Ticker Reports for June 11th
Top 3 High-Yield Stocks with Strong Analyst Ratings
Dividend stocks are among the most attractive on Wall Street because they pay you to own them. However, not all dividend stocks are equal, so it takes more than a distribution and some attractive metrics to make them a good buy. This is a look at three dividend stocks that also get high ratings from analysts. They are ranked highly on MarketBeat’s Top Rated Dividend Stocks list because of their safe payments and analysts' sentiment. All come with a rating of 3.0 or higher, which equates to a Buy or Better rating, have an outlook for at least a double-digit upside, and pay market-beating yields. This combination can deliver market-beating total returns for investors.
Upbound Group: A High-Yielding Deep Value
Upbound Group (NASDAQ: UPBD) is a deep value for investors, trading at only 8.75x earnings. Sentiment is firm, and the consensus price target, which implies a 20% upside, is rising. The latest update comes from BTIG, which initiated at Buy and set its target at $45, setting a new high-end for the market.
The Buy-rated stock has come under pressure this year but shows solid support at the low end of the analysts' range, which investors can assume is the price floor. Among the market drivers are the company’s recent outperformance, return to growth, cash flow, and outlook. The outlook includes persistent growth and margin expansion.
Capital returns from Upbound Group are robust. The dividend, which is only 40% of this year’s earnings outlook, runs about 4.5% in yield, with shares at the low end of their trading range. The distribution growth is erratic but present, so investors may expect another increase this year or early 2025. The balance sheet is healthy, with low leverage near 2x equity, allowing for share repurchases. The share count is down about 1% on average at the end of FQ1 and should continue to fall this year.
Atlas Energy Can Set a New High Soon
Buy-rated Atlas Energy Solutions (NYSE: AESI) yields an attractive 3.5% and provides value at 9.5x earnings. The company serves the oilfield industry in the Permian Basin and Texas, providing mesh and sand for the well-completion process. In business since 2017, the company has been growing in leaps and bounds while profiting for investors. Among the latest earnings report details are 25% top-line growth offset by margin compression. However, the margin compression is due to accretive acquisition and business investment already paying off by improving scale and leverage.
The Q1 report led two analysts to revise their targets higher. The two new targets are above the consensus, leading the market to the high end of the range, which would be a new all-time high. Regardless, the consensus estimate is worth an 18% upside and a new all-time high.
The balance sheet highlights an increase in debt and liabilities offset by increased receivables, inventory, property, and goodwill, which has left equity up. Leverage is slightly elevated at 4x equity, but this is not a red flag considering the cause. The company’s acquisitions of Hi-Crush and investment in the Dune Express will quickly improve revenue, cash flow, earnings, and leverage. The Dune Express will be a game changer for the company, improving efficiency, safety, and emissions.
Copa: The Only Airline You Need To Own
Copa (NYSE: CPA) isn’t the largest airline in the world, but its valuation, yield, outlook, and analyst sentiment make it the best in breed for the sector. The company is focused on the rapidly growing and gentrifying Latin American market, helping it sustain growth, widen margins and pay dividends. This stock carries the highest rating and yield of any on this list, 3.25 and 5.1%, making it an attractive high-yield play across industries and sectors.
The latest earnings report spurred the analysts to raise their targets. MarketBeat.com tracks four revisions that are leading the market above the consensus, which offers a substantial 60% upside.
![AI Hell Will Break Loose [June 30, 2024] …](https://www.marketbeat.com/images/webpush/files/thumb_2046push_documents.jpg)
AI Hell Will Break Loose [June 30, 2024] …
On June 30, 2024, AI will reach a critical tipping point…
Whatever you do, make sure you prepare before June 30 at the very latest.
3 Stocks to Watch: Chip Shortage Impact on Industries
Late 2020 marked the onset of a severe global chip shortage, which had far-reaching repercussions throughout the interconnected world economy. The chip shortage stemmed from multiple factors, including pandemic-related disruptions, surging demand for electronics, and pre-existing supply chain vulnerabilities. These factors exposed the critical importance of semiconductors in virtually every industry sector globally.
From automotive, manufacturing, and consumer electronics to healthcare and telecommunications, industries worldwide grappled with production delays, rising costs, and an uncertain future. Furthermore, escalating geopolitical tensions, particularly between the US and China, introduce a new layer of complexity to the strained global chip market. These tensions have manifested in trade restrictions, technological competition, and growing concerns about supply chain security, further highlighting the strategic importance of semiconductors in the 21st century.
