7% lower on the day.Two more specialized ETFs are worth noting as both saw trading volume that was far outside of normal. In fact, both these funds experienced volume levels that were more than double their average for the most-recent trading session. This could make these ETFs the ones to watch out for in the days ahead to see if this trend of extra-interest continues.SGOL: Volume 3.63 Times AverageThis gold ETF was under the microscope as about 4.4 million shares moved hands. This compares with an average trading volume of roughly 1.25 million shares and came as SGOL lost about 2% in the last trading session. SGOL is down 6.5% in a month’s time.DVY: Volume 2.69 Times AverageThis dividend ETF was in the spotlight as around 2.23 million shares moved hands compared with an average of 834,450 shares a day. We also saw some price movement as DVY lost 0.8% in the last session. DVY has slumped 5.9% over the past month.  Want key ETF info delivered straight to your inbox? Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco QQQ (QQQ): ETF Research Reports abrdn Physical Gold Shares ETF (SGOL): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports iShares Select Dividend ETF (DVY): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 16th, 2022

Keurig Dr Pepper (KDP) Cheers Investors With Dividend Hike

Amid rising cost concerns, Keurig Dr Pepper (KDP) rewards its shareholders with a dividend hike of 6.7%, payable on Oct 14, 2022. Keurig Dr Pepper KDP announced that its board of directors approved a quarterly cash dividend hike of 6.7%. The quarterly dividend will be paid out on Oct 14, 2022, to shareholders of record at the close of the business on Sep 30, 2022. This brings the new annualized dividend to 80 cents per share, resulting in a dividend yield of 2.5%.The dividend increase is likely to be a relief for investors, as the company raised concerns about significant input cost inflation, rising transportation costs and supply-chain disruptions, which are likely to persist in the near term. These, along with the adverse impacts of higher marketing investment, dented the margins.In second-quarter 2022, the adjusted gross margin contracted 180 basis points (bps) year over year to 54.7%. This was mainly due to higher transportation, warehousing and retail labor costs. The adjusted operating margin contracted 330 bps to 23.4%.However, the ongoing recovery in the supply chain of coffee and non-carbonated beverages, as well as robust pricing actions, bode well for KDP. It has been gaining from solid portfolio demand and strong market share gains.As a result, retail dollar consumption increased 9.9% and market share expansion rose above 92% of KDP's cold beverage portfolio in second-quarter 2022. This mainly reflected strength in CSDs3, premium unflavored water, coconut water, seltzers, teas, apple juice, vegetable juice and fruit drinks. Strength in Dr Pepper, Sunkist, Canada Dry, A&W and Squirt CSDs, CORE Hydration, Vita Coco, Polar seltzers, Snapple, Hawaiian Punch, and Mott's aided the quarterly results.Strength across the Packaged Beverages segment serves as a key growth driver, backed by growth in CSDs, CORE Hydration, Snapple, Polar seltzers, Vita Coco, Mott's and Hawaiian Punch. The segment witnessed sales growth of 12.8% in the second quarter, gaining from a favorable volume/mix of 1.9% and a higher net price realization of 11%.In coffee, retail dollar consumption of single-serve pods manufactured by Keurig Dr Pepper rose 3.8% in channels tracked by Iri, driven by improved pricing in partner and KDP-owned and licensed brands. KDP’s coffee systems sales increased 9%, owing to the company’s completion of the coffee recovery program.Driven by the above-mentioned factors, management raised its 2022 sales view. It projects net sales (cc) to grow in the low-double-digit range compared with the earlier stated high-single-digit increase. Adjusted earnings per share are envisioned to grow in the mid-single digits for 2022. Adjusted earnings per share growth are expected to be in the high-single digits for the second half of 2022.We note that shares of this Zacks Rank #3 (Hold) company have gained 9.8% in the past three months compared with the industry’s growth of 7.4%. Image Source: Zacks Investment Research Coming to the latest news, the company has a dividend payout ratio of 58.3%. KDP’s ability to reward shareholders with dividends and buybacks is backed by a strong cash flow and revenue-generation capacity. The company’s annualized cash flow growth rate has been 22.5% over the past 3-5 years versus the industry average of 7.6%.All said, Keurig Dr Pepper’s impressive fundamentals, strong footing in the industry and solid portfolio make it a promising stock.Stocks to ConsiderWe highlighted some better-ranked stocks from the broader Consumer Staples space, namely Chef Warehouse CHEF, Campbell Soup CPB and General Mills GIS.Chef’s Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 372.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Chef Warehouse’s current financial-year sales and earnings per share suggests growth of 38.1% and 2,820%, respectively, from the year-ago reported numbers.Campbell Soup, the manufacturer and marketer of high-quality, branded convenience food products, currently carries a Zacks Rank #2 (Buy). It has an expected long-term earnings growth rate of 1.6%.The Zacks Consensus Estimate for Campbell Soup’s current financial-year sales and earnings per share suggests growth of 10.1% and 15.4%, respectively, from the year-ago reported numbers. CPB has a trailing two-quarter earnings surprise of 10.8%, on average.General Mills, which manufactures and markets branded consumer foods worldwide, currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 6.5%, on average.The Zacks Consensus Estimate for General Mills’ current financial year’s sales and EPS suggests growth of 2% and 1.5%, respectively, from the year-ago reported figures. Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in?  If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.>>Send me my free report on the top 5 EV stocksWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Mills, Inc. (GIS): Free Stock Analysis Report Campbell Soup Company (CPB): Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF): Free Stock Analysis Report Keurig Dr Pepper, Inc (KDP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 15th, 2022

Here"s Why Investors Should Retain Leggett"s (LEG) Stock Now

