Blue chip – Sweet As A Biscuit http://sweetasabiscuit.com/ Fri, 23 Sep 2022 05:31:41 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://sweetasabiscuit.com/wp-content/uploads/2021/10/icon-14-120x120.png Blue chip – Sweet As A Biscuit http://sweetasabiscuit.com/ 32 32 Avoid inflation with blue chip art stocks https://sweetasabiscuit.com/avoid-inflation-with-blue-chip-art-stocks/ Thu, 22 Sep 2022 21:02:02 +0000 https://sweetasabiscuit.com/avoid-inflation-with-blue-chip-art-stocks/ Note from Chris: Inflation is the biggest threat to your wealth right now. It caused stocks and bonds to fall. It also sent the Fed into rate hike mode. This increases the risk of recession. To retaliate, his colleague Teeka Tiwari recommends rare assets such as collectibles and art. The government can “print” as many […]]]>

Note from Chris: Inflation is the biggest threat to your wealth right now. It caused stocks and bonds to fall. It also sent the Fed into rate hike mode. This increases the risk of recession.

To retaliate, his colleague Teeka Tiwari recommends rare assets such as collectibles and art. The government can “print” as many dollars as it wants. But it can’t print a 1960s Ferrari 250 GT or a Pablo Picasso painting. This, added to their enduring desirability, makes them great stores of value.

Yesterday I showed how you can now buy shares of works of art by Picasso and other iconic artists through a platform called masterpieces. It’s the brainchild of tech entrepreneur and art collector Scott Lynn.

I spoke with Scott about how owning art stocks can help you build a higher-return, lower-risk portfolio…and how you don’t have to be a buyer rich to enjoy. It’s all in the questions and answers below…



Q&A with Scott Lynn, CEO, Masterworks

Chris Lowe: Buying stock in iconic works of art is a game-changing idea. What is the origin story of Masterworks?

Scott: For about 20 years, I launched technology companies in different segments, from gaming to FinTech. And I was collecting art throughout that period.

Masterworks takes my passion for art collecting and combines it with my skills in finance and technology. It takes that asset class – art – which was only accessible to wealthy buyers. And it opens it up to everyday investors through securitization.

Cris: Explain to our readers how it works.

Scott: It’s the same thing that private companies have to do to go public. We take a work of art… file it with the SEC [the U.S. Securities and Exchange Commission, the main stock market regulator]…and sell shares in this work of art.

Cris: I called it splitting, because it buys a fraction of a Picasso. You call it securitization. But it looks like it’s the same thing. You take a painting, make a business out of it, and sell shares in it.

Scott: Exactly.

Cris: What benefits does art as an asset class bring to investors? Our readers can own stocks, bonds, cryptocurrencies, and private equity in ordinary companies. Why add contemporary art?

Scott: It’s a matter of diversification. Investors with a traditional 60/40 portfolio between stocks and bonds are susceptible to volatility as we are currently seeing. This portfolio is down about 17% this year. It is not diversified enough in other asset classes.

Take a step back and ask yourself what you are trying to do as an investor. You are trying to generate the highest returns with the lowest volatility.

To do this, you need to diversify into a set of different asset classes that don’t move in parallel. When one goes down, another goes up or stays flat. This mitigates the overall volatility of your portfolio.

Art is a great way to do this. The correlation between art and the S&P 500 is between 0 and 0.2. A correlation of zero means that the two assets move independently of each other. So it’s a very weak correlation.

Additionally, the Masterworks portfolio has appreciated around 15% to 15.5% per year since its launch in 2018. So you have those excellent returns as well.

Cris: What about inflation? How does this affect art prices?

Scott: There are two things to understand about art prices…

First, they are linked to the growth of the world’s richest 1%. The people who buy and trade these $10, 20, or $30 million paintings tend to be the richest people in the world. And generally, they behave differently during inflationary cycles than regular investors.

Second, the art market is global. The United States, China and Western Europe account for approximately 75% of the global art market. You can buy a painting in New York, put it on a plane and sell it in Hong Kong. They are not as sensitive to country-specific issues as other asset classes.

So I would say art prices are mostly inflation neutral. Inflation does not really change the appreciation of art prices. It’s not like a bond that will go down in value as inflation goes up.

Cris: Do I buy stocks from this chart through my broker like I buy stocks from Microsoft or Ford?

Scott: At Masterworks, we do something called “direct emitter”. We sell shares directly through our website. You don’t need a brokerage account to invest in it. Just go to Masterpieces websitecreate an account and speak to one of our financial advisors to get started.

Our minimum for each board is $15,000. But if it’s not suitable, we reduce that for investors. This is something I encourage your readers to discuss with our financial advisors. They will give you advice on how to get started in a way that suits your needs.

Cris: What does your clientele look like? Are they family investors, family offices or large institutional players?

Scott: All the foregoing. We don’t work as often with investors who want to invest $500 with the expectation that it will turn into $50,000. It’s more about building a higher return, lower risk portfolio that allows you to build more stable wealth over time.

Cris: Thanks Scott.

Scott: My pleasure.

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Is this Blue Chip Dividend stock a buy? https://sweetasabiscuit.com/is-this-blue-chip-dividend-stock-a-buy-2/ Wed, 21 Sep 2022 11:30:00 +0000 https://sweetasabiscuit.com/is-this-blue-chip-dividend-stock-a-buy-2/ How can an investor be sure that a company is of quality? Investing is as much an art as it is a science, but outperforming the market for at least five years is usually a good sign. Delivering total annual returns of 28.7% over the past five years, the home retailer Williams Sonoma (WSM -4.15%) […]]]>

How can an investor be sure that a company is of quality? Investing is as much an art as it is a science, but outperforming the market for at least five years is usually a good sign.

