Latest news with #bluechipstocks
Yahoo
4 days ago
- Business
- Yahoo
2 Dow Jones Stocks with Promising Prospects and 1 to Avoid
The Dow Jones (^DJI) is made up of 30 of the most established and influential companies in the market. But even blue-chip stocks can struggle - some are dealing with slowing growth, outdated business models, or increasing competition. Finding the best companies in the Dow Jones isn't always straightforward, and that's why we started StockStory. That said, here are two Dow Jones stocks positioned for long-term growth and one best left off your watchlist. Market Cap: $80.01 billion Producers of the first asthma inhaler, 3M Company (NYSE:MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods. Why Do We Avoid MMM? Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth Earnings per share have contracted by 3.4% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance Eroding returns on capital from an already low base indicate that management's recent investments are destroying value 3M's stock price of $150.49 implies a valuation ratio of 19x forward P/E. Check out our free in-depth research report to learn more about why MMM doesn't pass our bar. Market Cap: $149.7 billion Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ:AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases. Why Does AMGN Stand Out? Solid 14.1% annual revenue growth over the last two years indicates its offering's solve complex business issues Revenue base of $34.13 billion gives it economies of scale and some negotiating power Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends Amgen is trading at $279.50 per share, or 13.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it's free. Market Cap: $270.4 billion With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE:UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care. Why Will UNH Outperform? Massive revenue base of $410.1 billion gives it meaningful leverage when negotiating reimbursement rates Share repurchases over the last five years enabled its annual earnings per share growth of 13.1% to outpace its revenue gains Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures At $298.95 per share, UnitedHealth trades at 9.7x forward P/E. Is now a good time to buy? Find out in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
How Dividend Stocks Can Supercharge Your Retirement Income
Retirement should be about keeping your income steady and stress-free. The secret? Make smart financial moves that maximize returns while minimizing taxes. Trending Now: Try This: Dividend stocks pay regular income to investors from a company's profits, offering retirees a steady cash flow. GOBankingRates spoke with Gil Baumgarten, wealth expert and president of Segment Wealth Management, to learn why dividend stocks can be a game-changer for retirement income. Dividend stocks can offer stability, but selecting the right ones is essential. 'High dividend stocks (over 4% annualized yield) tend to be more stable in price and lower in overall return than other stocks,' Baumgarten said. However, high yields can sometimes signal corporate stress, so yield alone shouldn't be the primary focus. Instead, Baumgarten suggested looking for companies with 'low but rising dividends,' which often signal strong financial health and better growth potential over the long term. These stocks can offer both stability and favorable after-tax returns. Up Next: When it comes to taxes, dividend stocks hold a distinct advantage for retirees. Blue-chip stocks (those issued by prominent, well-established companies) or exchange-traded funds (ETFs) made up of blue-chip stocks 'tend to offer rising dividend payments to shareholders and compound the gains in share price over time,' Baumgarten said. The real advantage comes with what's known as 'unrealized' gains. These are gains that accrue as the stock price rises but are not taxed until sold. Under current U.S. tax laws, stocks held until death often qualify for a tax-free 'step-up in basis,' eliminating accumulated capital gains over decades. For retirees, holding onto these investments for the long haul can result in significant tax savings. Unlike some other income strategies, where gains may be taxed at each transaction, dividend stocks allow retirees to defer and minimize taxes. One major tax advantage of dividend stocks is their capped tax rate. Ordinary