Leggett (LEG) is benefiting from its long-term strategic plan amid ongoing industry challenges. Leggett & Platt, Incorporated’s LEG shares have been improving compared with the Zacks Furniture industry, the Zacks Consumer Discretionary sector and S&P 500 index. In the past six months, the stock has gained 5.8% compared with the industry’s 5.5% increase. The sector and S&P 500 index have declined 17.6% and 6.6%, respectively, in the same time frame.This global manufacturer of a wide variety of engineered components benefits from its long-term strategic plan, raw material-related selling prices increase and bolt-on acquisitions. Also, impressive liquidity is helping it to combat inflationary pressure and reward shareholders with regular dividends.However, supply chain disruptions, especially in chemicals, semiconductors, labor and transportation, constrain volume growth. Also, inflation is denting profitability.Image Source: Zacks Investment ResearchLet’s discuss the factors influencing this Zacks Rank #4 (Sell) company.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Growth DriversStrategic Moves: Leggett remains on track with its long-term strategic plan, which was announced in November 2007. The company completed the first two parts of its strategic plan and is now working on the third part of the plan that aims to achieve top-line growth of 6-9% annually. This long-term revenue target assumes 6% organic growth and growth from acquisitions.In first-half 2022, net trade sales increased 10% from the prior-year levels. Of this growth, raw material-related selling price added 14% and acquisitions (net of divestitures) contributed 1% to sales. Although the recent market slowdown arising from macro market uncertainties may compel the company to carry out the plan at a slower pace, it will certainly gain traction as the effects of the pandemic gradually phase out.Accretive Acquisitions: Leggett’s business depends largely on acquisitions as part of its growth strategy to supplement organic growth and expand across boundaries. In the long term, it expects these strategic acquisitions to generate 6-9% revenue growth annually.In first-half 2021, Leggett acquired three businesses. On Jun 4, 2021, it acquired Kayfoam — a leading provider of specialty foam and finished mattresses, primarily serving customers in the U.K. as well as Ireland. Located near Dublin, Kayfoam has two manufacturing facilities with combined annual sales of approximately $80 million. Similar to the U.S. Bedding business, the Kayfoam acquisition allows Leggett to support European bedding customers.Moreover, no businesses were acquired during first-half 2022.Strong Liquidity: Leggett has enough liquidity to manage the ongoing crisis. As of Jun 30, 2022, the company had $1.3 billion in total liquidity, including cash and equivalents of $269.9 million. Long-term debt at June-end was $1.79 billion, down from the 2021-end. It has $300 million in senior notes due on Aug 15, 2022, which LEG expects to pay with cash on hand and commercial paper borrowing. This apart, the company has no significant debt maturity before 2024.Leggett has been actively managing cash flows, returning considerable free cash to investors through share repurchases and dividends. In May 2022, the company announced that it had increased the quarterly dividend to 44 cents per share, reflecting a 4.8% increase from a year ago period. This marks its 51st year of a consecutive annual dividend increase and places the company among 31 other companies, known as "Dividend Kings”, with at least 50 years of consecutive annual dividend increases. Its long-term targeted dividend payout ratio is approximately 50% of adjusted EPS.Factors Impacting MarginsIntense Inflation: Consumers in the housing industry are increasingly concerned about rising inflation. During first-half 2022, adjusted EBIT and adjusted EBITDA margin contracted 60 basis points (bps) and 110 bps, thanks to lower volume, higher raw material and transportation costs and production inefficiencies and related premium freight costs.Due to these headwinds, Leggett reduced its earnings and EBIT guidance for 2022. Earnings for the year are now expected to be between $2.65 and 2.80 per share, down from the prior expectation of $2.70-$3.00. The company expects an EBIT margin of 10.5-10.7% (lowered upper range from 11%) compared with 11.2% reported in 2021.Supply Chain Bottlenecks: Leggett has been witnessing supply chain disruptions. In the first and the second quarter, volume was down 4% and 6% year over year, respectively, due to demand softness in residential end markets, mostly in Bedding. Market demand remains soft due to reduced consumer activity and elevated inventory levels across the industry. The Specialized Products unit also witnessed lower volume in Automotive, primarily due to the Russia-Ukraine ongoing conflict. In Aerospace, the industry is not anticipated to return to 2019 demand levels until 2024 due to these headwinds.Leggett expects demand softness to continue throughout the third and fourth quarters. Year-over-year low-to-mid single-digits down volume are likely to dent the company’s top line in 2022. Sales are likely to be down low-double digits in Bedding Products and roughly flat in Furniture, Flooring & Textile Products segment.Dependency on Housing Market: The furniture industry is directly related to the housing market. The housing industry is cyclical and affected by consumer confidence levels, prevailing economic conditions and interest rates. The federal government’s actions related to economic stimulus, taxation and borrowing limits could affect consumer confidence and spending levels, which might hurt the economy and the housing market. Leggett also remains vulnerable to other macroeconomic factors like unemployment, fluctuating interest rates and disposable income levels.Some Better-Ranked Stocks in the Consumer Discretionary SectorSome better-ranked stocks in the sector are Marriott Vacations Worldwide Corporation VAC Hyatt Hotels Corporation H and Choice Hotels International, Inc. CHH.Marriott Vacations sports a Zacks Rank #1. VAC has a trailing four-quarter earnings surprise of 13.9%, on average. The stock has declined 5.4% in the past year.The Zacks Consensus Estimate for VAC’s current financial year sales and earnings per share (EPS) indicates an increase of 19.7% and 131.4%, respectively, from the year-ago period’s reported levels.Hyatt carries a Zacks Rank #2 (Buy). H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has increased 25.3% in the past year.The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates growth of 89.1% and 113%, respectively, from the year-ago period’s reported levels.Choice Hotels carries a Zacks Rank #2. CHH has a trailing four-quarter earnings surprise of 11.2%, on average. The stock has declined 3.6% in the past year.The Zacks Consensus Estimate for CHH’s current financial year sales and EPS indicates growth of 25.3% and 21.7%, respectively, from the year-ago period’s reported levels. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hyatt Hotels Corporation (H): Free Stock Analysis Report Leggett & Platt, Incorporated (LEG): Free Stock Analysis Report Choice Hotels International, Inc. (CHH): Free Stock Analysis Report Marriot Vacations Worldwide Corporation (VAC): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 14th, 2022

3 Reasons to Hold Brown-Forman (BF.B) Despite Cost Inflation

Brown-Forman (BF.B) is poised to strengthen from a robust brand portfolio, consumer demand and market recovery, despite the pullback from high inflationary costs. Brown-Forman Corporation (BF.B) appears to be a lucrative pick with solid growth prospects. The company has been in investors’ good books thanks to robust strength in its brands, growth across markets and strong consumer demand. The company’s efforts to diversify its brand portfolio to stay ahead of the curve bode well. However, it has been witnessing rising inflationary and supply-chain issues. Higher SG&A and advertising costs remain concerns.The company boasts a robust earnings surprise trend, which continued in first-quarter fiscal 2023. Both top and bottom lines beat the Zacks Consensus Estimate and rose year over year in the fiscal first quarter. This marked the third straight quarter of top and bottom-line beat. The company gained from the increased demand for its brands, mainly Jack Daniel’s Tennessee Whiskey, and growth across all regions and the Travel Retail channel.Backed by the robust surprise trend, the stock has outperformed the industry and the sector year to date. Although BF.B lost 2.2%, it fared better than the industry’s