Ticker Reports for November 2nd
3 Large-Cap Stocks Primed for a Year-End Melt-Up Rally
Now that the U.S. economy is going through a potential scenario of inflation sparking up once again, investors might be wary of where to invest their capital accordingly so that inflation doesn’t erode their buying power but also wisely enough so that losses don’t come their way to add onto the potential inflation risks coming ahead.
Large-cap stocks are probably the best place to be today and for the coming quarters because if inflation does make its way back into the economy, which seems to be the case considering how much gold and Bitcoin have rallied or how the iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT) has sold off against most stock indexes, then companies with enough size and international exposure will be the ones that make it out alright.
However, not all large-cap stocks are the same in this cycle. Investors need to make sure that these businesses have enough fundamental factors to protect their business models from inflation pressures and still deliver reasonable growth. This is why investors should look into Exxon Mobil Co. (NYSE: XOM) in the energy sector, then Mastercard Inc. (NYSE: MA) for financial sector exposure, and even consumer staple giant Coca-Cola Co. (NYSE: KO).
How Exxon Mobil Stock Could Shield Investors Amid Rising Inflation Pressures
It would make sense to invest in a commodity-based business like Exxon, which Paul Tudor Jones recommended
Warren Buffett has gotten into the space ahead of the curb, buying up to 29% of Occidental Petroleum Co. (NYSE: OXY) in an early bet for oil prices going higher. However, retail investors would be better off with a bigger company like Exxon, as international exposure and scalability will allow it to outpace domestic inflation rates.
Recently, Wall Street analysts have also caught onto this trend. Specifically, those at Scotiabank reiterated their “Outperform” rating on Exxon Mobil stock, coupling it with a $145 share price target. Exxon Mobil stock would have to rally by as much as 23% from where it trades today to prove these analysts right.
Then there are the recent institutional buys that let investors know where the rest of the market stands regarding Exxon Mobil. Those at National Pension Service decided to boost their stake in Exxon Mobil stock by 14.5% as of late October 2024, bringing their net investment up to $999.1 million today.
Last but not least, Exxon Mobil shareholders now enjoy a $3.8 payout per share, which translates into a dividend yield of up to 3.2% to beat today’s rate of inflation. This makes it a preferential stock for markets to pursue when inflation goes back up.
Mastercard's Business Model: A Top Pick for Investors Betting on a Market Melt-Up
Credit card providers like Mastercard love inflation because they charge a small percentage fee based on the value of items transacted. Rising prices across all items make their fee structure a cash-flowing cow for investors to exploit if properly anticipated.
More than that, as inflation makes it harder for consumers to rely only on debit, credit cards—and their rewards systems—can be a much more attractive alternative for virtually all consumers in the economy, raising Mastercard's earnings potential.
This is why Wall Street analysts now see Mastercard stock delivering up to $4.38 in earnings per share (EPS) for the next 12 months, which is significantly higher than today’s $3.89 EPS, 12.5% higher. More than that, analysts at J.P. Morgan Chase now see Mastercard stock trading at up to $593 a share, calling for a net upside of 18% from today’s price.
The double-digit upside in a $464 billion company is hard to come by, so investors must pay attention to this melt-up play before inflation gets here. The National Pension Service also saw room to increase its holdings in Mastercard stock by 14.3% as of October 2024, netting $743.8 million today.
Coca-Cola Stock: A Safe, Stable Investment Amid Economic Uncertainty
With over three billion servings per day of Coca-Cola products, inflation can be one of the brand’s best allies, assuming Coca-Cola can retain the strong business moat it has achieved today.
Simply raising prices to match inflation would mean an additional few billion in revenues for Coca-Cola. History has shown that the company has enough market share and consumer loyalty, and these price increases won’t hurt the company’s cash flows, as demand will stay put.
This is why analysts at Truist Financial now see a $80 share price target for Coca-Cola stock after reiterating their “Buy” rating. This new view calls for up to 22% upside from where the stock trades today. Again, this is a rare double-digit upside potential in such a large business.
Coca-Cola’s annualized 2.95% dividend yield is another reason that markets will likely treat it as a preferential place to be, considering the fact that inflation might make its way back into the economy.