dividends are taxed at a maximum of 23.8%, roughly half the top tax bracket rate. However, the real benefit is the potential for tax-free growth. Baumgarten warns against frequent stock trading or portfolio churn, 'Transactional methods to swap one stock for another can render much higher taxes.' He adds that this strategy also risks triggering taxes on gains that might otherwise be avoided, creating 'a hurdle to overcome, arguing for extreme patience.' By holding onto dividend stocks and letting the share price grow over time, retirees can avoid paying unnecessary taxes and allow their investments to compound. The key is to resist the urge to frequently trade or cash in dividends for short-term gains. Some retirees might find comfort in regular dividend checks, but Baumgarten suggests reinvesting these dividends as the smarter long-term approach. 'Many investors find comfort in big mailbox checks that get re-deposited and never spent,' he said. However, this cycle can generate more overall taxes. In other words, opting for lower-yield stocks from healthy companies and holding onto them for the long term can lead to greater wealth accumulation. The potential tax savings from long-term stock growth, combined with lower dividend payouts, can ultimately provide more financial security in retirement. Dividend taxes are often debated, with critics claiming that lower rates mostly benefit the wealthy. Baumgarten counters that dividends are taxed twice: 'Companies pay corporate income tax of 21% on the same dollars before they are distributed to shareholders.' Add in the personal tax on dividends, and these profits can be hit with a total tax rate of over 40%. Baumgarten's solution? Advocate for more people to become shareholders. While dividend stocks offer undeniable tax benefits for those who invest, the bigger picture involves educating more people about these opportunities to grow wealth for the long term. For retirees seeking income growth and tax management, dividend stocks are a smart strategy for stability, growth and tax efficiency. With the right dividend stocks and a patient approach, retirees can strengthen their financial outlook while minimizing tax burdens. More From GOBankingRates Surprising Items People Are Stocking Up On Before Tariff Pains Hit: Is It Smart? The 5 Car Brands Named the Least Reliable of 2025 This article originally appeared on How Dividend Stocks Can Supercharge Your Retirement Income 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
Entrepreneur
26-05-2025
- Business
- Entrepreneur
Doubt the Market? 3 Stocks to Rideout Fear, Uncertainty and Doubt
While the market has rallied off its April lows, uncertainty continues to dominate investor sentiment. To avoid the volatility, consider these three stocks. This story originally appeared on MarketBeat Lately, the market has been delivering more plot twists to investors than a season of Severance. Solid tech earnings come in tandem with pulled guidance from public-facing companies like airlines and retailers. Economic data points to consumer and job market resilience, yet public sentiment continues to sour, and business surveys show inflation expectations continuing to creep higher. And of course, erratic tariff policy looms over stocks like a storm cloud, threatening to puncture profit margins across a wide range of companies and sectors. The S&P 500 has rallied more than 15% off its April 8 low following President Trump's reciprocal tariff pause, but uncertainty keeps the February all-time high at arm's length. When the future becomes cloudy, the search for growth must be balanced with security. Value investing pioneer Benjamin Graham emphasized the 'margin of safety' when picking stocks, which means searching for assets and trading for less than their intrinsic value. Searching for Safety Amidst Market Volatility Investors tend to flock to less volatile assets like blue-chip stocks when the only certainty is more uncertainty. Blue chips often meet Graham's margin of safety definition through their large market caps, strong sales growth, market dominance, and a history of dividend increases. Today, we'll look at three stocks built to ride out a storm of uncertainty. These stocks were chosen based on fundamental factors like valuation, earnings potential, and dividend strength, along with technical metrics like beta that measure volatility in relation to the