Latest news with #WallStreetHorizon
Yahoo
18-05-2025
- Business
- Yahoo
Dividend Hikes Offer Optimism Amid Tariff Turmoil
S&P 500 earnings per share estimates have come down sharply. According to FactSet, calendar year 2025 is now expected to show $266 in operating EPS for the Index.[1] Forecasts had called for nearly $280 as recently as last Q3 last year. Of course, macro headwinds have come about, to put it nicely. Many large US multinational corporations are tarrified, as Ed Yardeni puts it. Josh Brown of Ritholtz Wealth Management has dubbed it Tariff Spring. Still, global equities have proven to be resilient. High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock? Following a sharp rally off the April 7th low, US large caps now collectively trade just above the 20x price-to-earnings multiple mark, while international stocks actually closed April at an all-time high on a total return basis.[2] Investors should go beyond profit expectations and near-term price action, though. Our team dug into the data and found some interesting results. It turns out that since the beginning of April, 29% of global firms that have updated their dividend policies have raised their dividend, while just 7% have announced a cut. While still early for a full second-quarter tally, that 23% positive differential is five percentage points above the 17.9% hikers-to-cutters gap from Q2 last year. It's also better than the 17.2% figure compared to two years ago. Dividend Changes by Percent: Solid Start to Q2 (Net +23%) Source: Wall Street Horizon The bears might assert that we are torturing the data with this one, but it's clear that corporate profitability was very strong ahead of President Trump's so-called Liberation Day. Much uncertainty lies ahead, even after the sanguine stock response in the past four weeks, but perhaps executives are signaling to investors that we'll get through this era of unease okay. The pessimists and optimists will keep duking it out, and we'll watch how first-quarter earnings come in over the weeks ahead. Usually, the latter half of the reporting period is somewhat uneventful since big-cap tech (sans NVIDIA (NVDA)) has already issued numbers to the street. This time, though, retailers will be particularly pivotal to monitor. Consumer companies are in the crosshairs of the tariff turmoil. Immediately before the release of the April Retail Sales report, Walmart (WMT) reports next Thursday morning (May 15). A slew of retailers then post Q1 results the following week, including the likes of Home Depot (HD), Lowe's (LOW), Macy's (M), Target (TGT), and Ross Stores (ROST). We've already heard from two consumer-related blue-chips, one from the Staples sector and the other from the Health Care space. Procter & Gamble (NYSE:PG) topped analysts' earnings estimates on the morning of April 24, but $19.8 billion of Q1 revenue missed Wall Street's forecast.[3] Shares fell by 3.7% in the session that followed, and PG actually touched an intraday 52-week low that day. A mild share bounceback has ensued, but it might not have been Procter's profits that impressed investors. Rather, the stalwart household name announced a dividend increase on April 8, 2025, marking its 69th consecutive year of dividend growth.[4] It's a dividend aristocrat, of course, meaning the company has increased its dividend for each of the past 25 years. To be clear, PG hiking its payout is not the most aggressive of risk-on signals, but this corporate body language should remind investors that amid uncertain macro times, high-quality companies can execute well, rewarding shareholders. A week after Procter's dividend increase announcement, Johnson & Johnson (NYSE:JNJ) reported a strong start to the year, beating on both the top and bottom lines. The $376 billion market cap Pharmaceuticals industry company also boosted its full-year revenue outlook, but investors were not impressed.[5] The stock fell by half a percent on April 15th, marking a second straight weak reaction to earnings. Perhaps the street was on edge after its management team estimated that tariffs would draw a $400 million hit to its top line this year. Still, on the call, it expressed confidence in operational and financial prospects for the balance of 2025. Moreover, JNJ increased its dividend for the 63rd straight year, a 4.8% hike, bringing the forward yield to 3.3%, more than double that of the S&P 500.