Top 4 Gold Stocks for November
FREE Report: Top 4 Gold Stocks Ready to Surge as Gold Prices Climb Higher
Click Here to Download Top 4 Gold Stocks Report
Roblox Stock Set for More Gains After Strong Earnings Report
Despite the S&P 500 falling by over 1.3% on the morning of Halloween, some stocks have reason to celebrate their strong price action to beat most – if not all – of other peers in the stock market. Today, it is Roblox Co. (NYSE: RBLX) that announced its latest quarterly earnings results, the reason why markets reacted by sending the stock to a new 52-week high.
After rallying by as much as 17% for the day, Roblox stock now has a record of up to 35.6% returns for the year. It now stands above the rest of the technology sector as measured through its outperformance of over 30% compared to the Technology Select Sector SPDR Fund (NYSEARCA: XLK). The fundamentals reported in this stock today give investors another reason to stick with this name moving forward, as the momentum achieved recently is likely to continue.
Wall Street analysts believe this as well, as they had been raising the company’s price targets before the earnings results came out. This means they will probably have to go back to the drawing board to come up with an updated view that more closely reflects the company's valuation after today’s results show how much more value there could be had in this fast-growing name.
Roblox Stock Surges as Key Growth Drivers Fire on All Cylinders
For a stock to rally as much as Roblox did, markets need to see enough growth to outpace any preference for other names in the sector. Roblox delivered this to investors in its recent quarter, starting with a massive 29% growth in revenues over the past 12 months.
Of course, revenue would mean nothing if the Roblox user base wasn’t pushing hard as a tailwind for the company. Daily Active users grew to 88.9 million, or 27% over the year, giving revenue enough room to keep growing along with expectations for more.
The demographics in Roblox keep improving as well. Now, over 34% of users are over the age of 13, compared to only 26% for the last quarter. This means that there’s a larger user base in Roblox that is closer to being of working age and not so reliant on parent allowances to pay for their Roblox add-ons and in-game purchases.
All of Roblox's growth and improvement resulted in one of the main metrics investors look at when considering a business to buy: free cash flow (operating cash flow minus capital expenditures), which grew to an all-time high of $218 million, up by as much as 95.3% compared to last year’s $111.6 million.
Achieving and maintaining positive free cash flow is the foundation for other investor benefits like stock buybacks, and it also enables accelerated growth in a business. This new jump in free cash flow could pressure Wall Street analysts to reiterate their recent price targets on Roblox stock.
As of today, only those at Piper Sandler were bold enough to raise their price targets to $54 from a previous $48. This valuation would call for a rally of 5% from where the stock got to today. However, these valuations were set at the beginning of October 2024, well before the company released its recent bullish results.
It would be safe to assume, then, that analysts need to reiterate their ratings and valuations on Roblox stock to reflect the recent results. Otherwise, they risk falling behind on the reality of how much this company might be worth today. That is one reason investors should consider buying Roblox before all these analysts jump on it.
Roblox Stock Clears Accusations, Sets the Stage for Future Momentum
Over the past quarter, a bearish report from Hindenburg Research pointed out that Roblox's methods of recording revenue and user growth were fraudulent. However, one way to explain how Roblox did nothing wrong in its methodologies is to provide a breakdown of its financials, which can be found in this analysis here.
More than that, the bearish report suggested that the company's safety measures regarding its underage audience weren't robust enough to provide a safe environment for its users. While these accusations might be true for most of the online gaming and social media space, there is no evidence that Roblox specifically bypassed any safety protocols.
Knowing that these accusations had no grounds for sending the stock lower, it seems that the $40 a share level acted as a very strong support for the call for new buyers as well. Some of these buyers came from Robeco Institutional Asset Management, which boosted its holdings in Roblox stock up to $35.6 million today.
As a final check for market sentiment, investors can compare the company's valuation multiples against the rest of the software industry. Particularly a price-to-book (P/B) ratio, where Roblox calls for a massive 392.4x versus the software industry's average 5.2x valuation today.
Some would call it expensive; others understand that stocks that offer this type of growth potential will never trade at low enough multiples, as the market is forward-looking and likes to get ahead of the curb on these high-potential stocks.
10 Best AI Stocks to Buy Now
Are you ready to capitalize on the booming AI market? Our experts have identified the top 10 AI stocks set to skyrocket.