Delivering total annual returns of 28.7% over the past five years, the home retailer Williams Sonoma (WSM -4.15%) far exceeded the S&P500 annual total returns of 12.8% of the index over the same period. A $10,000 investment in the retailer would now be worth over $35,000 with dividends reinvested. For context, that’s nearly double the $18,000 the S&P 500 index would have put the same investment in at that time.

But is Williams-Sonoma stock still a buy for dividend investors? Let’s look at the company’s fundamentals and valuation to find out.

Strong brands and a favorable clientele

For those unfamiliar with Williams-Sonoma, the kitchen and home furnishings retailer has a variety of well-known brands. These include the eponymous Williams-Sonoma, Pottery Barn, West Elm and Mark and Graham.

The company reported net revenue of $2.1 billion for the fiscal second quarter that ended July 31. This equates to a 9.7% year-on-year growth rate. Williams-Sonoma’s results for the quarter were above most other retailers. How was it possible?

High inflation is costing the typical American household several thousand dollars more than just last year. Since wage increases have not followed, this has eaten away at most households’ discretionary income.

What makes Williams-Sonoma unique is the profile of its customers. Because its products mostly appeal to economically upper-class households, demand has remained strong. Indeed, higher prices at the pump and at the grocery store have less of a negative impact on the discretionary income of those at the top of the economic ladder. That’s how Williams-Sonoma’s comparable brand revenue jumped 11.3% year-over-year.

The company’s diluted earnings per share (EPS) climbed 20.6% to $3.87 in the quarter. Rising costs actually caused Williams-Sonoma’s net margin to fall 14 basis points from a year earlier, to 12.5%. However, a 9.8% drop in the company’s outstanding shares to 69.1 million due to share buybacks more than offset this slight drop in profitability.

Along with share buybacks, continued investment in the company’s existing brands and acquisitions will increase the company’s market share in the door-to-door retail market by $830 billion.

Image source: Getty Images.

Dividend may continue to accrue

Investors focused on passive income will appreciate that Williams-Sonoma’s 2.3% dividend yield is significantly higher than the 1.7% average yield of the S&P 500 Index. And the icing on the cake is that there is plenty of room for future growth in the payment, which has already been growing every year for over a decade.

Williams-Sonoma’s dividend payout ratio is just 18% and dividend growth is expected to slightly outpace earnings growth for the foreseeable future. That’s why I expect high single-digit annual dividend growth over the next few years.

A wonderful company at a reduced valuation

The fundamentals of Williams-Sonoma are solid. Still, the market doesn’t seem to fully appreciate the stock.

Its forward price-to-earnings (P/E) ratio of 8.1 is below the luxury industry average of 10. This makes the dividend stock a terrific buy for dividend growth investors.

Kody Kester holds positions at Williams-Sonoma. The Motley Fool fills positions and recommends Williams-Sonoma. The Motley Fool has a disclosure policy.

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The defense wins the ball games; 3 top stocks to consider https://sweetasabiscuit.com/the-defense-wins-the-ball-games-3-top-stocks-to-consider/ Mon, 19 Sep 2022 18:47:00 +0000 https://sweetasabiscuit.com/the-defense-wins-the-ball-games-3-top-stocks-to-consider/ If there was one word to describe the market in 2022 so far, most investors would agree that “volatile” would be the correct choice. The Fed has completely pivoted to a hawkish nature, raising interest rates in an effort to bring down historically high inflation. In times of heightened volatility, investors might consider adding blue […]]]>

If there was one word to describe the market in 2022 so far, most investors would agree that “volatile” would be the correct choice. The Fed has completely pivoted to a hawkish nature, raising interest rates in an effort to bring down historically high inflation.

In times of heightened volatility, investors might consider adding blue chip stocks to their portfolios for an extra layer of defense.

Blue chip stocks are companies that have always provided quality, reliability and the ability to operate profitably in good times and bad.

Due to their entrenched nature and track record of success, these companies have positioned themselves to weather a dark tax cloud better than most.

To put the icing on the cake, they typically post rock-solid dividend metrics, allowing investors to reap a steady stream of income.

Three stocks – McKesson MCK, Johnson & Johnson JNJ and Caterpillar CAT – all meet the criteria. Below is a chart illustrating how the three companies’ stocks have performed year-to-date with the integrated S&P 500 as a benchmark.

Image source: Zacks Investment Research

As we can see, the stocks of all three companies were significantly stronger than the S&P 500 YTD, no doubt displaying their defensive nature.

Let’s take a closer look at each of them.

McKesson Corp.

Texas-based McKesson MCK is a healthcare services and information technology company operating through two segments: Delivery Solutions and Technology Solutions.

Analysts have been bullish on their earnings outlook over the past few months, helping the stock rise to a favorable Zacks rank of No. 2 (buy).

Zacks Investment Research
Image source: Zacks Investment Research

Along with a strengthening earnings outlook, McKesson shares could be undervalued, further bolstered by its style score of an A for value.

The company’s 14.2X forward earnings multiple sits above its five-year median, but represents a staggering 33% discount to its medical sector Zacks.

Zacks Investment Research
Image source: Zacks Investment Research

Additionally, MCK has a very favorable growth profile – earnings are expected to grow by 2.3% in FY23 and a further 7.4% in FY24.

The growth in turnover is also worth highlighting; MCK’s annual revenue is expected to increase 4% in FY23 and 5% in FY24.

Zacks Investment Research
Image source: Zacks Investment Research

Johnson & Johnson

Based in New Jersey, Johnson & Johnson JNJ is an American multinational corporation that develops medical devices, pharmaceuticals and consumer packaged goods.