decline of 4.1% and the sector’s decline of 5.7%. The stock also compares favorably with the S&P 500’s decline of 14.5% in the same period.Image Source: Zacks Investment ResearchFactors Driving GrowthBusiness MomentumBrown-Forman is anticipated to retain its strong business momentum on continued portfolio strength and growth across all geographic regions. The company’s first-quarter fiscal 2023 results benefited from strength in Jack Daniel’s Tennessee Whiskey and tequila categories along with growth in the Travel Retail channel. Further, growth in the United States continues to be driven by volume gains in Woodford Reserve, Jack Daniel’s Tennessee Honey and Jack Daniel’s Tennessee Fire.The developed international markets have been benefiting from continued recovery in the on-trade channel and the revival of travel and tourism, while the emerging markets continue to reflect the growth of Jack Daniel’s Tennessee Whiskey in Sub-Saharan Africa, Brazil and Chile, as well as New Mix in Mexico. Further, the Travel Retail channel has been gaining from the continued rebound in travel trends.Investment in BrandsBrown-Forman is focused on investing in the diversification of its brand portfolio to drive growth. For more than a decade,  Jack Daniel's Tennessee Whiskey has been the key contributor to growth in the United States. The company’s investments in brands center around broadening the Jack Daniel’s family of brands, while also exiting the weaker brands and expanding the fast-growing premium spirits category. The company is investing toward organically accelerating the growth of two fast-growing spirits categories, bourbon and tequila. The balanced portfolio investments are supporting the company’s track record of consistent growth.In first-quarter fiscal 2023, sales for the Jack Daniel’s family of brands benefited from the continued consumer interest in flavor, which boosted the performance of Jack Daniel’s Tennessee Honey, Jack Daniel’s RTDs, and Jack Daniel’s Tennessee Fire. Innovation contributed to sales growth through the launch of Jack Daniel’s Bonded series. Premium bourbon brands, including Woodford Reserve and Old Forester, were  supported by higher volume in the United States.Sustainable Shareholder ReturnsBrown-Forman traditionally returns excess cash to shareholders through regular dividend payouts and share repurchases. The company returned nearly $90 million to its shareholders via dividends in first-quarter fiscal 2022. BF.B declared a quarterly cash dividend of 18.85 cents per share on Class A and B common stock. The dividend will be paid out on Oct 3, 2022, to shareholders on record as of Sep 6. The company has a dividend payout ratio of 40.6%, annualized dividend yield of 1.1% and a free cash flow yield of 47.4%. The annual free cash flow return on investment of 15.8%, ahead of the industry’s 12.9%, indicates that the company’s dividend payment is sustainable.Wrapping UpGiven the aforementioned strengths, Brown-Forman looks well-placed despite the odds of inflationary input costs, supply-chain issues and higher SG&A and advertising costs. The company is likely to retain momentum in the long term backed by focus on brands and cost management. The removal of the EU and the U.K. tariffs on American whiskey also remains a boon for the company.The Zacks Consensus Estimate for BF.B’s fiscal 2023 sales and earnings suggests growth of 2.2% and 12.6%, respectively. It has a trailing four-quarter earnings surprise of 10.2%.Stocks to ConsiderWe have highlighted some better-ranked stocks from the broader Consumer Staples space, namely Constellation Brands Inc. STZ, PepsiCo Inc. PEP and Fomento Economico Mexicano FMX.Constellation Brands produces and market beer, wine and spirits. It currently has a Zacks Rank #2 (Buy). Shares of STZ have lost 4.4% in the year-to-date period. The company has an expected EPS growth rate of 10.8% for three-five years.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Constellation Brands’ current financial-year sales and earnings suggests growth of 7.6% and 7.2%, respectively, from the year-ago period’s reported figures. STZ has a trailing four-quarter earnings surprise of 4.4%, on average.PepsiCo is one of the leading global food and beverage companies. It currently has a Zacks Rank #2. The company has an expected EPS growth rate of 7.7% for three to five years. Shares of PEP have declined 3.6% year to  date.The Zacks Consensus Estimate for PepsiCo’s current financial-year sales and earnings suggests growth of 5.6% and 6.4%, respectively, from the year-ago period’s reported figures. PEP has a trailing four-quarter earnings surprise of 3.8%, on average.Fomento Economico Mexicano, alias FEMSA, has exposure to various industries, including beverage, beer and retail, which gives it an edge over its competitors. It currently has a Zacks Rank #2. FMX has a trailing four-quarter earnings surprise of 18.9%, on average. Shares of FMX have lost 14.9% year to date.The Zacks Consensus Estimate for FEMSA’s current financial-year sales suggests growth of 11.3% from the year-ago period's reported figures. FMX has an expected EPS growth rate of 11.4% for three-five years. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BrownForman Corporation (BF.B): Free Stock Analysis Report Fomento Economico Mexicano S.A.B. de C.V. (FMX): Free Stock Analysis Report PepsiCo, Inc. (PEP): Free Stock Analysis Report Constellation Brands Inc (STZ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 14th, 2022

Inverse ETFs Rally on Stocks" Worst Drop Since June 2020

U.S. stocks crashed on Sep 13, following hotter-than-expected inflation data. This has led to a surge in inverse or inverse-leveraged ETFs. U.S. stocks crashed on Sep 13, following hotter-than-expected inflation data. This sparked fears of more aggressive rate hikes by the Fed that would continue to weigh on economic growth.All three major indices posted the steepest one-day losses since Jun 11, 2020, with the Dow Jones Industrial Average plunging 3.9% and the S&P 500 dropping 4.3%. The tech-heavy Nasdaq Composite tumbled 5.2%. In fact, the six largest U.S. tech companies lost more than $500 billion in value in a single day.The bearish sentiments led to a surge in inverse or inverse-leveraged ETFs as these fetch outsized returns on bearish sentiments in a short span. BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN FNGD, Direxion Daily Semiconductor Bear 3x Shares SOXS, ProShares UltraPro Short QQQ SQQQ, Daily S&P 500 High Beta Bear 3X Shares HIBS and Direxion Daily S&P Biotech Bear 3x Shares LABD outperformed on the Sep 13 session from different segments of the stock market and might continue their strong performance if sentiments remain the same.Inverse and inverse-leveraged ETFs either create an inverse short position or a leveraged inverse short position in the underlying index through the use of swaps, options, futures contracts and other financial instruments. Due to their compounding effect, investors can enjoy higher returns in very short time, provided the trend prevails.The steep decline erased all of the gains made recently, pushing the S&P 500 to below the 3,700 level. The S&P 500 is off 17% so far this year, while the Dow Jones is down 14%. Meanwhile, the Nasdaq Composite Index lost 26% (read: Hedge Volatility With These ETFs).The new inflation data shows that the consumer price index climbed 8.3% year over year in August, down from an 8.5% rise in July but above the 8.1% increase expected by analysts. Inflation also rose 0.1% from July, dashing investors’ hopes that