To that end we believe that shares of high quality stocks purchased at a historically repetitive area of low-price/high-yield offers the greater potential for downside protection and upside appreciation.
The Timely Ten, therefore, is not just another ‘best of, right now’ list. Rather, it is our reasoned expectation — based on our methodology and experience — that these ten currently Undervalued stocks offer the greatest real total-return potential over the next five years.
Whether you are building a portfolio from scratch, are partially invested and seeking new positions, or are fully invested and in need of some affirmation and hand holding, The Timely Ten represents our top ten current recommendations.
The Timely Ten is comprised of stocks from the Undervalued category that generally have an S&P Dividend & Earnings Quality ranking of A- or better and a rating for exemplary long-term dividend growth.
These stocks also have a P/E ratio of 15 or less, a payout ratio of 50% or less, and technical characteristics that suggest the potential for imminent capital appreciation.
Our latest Timely Ten selections are:
Dividend Income orientated Blog. Ideas and Thoughts about Stocks, Dividends and Growth Opportunities.
8 Top Picks With Buy Ratings Seen Out Of Merrill Lynch
The year-end prices are actually Merrill Lynch reference prices here rather than actual formal year-end prints on the NYSE or other exchanges. These are 8 top picks with Buy ratings seen out of Merrill Lynch as a kick-off to 2016.
Texas Instruments Inc. (NASDAQ: TXN) closed out 2016 at $72.97, and Merrill Lynch has a price objective of $82.00. If you consider the 2.7% dividend yield, Merrill Lynch is calling for Texas Instruments to generate a return of 15%. What investors might want to consider is that the consensus analyst target price is $74.89, very close to the current price, but Merrill Lynch’s price objective is exactly $10 less than the most aggressive price target on Wall Street. Texas Instruments has a 52-week range of $46.73 to $75.25. RBC was also positive here on Texas Instruments and other large caps.
Norfolk Southern Corp. (NYSE: NSC) is another top pick from Merrill Lynch, with the firm’s $122.00 price objective being higher than the $108.82 most recent price. Norfolk Southern’s consensus analyst price target of $105.19 is actually lower than the current share price. That makes Merrill Lynch much more positive than the street even if they are just calling for 13% upside. Norfolk Southern has a 52-week range of $64.51 to $111.43.
Hess Corp. (NYSE: HES) was last at $62.90, and Merrill Lynch’s price objective was last seen at $80.00. Hess has a 52-week range of $32.41 to $65.56 and its consensus analyst price target is just at $64.75. What matters here is that Merrill Lynch actually has the highest seen street price target of major analysts.
General Dynamics Corp. (NYSE: GD) was last trading at $173.21 versus a Merrill Lynch price objective of $200.00 for the company. That implies a gain of 15% if Merrill Lynch is right, and then there is the 1.8% dividend yield to consider for total return investors. General Dynamics has a consensus analyst target price of $186.06 and a 52-week range of $121.61 to $180.09.
Aetna Inc. (NYSE: AET) closed out the year at $124.45, and the firm has a $149 price objective. Aetna has a consensus analyst target of $138.93 and has a 52-week range of $92.42 to $136.50. That is still down 10% from a peak, and it remains unknown if the Trump administration will be more tolerant of insurance mergers versus that Obama administration.
Dover Corp. (NYSE: DOV) was at $75.19 at the end of 2016 and the firm has a $85.00 price objective. This is 13% in implied upside for Dover, before considering its 2.3% dividend yield.
MGM Resorts International (NYSE: MGM) is also a top pick for the first quarter, and Merrill Lynch’s price objective of $33.00 was versus a recent price of $28.50. The consensus analyst target price is a tad higher at $33.86.
SVB Financial Group (NASDAQ: SIVB) has a Buy rating at the firm, and this top pick among the bank stocks has a price objective of $190 versus a current $170.38 close. The parent of Silicon Valley Bank has a consensus analyst price target of $176.19, and its 52-week range is $77.87 to $176.77.
Texas Instruments Inc. (NASDAQ: TXN) closed out 2016 at $72.97, and Merrill Lynch has a price objective of $82.00. If you consider the 2.7% dividend yield, Merrill Lynch is calling for Texas Instruments to generate a return of 15%. What investors might want to consider is that the consensus analyst target price is $74.89, very close to the current price, but Merrill Lynch’s price objective is exactly $10 less than the most aggressive price target on Wall Street. Texas Instruments has a 52-week range of $46.73 to $75.25. RBC was also positive here on Texas Instruments and other large caps.
Norfolk Southern Corp. (NYSE: NSC) is another top pick from Merrill Lynch, with the firm’s $122.00 price objective being higher than the $108.82 most recent price. Norfolk Southern’s consensus analyst price target of $105.19 is actually lower than the current share price. That makes Merrill Lynch much more positive than the street even if they are just calling for 13% upside. Norfolk Southern has a 52-week range of $64.51 to $111.43.
Hess Corp. (NYSE: HES) was last at $62.90, and Merrill Lynch’s price objective was last seen at $80.00. Hess has a 52-week range of $32.41 to $65.56 and its consensus analyst price target is just at $64.75. What matters here is that Merrill Lynch actually has the highest seen street price target of major analysts.