broader market. If you remain unconvinced by this recent stock rally, consider these three companies for further inspection. Philip Morris International: Foundations for a Smoke-free Future [content-module:Forecast|NYSE:PM] Tobacco companies like Philip Morris International Inc. (NYSE: PM) are often popular stocks in uncertain periods thanks to their generous dividends and minimal volatility; PM fits both categories with a 3% yield and 0.52 beta. However, the firm is also ahead of the pack in future growth plans thanks to its priority on smokeless products. Philip Morris manufactures the popular ZYN nicotine pouches, along with other smokeless products like IQOS that heat tobacco to create an aerosol instead of burning it to produce smoke. Smokeless products are seen as a healthier alternative to cigarettes and vaporizers, and PM generated more than 40% of its Q1 2025 revenue from smokeless sources. ZYN was an especially hot seller, with shipments increasing by more than 50% in the quarter. The company aims to sell 100% smoke-free products by 2030. PM shares have jumped to new all-time highs in 2025, posting over 40% year-to-date gains. The valuation is loftier than that of competitors like Altria Group Inc. (NYSE: MO), but PM is better positioned for the smokeless transition ahead, which explains the stock's outperformance. PM expects earnings growth of more than 10% over the next 12 months (while MO's decline), and the dividend payout rate is projected to drop to a manageable 68% in 2026, likely preceding an 18th consecutive annual payout increase. Cardinal Health: A Bright Light in a Sunless Sector [content-module:Forecast|NYSE:CAH] The healthcare and medical sectors have been lagging behind the broader market for years, but Cardinal Health Inc. (NYSE: CAH) has been one of the few healthcare stocks that have shown strength. The stock punched through a new all-time high in early 2024 and continues to rally, with shares up more than 25% in 2025. Cardinal Health has a strong dividend with a DPR under 35% and a 29-year track record of payment increases, but the earnings strength is what has investors taking notice. The company reported fiscal Q3 2025 earnings earlier this month and posted a solid beat. EPS exceeded analyst estimates by 9% and showed year-over-year growth of over 13%. Revenue slightly missed expectations, but the firm raised full-year 2025 EPS guidance from $7.90 to a $8.05 to $8.15 range. Following the report, analysts at Morgan Stanley and Robert Baird boosted price targets to $166 and $170, which would indicate an upside potential of 9% to 16% from current levels. Alphabet Inc: Growth at a Value Price [content-module:Forecast|NYSE:CAH] Google-parent Alphabet Inc. (NASDAQ: GOOGL) might not be what investors first envision when thinking of blue chips, but it's not 2017 anymore, and Alphabet has an enticing valuation to match the growth potential of mega-cap tech. The stock trades at less than 20 times earnings, the first time since 2012 that GOOGL shares have traded with a sub-20 P/E. With a beta of 1.01, its volatility is nearly even to the S&P 500, and the company even paid its first dividend last year, indicating future emphasis on rewarding shareholders along with R/D reinvestments. Alphabet has been the subject of recent DOJ investigations, and comments by Apple's Eddy Cue about AI replacing traditional search have negatively impacted the stock this month. However, the company posted strong top and bottom-line earnings on April 25, and the average price target amongst analysts covering the stock is $199, representing potential upside of over 15%. Strong Earnings and Safe Dividends: An Elixir for Market Uncertainty Investing in blue chips is a great way to limit downside risk in volatile markets, but it's not a replacement for due diligence or personal risk tolerance analysis. Always research specific companies before buying shares to ensure they fit your investment plan. Use resources like MarketBeat's dividend calculator to aid your decision-making, and always consult an advisor before making any changes to your portfolio. Before you make your next trade, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list. They believe these five stocks are the five best companies for investors to buy now... See The Five Stocks Here
Yahoo
10-05-2025
- Business
- Yahoo
Is KKR & Co. Inc. (KKR) the Worst Blue Chip Stock to Buy?