price pressures would weaken, allowing the Fed to slow its pace of interest rate increases in the coming months. Declining gasoline prices were offset by gains in the costs of rent and in food prices.The cental bank is expected to lift off interest rates by 75 bps to tamp down inflation in the Sep 20-21 meeting. The unexpected high inflation report could prompt the Fed to continue its aggressive hikes longer than anticipated. Wall Street's big fear is that higher rates will eventually lead to an economic slowdown or even a recession.BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN (FNGD) – Up 19.7%BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN seeks to offer three times inverse leveraged exposure to the NYSE FANG+ Index, an equal-dollar weighted index, targeting the highly-traded growth stocks of next-generation technology and tech-enabled companies in the technology and consumer discretionary sectors.BMO REX MicroSectors FANG+ Index -3X Inverse Leveraged ETN has accumulated $114 million in its asset base. It charges 95 bps in annual fees and trades in an average daily volume of 885,000 shares.Direxion Daily Semiconductor Bear 3x Shares (SOXS) – Up 18.7%Direxion Daily Semiconductor Bear 3x Shares targets the semiconductor corner of the technology sector with three times inverse leveraged exposure to the ICE Semiconductor Index.Direxion Daily Semiconductor Bear 3x Shares has amassed about $528.7 million in its asset base while charging 95 bps in fees per year. Volume is good as it exchanges 66.7 million shares per day on average.ProShares UltraPro Short QQQ (SQQQ) - Up 16.5%ProShares UltraPro Short QQQ provides three times inverse exposure to the daily performance of the Nasdaq-100 Index, charging 95 bps in annual fees. The index measures the performance of the 100 largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization.ProShares UltraPro Short QQQ has AUM of $5 billion and trades in an average daily volume of about 111.1 million shares.Daily S&P 500 High Beta Bear 3X Shares (HIBS) – Up 15.5%Daily S&P 500 High Beta Bear 3X Shares offers three times inverse exposure to the performance of the S&P 500 High Beta Index. It has gathered $62.4 million in AUM and trades in an average daily volume of 1.5 million shares (read: Low-Beta ETFs to Beat Market Turmoil).Daily S&P 500 High Beta Bear 3X Shares charges 95 bps in fees per year from investors.Direxion Daily S&P Biotech Bear 3x Shares (LABD) – Up 15.4%Direxion Daily S&P Biotech Bear 3x Shares seeks to deliver three times the inverse daily performance of the S&P Biotechnology Select Industry Index, which includes the domestic companies from the biotechnology industry.Direxion Daily S&P Biotech Bear 3x Shares has amassed $219.3 million in its asset base and has an average daily volume of around 12 million shares. LABD charges investors 94 bps in annual fees.Bottom LineWhile the strategy is highly beneficial for short-term traders, it could lead to huge losses compared with traditional funds in fluctuating or seesawing markets. Further, their performances could vary significantly from the actual performance of their underlying index over a longer period compared to a shorter period (such as weeks or months) due to their compounding effect (see: all the Inverse Equity ETFs here).Still, for ETF investors bearish on equities for the near term, either of the above products could make an interesting choice. Clearly, these could be intriguing for those with a high-risk tolerance, and a belief that the “trend is the friend” in this specific corner of the investing world. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Direxion Daily S&P Biotech Bear 3X Shares (LABD): ETF Research Reports ProShares UltraPro Short QQQ (SQQQ): ETF Research Reports Direxion Daily Semiconductor Bear 3X Shares (SOXS): ETF Research Reports MicroSectors FANG Index 3X Inverse Leveraged ETNs (FNGD): ETF Research Reports Direxion Daily S&P 500 High Beta Bear 3X Shares (HIBS): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 14th, 2022

Futures Surge, Dollar Crumbles Ahead Of Pivotal CPI Print

Futures Surge, Dollar Crumbles Ahead Of Pivotal CPI Print US futures extended their gains for fifth consecutive day - their longest winning streak since July - rising ahead of today's "pivotal" CPI data. Futures on the S&P 500 and Nasdaq 100 gained 0.7% at 7:45 a.m. in New York ahead of the data that’s due at 8:30 a.m. The underlying gauges advanced Monday for a fourth straight day amid hopes that inflation will show further signs of cooling with the headline print actually declining for the first time in two years, before the Fed’s decision on interest rates next week. Treasury yields dipped while the Bloomberg dollar index extended its recent decline, sliding 0.3% to a two week low as traders bet that US inflation is near peaking, therefore challenging the dollar-dominance narrative, in the process pushing oil and bitcoin higher. In premarket trading, tech giants including Apple and Microsoft climbed. Satellite-imaging company Planet Labs shares gained as much as 12% in US premarket session after raising full year forecasts for both revenue and adjusted gross margin. Oracle shares rose 1.9% as analysts are positive on the company’s 1Q top-line growth amid accelerating cloud revenue expansion. More bearish commentators, however, highlight a drop in operating margin as the integration of health records provider Cerner pushes up costs. Here are some other notable premarket movers: Rent the Runway (RENT US) shares slump 23% in premarket trading after reporting a drop in subscribers in the second-quarter and announcing a restructuring of the company. Dow (DOW US) shares declined 0.7% in premarket trading as Jefferies downgraded the stock to hold, saying that it is likely to be range-bound in the near term, with downside risk as rising interest rates further hit customer confidence. Peloton (PTON US) shares may be in focus as Citi analysts say that the departure of the company’s founders, including Executive Chairman John Foley, completes the organizational changes at Peloton and should improve its free cash flow picture. Keep an eye on Innovid (CTV US) shares as Morgan Stanley initiates coverage with an underweight rating, saying that the company has good positioning in connected TV, but the stock appears to be “more than fully valued”. Previewing the CPI (our full preview here), UBS chief economist Paul Donovan writes that while US August consumer price inflation is due "Consumer prices do not measure the cost of living. Fantasy numbers in US CPI calculation further divorce this price measure from the cost of living. However, the Fed’s June policy error elevated the importance of consumer price inflation. Disinflation and deflation in durable goods, the longest period of gasoline price deflation for years, and some evidence of squeezing profit margins all suggest a lower reading." “It’s way to early to expect the Fed to react to the fact that we’re past peak inflation,” Nannette Hechler-Fayd’Herbe, chief investment officer at Credit Suisse International Wealth Management, told Bloomberg TV. “When you look at S&P 500 we have seen very big support levels from a technical point of view, so I can very well envisage that volatility takes us down to these levels once the market finally realizes the Fed will not cut rates as early as 2023.” The government’s report is expected to show that consumer inflation increased 8.1% in August from the same month last year, down from 8.5% in July yet still historically elevated. The figures