General Dynamics Corp. (NYSE: GD) was last trading at $173.21 versus a Merrill Lynch price objective of $200.00 for the company. That implies a gain of 15% if Merrill Lynch is right, and then there is the 1.8% dividend yield to consider for total return investors. General Dynamics has a consensus analyst target price of $186.06 and a 52-week range of $121.61 to $180.09.
Aetna Inc. (NYSE: AET) closed out the year at $124.45, and the firm has a $149 price objective. Aetna has a consensus analyst target of $138.93 and has a 52-week range of $92.42 to $136.50. That is still down 10% from a peak, and it remains unknown if the Trump administration will be more tolerant of insurance mergers versus that Obama administration.
Dover Corp. (NYSE: DOV) was at $75.19 at the end of 2016 and the firm has a $85.00 price objective. This is 13% in implied upside for Dover, before considering its 2.3% dividend yield.
MGM Resorts International (NYSE: MGM) is also a top pick for the first quarter, and Merrill Lynch’s price objective of $33.00 was versus a recent price of $28.50. The consensus analyst target price is a tad higher at $33.86.
SVB Financial Group (NASDAQ: SIVB) has a Buy rating at the firm, and this top pick among the bank stocks has a price objective of $190 versus a current $170.38 close. The parent of Silicon Valley Bank has a consensus analyst price target of $176.19, and its 52-week range is $77.87 to $176.77.
High Dividend Growth For A Long Time: A Winning Strategy For 2017
Stocks that have a strong history of dividend growth as opposed to those that pays high yields form a healthy portfolio with more scope for capital appreciation. This is because these stocks act as a hedge against economic or political uncertainty as well as stock market volatility. Simultaneously, these offer outsized payouts or sizable yields on a regular basis irrespective of the market direction.
Additionally, these stocks have superior fundamentals compared to other dividend paying stocks as dividend growth reflects a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. All these make dividend growth a quality and promising investment for the long term.
However, the long history of outperformance by dividend growth stocks compared with the broader stock market or any other dividend paying stocks does not necessarily mean that they have the highest yields.
Here are a few ideas for a winning dividend growth portfolio:
10 Best Stocks Of The Past Decade
For most investors, the key to finding the best stocks is patience. Through both ups and downs, great stocks can generate truly spectacular price appreciation.
Selling into a crash is a sure way to scuttle your returns. By the same token, buying into market peaks is also going to cripple performance. Stick to a plan, however, and the best stocks will crush the broader market over the longer term.
That’s critical when the S&P 500 isn’t getting it done. Over the past decade, the U.S. benchmark delivered a nominal price gain of 60%. (With dividends and inflation, it comes to 67%.) Yup, it’s been a disappointing decade to say the least.
Past performance is not an indication of future returns, but looking at the S&P 500’s 10 best stocks over the last 10 years is instructive nonetheless. Brands, healthcare and technology dominate the list. Interestingly, good old fashioned retail does too.
Whatever the sector, the most important contributor to gains was staying the course. Have a look at how the S&P 500’s 10 best stocks over the past decade outperformed by a huge margin if you just held on — and how much juice these stocks might have left.
Selling into a crash is a sure way to scuttle your returns. By the same token, buying into market peaks is also going to cripple performance. Stick to a plan, however, and the best stocks will crush the broader market over the longer term.
That’s critical when the S&P 500 isn’t getting it done. Over the past decade, the U.S. benchmark delivered a nominal price gain of 60%. (With dividends and inflation, it comes to 67%.) Yup, it’s been a disappointing decade to say the least.
Past performance is not an indication of future returns, but looking at the S&P 500’s 10 best stocks over the last 10 years is instructive nonetheless. Brands, healthcare and technology dominate the list. Interestingly, good old fashioned retail does too.
Whatever the sector, the most important contributor to gains was staying the course. Have a look at how the S&P 500’s 10 best stocks over the past decade outperformed by a huge margin if you just held on — and how much juice these stocks might have left.
9 Cheap Dividend Aristocrats You Shoud Consider For The Year 2017
2016 is in the books, and the S&P 500 gained over 11% on the year. That’s great news if you’re already in the stock market … but it’s bad news if you’re looking to buy.
The market’s price-to-earnings (P/E) ratio is now 26.1, which is 17.6% higher than it was at the beginning of the year. In other words, if you buy stocks now, you’re paying nearly a fifth more for those companies’ earnings than you would have nearly 12 months ago.
We want stocks that have gone up less than the market year-to-date and with P/E ratios that are below the S&P 500 average. Our shopping list should also include companies with strong financials, and especially a history of revenue—and dividend—growth.
You may be surprised to hear that there are a few such stocks are out there, even if they’re getting tougher to find.
Attached I've compiled a list of the cheapest Dividend Aristocrats by forward P/E. They might be a first step for further research.
Here are the cheapest Dividend Aristocrats....
The market’s price-to-earnings (P/E) ratio is now 26.1, which is 17.6% higher than it was at the beginning of the year. In other words, if you buy stocks now, you’re paying nearly a fifth more for those companies’ earnings than you would have nearly 12 months ago.
We want stocks that have gone up less than the market year-to-date and with P/E ratios that are below the S&P 500 average. Our shopping list should also include companies with strong financials, and especially a history of revenue—and dividend—growth.
You may be surprised to hear that there are a few such stocks are out there, even if they’re getting tougher to find.
Attached I've compiled a list of the cheapest Dividend Aristocrats by forward P/E. They might be a first step for further research.
Here are the cheapest Dividend Aristocrats....
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