We recently published a list of . In this article, we are going to take a look at where KKR & Co. Inc. (NYSE:KKR) stands against other worst blue chip stocks to buy. As per Niamh Brodie-Machura, Co-Chief Investment Officer at Fidelity International, the effect of tariffs is expected to shift lower as and when the deals are made, supply chains adapt, and there is some adjustment in consumption patterns with lower tariffed goods witnessing relatively increased demand. However, there continues to be a period of increased volatility, and investors who plan to add risk should be careful. The environment is more of an opportunity to better position portfolios for resilience amidst uncertainty. Contrary to expectations, BlackRock, in its release dated April 23, highlighted that international equities outperformed the US equities by 11% in 2025. The US growth stocks fell by 10%, and US value stocks increased by 2%. This transition demonstrates a significant market rotation throughout geography and style as value stocks continue to gain favor over growth stocks. Within the US market, value equities, mainly in defensive sectors such as healthcare, have been performing well, says the asset manager. BlackRock also added that the narrowing of the earnings gap and the industry's attractive characteristics, like innovation and the growth of aging populations, have been fueling the performance. Notably, active management strategies are advantageous when it comes to navigating the fluctuating markets. READ ALSO: and . BlackRock believes that the US large-cap value equities are the only major US index having positive returns YTD through March 31. Among the value equities, its investors are spotting opportunities in defensive sectors. In the current fast-moving political environment, primarily new trade policies, value equities can possess an additional tailwind. This stems from their ability to fetch a greater share of revenue from the US. Elsewhere, if tariff discussions continue longer than expected or the average tariff rates differ from the current expectations, it is important to make portfolio changes accordingly, says Fiduciary Trust (a privately held wealth management firm). Notably, the capex spending on AI is expected to remain strong, and AI will likely fuel long-term productivity. The firm also opines that changes will be made to bank capital ratio rules, enabling them to enhance lending and/or increase stock buybacks. Both of these measures can improve earnings. To list the 10 Worst Blue Chip Stocks to Buy, we scanned through the holdings of SPDR® S&P 500® ETF Trust and chose the ones that declined between 15%-30% on a YTD basis. After getting an extended list of stocks, we selected the ones popular among hedge funds. Finally, the stocks were ranked in ascending order of their hedge fund holdings, as of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A modern looking financial adviser sitting in front of a trading monitor, gesturing to a group of investors. KKR & Co. Inc. (NYSE:KKR) is a private equity and real estate investment firm that specializes in direct and fund-of-fund investments. Michael Brown, an analyst from Wells Fargo, maintained a 'Buy' rating on the company's stock and the associated price target was $120.00. The analyst's rating comes off the back of factors such as the launch of KKR/Capital credit interval funds, which can fuel significant inflows across the year. As per the analyst, the partnership with Capital is being regarded as a strategic move that can enhance KKR & Co. Inc. (NYSE:KKR)'s market position, while more fund offerings are expected in the future. Amidst the market volatility, monetization activities remained steady, reflecting resilience in the company's operations. Elsewhere, Wells Fargo remains confident in KKR & Co. Inc. (NYSE:KKR)'s ability to capitalize on the anticipated fundraising supercycle and offer growth amidst the expected positive changes in the broader investment landscape. Given the company's healthy brand reputation, it can attract robust capital inflows, resulting in strong growth in AUM. The increased capital base can help generate higher management fees and can offer KKR & Co. Inc. (NYSE:KKR) more opportunities for attractive investments throughout its strategies. Also, its diverse product offerings and global reach can help it capture a significant share of investor capital during the supercycle. River Road Asset Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said: 'Another positive contributor was KKR & Co. Inc. (NYSE:KKR), a leading global alternative asset manager. Institutions have sought out KKR's dynamic investment expertise for nearly 50 years. The company's AUM has grown at a 20% CAGR since 2011 as it has broadened its product line-up to include infrastructure, real estate, credit, and liquid strategies for the mass market. Over 90% of the company's assets are 'locked-up' for at least eight years and over 50% are perpetual. Insiders own 36% of the company, and we believe the balance sheet is rock solid with net cash and ~30% of its market cap represented by illiquid investments, that will soon begin paying material dividends to KKR. Overall, KKR ranks 4th on our list of worst blue chip stocks to buy. While we acknowledge the potential of KKR as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than KKR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at .
Yahoo
10-05-2025
- Business
- Yahoo
Is Tesla, Inc. (TSLA) the Worst Blue Chip Stock to Buy?