JNJ is part of the elite Dividend King group, increasing its dividend payout for an astonishing 60 consecutive years.

JNJ’s annual dividend yields 2.7%, well above the 1.4% average for its Zacks medical sector. To top it off, JNJ boasts a rock-solid five-year annualized dividend growth rate of 6%.

Zacks Investment Research
Image source: Zacks Investment Research

The company’s steady growth trajectory appears to be continuing – earnings are expected to climb nearly 3% in FY22 and another 4.7% in FY24.

Revenue growth is also commendable, with the company’s revenue expected to grow 2% and 4% respectively in FY23 and FY24.

Zacks Investment Research
Image source: Zacks Investment Research

Like MCK, Johnson & Johnson shares are trading at attractive valuation multiples; The company’s 15.6X forward earnings multiple is well below its five-year median of 16.9X and represents a steep 26% discount to its Zacks medical sector.

Zacks Investment Research
Image source: Zacks Investment Research

caterpillar

Caterpillar CAT is the world’s largest manufacturer of construction equipment. The company designs, develops, designs, manufactures, markets and sells machinery, engines, financial products and insurance to its customers.

CAT has impressively increased its dividend for 28 consecutive years, ranking it as a dividend aristocrat. The company’s annual dividend yields 2.7%, which is noticeably higher than Zacks Industrials sector average of 1.7%.

Additionally, the machinery titan boasts an attractive five-year annualized dividend growth rate of 8.9%, coupled with a payout ratio that is sustainably at 39% of earnings.

Zacks Investment Research
Image source: Zacks Investment Research

CAT’s forward earnings multiple has fallen significantly from its 2020 high of 33.6X, perhaps indicating that long-term investors may be interested.

Currently, the company is posting a forward earnings multiple of 14.2X, a far cry from its five-year median of 16.7X, and is a notable 8% discount to its Zacks sector.

Zacks Investment Research
Image source: Zacks Investment Research

In summary, the company has a stellar growth profile, with earnings expected to climb in double-digit percentages in FY22 and FY23.

Revenue growth is also commendable – revenue is expected to grow 12% in FY22 and 6% in FY23.

Zacks Investment Research
Image source: Zacks Investment Research

Conclusion

Blue chip stocks generally provide an additional layer of defense to a portfolio. And in 2022, it goes without saying that all investors could benefit from a heavily defense-focused approach.

Additionally, they typically pay large dividends coupled with a strong track record of proven and successful business operations.

With the Fed tightening cycle hitting high growth and tech harder than most, McKesson MCK, Johnson & Johnson JNJ and Caterpillar CAT could all be options for investors looking to offset losses in beta stocks. higher.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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2 Blue Chip Stocks Tiger Management Promotes Reliability During Turbulent Markets – Microsoft (NASDAQ:MSFT), Blackstone (NYSE:BX) https://sweetasabiscuit.com/2-blue-chip-stocks-tiger-management-promotes-reliability-during-turbulent-markets-microsoft-nasdaqmsft-blackstone-nysebx/ Sun, 18 Sep 2022 20:33:31 +0000 https://sweetasabiscuit.com/2-blue-chip-stocks-tiger-management-promotes-reliability-during-turbulent-markets-microsoft-nasdaqmsft-blackstone-nysebx/ The end Julian Robertsonfounder of hedge fund Tiger Management, had an annual return of 31.7% from its inception in 1980 until its peak in 1998, compared to 12.7% for the S&P 500. During the second quarter, Tiger Management reduced its portfolio from 33 positions to just 13. The most notable position change was in the […]]]>

The end Julian Robertsonfounder of hedge fund Tiger Management, had an annual return of 31.7% from its inception in 1980 until its peak in 1998, compared to 12.7% for the S&P 500.

During the second quarter, Tiger Management reduced its portfolio from 33 positions to just 13. The most notable position change was in the Invesco QQQ Trust, Series 1 QQQthe hedge fund having reduced its position by 325,000 shares, and also holds put options on these shares.

Although the billionaire investor has cut many positions as rising interest rates have driven stocks lower, there are still a few stocks that Robertson is keeping in his long-term arsenal. Here are two dividend-paying stocks Tiger Management still holds through the turbulent markets.

Blackstone Group Inc. Bx offers a dividend yield of 5.40% or $5.13 per share per year, making quarterly payments, with an inconsistent history of increasing its dividends. Blackstone is one of the world’s largest alternative asset managers with total assets under management of $940.8 billion, including $683.8 billion in remunerated assets under management, as of the end of June 2022.

During the second quarter, Tiger Management reduced the hedge fund position by 305,000 shares, but remains the firm’s fourth most-held position, accounting for 12% of the portfolio or 286,500 shares held.

Leaving: S&P 500, Nasdaq Futures Plunge After Consumer Price Inflation Surprises Rise – Twitter, Peloton, Oracle Stocks In Focus

Microsoft Corporation MSFT offers a dividend yield of 1.02% or $2.48 per share per year, paying quarterly, with a notable history of increasing its dividends for 19 years. Microsoft licenses consumer and enterprise software and is known for its Windows operating systems and Office productivity suite.

During the second quarter, Tiger Management reduced its stake in Microsoft by 99,300 shares, but it is still the third most-held position in the hedge fund, accounting for 12% of the portfolio or 104,100 shares held.

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Blue-chip stocks to avoid right now https://sweetasabiscuit.com/blue-chip-stocks-to-avoid-right-now/ Thu, 15 Sep 2022 17:01:59 +0000 https://sweetasabiscuit.com/blue-chip-stocks-to-avoid-right-now/ Source: iQoncept/Shutterstock.com It’s been a lousy first half of the week – not thanks to the shocking consumer inflation report – and the market is still struggling to find momentum in the second half of the week. As you may recall, markets fell sharply on Tuesday in reaction to the inflation surprise, with the S&P […]]]>

Source: iQoncept/Shutterstock.com

It’s been a lousy first half of the week – not thanks to the shocking consumer inflation report – and the market is still struggling to find momentum in the second half of the week.