aren’t likely to sway the Fed’s September decision, with traders almost fully expecting another 75-basis-point increase next week, taking their cue from officials supporting that view. Still, solid signs of peaking inflation can affect the US central bank’s policy in later meetings. “With a lot of US policymakers calling for a front-loading approach, the odds appear to favor a 75 basis-point move if markets are to be convinced the US central bank is serious about driving inflation lower on a ‘sustainable basis'," said Michael Hewson, chief market analyst at CMC Markets UK. That “means today’s inflation numbers may not be terribly instructive.” Meanwhile, JPMorgan permabullish strategists Marko Kolanovic and Nikolaos Panigirtzoglou said a soft landing is becoming the more likely scenario for the global economy, which will continue to provide tailwinds for risky assets. As a reminder, Marko has said to buy the dip pretty much every single week in 2022. Recent data pointing to moderating inflation and wage pressures, rebounding growth and stabilizing consumer confidence suggest the world will avoid a recession, they said. Not confirming their optimism,  a Bank of America survey showed investors are fleeing equities en masse amid the specter of a recession, with allocations to stocks at record lows and cash exposure at all-time highs. “The fact is that two consecutive reports showing a sharp deceleration combined with last month’s goldilocks jobs report will be a really encouraging sign and could trigger a broader risk rebound in the markets,” said Craig Erlam, a senior market analyst at Oanda Europe Ltd. “It may not be enough to tip the Fed balance in favor of a more modest 50 basis point rate hike next week but it may slow the pace of tightening thereafter.” In Europe, corporate news helped buoy the Stoxx Europe 600 index, with UBS Group AG rising after raising its dividend and share-buyback target, and Bayer AG jumping more than 2% after starting the search for a new chief executive. Retailers and grocers pared some of their recent rally after Ocado Group Plc said inflation and energy costs will weigh on profit. The FTSE MIB outperformed peers, adding 0.3%. Utilities, consumer products and miners are the strongest performing sectors.  Earlier in the session, Asian stocks extended their recent rally as several markets returned from holidays, and as traders awaited a key US inflation data release due later Tuesday. The MSCI Asia Pacific Index rose as much as 0.7%, poised for a fourth-straight day of gains, driven by technology shares. South Korean stocks led advances among regional benchmarks in a catch-up rally following a four-day weekend. The US CPI report is expected to show a mixed picture, hinting that inflation may have peaked but remained elevated. This could provide more clues to the Federal Reserve’s rate decision next week, with traders currently expecting another 75-basis-point increase. “Further pushback from the Fed could be likely but for now, with the Fed blackout period in place, market bulls may be hoping to see underperformance in the upcoming inflation data,” Jun Rong Yeap, a market strategist at IG Asia Pte, wrote in a note. How to trade dollar, bonds or equities ahead of the Fed decision? This week’s MLIV Pulse survey asks about the best trades going into the FOMC meeting. Please click here to share your views anonymously. Chinese equities edged higher as traders returned from a holiday. President Xi Jinping plans to travel to Central Asia this week in what would be his first trip abroad since the Covid pandemic began. Shares in Hong Kong fell. Japanese equities rose for a fourth day, driven by optimism that inflation is close to the peak as investors await US CPI data to be announced late Tuesday.  The Topix Index rose 0.3% to 1,986.57 as of market close Tokyo time, while the Nikkei advanced 0.3% to 28,614.63. Nintendo Co. contributed the most to the Topix Index gain, increasing 5.5%. Out of 2,169 stocks in the index, 1,126 rose and 903 fell, while 140 were unchanged. “Consumer surveys released by the New York Fed show that inflation expectations have receded, supporting stock prices to some extent,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management. In Australia, the S&P/ASX 200 index rose 0.7% to close at 7,009.70, boosted by gains in banks and mining shares. The benchmark reached the highest level since Aug. 26.  Ramsay Health Care tumbled more than 10% after a consortium led by KKR & Co. indicated it won’t improve the terms of a takeover proposal, indicating the end of a A$20.1 billion ($14 billion) pursuit. In New Zealand, the S&P/NZX 50 index fell 0.4% to 11,762.15 Key equity gauges in India advanced for fourth consecutive session to edge closer to peaks seen in October as shares in the heavily weighted finance sector rebound following the resumption of inflows from foreigners. The S&P BSE Sensex gained 0.8% to 60,571.08 in Mumbai, while the NSE Nifty 50 Index rose by a similar measure. Both gauges are less than 3% short of their record highs after climbing more than 14% since the end of June. The rally in stocks comes despite surging consumer prices in the country. Retail inflation accelerated to 7% in August, slightly above the consensus estimate, data released Monday evening showed. Foreign investors have net bought more than $8 billion of local equities since end of June, with a large proportion going into shares of financial firms.  “The current market buoyancy globally, including in India, is based on the expectation that inflation has peaked along with softening crude prices,” said Naveen Kulkarni, chief investment officer of Axis Securities’ PMS business. With the onset of winter, investors should watch energy prices in Europe and the US, which can re-ignite inflation, he added.  HDFC Bank Ltd contributed the most to the Sensex’s gain, increasing 1.3%. Out of 30 shares in the benchmark index, 24 rose and 6 fell. In FX, the Bloomberg Dollar Spot Index extended its recent losses, and after hitting an all time high at the start of the month, fell to a two-week low as the greenback weakened against all of its Group-of-10 peers apart from the Norwegian krone. CAD and NZD were the weakest performers in G-10 FX, SEK and JPY outperform. The euro rose a third day, to touch a day high of 1.0155 versus the greenback. European bonds traded mostly lower. German yields rose up to 4bps as they underperformed Italian bonds and with both countries tapping the market today The Norwegian krone posted a small drop versus the euro after a key survey of business sentiment by Norges Bank showed that the economy faces worsening prospects amid a “sharp” rise in prices. The yen reversed an Asia-session loss while the Australian and New Zealand dollars swung between modest gains and losses In fixed income, Treasuries held gains into early US session, having pared most of Monday afternoon’s slide that followed weak 10-year note auction. US yields are richer by 4bp-5bp across the curve; the long-end lags, steepening 5s30s by about 1bp. The 10-year yield eased 4bps to near 3.31%. Bunds 10-year yield is up 1bp to around 1.66% and gilts 10-year yield is little changed. Treasuries outperform bunds and gilts as stock futures reach highest levels this month. The US auction cycle concludes with $18b 30-year bond reopening at 1pm. WI 30-year yield around 3.475% is above auction stops since 2014 and ~37bp cheaper than August’s, which tailed by 1.1bp. IG dollar issuance slate empty so far; Monday saw eight borrowers price $11.7b; activity expected to be lighter Tuesday with focus on August inflation data. Focal points of US session include CPI inflation and 30-year bond auction; Monday’s 3-year sale also tailed.   