Latest news with #dividendstock
Yahoo
21-07-2025
- Business
- Yahoo
Why Verizon (VZ) Stock Is Up Today
What Happened? Shares of telecommunications giant Verizon (NYSE:VZ) jumped 5.1% in the afternoon session after the company reported second-quarter earnings and raised its full-year financial guidance. The company announced it now expects full-year free cash flow to be between $19.5 billion and $20.5 billion, a significant increase from the previous forecast of $17.5 billion to $18.5 billion. Free cash flow, which is the cash left over after a company pays for its operating expenses and capital expenditures, is a key metric for investors, particularly for a high-dividend stock like Verizon. For the quarter, Verizon reported adjusted earnings per share of $1.22 on revenue of $34.5 billion, beating analyst expectations. The company also raised the lower end of its forecast for full-year adjusted earnings growth. While the company saw a net loss in postpaid phone subscribers, a closely watched metric, the strong financial outlook and improved cash flow forecast appeared to outweigh those concerns for investors. Is now the time to buy Verizon? Access our full analysis report here, it's free. What Is The Market Telling Us Verizon's shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. The biggest move we wrote about over the last year was 4 months ago when the stock dropped 8% on the news that the firm guided for weaker wireless subscriber growth in the first quarter (2025) due to "off-season promotions by competitors." Despite this, Verizon maintained its guidance for single-digit growth in annual phone upgrades, as it expected a rebound later in the year( 2025). Verizon is up 6.6% since the beginning of the year, and at $42.87 per share, it is trading close to its 52-week high of $46.49 from March 2025. Investors who bought $1,000 worth of Verizon's shares 5 years ago would now be looking at an investment worth $767.64. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. 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
12-07-2025
- Business
- Yahoo
Microsoft (MSFT): A Bull Case Theory
We came across a bullish thesis on Microsoft on Max Dividends's Substack. As of 2ⁿᵈ July, Microsoft's share was trading at $491.09. MSFT's trailing and forward P/E were 38.01 and 32.85 respectively according to Yahoo Finance. Radu Bercan / Microsoft (MSFT) is a dividend stock that stands out with a strong business model, reliable dividends, and massive growth potential. Microsoft, founded in 1975 by Bill Gates and Paul Allen, is a leader in cloud computing, artificial intelligence, and enterprise software. The company has a history of dividend growth, with 20 consecutive years of annual payout increases, and a 10-year dividend growth rate of 10.2%. Microsoft's dividend policy complements its $60 billion share repurchase program, creating a powerful total return proposition. Microsoft's future growth prospects are driven by its leadership in cloud computing (Azure), artificial intelligence (AI), and enterprise software. The company's $80 billion investment in AI infrastructure in FY2025 underscores its commitment to scaling high-margin AI services. Key growth drivers include AI monetization, cloud and hybrid work solutions, and strategic partnerships. Microsoft's AAA credit rating and diversified cash flows provide resilience, making it an attractive long-term investment with a 12-month average price target of $513 (11.8% upside). Microsoft's key traits define true 'forever stocks': wide economic moats, consistent free cash flow generation, and management teams that balance reinvestment with shareholder returns. While their dividend yields may appear modest, their double-digit dividend growth rates and massive share buyback programs create powerful compounding potential. Microsoft's strong financials, growth prospects, and commitment to returning capital to investors make it an ideal forever holding. Previously, we covered a on Microsoft by Ray Myers, published on May 25, which highlighted the company's critical role in AI infrastructure and energy needs. The stock has appreciated by 7.02% since our coverage. This is because the previous thesis on energy needs for AI played out. Max Dividends shares a similar view, emphasizing Microsoft's leadership in cloud computing, AI, and enterprise software, with a history of dividend growth and massive growth potential. The conviction in the thesis has strengthened, with Microsoft's $80 billion investment in AI infrastructure and a 12-month average price target of $513. Microsoft is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held MSFT at the end of first quarter which was 317 in the previous quarter. Microsoft is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held MSFT at the end of first quarter which was 317 in the previous quarter. While we acknowledge the risk and potential of MSFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
15-06-2025
- Business
- Yahoo
3 Reasons Why This Dirt Cheap High-Yield Dividend Stock Is a Buy for the Second Half of 2025
Packaged food companies are in an industry-wide downturn. J.M. Smucker continues to generate excellent free cash flow to support its growing dividend. The stock's valuation is beyond cheap. 