As you may recall, markets fell sharply on Tuesday in reaction to the inflation surprise, with the S&P 500 falling 4.32% and the Dow Jones and NASDAQ falling 3.94% and 5, 16%, respectively.

Now, as we talked about on Tuesday Market360, the consumer price index (CPI) August’s reading was much higher than economists expected – and Wall Street wasn’t happy about it. Specifically, the CPI rose 8.3% year-over-year, above forecasts for an 8.1% rise. The CPI also rose 0.1% month over month, which was well above estimates for a 0.1% decline.

Core CPI, which excludes energy and food, rose 6.3% year over year and 0.6% month over month. That compares with economists’ projections that the core CPI is expected to rise 6.3% year-on-year and 0.6% month-on-month.

As a result, the Federal Reserve will likely raise interest rates by 75 or even 100 basis points at next week’s Federal Open Market Committee (FOMC) meeting. The market currently sees an 80% chance of a 75 basis point rise and a 20% chance of a full percentage increase. Furthermore, the Fed may even raise rates again in November before the midterm elections, which is highly unusual.

Then yesterday we got the Producer Price Index (PPI) report, which helped stocks firm up a bit. The PPI measures the selling price of goods that producers pay or wholesale prices. For August, the PPI fell 0.1%, which was in line with expectations. Year-over-year, the index is up 8.7%, which is the lowest we’ve seen since August 2021. That’s good news, folks.

Additionally, this morning’s retail sales report showed 0.3% growth in August, proving that the consumer remains resilient even in the face of inflation.

As the market continues to hold its breath awaiting the FOMC statement next week, the PPI indicates lower prices on the horizon.

What’s important right now is to stay focused on stocks that will continue to profit in our current market environment. The fact is, in an inflationary environment like the one we find ourselves in today, our best bet is to stay focused on commodity stocks. I’m talking about companies in the energy, consumer staples and industrials sectors.

There are also stocks to avoid, and today I want to go over the top-notch stocks you should avoid right now. After taking a close look at the latest data on institutional buying pressure and the fundamental health of each company, I’ve decided to revise my Portfolio Grader recommendations for 61 headlines.

Now, of those 61 stocks, 13 have been downgraded from a Hold (C rating) to a Sell (D rating). Chances are you have at least one of these stocks in your portfolio. I’ve included the top 10 stocks for sale in the table below, but you can find the full list of stocks here.

EL Estée Lauder Companies Inc. Class A D
FDX FedEx Corporation D
GOOG Alphabet Inc. Class C D
GOOGL Alphabet Inc. Class A D
GPN Global Payments Inc. D
HMC Honda Motor Co., Ltd. Sponsored ADR D
HTHT ADR sponsored by H World Group Limited D
MFG Mizuho Financial Group Inc sponsored ADR D
MGA Magna International Inc. D
PLEASANT ADR sponsored by NICE Ltd D

I should note that there are still many interesting opportunities to invest in. In fact, there’s a phenomenon that only happens once a decade. it’s happening right now this opens a small window for potentially huge gains for some low-priced stocks.

I will explain everything in my special Less than $10 event, which will go live today at 4 p.m. sharp EST. I’ll also reveal the name, ticker symbol and more about an amazing company that is currently trading at less than $10 per share and is uniquely positioned to benefit from this phenomenon. There is still time to register if you haven’t already. Simply click here now to reserve your spot. Don’t forget that participation is 100% free. I look forward to speaking with you soon!

Sincerely,

Source: InvestorPlace, unless otherwise stated

Louis Navellier

Publisher hereby declares that as of the date of this e-mail, Publisher owns, directly or indirectly, the following securities which are the subject of commentary, analysis, opinion, advice or recommendations in, or which are otherwise mentioned in, the dissertation below:

Alphabet Inc. (GOOG)

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The Waterfall City of Attacq continues to attract quality local and global blue chip corporate clients https://sweetasabiscuit.com/the-waterfall-city-of-attacq-continues-to-attract-quality-local-and-global-blue-chip-corporate-clients/ Tue, 13 Sep 2022 08:25:38 +0000 https://sweetasabiscuit.com/the-waterfall-city-of-attacq-continues-to-attract-quality-local-and-global-blue-chip-corporate-clients/ Africa Shopping Center. Image source: Tripadvisor Attacq, the REIT developing JSE-listed Waterfall City today announced the resumption of dividends of 50.0 cents per share for the year to the end of June 2022, representing a payout ratio of 80%, as well as an increase in distributable income per share of 34.2% to 62.8 centimes. Attacq […]]]>

Africa Shopping Center. Image source: Tripadvisor


Attacq, the REIT developing JSE-listed Waterfall City today announced the resumption of dividends of 50.0 cents per share for the year to the end of June 2022, representing a payout ratio of 80%, as well as an increase in distributable income per share of 34.2% to 62.8 centimes.

Attacq said his performance was particularly satisfactory in the context of South Africa’s record unemployment levels and low growth environment, and highlighted the underlying quality of the portfolio, characterized by continued growth in the Waterfall City’s growing mixed-use neighborhood that continues to attract quality businesses. top-notch local and global corporate clients.

Over the past year, we have emerged from COVID-19 with an improved corporate culture and capital structure. We are now focused on new opportunities, primarily through the implementation of our environmental plan, in support of sustainable growth within our portfolio and the achievement of the purpose and vision of the company,” says Jackie van Niekerk, CEO of Attacq.