In commodities, WTI and Brent are firmer intraday as a function of the receding Dollar, but traders are wary of short-term upward moves as China continues with strings of lockdowns. WTI trades within Monday’s range, adding 1.1% to near $88.71. Spot gold trades on either side of the flat mark in the run-up to US CPI, under its 50 and 21 DMAs at 1,740.82/oz and USD 1,731.05/oz respectively. Base metals are mostly firmer amid the weaker Buck and upside across stocks. Bitcoin trades on either side of USD 22,500, whilst Ethereum pulled back after reaching levels close to 1,800. Looking to the day ahead, along with August CPI in the US, American data will include NFIB Small Business optimism (came in at 91.8, higher than the 90.8 expeected) and average hourly earnings, German and Eurozone ZEW survey results, UK August jobless claims, July average weekly earnings, and unemployment rate, Japanese August PPI, and Italian 2Q unemployment rate. Market Snapshot S&P 500 futures up 0.5% to 4,129.25 STOXX Europe 600 up 0.3% to 429.10 MXAP up 0.5% to 156.38 MXAPJ up 0.6% to 513.28 Nikkei up 0.3% to 28,614.63 Topix up 0.3% to 1,986.57 Hang Seng Index down 0.2% to 19,326.86 Shanghai Composite little changed at 3,263.80 Sensex up 0.8% to 60,577.61 Australia S&P/ASX 200 up 0.6% to 7,009.69 Kospi up 2.7% to 2,449.54 Gold spot down 0.1% to $1,723.41 U.S. Dollar Index down 0.22% to 108.09 German 10Y yield little changed at 1.67% Euro up 0.2% to $1.0140 Top Overnight News from Bloomberg Pacific Investment Management Co. is advocating a radical solution to fix the liquidity woes plaguing the world of bonds: The entire $23.7 trillion Treasury market should move to a model where investors can transact directly with each other -- reducing their unhealthy dependence on balance-sheet-constrained banks The euro is up by almost 3% from two-decade lows hit a week ago against the dollar, and option markets suggest the rally has more room to run. The bet is that US consumer price data due later Tuesday will show inflation is near peaking, therefore challenging the dollar-dominance narrative. That view is behind the greenback’s recent retreat versus its major peers Germany is set to use a fund created to help companies cope with the economic hit from the pandemic to provide loan guarantees for struggling energy firms, according to a person familiar with the plan. The volume of loan guarantees available would be around 67 billion euros ($68 billion) China’s Premier Li Keqiang called for more policies to drive up consumption in the economy as latest figures show a further plunge in travel and spending over a three-day public holiday amid tight Covid controls For the better part of a decade, a US hedge-fund manager who has never even set foot in China has been patiently betting that the yuan will stage a massive collapse, one so deep that its value could be cut in half It’s not a common sight for euro overnight volatility to trade above 20% on non-central bank decision days. Yet this is what investors face this morning as everyone is on the lookout for the release of the US inflation report Britain’s unemployment rate fell to the lowest since 1974 as more people dropped out of the workforce, fanning upward pressure on wages. The government said 3.6% of adults were out of work and looking for jobs in the three months through July, lower than the 3.8% pace in the previous months. Economists had expected no change Secretary of State Antony Blinken said it was ‘unlikely’ the US and Iran would reach a new nuclear deal anytime soon, adding to Western officials’ downbeat assessment over the prospects for reviving an accord that President Donald Trump abandoned in 2018 Japan has more firepower in its foreign exchange reserves than it did the last time it intervened in markets to support its currency, though a unilateral move is seen as unlikely to succeed without US support A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks traded positive after the advances in global peers including on Wall St. where sentiment was helped by slowing inflation expectations, although gains were capped ahead of US CPI data and amid further China COVID woes. ASX 200 reclaimed the 7,000 level with advances led by the commodity-related sectors and with the risk tone also helped by an improvement in business and consumer sentiment data. Nikkei 225 marginally gained amid hopes of further supportive measures with Japan to potentially implement a nationwide travel incentive this month. Hang Seng and Shanghai Comp were slightly firmer but with upside contained after fresh COVID restrictions including in Sanhe near Beijing and with Shijiazhuang city in Hebei also locking down a district due to coronavirus. Top Asian News Emmys for Netflix’s Squid Game Boost ‘K-Drama’ Stocks in Seoul Fosun Chief Says Many Overseas Units Resilient Amid Pandemic Holders of Fosun’s 2b Yuan Bond Request Early Repayment in Full Netflix’s Megahit ‘Squid Game’ Wins Top Emmy Awards Woodford Administrator Faces Possible £306 Million Hit, UK Says European bourses tread water with modest gains following a relatively mixed APAC lead. European sectors are mostly higher with no overarching theme or bias. Stateside, futures are edging higher in early European trade with a broad-based performance seen across the ES, NQ, YM, and RTY. Top European News UK Chancellor Kwarteng told Treasury officials to adapt to a new approach focused on boosting GDP to 2.5%, the long-term average pre-GFC, ahead of the mini-Budget announcement next week which includes tax cuts and increased borrowing, according to FT. UK and EU are reportedly seeking to avoid a September 15th legal deadline over ‘grace periods’ becoming a flashpoint in talks, according to officials from both sides cited by the FT. The EU is delaying plans to cut the use of pesticides amid food production fears and subsequent price increases as a result, according to the FT. UK's Felixstowe port has received notice from union of further strike action from 27th Sept to 5th Oct; collective bargaining process has been exhausted - no prospect of an agreement being reached with union. EU Commission President is to call another energy meeting by end-September, according to the Spanish Energy Minister, according Reuters. German Economy Ministry report says early indicators and polls point to a rising number of insolvencies in H2, but there is no 'insolvency wave' in sight, via Reuters. EU is reportedly mulling a EUR 180-200 price cap from lower-cost sources (vs guided EUR 200); eyes taking 33% of extra profits from fossil fuel companies, according to Bloomberg sources. Ocado Plummets as Shoppers Cut Back and Energy Costs Bite Mercedes-Benz Wins Dismissal of German Climate Lawsuit Some 17 Million in Europe Got Long Covid in First Pandemic Years FX DXY is softer and trades on either side of 108.00, ahead of yesterday's 107.80 low and the 50 DMA at 107.52. EUR/USD faded at 1.0160 with decent option expiry interest between 1.0170-80 (1.21bn). The JPY continued its correction to almost 142.00 against the Greenback, irrespective of mixed Japanese PPI prints. Fixed Income Choppy and divergent price action in debt futures as EZ bonds digest decent auction results from Germany and Italy. Gilts regroup after underperformance on the back of better than expected UK data. Bunds are holding above 144.00 having fallen to a marginal new Eurex low at 143.86 US