Download our free report today
Top 3 REIT Picks for 2025: High Yields and Rising Earnings Ahead
Real Estate Investment Trusts, also known as REITs, are a type of stock market investment that provides one thing in spades: income. This is because they must distribute at least 90% of their earnings to shareholders to maintain their tax-advantaged status.
Additionally, their stock prices can appreciate significantly, offering the potential for a mixture of both dividends and growth. As their earnings increase, they can often also increase the amount they pay out as dividends. These three REITs are offering investors at least 5% dividend yields, and analysts project at least 15% increases in their adjusted earnings per share (EPS) for fiscal 2025.
Realty Income: The Monthly Dividend Company
First is Realty Income Corporation (NYSE: O). The real estate company offers a strong dividend yield of 5.2%, and analysts expect its adjusted EPS to grow by 21% in 2025. The company owns and manages freestanding commercial properties and is in the top 10 largest REITs in the U.S. by market capitalization.
It differentiates itself when it comes to returning capital to investors by paying dividends every single month rather than quarterly. This gives the investor increased utility in how they want to use their dividends as they get access to them sooner. However, they must also be more on top of reallocating their dividends to make sure they are fully invested. Realty Income offers a dividend reinvestment program, or DRIP, where it will automatically reinvest the dividends back into more shares if the investor chooses.
The twelve-month average price target for Realty Income predicts some moderate upside in the stock of 8%. However, analysts over at UBS Group are particularly bullish. Their $72 price target implies an upside of 19%. Another positive factor for Realty Income is that the company has a consistent track record of raising its dividend. It has done so for over 25 consecutive years, allowing it membership in the S&P 500 Dividend Aristocrats.
Park Hotels: Luxury Hotel REIT With A Chance For Big Dividend Spikes
Next is Park Hotels and Resorts (NYSE: PK). The company owns and manages a real estate portfolio of upscale hotels, many of which are under the Hilton brand. Hilton actually spun off a portfolio of properties back in 2017, which is now Park Hotels and Resorts. It hasn’t been a great year for the firm, with shares providing a total return of -4%.
If the company’s Q4 results come in as expected, it will have seen a moderate revenue decline of 3% over the year. However, analysts expect revenue growth to turn slightly positive again in 2025 and 2026. Analysts expect adjusted earnings per share to grow much more rapidly at 60% in 2025 and 15% in 2026.
Additionally, the company’s next twelve months' dividend yield, a forward-looking measurement, is predicting massive income for investors. The number sits at 9%, which, although big, is significantly smaller than the yield over the last twelve months. That number sits at over 17%. This absurdly high number is due to a 77-cent special dividend the company paid at the end of 2023 in addition to the especially large 93-cent quarterly dividend. The company also did this back in 2018. Although, more often than not, these massive dividend spikes don’t occur, their possibility is a perk of this REIT.
Crown Castle: Specialized Telecom REIT With Earnings Projected to Recover
Last is Crown Castle (NYSE: CCI). It is a specialized REIT, as it owns, operates, and leases communication infrastructure. Specifically, it collects revenue through leasing its towers and fiber optic lines to some of the largest telecom companies in the world. T-Mobile (NASDAQ: TMUS), AT&T (NYSE: T), and Verizon (NYSE: VZ) together accounted for around 70% of total revenues in 2023.
It has also struggled in 2024, providing investors with a total return of -2%. If its Q4 financials align with estimates, its adjusted EPS will have dropped 37% from the previous year. However, it is projected to recover in 2025, with adjusted EPS expected to grow by 18%, based on the average of 11 analyst forecasts. Analysts predict the figure will continue to rise in the foreseeable future after 2025.
The firm’s dividend yield of 5.8% shows its notable income-providing potential. The company also has a consistent track record of raising its annual dividend; it has done so every year since 2015. In 2024, it's on track to equal its annual dividend from 2023 unless it raises its payout in Q4.
MarketBeat Media, LLC dba TickerReport
345 N Reid Place, Suite 620, Sioux Falls, SD 57103.
0 Response to "🌟 Top 3 REIT Picks for 2025: High Yields and Rising Earnings Ahead"
Post a Comment