Tag Archives: NYSE:PM

Top 10 Consumer Staples: Are There Any Worthy Buys? Part 4

In the last 12 months, the Consumer Staples ETF (NYSEARCA:XLP) has outperformed the SPDR S&P 500 Trust ETF (NYSEARCA:SPY). The SPY has risen 3.6%, while the XLP has appreciated 8.5%. Over longer periods, the XLP has tended to be market perform or market outperform while offering a higher yield.

Now that the Consumer Staples sector as a whole has outperformed the market recently, it may be time to consider taking some profits or simply do nothing and collect the dividends.

Investors planning to make new investments in this sector should be extra careful about valuation and determine how much they’re willing to pay.

Procter & Gamble Co (NYSE:PG), The Coca-Cola Co (NYSE:KO), and PepsiCo, Inc. (NYSE:PEP) trade at relatively expensive multiples compared with their historical trading levels. Although the companies still pay solid dividends at yields of about 3%, investors can probably find better opportunities for total returns in new investments.

For example, Philip Morris International Inc. (NYSE:PM) and Altria Group Inc (NYSE:MO) trade at similar multiples to PG, KO, and PEP but offer higher yields with better growth prospects — albeit not an apple to apple comparison.

CVS Health Corp (NYSE:CVS) benefits from an aging population in the U.S. Further, CVS trades at a reasonable multiple of 17.5, making it one of the better opportunities to explore for total returns in the double-digits if investors don’t need immediate income.

The above is an excerpt from my Seeking Alpha article. So, to learn more about earnings estimates and dividend information of each company, check out the article here: Top 10 Consumer Staples: Are There Any Worthy Buys? Part 4

This is a part of a series covering the top stocks in each sector:

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Disclosure: At the time of writing, I own shares in AAPL, AMGN, FB, NKE, and SBUX.

Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.

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Consumer Staple and Utility Stocks are Near All Time Highs

The S&P 500 that represents the U.S. market is near an all-time high which might make stock investors nervous, especially when the market has been trading sideways. What should stock investors do? The short answer is to ignore the market and focus on individual companies. The long answer will come later in this article.

The S&P 500 has been trading in a sideways channel since August 2015. Right now, NYSEARCA:SPY is back at the top of the channel, and if it doesn’t break above the US$208 resistance persistently, it will head back down. If SPY falls past the US$185 support persistently, this will mark the top of the market for the time being.

SPY chart

SPY Weekly Chart

Investors have been piling on to the consumer staples and utilities as the select ETFs have been hitting new highs. See the Consumer Staples ETF (NYSEARCA:XLP) and Utilities ETF (NYSEARCA:XLU) charts below.

XLP chart

Consumer Staples ETF Weekly Chart

XLU chart

Utilities ETF Weekly Chart

Both the Consumer Staples ETF and Utilities ETF look like they’re losing steam as they hit or are near overbought territories. Read More

High Dividend Stocks Priced at a Value: February 2015 Watchlist

When I say “high dividends”, I mean companies which are paying 1.8x (or 80%) more dividends than the index. For example, SPDR S&P 500 ETF Trust (NYSEARCA:SPY)’s Friday closing yield is 1.83%. So, a company paying out a high dividend would be one that pays at least a yield of 3.3%. Likewise, on the Canada side, iShares S&P/TSX 60 Index Fund (TSE:XIU) had a yield of 1.93%. So, a Canadian company paying out a high dividend must pay at least a 3.48% yield.

For February, I identified some high dividend/distribution companies in the US and a Canadian retail REIT that I’ve added to this month. Canadians can consider getting monthly income from this Canadian REIT.

High Dividend US Companies

This list shows the current yields, and I believe are good starting yields (with respective to the company’s historical yields) to start buying into these companies if you believe in the future of these companies.

  • AbbVie (NYSE:ABBV) – yield: 3.38%
  • Philip Morris International (NYSE:PM) – yield: 4.83%
  • Chevron (NYSE:CVX) – yield: 3.79%

Chevron was in the last watchlist: Dividend Stocks at a Value: January 2015 Watchlist. Since that article, Chevron’s yield has drop due to price rising a few dollars. Long-term income investors shouldn’t sweat the small changes in price though, as Chevron is still attractive at a yield of 3.79%.

AbbVie

AbbVie logo

AbbVie is a global biopharmaceutical company hardquartered in Illinois. It was spun off from Abbott in January 2013. It has around 25,000 employees and 7 research & development and manufacturing facilities around the world. AbbVie’s focus is on immunology and virology diseases. Currently, Humira, AbbVie’s top drug, makes more than 50% of the company’s profits. Fundamentally, both Morningstar and F.A.S.T. Graphs show it is priced in the fair value range. Technically, it is bouncing off of a recent bottom. Currently marked as in the fair value range by Morningstar, AbbVie is certainly worth considering on a pullback.

Philip Morris International

Philip Morris logo

Philip Morris is a leading global tobacco company, owning 7 of the world’s top 15 international brands, including Marlboro. Philip Morris holds 28% of the global market, excluding China. Other than to provide products to adult smokers, and to generate superior returns for shareholders, Philip Morris also has the goal of reducing harm caused by smoking by developing products which are close in look, feel, and taste to the conventional cigarettes but seem to be less harmful.
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