TSMC: A Foundry Leader
At the heart of the global semiconductor industry lies Taiwan Semiconductor Manufacturing Company (NYSE: TSM) (TSMC), the world's largest and most advanced semiconductor foundry. A semiconductor foundry manufactures chips designed by other companies, acting as a specialized factory for the semiconductor industry. Foundries are crucial because they allow companies to design and sell chips without investing in expensive fabrication facilities, fostering innovation and competition in the semiconductor market.
TSMC's dominance stems from its unparalleled expertise in manufacturing chips designed by other companies, enabling a vast ecosystem of fabless semiconductor companies to thrive. TSMC’s earnings report for Q1 showed a consolidated revenue of approximately $18.87 billion (converted from the reported New Taiwan Dollar), marking a 16.5% increase year-over-year, though a 5.3% decline from the previous quarter. The company attributed this decline to typical smartphone seasonality, partially offset by persistent demand for high-performance computing (HPC) applications. High-performance computing (HPC) involves using powerful computer systems to solve complex problems that require massive processing power and data analysis. The demand for HPC is rapidly increasing due to its growing applications in artificial intelligence, scientific research, drug discovery, financial modeling, and other data-intensive fields.
TSMC’s advanced process technologies, particularly its 3nm and 5nm nodes, are in high demand, reflecting the industry's relentless pursuit of smaller, faster, and more efficient chips. These leading-edge nodes, accounting for 65% of TSMC's total wafer revenue in Q1 2024, are crucial for powering next-generation smartphones, data centers, and AI applications. Looking forward, TSMC expects strong demand for these advanced nodes to continue, partially offset by continued smartphone seasonality, leading to a projected revenue of between $19.6 billion and $20.4 billion for Q2 2024. The company remains committed to expanding its production capacity to meet the ever-growing global semiconductor demand.
Intel: Regaining Market Share and Expanding Domestic Manufacturing
Intel Corporation (NASDAQ: INTC) was once synonymous with semiconductor manufacturing, but the company has faced significant challenges in recent years. Intel has lost ground to competitors like TSMC and Samsung in process technology and market share. However, under the leadership of CEO Pat Gelsinger, Intel is embarking on an ambitious turnaround strategy to reclaim its position as a leader in chip manufacturing.
Intel's "IDM 2.0" initiative is central to this strategy, which involves substantial investments in internal manufacturing capacity and external foundry partnerships. Intel is also investing heavily in new fabrication facilities (fabs) in the United States, a move driven by both economic and national security considerations. This expansion aims to bolster domestic chip production, address supply chain vulnerabilities, and strengthen the US's position in the global semiconductor industry.
Intel’s earnings report for Q1 2024 reported revenue of $12.7 billion, a 9% increase year-over-year, exceeding Intel’s analyst community’s expectations. However, the company reported a GAAP net loss of $437 million, or $0.09 per share, partly attributed to ongoing investments in its turnaround strategy and the cyclical nature of the semiconductor industry. Despite these challenges, Intel remains optimistic about its long-term prospects. The company expects to return to year-over-year revenue and non-GAAP EPS growth in fiscal year 2024, driven by its anticipated progress in process technology, increased manufacturing capacity, and growing demand for its products in key markets like data centers and AI.
NVIDIA: Capitalizing on The AI Revolution
NVIDIA Corporation (NASDAQ: NVDA) dominates the graphics processing unit (GPU) market. NVIDIA has strategically positioned itself at the forefront of the AI revolution. NVIDIA’s GPUs were originally designed for high-performance graphics in gaming but have since become essential components in data centers, cryptocurrency mining facilities, and AI applications worldwide. The company's "Hopper" architecture for GPUs has set new standards for performance and efficiency in AI training and inference, powering the development of advanced AI models and driving innovation across numerous industries.
NVIDIA’s earnings for Q1 2025 showed the company achieving record revenue of $26.0 billion, a remarkable 18% increase from the previous quarter and an astounding 262% surge year-over-year. This surge was fueled primarily by strong demand for data center products, which generated a record $22.6 billion in revenue, representing a 23% increase from the previous quarter and a 427% leap year-over-year. The company's data center growth is attributed to the accelerating adoption of generative AI, a technology requiring immense computing power, making NVIDIA's GPUs a coveted resource for companies at the forefront of this technological wave.
