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Yahoo
04-06-2025
- Business
- Yahoo
3 Rock-Solid Dow Jones Dividend Stocks to Double Up on in June
Chevron is a high-yield dividend stock that's well positioned to withstand the current downturn in energy prices. Honeywell's breakup could accelerate earnings growth within its businesses, not least through mergers and acquisitions. Home Depot's growth has ground to a halt, but the stock is a good value and pays a reliable dividend. 10 stocks we like better than Chevron › The Dow Jones Industrial Average (DJINDICES: ^DJI) is one of the major stock market benchmarks. But unlike the S&P 500 (SNPINDEX: ^GSPC), which has just over 500 components, or the Nasdaq Composite (NASDAQINDEX: ^IXIC), which has a few thousand stocks, the Dow only contains 30 components. Each company in the Dow is meant to represent a major stock market sector or industry. As representatives, Dow companies tend to be reliable, industry-leading businesses -- making the Dow a good place to look for blue chip stocks. Here's why Chevron (NYSE: CVX), Honeywell International (NASDAQ: HON), and Home Depot (NYSE: HD) stand out as top Dow stocks to buy now. Scott Levine (Chevron): With the midpoint of 2025 nearly upon us, it's a great time to look back on how things have fared so far and to take action if necessary. For those eager to start a new position, Chevron is a strong consideration right now. While the stock's performance this year has been unfavorable, it should certainly not dissuade patient investors with long investing horizons. Of course, the stock's 5% forward dividend yield doesn't hurt either. An oil supermajor, Chevron has robust operations throughout the energy value chain. This, in part, helps the company weather downturns in energy prices -- something that savvy investors know well. For example, while the price of oil benchmark West Texas Intermediate has dropped nearly 12% since the start of the year, shares of Chevron have only dipped 3.5% lower at the time of this writing. Furthermore, with energy prices lower, management has taken steps to ensure that the company's financial position remains strong. In addition to a $2 billion reduction in capital expenditures from 2024, management aims to achieve $2 billion to $3 billion in cost savings by the end of 2026. Illustrating further the company's resilience during downturns in energy prices, Chevron has consistently hiked its dividend higher for 38 consecutive years -- a period that has certainly seen its share of plunging oil prices. And all the while, the company has continued rewarding shareholders and growing the business. Shares are currently attractively priced, changing hands at 7.9 times operating cash flow, a discount to their five-year average multiple 8.4. Lee Samaha (Honeywell International): Currently sporting a 2% dividend yield, Honeywell's attractiveness to passive income investors isn't about its current yield but more about its potential to increase it. Or rather, the ability of the three new companies that Honeywell will become to increase their earnings. As readers already know, Honeywell is splitting into three different companies. Its advanced materials business, Solstice Advanced Materials, will be spun out in late 2025 or early 2026, with Honeywell Aerospace and Honeywell Automation separated in late 2026. The motive behind the breakup makes sense and should allow the respective management teams to better focus on generating value for investors while running their own capital allocation policies. In addition, the new listings might attract investors looking for more pure-play stocks in sustainable technologies (advanced materials), industrial and building automation, and aerospace. If there is criticism of Honeywell's management in recent years, it's come from its lackluster record in making acquisitions to boost growth, not least because the company tends to have a rock-solid balance sheet and an easily covered dividend. That conservatism over acquisitions changed somewhat with Vimul Kapur's appointment as CEO in 2023 -- examples include the $4.95 billion acquisition of Carrier Global Access Solutions (Automation) last year and the recent announcement of a $1.8 billion deal to buy Johnson Matthey's catalyst technology business (Solstice). These deals are part of a more aggressive approach to capital allocation, which should continue after the three stand-alone companies are created with their own priorities. As such, there's plenty of reason to believe they will create more value for investors as stand-alone companies. Daniel Foelber (Home Depot): Home Depot stock dipped after reporting first-quarter fiscal 2025 results -- with the stock now down 6.8% year to date at the time of this writing. Total revenue for the quarter was up 9.4% -- mainly thanks to Home Depot's blockbuster $18.25 billion acquisition of SRS Distribution. The acquisition was completed in June 2024 and therefore didn't impact first quarter fiscal 2024. Home Depot's comparable store sales decreased by 0.3% in the quarter -- illustrating consumer spending