[6] This got us thinking: How have dividend stocks collectively performed year to date? Through April, the high dividend factor has been solid, up about three percentage points when comparing the Vanguard High Dividend Yield ETF's (VYM) return to the S&P 500 Trust ETF (SPY). And since we centered on a pair of dividend aristocrats, the S&P 500 Dividend Aristocrats ETF (NOBL) has done even better, outperforming SPY by more than four percentage points so far in 2025.[7] Could dividends keep working? Hard to say, but it's likely safe to assume that macro headlines about trade policy will keep rolling in over the next few months, keeping investors nervous. With weak survey data and downright bearish investor sentiment readings, stocks have surprised investors as we progress through the second quarter.[8] The Q1 earnings season has been mixed, but there have been few shockers. Reliable dividend-increase stocks posted alpha through April, but volatility could be in store as retail earnings updates roll in fast and furious starting next week. 1 Earnings Insight, FactSet, John Butters, May 2, 2025, VGTSX, StockCharts, May 5, 2025, Procter & Gamble Non-GAAP EPS of $1.54 beats by $0.01, revenue of $19.8B misses by $350M, Seeking Alpha, Deepa Sarvaiya, April 24, 2025, P&G Declares Dividend Increase, The Procter & Gamble Company, April 8, 2025, J&J Boosts Outlook Despite Incoming Tariff Costs, The Wall Street Journal, Dean Seal, Connor Hart, April 15, 2025, Johnson & Johnson Announces 63rd Consecutive Year of Dividend Increase; Raises Quarterly Dividend by 4.8%, Johnson & Johnson, APril 15, 2025, VYM, StockCharts, May 5, 2025, The AAII Investor Sentiment Survey, AAII, May 1, 2025, Copyright 2025 Wall Street Horizon, Inc. All rights reserved. Do not copy, distribute, sell or modify this document without Wall Street Horizon's prior written consent. This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this publication, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information. This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided is not an invitation to purchase securities, including any listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX Group and its affiliated companies do not endorse or recommend any securities referenced in this publication. This publication shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, and TSX Venture Exchange are the trademarks of TSX Inc. and are used under license. Wall Street Horizon is the trademark of Wall Street Horizon, Inc. All other trademarks used in this publication are the property of their respective owners. This article first appeared on GuruFocus.
Yahoo
18-05-2025
- Business
- Yahoo
Dividend Hikes Offer Optimism Amid Tariff Turmoil
S&P 500 earnings per share estimates have come down sharply. According to FactSet, calendar year 2025 is now expected to show $266 in operating EPS for the Index.[1] Forecasts had called for nearly $280 as recently as last Q3 last year. Of course, macro headwinds have come about, to put it nicely. Many large US multinational corporations are tarrified, as Ed Yardeni puts it. Josh Brown of Ritholtz Wealth Management has dubbed it Tariff Spring. Still, global equities have proven to be resilient. High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock? Following a sharp rally off the April 7th low, US large caps now collectively trade just above the 20x price-to-earnings multiple mark, while international stocks actually closed April at an all-time high on a total return basis.[2] Investors should go beyond profit expectations and near-term price action, though. Our team dug into the data and found some interesting results. It turns out that since the beginning of April, 29% of global firms that have updated their dividend policies have raised their dividend, while just 7% have announced a cut. While still early for a full second-quarter tally, that 23% positive differential is five percentage points above the 17.9% hikers-to-cutters gap from Q2 last year. It's also better than the 17.2% figure compared to two years ago. Dividend Changes by Percent: Solid Start to Q2 (Net +23%) Source: Wall Street Horizon The bears might assert that we are torturing the data with this one, but it's clear that corporate profitability was very strong ahead of President Trump's so-called Liberation Day. Much uncertainty lies ahead, even after the sanguine stock response in the past four weeks, but perhaps executives are signaling to investors that we'll get through this era of unease okay. The pessimists and optimists will keep duking it out, and we'll watch how first-quarter earnings come in over the weeks ahead. Usually, the latter half of the reporting period is somewhat uneventful since big-cap tech (sans NVIDIA (NVDA)) has already