10 stocks we like better than J.M. Smucker › J.M. Smucker's (NYSE: SJM) stock price tumbled 15.6% on Tuesday after the packaged food giant reported fourth-quarter fiscal 2025 results and updated its fiscal 2026 guidance. The stock price of the maker of Uncrustables, Folgers, Jif peanut butter, Twinkies, pet brand Milk-Bone, and other products is now hovering around its lowest level in over a decade. Here are three reasons why the sell-off has made J.M. Smucker too cheap to ignore, and why the high-yield dividend stock is a great buy for the second half of 2025. Net sales fell 3% year over year in J.M. Smucker's Q4 but were still up a solid 7% for the full fiscal year. Adjusted earnings per share (EPS) rose 2% to $10.12. For fiscal 2026, the company expects net sales to increase by 2% to 4%, but adjusted EPS to fall to $8.50 to $9.50. The stock is likely taking a hit because earnings are sliding, and it remains to be seen if the company will be able to pass along cost pressures to consumers. For example, coffee net sales rose 11% in the company's latest quarter, but that was heavily due to price increases from June and October of last year. J.M. Smucker is dealing with record-high green (unroasted) coffee production costs. So it plans to hike prices again in May and stage yet another price increase in August. J.M. Smucker said it will be able to offset higher costs if the price increases work. But if customers push back on these price hikes, then sales volumes would decline, affecting profitability. However, the company believes that its at-home coffee brands will appeal to people looking for affordable experiences outside of coffee shops. Price increases are happening across the company's portfolio. J.M. Smucker just increased prices on its popular Uncrustables sandwiches for the first time in over three years, as net sales in its Frozen Handheld and Spreads segment ground to a halt. For pet foods, the company is seeing good results from its Meow Mix cat brand, but weakness from dog brand Milk-Bone as consumers pull back on discretionary spending -- like on dog treats. Sweet Baked Snacks continues to be one of the worst performers for J.M. Smucker, dragged down by Hostess. J.M. Smucker bought Hostess Brands in November 2023 for $5.6 billion -- which, in hindsight, was not a good use of capital. For context, J.M. Smucker's market cap has fallen to just $10.05 billion -- and Hostess is not even close to being worth half of the company. In J.M. Smucker's latest quarter, Sweet Baked Sales was the company's smallest segment by revenue, generating roughly 12% of total net sales. The segment had by far the worst comparable results, with net sales down 26% year over year. Longer term, J.M. Smucker expects the Sweet Baked Snacks segment to achieve just 3% net sales growth per year. J.M. Smucker generated $816.6 million in free cash flow (FCF) in fiscal 2025, which was plenty to cover $455.4 million in dividend payments. For fiscal 2026, management expects even higher FCF of $875 million, which is roughly double its dividend. On the earnings call, management said that it is confident in the company's ability to deliver $1 billion in annual FCF over the long term. Despite lackluster results, J.M. Smucker maintains a cash flow that can support its growing dividend. The company has raised its dividend for 29 consecutive years, making it a reliable source of passive income. Its yield has ballooned to 4.6% due to the sell-off in the stock and continuous dividend raises. Typically, when a company's yield jumps, it can be a red flag that its dividend is becoming unaffordable. But that's not the case with J.M. Smucker. The company has an FCF yield of 6.5%, meaning it could theoretically support a 6.5% dividend yield if it funded the whole expense with FCF. Based on the company's long-term guidance for $1 billion in FCF and a market cap around $10 billion, simple math tells us that J.M. Smucker would have an FCF yield of a whopping 10% if its stock price stayed depressed and it hit its FCF target. All told, J.M. Smucker is a solid source of passive income even during this challenging operating environment. Based on its fiscal 2026 guidance for $875 million in FCF and $8.50 to $9.50 in adjusted EPS, J.M. Smucker has a forward price-to-FCF ratio of just 11.5 and a forward price-to-earnings ratio of 10.5 at the midpoint of its adjusted earnings guidance. These are bargain-bin levels, even for a traditionally low-growth company. For context, J.M. Smucker's 10-year median price-to-FCF ratio is 15.4, and its 10-year median P/E is 21.6. This suggests that the company is being valued at a steep discount compared to historical averages. J.M. Smucker stock is under pressure because its earnings are falling, and it increasingly relies on price hikes to offset costs across key categories. During inflationary periods, investors may want to take caution when looking at a company's sales growth and focus more on operating margins and earnings. J.M. Smucker is guiding for a slight increase in net sales in its upcoming fiscal year. But if costs are rising at an even faster rate, it's really a net negative in sales growth. Cost pressures and potential volume declines are likely why J.M. Smucker is guiding for lower earnings in fiscal 2026. The outlook is bleak, but J.M. Smucker has already delivered a lot of bad news, setting the stage for a recovery in the stock even if results are just mediocre. For example, the company has reset expectations for Hostess so investors can digest the poor acquisition and move on. Investors can also appreciate that the company is foreshadowing price increases to offset costs, rather than surprising them later in the fiscal year. There are valid reasons for the stock's pullback, but J.M. Smucker is simply too beaten down for a company that continues to generate tons of FCF and can afford to grow its dividend. Investors are getting an opportunity to scoop up shares of this high-yield dividend stock at a bargain level, making it a great buy for the second half of 2025. Before you buy stock in J.M. Smucker, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and J.M. Smucker 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 $655,255!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $888,780!* Now, it's worth noting Stock Advisor's total average return is 999% — a market-crushing outperformance compared to 174% 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 9, 2025 Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends J.M. Smucker. The Motley Fool has a disclosure policy. 3 Reasons Why This Dirt Cheap High-Yield Dividend Stock Is a Buy for the Second Half of 2025 was originally published by The Motley Fool