weakness. Home Depot reaffirmed its guidance for fiscal 2025, but that guidance wasn't great to begin with. The company expects just a 1% increase in comparable sales growth over the same 52-week period in fiscal 2024. On its latest earnings call, Home Depot discussed the impact of high interest rates and mortgage rates as causes for low housing turnover despite a need for home improvement on a relatively old housing stock -- with 55% of homes now 40 years or older. Home Depot said that consumers are working on smaller projects like painting and yardwork but are hesitant to take on larger projects because they typically require financing, like tapping into home equity. However, the longer consumers put off home improvement projects, the greater the pent-up demand when the cycle turns. It's worth understanding that Home Depot's customers tend to make good income and have equity in their homes -- which is why a strong housing market is vital to Home Depot's results. Home Depot CEO Ted Decker said the following on the first-quarter 2025 earnings call: But again, the thing to keep in mind is we have a very different customer and a very different sort of use case for expenditure in home improvement. So, our customer, from a broad basis, is one of the strongest in the economy. The average income is $110,000, 80% of our customers own their homes. We've talked about how much home price appreciation they've seen over the past year. Stock markets have recovered, job and wage growth are strong. So, our customer is in a good spot right now. Home Depot may not be firing on all cylinders right now, but it has an excellent business model and an industry-leading position in the home improvement industry, making it a coiled spring for long-term economic growth. The company has paid and raised its dividend every year since 2010 and yields 2.5% at the time of this writing -- making it a solid source of passive income. Home Depot's valuation is reasonable, with a 24.6 price-to-earnings ratio -- just slightly above its 10-year median of 22.9. Add it all up, and Home Depot is a great choice for long-term investors who care more about a company's future than its near-term challenges. Before you buy stock in Chevron, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chevron wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron and Home Depot. The Motley Fool has a disclosure policy. 3 Rock-Solid Dow Jones Dividend Stocks to Double Up on in June was originally published by The Motley Fool
Yahoo
03-06-2025
- Business
- Yahoo
3 Artificial Intelligence (AI) Stocks to Buy If You're Bullish on a 2025 Rebound
The major benchmarks had a difficult couple of months, but have rebounded in recent weeks. Though uncertainty remains, artificial intelligence (AI) stocks could benefit if the indexes continue to march higher. 10 stocks we like better than Advanced Micro Devices › The three major benchmarks struggled in the first months of the year as investors worried about the economic situation ahead. President Donald Trump set out a plan to impose tariffs on imports, a move analysts and economists said could weigh on growth. The concern is both businesses and consumers would face higher costs -- a scenario that might hurt corporate earnings. Over the past few weeks, though, certain positive elements have helped the S&P 500 (SNPINDEX: ^GSPC), the Dow Jones Industrial Average (DJINDICES: ^DJI), and the Nasdaq Composite (NASDAQINDEX: ^IXIC) to rebound. The U.S. reached initial trade deals with the U.K. and China, and the U.S. temporarily exempted the high-growth area of electronics from import tariffs. Of course, uncertainty still remains. A federal court ruling recently halted Trump's tariffs, but an appeals court then ruled the U.S. could continue collecting duties. And this legal battle may continue. Meanwhile, tensions between the U.S. and China just intensified again as the U.S. said China breached their trade agreement. But these latest events could be temporary disturbances and might not hold indexes back for very long. And artificial intelligence (AI) stocks could be the first to benefit, considering the growth potential of that market -- analysts expect it to surpass $2 trillion by the early 2030s. So, if you're bullish on a 2025 rebound, consider these three AI stocks to buy. Nvidia dominates the AI chip market, but that doesn't mean there isn't room for other winners. And one that's showing potential is Advanced Micro Devices (NASDAQ: AMD). This chip designer is on the way up, offering an AI chip -- MI300X -- that may not beat Nvidia's top chip, but still offers customers quality performance. Customers are realizing this, helping AMD's data center revenue to soar 57% in the recent quarter. Year-over-year growth accelerated for the fourth straight quarter, even against the backdrop of a complex economic environment, CEO Lisa Su said. This was done at increasing profitability on sales, with non-GAAP (generally accepted accounting principles) gross margin expanding to 54% from 52% in the year-earlier period. AMD also is a leader in the central processing unit (CPU) market -- these are the main processors found in standard computers -- and recently gained more than 16% in CPU market share, bringing it close to beating Intel in that market, according to Wccftech. AMD trades for 27x forward earnings estimates, down from 54x less than a year ago, yet revenue has climbed significantly -- so now looks like a great time to buy. Broadcom (NASDAQ: AVGO) is a networking expert, selling a wide range of products used anywhere from your smartphone to data centers. And speaking of data centers, they're driving growth for the company now as demand from AI customers soars. In the most recent quarter, the company's AI revenue surged 77% to $4.1 billion, and consolidated revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached record levels. Importantly, the momentum looks set to continue. Broadcom forecast $4.4 billion in AI semiconductor revenue for the second quarter, saying this will be driven by big cloud service providers as they pile into connectivity solutions. Broadcom also predicted its three major cloud customers will result in a serviceable addressable market of $60 billion to $90 billion in fiscal 2027. And this doesn't even include four other big customers working with Broadcom to develop AI accelerators. Broadcom stock is trading close to its all-time high, but considering the AI growth ahead and its valuation of 36x forward earnings estimates, there still is room for the stock to run -- and it may gather momentum as the indexes rebound. Oracle (NYSE: ORCL) once was mainly known for its database management platform, but in recent times, it's become a significant player in the AI story. This tech giant offers a broad and flexible range of cloud solutions and has seen AI cloud infrastructure revenue take off in recent quarters -- in the most recent period, it soared nearly 50%. The company's record level of sales contracts in the quarter offer us visibility on what's ahead, and there's reason to be optimistic: This $48 billion in contracts helped remaining performance obligations, or revenue to expect from these deals, to climb 63% to $130 billion. On top of this, Oracle is involved in the Stargate project to build out AI infrastructure in the U.S., and the company also is playing a key role in an international Stargate effort. Along with partners including AI chip giant Nvidia, Oracle will help build a Stargate campus in the United Arab Emirates. As for valuation, Oracle looks reasonably priced, trading at 27x forward earnings estimates, considering these catalysts for growth that could push the stock higher in the months and quarters to come. So, if indexes rebound in 2025, Oracle may be one of the big winners. Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Adria Cimino has positions in Oracle. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Nvidia, and Oracle. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. 3 Artificial Intelligence (AI) Stocks to Buy If You're Bullish on a 2025 Rebound was originally published by The Motley Fool
Yahoo
17-05-2025
- Business
- Yahoo
This Recession Forecasting Tool Hasn't Been Wrong Since 1966 -- and It Has a Clear Message for Wall Street
Though Wall Street is flush with catalysts, investors may be ignoring the biggest one -- the U.S. economy. A predictive tool used by Federal Reserve Bank of New York paints a potentially troublesome picture for the U.S. economy. Thankfully, economic and stock market cycles aren't linear. 10 stocks we like better than S&P 500 Index › Wall Street hasn't been hurting for catalysts of late. Following a nearly two-and-a-half-year climb in the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC), which was spurred by the rise of artificial intelligence (AI), investors have been hypnotized in 2025 by President Donald Trump's ever-changing tariff policies, wild swings in Treasury bond yields, and the return of stock-split euphoria. But it's fair to question whether Wall Street and the investing community are missing the bigger picture: The U.S. economy. Although the economy and stock market aren't tied at the hip, corporate earnings often ebb and flow with the domestic economy. According to one recession forecasting tool, which hasn't been wrong in 59 years -- and has only been incorrect once when back-tested to 1959 -- things may not be as rosy for the U.S. economy and stock market as they appear on the surface. There isn't any data point or forecasting tool on the planet that can guarantee what's going to happen next with the U.S. economy and/or Wall Street. But there are select metrics, forecasting tools, and events that have strongly correlated with directional moves in the Dow, S&P 500, and Nasdaq Composite throughout history. For instance, notable declines in M2 money supply have historically led to economic downturns and tough times for Wall Street. Perhaps Wall Street's biggest concern at the moment has less to do with Trump's tariff policies, and everything to do with what the Federal Reserve Bank of New York's recession probability tool says comes next. The New York Fed's recession predicting tool