Treasuries are firmer across the board pre-US CPI, irrespective of Monday’s poorly received 3 and 10 year offerings. Commodities WTI and Brent are firmer intraday as a function of the receding Dollar, but traders are wary of short-term upward moves as China continues with strings of lockdowns. Spot gold trades on either side of the flat mark in the run-up to US CPI, under its 50 and 21 DMAs at 1,740.82/oz and USD 1,731.05/oz respectively Base metals are mostly firmer amid the weaker Buck and upside across stocks. Crypto Bitcoin trades on either side of USD 22,500, whilst Ethereum pulled back after reaching levels close to 1,800. US Event Calendar 06:00: Aug. SMALL BUSINESS OPTIMISM, 91.8, est. 90.8, prior 89.9 08:30: Aug. Real Avg Hourly Earning YoY, prior -3.0% 08:30: Aug. CPI Ex Food and Energy MoM, est. 0.3%, prior 0.3% 08:30: Aug. CPI Core Index SA, est. 296.250, prior 295.275 08:30: Aug. CPI Index NSA, est. 295.588, prior 296.276 08:30: Aug. CPI Ex Food and Energy YoY, est. 6.1%, prior 5.9% 08:30: Aug. CPI YoY, est. 8.1%, prior 8.5% 08:30: Aug. Real Avg Weekly Earnings YoY, prior -3.6% 08:30: Aug. CPI MoM, est. -0.1%, prior 0% 14:00: Aug. Monthly Budget Statement, est. -$217b, prior -$170.6b DB's Jim Reid concludes the overnight wrap It’s that time again. US CPI will clearly be the major focus today and could shape next week’s FOMC and the rest of the month’s trading. Or, of course, it could be a damp squib but I’m sure they’ll be something in it to move markets. Our economists are expecting a slight decline in the headline number, (-0.09% MoM) but for core to pick up (+0.30%). On a YoY basis, headline CPI should fall five-tenths to 8.0% while core should increase a tenth to 6.0%. With the market pricing a near certainty of a 75bp move next week (now at 73.4bps), that profile above won’t be enough to meaningfully reduce chances of a 75bp hike, and markets will turn to this Friday’s inflation expectations data as the last hurdle to clear before the Fed delivers (barring any late breaking news stories to the contrary). On that front, the New York Fed’s 3-year inflation expectations measure fell to its lowest level in 2 years yesterday, clocking in at 2.8% in August from 3.2% in July. For context, it’s retreated from a high of 4.2% in October of last year. Uncertainty remains near record highs, though, which will continue to give policymakers pause even as the 75th and 25th percentile of survey responses have also fallen. Ahead of CPI, the S&P 500 rallied (+1.06% and a 5-day rally for the first time since late-January/early-February) alongside the global risk complex, led by energy and big tech stocks, with the NASDAQ outperforming, up +1.27%. Apple (+3.85%) led the way in the first full trading day since their new iPhone went on sale on Friday. Orders have been strong so far. I upgrade every year but this time I decided not to.... until one minute before the virtual shop opened for the new products. As with every year I got seduced. While European sovereign curves rallied and flattened, the Treasury curve steepened, and yields climbed ahead of today’s inflation data. 2yr yields climbed +1.5bps while 10yr yields were +4.8bps higher, but some +9.8bps higher than their lunchtime lows. Much of that was after the Europe close as 10yr Bunds and BTP rallied -4.4bps and -5.7bps, respectively. One theory for the US yield sell-off was the fact that yesterday brought the first batch of US Treasury coupon auctions since the Fed doubled the size of their monthly QT runoff, with yields marching higher after both the 3yr and 10yr auction, as the market has to absorb additional collateral. There’s been a partial pullback in Asia this morning with yields on 10yr USTs down -2.12bps to 3.34%. The initial risk appetite yesterday was led by Europe, as most of the early focus was on the news we discussed 24 hours ago, namely Ukraine’s successful counter-offensive operation over the weekend. Risk sentiment enjoyed a boost, with the Euro also having its best day against the US dollar in a month, appreciating +0.80%. The wider implications of this success are still up for debate though. In particular, it seems like this pushes out the timeline on any potential peace talks, as Ukraine will be emboldened to double down on their red lines. In that vein, the Kremlin said yesterday there were no prospects for talks at the moment. On the downside, this potentially raises the spectre of escalation as well, whether it’s on the battlefield via unconventional weapons or a mass mobilisation from Russia, or on the economic front with Russia applying more pressure through natural gas markets through the remaining pipeline to Europe. European natural gas futures were trading in line with the broader risk sentiment yesterday though, rather than on potential tail risk scenarios, falling another -8.0%, closing below EUR 200 for the first time in a month. We peaked at EUR 342 eleven days ago, so down -44.23% since then. As hinted, European equities rallied strongly, with the STOXX 600 climbing +1.76%, the DAX +2.40% higher, and the CAC increasing +1.95%. Sticking with the theme of the war and energy, a draft EU proposal, to be officially unveiled this week, included mandatory power cut targets, bringing the bloc closer to rationing. The draft also includes a levy on extra profits at energy producers used to fund relief to consumers. These are still merely draft proposals, which would ultimately need member state buy-in to be implemented, so the negotiation process may wind up watering down the proposal. Nevertheless, as mentioned, natural gas futures fell on the news, with German and French power prices also falling -8.10% and -3.60%, respectively. The UK’s own energy support plan that we’ve recently covered is due to take effect come October. Whilst US CPI out later today will gain the lion’s share of attention over the near term, the UK has its own CPI print out tomorrow, as well. Our economists are expecting headline inflation to stay put at 10.1% yoy and core to increase to 6.4% yoy. With the new Energy Price Guarantee program in place, they’re lowering their peak forecast for CPI from 14% to 10.5%. Asian equity markets are firmly in the green while extending a global rally this morning on optimism that inflation is peaking. Across the region, the Kospi (+2.56%) is leading gains with the CSI (+0.70%), the Shanghai Composite (+0.33%) and the Hang Seng (+0.44%) catching up after reopening following a public holiday. Elsewhere, the Nikkei (+0.16%) is trading in positive territory in early trade. In overnight trading, US stock futures are pointing to slightly higher with the S&P 500 (+0.11%) and NASDAQ 100 (+0.10%). Early morning data indicated that pipeline prices in Japan appear to have stabilised as factory gate inflation (+9.0% y/y) in August remained unchanged (vs +9.4% in June), albeit a tenth above expectations. Looking at the data, the decline in global oil prices seems to have led the way despite the weakening in the Japanese yen. Oil prices are slightly lower in early Asian trade with Brent crude futures -0.18% at $93.83/bbl as China’s harsh zero-Covid policy continues to negatively impact the demand from the world’s top oil importer. To the day ahead, along with August CPI in the US, American data will include NFIB Small Business optimism and average hourly earnings, German and Eurozone ZEW survey results, UK August jobless claims, July average weekly earnings, and unemployment rate, Japanese August PPI, and Italian 2Q unemployment rate. Tyler Durden Tue, 09/13/2022 - 07:58.....»»