“A key ingredient to success has been the formulation and execution of our ‘hub’ strategy, which focuses on building segmented hubs of retail experience, collaboration and logistics that are smart, secure and sustainable.”

Other highlights include the conclusion of an amended lease agreement on space at the Cell C collaboration hub, subject to the completion of the recapitalization of Cell C, of ​​(24,955 m2), whereby the he Cell C campus warehouse (14,014 m2) was re-let at market price. related rents for a period of three years.

C-cell
C-cell

Attacq continues to ensure a quality rental income stream, as evidenced by the high proportion of international commercial clients with several blue-chip global companies, including Amazon Web Services, Cisco, Pfizer and Ericsson move to Waterfall City during the year.

Space utilization in Waterfall City and Lynnwood Bridge precinct, our largest collaboration centers, continues to increase as businesses return to the workplace.

Active capital allocation and balance sheet management

Commenting on the balance sheet and capital allocation, Raj Nana, financial director of Attacq, adds “During financial year 22, Attacq managed to deleverage its balance sheet, carried out several developments and increased its distributable profit. In addition, lower interest charges, higher rent collections and the receipt of a dividend from the investment in MAS contributed to an increase in total distributable income per share of 34.2%. »

Attack
Attack

The Group’s interest-bearing borrowings decreased by 18.7% while its net asset value per share increased by 11.0% to R17.49 (2021: R15.75 per share).

A cautious but encouraging outlook – investors and customers are looking for quality

At the macro level, there are a number of headwinds, including poor business confidence, high unemployment, rising inflation and rising interest rates, which are likely to limit economic growth. Despite these headwinds, the portfolio should continue to generate revenue growth, coupled with improved funding and liquidity positions, given the improved capital structure.

Attacq’s resilient portfolio is diversified by geography, sector and asset class, and, with its exposure to high-quality, defensive retail and residential properties, and complemented by high-quality office developments, is well positioned to grow further as consumers and businesses seek quality and convenience in their work, home and leisure destinations.

With this in mind, Attacq’s decision to halt its The Mix residential development projects and redouble its efforts on additional phases of the Group’s flagship development, Ellipse Waterfall, has paid off.

Ellipse Waterfall
Ellipse Waterfall

To date, Ellipse has achieved over R1 billion in sales to date since its launch in July 2021 and has already seen its first residents move into the mixed-use residential centre.

Read also : GUGU LOURIE: Apps, sun and data: how Attacq masters tech

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3 blue chip Canadian banks beaten to buy https://sweetasabiscuit.com/3-blue-chip-canadian-banks-beaten-to-buy/ Sun, 11 Sep 2022 11:00:00 +0000 https://sweetasabiscuit.com/3-blue-chip-canadian-banks-beaten-to-buy/ pawel.gaul This article was co-produced with Cappuccino Finance. The Big Five (Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce) are the largest banks in Canada and they dominate the Canadian banking landscape. Thanks to their size and the regulatory barriers on the sector, the […]]]>

pawel.gaul

This article was co-produced with Cappuccino Finance.

The Big Five (Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce) are the largest banks in Canada and they dominate the Canadian banking landscape.

Thanks to their size and the regulatory barriers on the sector, the five big banks benefit from large economic moats.

These Big Five banks control substantial assets, maintain a superb balance sheet with plenty of cash on hand, and are more profitable than other smaller banks.

The quality of their assets and balance sheets is clearly demonstrated by their positions in the top five places of the list of the safest banks in North America by Global Finance.

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Safest banks in North America 2021, Source: Global Finance

On top of that, they’ve been shareholder-friendly, paying a strong dividend and buying back stock. Some of them have a dividend sequence exceeding 150 years.

The liquidation of 20 to 25% of the major Canadian banks seems exaggerated, as dividends increase. Short-term volatility is to be expected, but investors with a buy and hold strategy might want to start adding bank stocks to their portfolios at these levels.

Recent market volatility and concerns about a housing bubble in Canada have caused their stock prices to fall, but I believe this is a market overreaction.

The big five Canadians will be fine.

Price declines have just created an opportunity to grab stocks at a bargain price and attractive yield.

The next three (Royal Bank of Canada, Toronto Dominion and Bank of Nova Scotia) are my favorite stocks, and all of them combine growth and dividend stability.

Royal Bank of Canada (RY)

Royal Bank of Canada is a diversified multinational bank based in Toronto. The bank offers personal and business banking, home equity financing, mortgages, mutual funds, brokerage accounts and credit card services. It is the largest bank in Canada by asset value ($1.4 billion).

Royal Bank of Canada is the recognized leader in Canadian banking. They hold a highly diversified portfolio, product lines ranked #1 or #2 in the industry, and strong customer relationships. The balance sheet is very solid, represented by a high level of Common Equity Tier 1 (CET1) and a solid liquidity coverage ratio (123%).

They are also more profitable than others, as evidenced by their high ROE. The recently proposed acquisition of Brewin Dolphin (the UK wealth management leader) will further diversify their portfolio and boost their growth trajectory.

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Source: Investor Relations

Although it noted some uncertainties in its earnings announcements, Royal Bank of Canada posted a solid quarter. Their net interest income was up 17% year-on-year, driven by strong volume growth and higher yield spreads in Canadian banking and wealth management.

Average personal deposit balances are about 30% higher than pre-pandemic levels, and corporate balance sheets and personal savings are stable and healthy across the board. Their Super Prime group shifted its cash to higher yielding offerings during the quarter.

They recorded a larger provision for credit losses as macroeconomic conditions deteriorate, and this larger provision contributed to lower net income in the quarter.