analyzes the spread (difference in yield) between the 10-year Treasury bond and three-month Treasury bill to calculate how likely it is that a recession will take shape over the next 12 months. In a healthy economy, the Treasury yield curve slopes up and to the right. This is to say that longer-dated bonds maturing in 10 to 30 years sport higher yields than Treasury bills maturing in a year or less. The longer your money is tied up in an interest-bearing asset, the higher the yield should be. When the yield curve inverts is where trouble starts brewing. This is where short-term Treasury bills have higher yields than long-term Treasury bonds. It's typically an indication that investors are worried about the outlook for the U.S. economy. The New York Fed's recession probability forecast is updated on a monthly basis, with the May 2025 update pointing to a 30.45% chance of a U.S. recession taking shape by April 2026. While this is well off the 2023 high of a greater than 70% chance of a recession occurring -- this was the highest reading in four decades -- every probability reading above 32% since 1966 has eventually been followed by a U.S. recession. But there's more to this correlation than simply looking at recession probability percentages. More often than not, previous recessions didn't materialize until the yield curve un-inverted and began moving sharply higher. You can see this dynamic in the 10-year and three-month Treasury spread comparison below. Since we're coming off the steepest inversion of the 10-year/three-month yield curve in four decades, it's only natural that it's taken a bit longer for the yield curve to attempt to right itself. This un-inversion of the yield curve, coupled with the history behind the New York Fed's recession probability tool, strongly points to a U.S. recession taking shape. It's worth noting that the initial read of U.S. first-quarter gross domestic product (GDP) showed a 0.3% contraction in the economy. While this is notably better than what the Federal Reserve Bank of Atlanta's GDPNow model had been forecasting, in terms of the U.S. economy shrinking, it still aligns with the New York Fed's recession indicator potentially being right. Based on an analysis from Bank of America Global Research, around two-thirds of the S&P 500's peak-to-trough drawdowns between 1927 and March 2023 occurred during, not before, U.S. recessions. Seeing a highly successful predictive indicator forecast a recession may not be what you, as an investor and/or working American, want to hear. But the pendulum for economic and stock market cycles swings in both directions -- and quite disproportionately. Regardless of fiscal and monetary policy, recessions are normal, healthy, and inevitable aspects of the economic cycle. While higher unemployment and weaker wage growth often accompany recessions, economic downturns are perhaps best known for being short-lived. In the nearly 80 years since World War II ended, the U.S. economy has navigated its way through a dozen official recessions. The average length of these 12 economic downturns is just 10 months, with none surpassing 18 months in length. On the other hand, the typical period of growth for the U.S. economy is roughly five years over the same timeline. The economic boom-and-bust cycle is anything but a mirror image, and it explains why the U.S. economy has grown noticeably over the long run. This wide disparity between optimism and pessimism can also be observed on Wall Street. In 2023, the analysts at Bespoke Investment Group published a data set to social media platform X that compared the length of every S&P 500 bull and bear market dating back to the start of the Great Depression in September 1929. Bespoke found that the average bear market downturn in the benchmark S&P 500 lasted 286 calendar days, or approximately 9.5 months. The data set also shows that the lengthiest bear market on record was 630 calendar days during the oil embargo of the mid-1970s. On the other hand, the average bull market has stuck around for 1,011 calendar days spanning nearly 94 years. What's more, if the current bull market for the S&P 500 were extrapolated to the present day, more than half of all bull markets since September 1929 (14 out of 27) would have lasted longer than the lengthiest bear market. It simply doesn't make much sense for investors to become too preoccupied with short-lived downturns when historical data conclusively shows that the U.S. economy and stock market spend a disproportionate amount of their time in the proverbial sun. Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,385!* Now, it's worth noting Stock Advisor's total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Bank of America is an advertising partner of Motley Fool Money. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Bank of America. The Motley Fool has a disclosure policy. This Recession Forecasting Tool Hasn't Been Wrong Since 1966 -- and It Has a Clear Message for Wall Street was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-05-2025
- Business
- Yahoo
Why Apple's Stock Is Surging Today