Category: blogSource: zerohedgeSep 13th, 2022

2 Dividend Stocks in the Competitive Financial Transaction Space

Financial transaction stocks are investing heavily to stay ahead of the competition and provide diversified payment solutions. Fidelity National (FIS) and Western Union (WU) are high-quality dividend stocks that can fetch you promising returns. The looming recession fears, ongoing geopolitical turmoil and inflationary pressure are affecting consumer spending, which might hurt companies in the Financial Transaction Services industry. The Russia-Ukraine conflict also put pressure on the transaction volumes of the firms that had operations across Russia.To counter the volatile situation, financial transaction companies are depending on capturing a greater market share, which can support their volume growth. The race to win more customers has led to higher competition and more spending on advertisements, technologies and client benefits. Industry players remain under constant pressure to develop enhanced capabilities that might lend a competitive edge over competitors. An elevated expense level might hamper the margins of the industry players.Yet There’s Hope.More and more people opting for digital payment methods are helping these companies grow. The COVID-19 pandemic triggered the demand for contactless payments, which are quick, easy and cost-effective in nature. Multiple flexible digital payment options like cryptocurrency, buy now, pay later (BNPL) and others, based on technologies like biometrics, QR code, artificial intelligence and blockchain, are providing consumers with different payment methods. Hence, the financial transaction services stocks are well-poised to gain from launching these diversified payment solutions.Also, resumption of business activities, higher pent-up demand and improved personal savings made during the pandemic might boost transaction volumes. Affirm Holdings, Inc.’s AFRM 2022 summer consumer spending trends revealed a growing interest in traveling. AFRM, a payments solution provider, reported that travel was in the second spot on the top spending list, while furniture and homewares were third and apparel was in the fourth position. Moreover, the global remittance market is rapidly growing at present. Companies investing in their digital platform to stay ahead in the fast-changing remittance market will stay above the competition.Amid the current market scenario, investing in high-quality dividend stocks will offer a steady source of income and provide protection against downside risk. These stocks are generally less volatile and hence are dependable when it comes to long-term investment planning.In this backdrop, investing in high-quality dividend stocks like Fidelity National Information Services, Inc. FIS and The Western Union Company WU might fetch you promising returns.Dividend Investing is PivotalCompanies with solid dividend track and profit-generating abilities are less susceptible to market swings and uncertainties. A sustainable business model, free cash flow generating abilities, growing profits, strong balance sheet and other outstanding fundamentals make these companies promising choices. These stocks are safe bets to create wealth.However, one should keep in mind that not every company can keep up with its dividend-paying momentum. As such, a cautious strategy is required to select the best dividend stocks with steady return potential.Here are two dividend-paying key picks that made the list from the Financial Transaction Services industry.Fidelity National: Based in Jacksonville, FL, Fidelity National provides banking and payments technology solutions, processing services and information-based services to the financial services industry. In January 2022, Fidelity announced a 21% sequential hike in the quarterly dividend. The company aims to increase its expected annual dividend growth rate to more than 20% per year. This will result in an incremental dividend payment of nearly $100 million in 2022. Currently, the dividend yield of the company is 2.1% and the payout ratio is at 27%. FIS's annualized growth rate was 8.4% over the past five years. (Check Fidelity National’s dividend history here).Fidelity National’s strong position in the financial and payments solutions business, backed by a superior product portfolio and digitization efforts, bodes well. In the trailing 12-month period, it generated free cash flows of $3,476 million. The Zacks Rank #3 (Hold) company’s inorganic growth strategies are encouraging. The Zacks Consensus Estimate for 2022 earnings per share implies year-over-year growth of 8.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Fidelity National Information Services, Inc. Dividend Yield (TTM) Fidelity National Information Services, Inc. dividend-yield-ttm | Fidelity National Information Services, Inc. QuoteWestern Union: Headquartered in Denver, CO, Western Union is a leader in global money transfer. It has made substantial investments to build a robust digital arm, which delivers accelerated and affordable money transfer services. WU enhances shareholders’ value through share buybacks and dividend payments. In the trailing 12-month period, it generated free cash flows of $901 million. Currently, the dividend yield of the company is 6.4% and the payout ratio is at 41%. WU's annualized growth rate was 7.1% over the past five years. (Check Western Union’s dividend history here).Western Union has started the implementation of a new Global Strategy, designed to drive efficiency, profitability and long-term revenue growth. These initiatives are expected to generate annual cost savings of approximately $150 million by 2022. The Zacks Rank #3 company’s tactical cost management efforts compelled management to hike its adjusted operating margin forecast for this year. WU’s Zacks Consensus Estimate for 2022 earnings per share currently stands at $1.80. It beat earnings estimates in each of the past four quarters, with the average surprise being 17.4%.The Western Union Company Dividend Yield (TTM) The Western Union Company dividend-yield-ttm | The Western Union Company Quote Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fidelity National Information Services, Inc. (FIS): Free Stock Analysis Report The Western Union Company (WU): Free Stock Analysis Report Affirm Holdings, Inc. (AFRM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research.....»»

Category: topSource: zacksSep 9th, 2022