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Source: Investor Relations

Buoyed by its strong performance and strong balance sheet, Royal Bank of Canada repurchased 10 million shares and paid $1.8 billion in dividends this quarter. They have consistently increased the dividend (4.63%, 5 year CAGR) and I expect them to continue in the future.

Given their valuation, the P/E ratio of 10.81x is significantly lower than their normal P/E ratio of 12.29x (5-year average). This lower valuation is caused by recent market volatility and a less optimistic economic outlook for Canada and the United States. But given their strong balance sheets and wide economic moat, I expect them to weather any economic cycle comfortably.

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QUICK charts

Toronto Dominion (TD)

Toronto-Dominion serves more than 27 million customers worldwide and has more than 2,000 outlets in North America. Toronto-Dominion operates through three major segments: Canadian Retail, US Retail and Wholesale Banking.

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Source: Investor Relations

In addition to the acquisition of First Horizon Bank announced earlier this year, Toronto-Dominion made another big move by announcing the acquisition of Cowen.

Because Cowen is a leading independent broker with a strong and diversified investment bank, the acquisition will significantly increase revenue and strengthen TD Securities’ services. TD Securities will benefit from the addition of strong talent (1,700 colleagues), greater presence (29 cities) and long-term growth (revenue synergy of $300-350 million).

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Source: Investor Relations

The term of the purchase was $39 per share and $1.3 billion in total (100% cash consideration). Although Toronto-Dominion used a lot of cash for this transaction, the CET1 ratio should still remain above 11%, demonstrating the strength of Toronto Dominion’s balance sheet. The expected return on investment after achieving full synergy is around 14% for the acquisition.

During the last quarter, Toronto-Dominion posted excellent earnings, beating both EPS and revenue estimates. Their Canadian retail segment earned $2.3 billion on record revenue of $7 billion. Their card business performed very well, with loan volume up 10% year-on-year as consumer spending remained robust. The corporate banking segment also recorded strong growth, driven by double-digit loan growth.

Given their valuation, the P/E ratio of 10.1x is around 20% lower than their 5-year average (12.0x). Uncertainty surrounding the Canadian real estate market, recession fears and hawkish central banks (both Canadian and US) are the main reasons for falling stock prices and the current low valuation.

Given their strong balance sheet and expected synergies from First Horizon Bank and Cowen, I expect Toronto-Dominion to continue to grow. Their revenues and earnings will continue their long-term growth trajectory, and shareholders will be rewarded with strong dividend growth and stock appreciation.

Toronto-Dominion’s dividend is well covered with a 42% payout ratio, and I expect them to continue to increase the dividend (8.10%, 5-year average).

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QUICK charts

Bank of Nova Scotia (BNS)

The Bank of Nova Scotia, or Scotiabank, is Canada’s third largest bank and offers a wide range of advice, products and services, including personal banking, commercial banking, wealth management and investment banking services.

Scotiabank offers a good combination of growth and stability. Their portfolio is diversified across high-quality markets that present strong growth opportunities, represented by a strong EPS growth target of 7% (11.5% in YTD 2022).

Return on equity is reasonably strong at 15.3% in 2022. As mentioned in the introduction, Scotiabank is one of the safest banks in North America (ranked 3rd) and their senior credit ratings are AA, Aa2 and A+ (Fitch, Moody’s and S&P respectively) with a stable outlook. Literally, shareholders’ money is in safe hands with Scotiabank.

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Source: Investor Relations

In the latest quarterly earnings call, Scotiabank reported strong earnings of $2.6 billion ($2.10 per share), up 4% from a year ago. Strong personal, business and commercial banking led to another strong quarter for Scotiabank. Net interest income increased 11% year-on-year, driven by asset and loan growth across all of their business segments.

The impact of high inflation and low consumer confidence was offset by a strong labor market and low defaults. Overall consumer spending in Canada has also shown resilience, helped by strong deposit balances and strong employment.

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Source: Investor Relations

Scotiabank’s stock price has fallen from $75 per share in March to its current level of around $55 per share, and this has created a good entry point for an investor looking for a opportunity for stock appreciation with a strong dividend payout.

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Source: Investor Relations

Their dividend yield is 5.86%, and given their strong balance sheet and growth trajectory, I expect their stock price to recover. Their P/E ratio of 8.17x is simply too low for a high quality bank like Scotiabank. Moreover, their valuation is around 25% lower than their historical average (10.99x, 5-year average).

During the past quarter, Scotiabank repurchased approximately five million shares (31 million shares year-to-date) and is committed to rewarding shareholders through its share buyback program. shares.

I also expect them to continue to increase their dividend (4.7% growth, 5-year average). Their dividend is well covered with a payout ratio of 47%. Economic uncertainty and high inflation could pose challenges for Scotiabank in the short term, but I remain confident that they will bring significant long-term gains.

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QUICK charts

Carry

The stock market, and to some extent the whole world, is full of uncertainties these days: ongoing Russian-Ukrainian war, oil production, high inflation, supply chain disruption and (always) Covid lockdowns. The list continues.

More specifically for the Canadian market, there are growing concerns about the Canadian real estate market. All of these uncertainties have combined to bring a lot of volatility to the stock market.

In turn, this volatility drove down the price of blue-chip stocks like Royal Bank of Canada, Toronto-Dominion and Scotiabank.

However, these three banks have outstanding balance sheets with ample cash on hand, so I expect them to weather an economic downturn very well and continue their long-term growth.

Additionally, Royal Bank of Canada and Toronto-Dominion have made key acquisitions that will boost their growth trajectories.

Therefore, I will take the recent drops in their price as a welcome gift. This is a great opportunity to add these stocks at a bargain price, while collecting a juicy dividend.

Note: We posted “What You Need to Know About Foreign Dividend Withholding Taxes” for iREIT members on Alpha.