Officials from the U.S. and China announced a 90-day pause on elevated tariff rates imposed on one another, signaling a major de-escalation in trade tensions. Apple, which makes the bulk of its iPhones in China, could have been severely impacted had current policies stayed in place. 10 stocks we like better than Apple › Shares of consumer tech giant Apple (NASDAQ: AAPL) traded over 5% higher, as of 11:51 a.m. ET today, after officials from the U.S. and China announced a 90-day pause on extremely high tariffs rates, setting the stage for a broader trade agreement. The Dow Jones Industrial Average (DJINDICES: ^DJI) traded over 860 points higher, while the tech-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC) was up about 3.4%. Few large tech stocks will benefit more from a de-escalation in trade tensions between the U.S. and China than Apple. Apple makes as much as 90% of its iPhones in China, according to some analysts. And moving its operations out of China would be very costly, considering the company has built significant infrastructure in the country and directly employs 14,000 people in China, not to mention the many others indirectly involved in its supply chain. Wedbush analyst Dan Ives had previously estimated that it would cost Apple about $30 billion over three years just to move about 10% of its production to the U.S. Now, the Trump administration in April had temporarily exempted consumer electronics like smartphones from the Chinese tariffs. However, Apple's CEO Tim Cook had estimated the company would take a $900 million hit from tariffs in the current quarter. Furthermore, media outlets had reported that Apple was contemplating increasing the price of its iPhones, although the company wasn't necessarily planning to link the potential increase to tariffs. With the worst of U.S.-China trade tensions now hopefully in the past, things look a lot better for Apple. Cook seems to have a running dialogue with Trump, which should help the company avoid any kind of tariffs that are overly punitive, boding well for the stock. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $614,911!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $714,958!* Now, it's worth noting Stock Advisor's total average return is 907% — a market-crushing outperformance compared to 163% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy. Why Apple's Stock Is Surging Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-05-2025
- Business
- Yahoo
After Warren Buffett's New $348 Billion Warning to Wall Street, Is He Worried About the Recent Stock Market Turmoil? The Answer May Surprise You.
Key Points Warren Buffett has been a net seller of stocks in recent quarters and has built up a record stockpile of cash. The famous investor shared his thoughts on the market this past weekend at Berkshire Hathaway's annual shareholder meeting. The Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 index (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) all soared last year -- but Warren Buffett didn't jump on the bandwagon and aggressively buy stocks. Instead, the billionaire investor was a net seller and built up a record stockpile of cash at Berkshire Hathaway. Buffett is known for going against the crowd and avoiding trends, so it's no surprise that he didn't get in on the action, instead focusing on the fact that stocks were getting more and more expensive. As a value investor, Buffett aims to buy quality companies when they're undervalued, so he won't jump into a stock at just any price. Clearly, in an expensive market environment, Buffett chooses to buy selectively. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » This year, though, amid concern about the impact of President Donald Trump's import tariffs on the economy and earnings, stocks have dropped from last year's highs -- and some have reached bargain valuations. The Nasdaq crashed last month, and the S&P 500 even temporarily entered a bear market. Since, the indexes have recouped some of their losses, but the market environment remains uncertain. Against this backdrop, Buffett has sent a new $348 billion warning to Wall Street. Considering this, is he worried about the recent stock market turmoil? The answer may surprise you. Image source: The Motley Fool. Trump's tariff plans First, let's consider the stock market's recent performance. As mentioned, all three benchmarks sank last month as Trump rolled out tariff plans. The president then decided to pause the duties to allow for 90 days of negotiations, and that helped the indexes rebound. The reason? Any signs of flexibility from the U.S. suggest the final tariff levels might be reasonable and won't significantly impact growth. Trump also temporarily exempted electronics from all import tariffs -- another sign the administration aims to minimize negative impact on U.S. companies. Of course, the risk remains that the final set of tariffs still may be high enough to make a mark on corporate earnings and the economy. And that's why it's been difficult for indexes to take one clear direction over the past few weeks.