issued numbers to the street. This time, though, retailers will be particularly pivotal to monitor. Consumer companies are in the crosshairs of the tariff turmoil. Immediately before the release of the April Retail Sales report, Walmart (WMT) reports next Thursday morning (May 15). A slew of retailers then post Q1 results the following week, including the likes of Home Depot (HD), Lowe's (LOW), Macy's (M), Target (TGT), and Ross Stores (ROST). We've already heard from two consumer-related blue-chips, one from the Staples sector and the other from the Health Care space. Procter & Gamble (NYSE:PG) topped analysts' earnings estimates on the morning of April 24, but $19.8 billion of Q1 revenue missed Wall Street's forecast.[3] Shares fell by 3.7% in the session that followed, and PG actually touched an intraday 52-week low that day. A mild share bounceback has ensued, but it might not have been Procter's profits that impressed investors. Rather, the stalwart household name announced a dividend increase on April 8, 2025, marking its 69th consecutive year of dividend growth.[4] It's a dividend aristocrat, of course, meaning the company has increased its dividend for each of the past 25 years. To be clear, PG hiking its payout is not the most aggressive of risk-on signals, but this corporate body language should remind investors that amid uncertain macro times, high-quality companies can execute well, rewarding shareholders. A week after Procter's dividend increase announcement, Johnson & Johnson (NYSE:JNJ) reported a strong start to the year, beating on both the top and bottom lines. The $376 billion market cap Pharmaceuticals industry company also boosted its full-year revenue outlook, but investors were not impressed.[5] The stock fell by half a percent on April 15th, marking a second straight weak reaction to earnings. Perhaps the street was on edge after its management team estimated that tariffs would draw a $400 million hit to its top line this year. Still, on the call, it expressed confidence in operational and financial prospects for the balance of 2025. Moreover, JNJ increased its dividend for the 63rd straight year, a 4.8% hike, bringing the forward yield to 3.3%, more than double that of the S&P 500.[6] This got us thinking: How have dividend stocks collectively performed year to date? Through April, the high dividend factor has been solid, up about three percentage points when comparing the Vanguard High Dividend Yield ETF's (VYM) return to the S&P 500 Trust ETF (SPY). And since we centered on a pair of dividend aristocrats, the S&P 500 Dividend Aristocrats ETF (NOBL) has done even better, outperforming SPY by more than four percentage points so far in 2025.[7] Could dividends keep working? Hard to say, but it's likely safe to assume that macro headlines about trade policy will keep rolling in over the next few months, keeping investors nervous. With weak survey data and downright bearish investor sentiment readings, stocks have surprised investors as we progress through the second quarter.[8] The Q1 earnings season has been mixed, but there have been few shockers. Reliable dividend-increase stocks posted alpha through April, but volatility could be in store as retail earnings updates roll in fast and furious starting next week. 1 Earnings Insight, FactSet, John Butters, May 2, 2025, VGTSX, StockCharts, May 5, 2025, Procter & Gamble Non-GAAP EPS of $1.54 beats by $0.01, revenue of $19.8B misses by $350M, Seeking Alpha, Deepa Sarvaiya, April 24, 2025, P&G Declares Dividend Increase, The Procter & Gamble Company, April 8, 2025, J&J Boosts Outlook Despite Incoming Tariff Costs, The Wall Street Journal, Dean Seal, Connor Hart, April 15, 2025, Johnson & Johnson Announces 63rd Consecutive Year of Dividend Increase; Raises Quarterly Dividend by 4.8%, Johnson & Johnson, APril 15, 2025, VYM, StockCharts, May 5, 2025, The AAII Investor Sentiment Survey, AAII, May 1, 2025, Copyright 2025 Wall Street Horizon, Inc. All rights reserved. Do not copy, distribute, sell or modify this document without Wall Street Horizon's prior written consent. This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this publication, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information. This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided is not an invitation to purchase securities, including any listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX Group and its affiliated companies do not endorse or recommend any securities referenced in this publication. This publication shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, and TSX Venture Exchange are the trademarks of TSX Inc. and are used under license. Wall Street Horizon is the trademark of Wall Street Horizon, Inc. All other trademarks used in this publication are the property of their respective owners. This article first appeared on GuruFocus. 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