Looking towards the future, NVIDIA is already laying the groundwork for further expansion. The company's next-generation "Blackwell" platform promises even greater performance and efficiency for AI workloads, aiming to solidify NVIDIA's leadership in this rapidly evolving field. Moreover, NVIDIA is targeting new markets with its "Spectrum-X" networking platform, designed to handle the massive data flows required for large-scale AI deployments in data centers reliant solely on Ethernet connectivity. These strategic initiatives, coupled with NVIDIA’s financial performance, underscore NVIDIA's commitment to pushing the boundaries of AI and shaping the future of computing.
The Evolving Semiconductor Landscape
TSMC, Intel, and NVIDIA tend to grab the spotlight in the semiconductor industry. However, other often-overlooked companies play crucial roles in this intricate ecosystem. Samsung (OTCMKTS: SSNLF) is a South Korean multinational conglomerate that is considered a formidable player in memory chips and contract chip manufacturing. Competing directly with TSMC in the foundry market, Samsung also holds a significant share of the global memory chip market, a crucial segment for various electronic devices. GlobalFoundries (NASDAQ: GFS) is a US-based semiconductor foundry that focuses on providing differentiated chip manufacturing services. GlobalFoundries caters to customers seeking specialized solutions or those seeking to diversify their supply chains beyond TSMC.
ASML Holding (NASDAQ: ASML) is a Dutch multinational corporation with a near-monopoly in the extreme ultraviolet (EUV) lithography machines market. These machines are essential for producing the most advanced chips, with TSMC, Samsung, and Intel relying heavily on ASML’s technology to manufacture their cutting-edge semiconductors. These companies' success and innovations will continue to shape the semiconductor landscape, influencing everything from smartphone performance and data center capabilities to the advancement of artificial intelligence.
Semiconductor Industry Challenges and Opportunities
The semiconductor industry has plenty of opportunities but faces significant challenges that demand careful navigation. Geopolitical tensions, particularly between the US and China, cast a long shadow over the industry. These tensions have resulted in trade restrictions, tariffs, and increased scrutiny of foreign investments in the semiconductor sector, potentially disrupting supply chains and hindering technological collaboration.
Moreover, the pursuit of advanced process technologies, while crucial for innovation, is becoming increasingly complex and capital-intensive. The transition to smaller nodes like 2nm and beyond requires substantial investments in research and development, sophisticated manufacturing facilities, and a highly skilled workforce.
Attracting and retaining top talent in a competitive market is another significant challenge for the industry. As demand for skilled engineers, technicians, and researchers continues to grow, semiconductor companies must compete for a limited talent pool, potentially driving up labor costs and impacting innovation. Despite these challenges, the semiconductor industry is presented with substantial opportunities for growth and innovation.
The relentless advancement of artificial intelligence, for example, drives demand for high-performance chips, creating a lucrative market for companies like NVIDIA specializing in GPUs and accelerated computing. Another significant trend is the rise of edge computing, driven by the need for faster data processing closer to the source. This paradigm shift creates demand for specialized, low-power chips optimized for data analysis and sensor processing at the network's edge.
Finally, as environmental, social, and governance (ESG) considerations become increasingly important for investors and consumers, the semiconductor industry faces pressure to improve its sustainability practices. Reducing chip manufacturing's environmental footprint, addressing resource consumption, and promoting ethical sourcing practices are all becoming critical for maintaining a competitive edge and ensuring long-term viability in a world increasingly focused on sustainability.
The Future of Chip Manufacturing
While showing signs of easing in some areas, the chip shortage is unlikely to be fully resolved in the short term. Lead times for some components remain extended, and the complex interplay of global demand, supply chain dynamics, and geopolitical factors continues to create uncertainty. Semiconductor companies, both established players and emerging contenders, are investing heavily in expanding production capacity, advancing process technologies, and securing their positions in a rapidly evolving market. The fierce competition for market share, innovation, and talent drives further consolidation and strategic partnerships within the industry.
As the world increasingly relies on semiconductor technology, the industry's strategic importance will only grow. Governments worldwide recognize semiconductors' critical role in economic competitiveness, national security, and technological advancement, leading to increased investment in domestic chip production and research.