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I buy those blue chip stocks that yield 6%+ https://sweetasabiscuit.com/i-buy-those-blue-chip-stocks-that-yield-6/ Sat, 10 Sep 2022 13:00:00 +0000 https://sweetasabiscuit.com/i-buy-those-blue-chip-stocks-that-yield-6/ z1b Everyone has their own definition of a blue chip security. Some investors classify companies as blue chips simply based on their size. Others only look at their background. And some only consider the risk of the underlying business. My definition of a best-in-class stock is one that exhibits some of the following characteristics: The […]]]>

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Everyone has their own definition of a blue chip security.

Some investors classify companies as blue chips simply based on their size. Others only look at their background. And some only consider the risk of the underlying business.

My definition of a best-in-class stock is one that exhibits some of the following characteristics:

  • The company is large and well established.
  • He has a solid track record.
  • Its activity is defensive.
  • He has a healthy track record.
  • It pays a constantly increasing dividend.
  • And it enjoys good growth prospects.

Simply put, a blue chip is a high quality business that has performed well in the past and should continue to deliver strong results over the long term.

Good examples would include companies like Walmart (WMT) or Procter & Gamble (PG).

Typically, these companies trade at high valuations and low yields because they are in high demand by investors.

But following the recent market decline, a few blue chip dividend stocks have become exceptionally cheap and are now offering yields above 6% in some cases. Such opportunities are particularly plentiful in the real estate sector as it is currently out of favor.

At High Yield Landlord we specialize in listed real estate investments, and we have rarely seen so many blue chips trading at such high valuations and in the following we highlight two opportunities that we are accumulating:

Residential real estate is generally considered a defensive investment because everyone needs a roof over their head whether the economy is doing well or not. It’s also something you can’t easily replace with technology, and a well-located property has always gained in value over the long term.

For this reason, residential properties typically sell at low cap rates, and the Real Estate Investment Trusts (“REITs”) that own them also at low yield prices.

Some popular names in the US include Mid-America (MAA), Equity Residential (EQR), and Independence Realty (IRT). They all have a yield of around 2-3%.

Central American Apartment Community

central America

But one of these companies is currently earning 6.5%, and against all odds, it’s actually one of the largest and most respected companies in this space:

Vonovia.

Vonovia is Europe’s largest landlord, with a portfolio of around €100 billion of properties, mostly located in Germany.

The company has all the characteristics of a blue chip:

  • He is tall.
  • He has a solid track record.
  • Its activity is defensive.
  • He has a healthy track record.
  • It pays a constantly increasing dividend.
  • And it enjoys good growth prospects.

But despite this, the company’s share price has crashed over the past year, dropping 50%, and as a result, its price is now at an exceptionally low valuation.

Chart
VONOI given by Y-Charts

Historically, Vonovia has been valued at a small premium to NAV and a low yield of 2-3% most of the time.

But currently, its price is discounted by 55% from the value of its assets and it pays a dividend yield of 6.5% – which is the lowest valuation in the company’s history.

The market priced it at such an exceptionally low valuation on fears that rising interest rates and the energy crisis in Germany could significantly hurt its business.

But we just don’t see it.

Sure, these are important short-term issues, but their long-term implications aren’t really important.

Vonovia has a strong BBB+ rated balance sheet with an LTV of 43% and well-laddered debt maturities. Only about 10% of its debt matures each year, and Vonovia has enough liquidity through its retained earnings (73% payout ratio) and its recurring asset sales program to repay debt maturing. deadline. Furthermore, interest rates only increase due to high inflation, which also increases Vonovia’s rental income and the value of its assets. In the first half of the year, the company’s funds from operations (“FFO”) per share rose another 5.5% and reached new all-time highs.

The energy crisis may seem even scarier, especially for US-based investors who lack grounding. But having lived in Germany for years, I’m not so worried.

What most investors seem to ignore is that tenants are responsible for paying energy bills. The direct impact on Vonovia is therefore not that significant. Sure, that may limit its ability to push for short-term rent increases since tenants can’t afford much, but it won’t suddenly kill Vonovia’s profitability as its stock price suggests. Vonovia’s properties are also more energy efficient than average, and its rents are affordable and below market, which should provide an extra margin of safety.

Finally, rent arrears were very low even at the worst of the pandemic. Germans are more conservative with their finances, have better savings, less credit, and are less likely to skip rent payments than in the United States. It’s also a cultural thing.

So this is at most a temporary crisis that will harm Vonovia’s growth in the short term, but eventually things will work out and its long-term prospects will not be affected.

Now you have the opportunity of a lifetime to buy Europe’s largest and bluest owner at a hugely reduced valuation. We buy it hand in hand at High Yield Landlord.

Another Blue-Chip: STORE Capital Corporation (STOR)

Historically, Berkshire Hathaway’s (BRK.A, BRK.B) largest REIT investment has been a REIT called STORE Capital. Apparently, Warren Buffett himself made the investment years ago.

In case you are unfamiliar with STOR, it is one of the leading net rental REITs. It primarily owns service-oriented single-tenant properties, such as KFC (YUM) fast food restaurants, car washes, pharmacies, and other recession-proof and e-commerce properties:

KFC |  Net Lease Advisor

Net Lease Advisor

STOR generates stable rental income from leases over 15 years with no landlord liability and the company’s cash flow increases thanks to contractual rent increases and new real estate acquisitions, which are being made with significant spreads on its cost of capital. It is generally considered a blue-chip as it has a strong BBB-rated balance sheet and one of the best track records and reputations in its industry.

But recently, Berkshire decided to exit its stake in STORE, which caused its share price to underperform. Many investors took this as a red flag, thinking that if Berkshire exits, then maybe they should exit as well.