Globe and Mail
01-04-2025
- Business
- Globe and Mail
There's Always a Bull Market Somewhere: US ETF Launches Notch a Record
Q1 2025 featured a more than 25% annual increase in new U.S. ETFs Some of last year's themes remain hot, but new strategies have caught investors' attention We highlight today's growth spots and call out potential risks Investors just can't get enough of ETFs, and issuers are more than happy to oblige. Through the middle of last week—still with a handful of days left in the quarter—208 new U.S. ETFs were launched in Q1, according to Wall Street Horizon data. Easily a record, it tops the 160 total from the first quarter of 2024. Our chart tells the story as the four-quarter moving average has been on the ascent since Q3 2023. We'll get into the details and the drivers later, but the upshot is that, despite volatility running high in recent months and downright bearish investor sentiment, more access to more ETFs has been an enduring theme. A Quarterly Record in U.S. ETF Launches Source: Wall Street Horizon According to a March Brown Brothers Harriman survey, 95% of investors plan to increase their ETF allocations in the next 12 months. 1 Not surprisingly, Bloomberg's Isabelle Lee reported last week that total assets held by U.S. active ETFs crossed the $1 trillion mark for the first time. 2 There's an ongoing boom, one that touches all investor types. Last fall, we called out that yield, protection, and cryptocurrency were among the bullish x-factors for 2024's ETF bull market. Those trends persist, and new ones appear to be gaining steam. ARKK: The Matriarch of Active ETFs TMX VettaFi reports that active ETFs are particularly interesting to investors today. 3 Born out of a surge in mutual fund-to-ETF conversions, active ETFs grew substantially in 2024, a trend that is anticipated to continue in the quarters ahead. Years ago, the ARK Innovation ETF (ARKK) brought active ETFs into the mainstream as the product managed by Cathie Wood soared during the pandemic thanks to significant rises in shares of Tesla (TSLA) and other high-growth stocks. Active ETFs differ from mutual funds for a variety of reasons, but maybe the most important feature is that ETFs must disclose their positions daily. Active fund managers were perhaps initially reticent to adopt the ETF wrapper as a product offering, but they appear to be coming around to what investors seemingly demand more of with each passing quarter. Tom Lee & Ray Dalio Strategies Tip-Off Fundstrat, an independent financial research boutique led by Tom Lee, head of research, got in on the ETF game, too. Fundstrat Capital launched the Granny Shots U.S. Large Cap ETF (GRNY) last November, broadly designed to hold stocks deemed 'granny shots,' or high-reward-potential ideas, and named after the unconventional basketball free-throw method. GRNY has attracted significant inflows—total assets under management are already approaching $1 billion less than five months since its inception. 4 Then, just last month, SSGA Funds launched the SPDR Bridgewater All Weather ETF (ALLW), a multi-asset allocation fund generally intended to follow the investing wisdom and famed principles of Bridgewater Associates founder Ray Dalio. 5 While Tom Lee's granny shots (GRNY) primarily home in on U.S. growth equities, ALLW focuses on macro themes and spreading exposure across asset classes and markets. The fund is marketed as making available hedge-fund-like exposure to retail investors via the efficient ETF wrapper. 6 Word on the Street ETF strategies are getting even more complex. At last week's Exchange Conference in Las Vegas, Bloomberg's Eric Balchunas commented that some of 2024's big themes, though still notable, are not as hot. 7 New niches, like private equity and private credit ETFs, are in the spotlight. ESG Funds: A Second Life? There are also inklings that a less trendy ETF trend—ESG funds—could make a comeback. The environmental, social, and governance movement was all the rage pre-pandemic, but critics contended that some companies went too far. Perceived missteps by companies like Target (TGT) and brands like Bud Light (owned by Anheuser-Busch InBev (BUD)) resulted in consumer backlash. 