The future of chip manufacturing will likely be characterized by rapid technological innovation, geopolitical volatility, and intense competition. Companies that can navigate this complex maze with success will be those that can adapt quickly to changing market dynamics, forge strategic partnerships, and continue to push the boundaries of innovation in the face of both challenges and opportunities.
🚀 Tap into this explosive trade opportunity asap
I learned about these explosive stocks during my two decades on Wall Street…
And used them to help grow my old hedge fund from just a few million to over $700 million dollars*.
So it's safe to say… these bad boys work.
What's the secret behind these special trades?
Well, right now, I'm going public with the unique strategy behind these "Calendar Stocks"…
Dividend King ABM Industries is on Track for New Highs
Dividend King ABM Industries (NYSE: ABM) is neither a high-profile stock nor an exciting investment, but that is not why it’s a good buy. A solid, in-demand business steadily growing and widening margins offset the lack of excitement. The margin is critical to this investment as it drives significant cash flow, allowing for self-funded expansion, ultra-safe dividends, distribution growth, and share repurchases.
The quality of the investment is seen in its status as a Dividend King. This label speaks volumes regarding foresight, corporate discipline, and the ability to withstand the natural ups and downs of the business cycle. The takeaway is that ABM Industries is a high-quality cash flow machine that returns capital to investors while driving shareholder value, and it is on track to set a new high.
ABM Industries Post Solid Quarter, Raises EPS Guidance
ABM Industries had a solid quarter, producing growth of 2% compared to last year. The $2 billion in revenue aligned with forecasts, which is not a catalyst for higher prices, but the margin is. The top-line growth was driven by a double-digit gain in three of the four operating segments, offset by a small single-digit decline in the office category. Office-related revenue is down due to sluggishness in the industry but offset by margin improvement and earnings quality. Critical details include all-organic growth driven by new and existing business.
The margin news is mixed but favorable to shareholders. The GAAP and adjusted margins are down compared to last year due to a one-off in the prior year and an expected increase in spending/CAPEX. The salient point is that the adjusted $0.82 in earnings is down 3% compared to last year but a full 1000 basis points better than the consensus forecast reported by MarketBeat.com. The earnings strength led management to increase the guidance, which catalyzed higher share prices.
Guidance for the year is good. The company expects low-single-digit growth, but the Q2 margin strength increased the EPS target. The adjusted EPS target was raised by a dime at the low end and $0.075 at the midpoint, above the analysts' consensus. This led to some upward revisions to the outlook and price targets that support the market. MarketBeat tracks four revisions since the report was released, all of which include upward movement in the price target. The consensus of the four new targets is near $50.50, leading the group to the high end of the target range and the stock price to the high end of its trading range.
Cash Flow and Balance Sheet Point to Sustained Capital Return
The company’s GAAP and adjusted margins were impacted by spending and one-offs from the previous year, but cash flow and free cash improved. Cash flow is up more than 4x and free cash flow more than 5x, allowing for significant share repurchases and dividend payments. The repurchases in Q2 helped to reduce the average count by 4.7% compared to last year. There is still ample funding left under the current authorization, enough to sustain repurchases for eight quarters at the Q2 pace, which plays into the dividend outlook.
Fewer shares reduce the company’s distribution total, allowing for sustained annual increases with or without earnings growth. Regarding the balance sheet, highlights include flat assets, a reduction in debt/liabilities, and a 2.5% increase in equity. Net leverage remains low at 2.3x net, leaving the company in a nimble operating condition to invest in growth and margin-enhancing activity.
Range-Bound ABM Industries Heading for the Upper Limits
ABM stock has been range-bound for nearly four years as the market digested the social-distancing and COVID-19-inspired gains. With the industry back to organic growth and cash flow rising, the stock is heading to the top of the range with momentum, and it looks like it could retest the upper boundary soon. The caveat is that resistance at $52 could be strong. This level coincides with the high end of the analysts' target range and may cap gains over the next quarter or two. However, assuming the company continues to grow steadily, widen its margin, and repurchase shares as expected, the market should drive this business services stock to a new high by the end of the year.
MarketBeat Media, LLC dba TickerReport
345 N Reid Place, Suite 620, Sioux Falls, SD 57103.
0 Response to "🌟 Dividend King ABM Industries is on Track for New Highs"
Post a Comment