We recently published a list of . In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other worst blue chip stocks to buy. As per Niamh Brodie-Machura, Co-Chief Investment Officer at Fidelity International, the effect of tariffs is expected to shift lower as and when the deals are made, supply chains adapt, and there is some adjustment in consumption patterns with lower tariffed goods witnessing relatively increased demand. However, there continues to be a period of increased volatility, and investors who plan to add risk should be careful. The environment is more of an opportunity to better position portfolios for resilience amidst uncertainty. Contrary to expectations, BlackRock, in its release dated April 23, highlighted that international equities outperformed the US equities by 11% in 2025. The US growth stocks fell by 10%, and US value stocks increased by 2%. This transition demonstrates a significant market rotation throughout geography and style as value stocks continue to gain favor over growth stocks. Within the US market, value equities, mainly in defensive sectors such as healthcare, have been performing well, says the asset manager. BlackRock also added that the narrowing of the earnings gap and the industry's attractive characteristics, like innovation and the growth of aging populations, have been fueling the performance. Notably, active management strategies are advantageous when it comes to navigating the fluctuating markets. READ ALSO: and . BlackRock believes that the US large-cap value equities are the only major US index having positive returns YTD through March 31. Among the value equities, its investors are spotting opportunities in defensive sectors. In the current fast-moving political environment, primarily new trade policies, value equities can possess an additional tailwind. This stems from their ability to fetch a greater share of revenue from the US. Elsewhere, if tariff discussions continue longer than expected or the average tariff rates differ from the current expectations, it is important to make portfolio changes accordingly, says Fiduciary Trust (a privately held wealth management firm). Notably, the capex spending on AI is expected to remain strong, and AI will likely fuel long-term productivity. The firm also opines that changes will be made to bank capital ratio rules, enabling them to enhance lending and/or increase stock buybacks. Both of these measures can improve earnings. To list the 10 Worst Blue Chip Stocks to Buy, we scanned through the holdings of SPDR® S&P 500® ETF Trust and chose the ones that declined between 15%-30% on a YTD basis. After getting an extended list of stocks, we selected the ones popular among hedge funds. Finally, the stocks were ranked in ascending order of their hedge fund holdings, as of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). Morgan Stanley analyst Adam Jonas recently maintained a 'Buy' rating on Tesla, Inc. (NASDAQ:TSLA)'s stock, setting a price objective of $410.00. The analyst's rating stems from factors demonstrating the company's strategic positioning in the evolving manufacturing landscape. The integration of AI and advanced manufacturing technologies continue to reshape the broader industry, and Tesla, Inc. (NASDAQ:TSLA) is the frontrunner of this transformation, says Jonas. By leveraging AI and robotics, the company remains well-placed to capitalize on the resurgence of US manufacturing, which remains in line with the vision of establishing cutting-edge factories domestically. The analyst further opines that the transition in manufacturing is not about reducing costs, but about embracing technological advancements to create factories of the future. Tesla, Inc. (NASDAQ:TSLA)'s commitment to innovation, together with its capability to implement AI-driven solutions, places it as a leader in the new industrial era. This strategic advantage and Tesla, Inc. (NASDAQ:TSLA)'s ongoing developments support the analyst's positive outlook. Baron Funds, an investment management firm, released its Q1 2025 investor letter. Here is what the fund said: 'Tesla, Inc. (NASDAQ:TSLA) manufactures electric vehicles (EVs), solar products, and energy storage solutions alongside the development of advanced real-world AI technologies. Shares fell due to declining analyst expectations for auto delivery volume and margins in 2025 as a result of 1) a refresh of the Model Y, its highest volume vehicle and the world's best selling car in 2024; 2) Elon Musk's controversial role in the Trump administration; and 3) regulatory changes that could pose potential operational challenges. Despite these headwinds, we remain confident in Tesla's long-term growth, underpinned by secular trends in EVs and energy storage adoption, a compelling product line, its leading cost structure, and cutting-edge technology. A Model Y refresh alongside the debut of new mass-market models should boost demand. Over time, we expect the political pressure to fade, while Tesla's AI ambitions—a robotaxi service launching this year and a fast-growing humanoid program—hold the promise of transforming its growth story.' Overall, TSLA ranks 2nd on our list of worst blue chip stocks to buy. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Sign in to access your portfolio