8 At a macro level, Putin's war in Ukraine and the resulting European energy crisis underscored that ESG for ESG's sake may not have been the best approach. Of course, recent U.S. political developments have made 'ESG' a 'dirty phrase' in some circles. But, as reported, there has been some renewed interest in the movement for some of those very same reasons. 9 It would not be surprising to see new twists on ESG—climate change, equality, and the state of corporate leadership are issues that could be top of mind going forward. 10 On the investment data front, Dr. Ron Dembo, CEO of commented on the lack of collaboration and data sharing within financial institutions and limitations of regulators in the latest TMX podcast ' Financial Institutions Repricing Financial Risk with the Effects of Climate Change. ' The Risks Amid any boom, it's a helpful exercise to consider what could disrupt the trend. ETFs seem to be here to stay but could growth slow? And why might that occur? One potential hurdle is the unknown around regulation. A new administration is in place—one purported to focus on cutting red tape—but it is unclear how the ETF industry may be impacted. Moreover, the sheer volume of new launches has led to a crowded field. With thousands of funds vying for attention, ticker symbol shortages have even emerged, a quirky side effect we noted last year. Third, to circle back to one of the key drivers of 2025's early-year ETF proliferation, active ETFs are almost inherently costlier than their passive peers. Vanguard Group announced a fresh set of fee cuts in February. 11 If so many complicated active ETF strategies don't pan out in the years ahead, dirt-cheap index products could be flocked to at the expense of catchy new funds. We'll just have to wait and see on that front. The Bottom Line US ETFs are already pacing for a record year. New launches come about fast and furious, with many funds being of the active variety. Investors clamored for juicy high-yield, downside protection, and crypto-related products in 2024, but new themes have emerged that issuers are pouncing on. Even with 'uncertainty' being the word of the day and macro jitters aplenty, the ETF freight train keeps chugging. 1 2025 Global ETF Investor Survey, Brown Brothers Harriman, March 24, 2025, 2 Active Management Lives On in ETFs After $1 Trillion Asset Haul, Bloomberg, Isabelle Lee, March 26, 2025, 3 Nearing $1 Trillion: Active ETF Engine Roars On, VettaFi, Kirsten Chang, March 21, 2025, 4 Fundstrat Granny Shots U.S. Large Cap ETF, Fundstrat Capital, March 27, 2025, 5 SPDR® Bridgewater® All Weather® ETF, State Street Global Advisors, March 27, 2025, 6 Access to Bridgewater's Expertise Via ETFs, ETF Trends, Todd Rosenbluth, March 6, 2025, 7 ETF Prime: On the Ground at Exchange in Vegas, ETF Trends, Karrie Gordon, March 25, 2025, 8 Target foot traffic falls for fifth consecutive week after its DEI reversal, Retail Brew, Andrew Adam Newman, March 7, 2025, 9 Impact Investing Firms Say Trump 2.0 Is Renewing Retail ESG Interest, Wealth Management, Patrick Donachie, March 19, 2025, 10 An Interesting Catalyst Could Renew Interest in ESG ETFs, ETF Trends, Todd Shriber, March 26, 2025, 11 Announcing the largest fee cut in Vanguard history, Vanguard, February 3, 2025, Copyright © 2025 Wall Street Horizon, Inc. All rights reserved. Do not copy, distribute, sell or modify this document without Wall Street Horizon's prior written consent. This information is provided for information purposes only. Neither TMX Group Limited nor any of its affiliated companies guarantees the completeness of the information contained in this publication, and we are not responsible for any errors or omissions in or your use of, or reliance on, the information. This publication is not intended to provide legal, accounting, tax, investment, financial or other advice and should not be relied upon for such advice. The information provided is not an invitation to purchase securities, including any listed on Toronto Stock Exchange and/or TSX Venture Exchange. TMX Group and its affiliated companies do not endorse or recommend any securities referenced in this publication. This publication shall not constitute an offer to sell or the solicitation of an offer to buy, nor may there be any sale of any securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. TMX, the TMX design, TMX Group, Toronto Stock Exchange, TSX, and TSX Venture Exchange are the trademarks of TSX Inc. and are used under license. Wall Street Horizon is the trademark of Wall Street Horizon, Inc. All other trademarks used in this publication are the property of their respective owners.