Chart
STOR given by Y-Charts

But the reality is that STORE was a rather small holding for Berkshire and it seems they invested mostly through the company’s former CEO, Chris Volk. When he left, they decided to sell too. It’s that simple.

So we don’t see it as a red flag.

On the contrary, we see it as an opportunity to buy more shares at a historically low valuation. Basically, STORE is doing better than average with record cash generation and dividend payouts.

It is expected to increase its AFFO per share by around 10% in 2022, which is well above its historical average, and yet its current FFO multiple is well below its historical average at just 12x.

Its dividend yield is now also 6%, which is well above its historical average. The dividend is expected to grow by over 5% per year and is guaranteed with a low payout ratio of 74%.

We expect investors to earn a 12-15% annual return through yield and growth alone. And as investors outpace Berkshire’s recent decision to exit its position, we also expect STORE to revalue closer to 18x FFO, unlocking 50% upside for patient shareholders. 12x FFO is just too cheap for a blue-chip that is doing so well.

Conclusion

Vonovia and STORE Capital are two examples of blue chips in the listed real estate sector that are currently undervalued.

They’re doing better than ever, but their market sentiment took a hit in 2022. The last time these companies were this cheap was in early 2020 and we doubled our money the following year.

The best time to buy is when everyone seems to be selling. Today is no different.

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Bucharest Stock Indices Rise Again, TTS Leads Prime Winners https://sweetasabiscuit.com/bucharest-stock-indices-rise-again-tts-leads-prime-winners/ Tue, 06 Sep 2022 15:26:00 +0000 https://sweetasabiscuit.com/bucharest-stock-indices-rise-again-tts-leads-prime-winners/ BUCHAREST (Romania), September 6 (SeeNews) – The indices of the Bucharest Stock Exchange (BVB) ended in the green on Tuesday as a freight forwarder Transport Trade Services [BSE:TTS] led the winners among the blue chips with an increase of 3.92% to 10.6 lei. The total turnover of BVB shares amounted to some 29.8 million lei […]]]>

BUCHAREST (Romania), September 6 (SeeNews) – The indices of the Bucharest Stock Exchange (BVB) ended in the green on Tuesday as a freight forwarder Transport Trade Services [BSE:TTS] led the winners among the blue chips with an increase of 3.92% to 10.6 lei.

The total turnover of BVB shares amounted to some 29.8 million lei (6.15 million dollars / 6.18 million euros) on Tuesday, against 14.4 million lei on Monday, according to the stock market data.

Banca Transilvania prime lender [BSE:TLV] rose 0.40% to 19.88 lei in the highest turnover of the day of 14.03 million lei.

Prime lender BRD Societe Generale [BSE:BRD] traded 1.56% higher at 13 lei in the second highest trading turnover during the session, of 3.74 million lei.

Premier oil and gas group OMV Petrom [BSE:SNP] rose 0.98% to 0.4660 lei in the third largest turnover of the day 3.5 million lei.

The details follow:

BET 12,055.22 0.52%
BET-TR 23,427.00 0.52%
BET-BK 2,201.88 0.27%
BET-FI 50,762.65 -0.18%
BET-NG 914.78 0.52%
BET-XT 1,056.81 0.42%
BET-XT-TR 2,040.70 0.42%
BETAeRO 908.33 0.62%
ROTX 27,396.64 0.59%

BET is the first index developed by BVB and represents the benchmark index for the local capital market. BET reflects the performance of the most traded companies on the BVB regulated market, excluding financial investment companies (FIS). It now includes 20 companies.

BET-TR is the first total return index launched by BVB. It is based on the structure of the BET market benchmark. BET-TR tracks changes in the price of the stocks that make it up and is adjusted to also reflect dividends paid by constituent companies.

BET-FI is the first sector index launched by BVB and reflects the evolution of the prices of FIS and other similar entities.

BET-BK was designed to be used as a benchmark by asset managers and other institutional investors.

BET-NG is a sector index that reflects the evolution of all companies listed on the BVB regulated market included in the energy and related utilities sector. The maximum index weighting a company can hold is 30%.

BET-XT tracks the price changes of the 25 most quoted companies on the BVB regulated market, including FIS.

BET-XT-TR is the total return version of the BET-XT index, which includes the top 25 Romanian companies listed on the BVB.

ROTX is an index developed by BVB in collaboration with the Vienna Stock Exchange. It tracks, in real time, the price changes of top-notch shares traded on the Bucharest Stock Exchange.

BET AeRO is the first index for the AeRO market developed by BVB that reflects the price development of representative companies listed on the AeRO market that meet the criteria of liquidity and free-float market capitalization. It is a free-float, market capitalization-weighted index with a maximum weighting of 15% for an index constituent.

(1 euro = 4.8287 lei)

BRD – Groupe Societe Generale SA is one of the largest banks in South Eastern Europe, for more references, see the Top 100 banks

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“Undervalued Bangladeshi blue chip stocks offer investment opportunity” https://sweetasabiscuit.com/undervalued-bangladeshi-blue-chip-stocks-offer-investment-opportunity/ Sat, 03 Sep 2022 15:25:00 +0000 https://sweetasabiscuit.com/undervalued-bangladeshi-blue-chip-stocks-offer-investment-opportunity/ Due to the depreciation of the Taka, foreign investors have been selling Bangladeshi stocks and as they mainly deal in large-cap stocks with strong fundamentals, blue-chip stocks are suffering from oversupply in stock exchanges, a manager said. assets Mohammad Emran Hasan. As soon as the sale of foreigners comes to an end, blue-chip stocks should […]]]>

Due to the depreciation of the Taka, foreign investors have been selling Bangladeshi stocks and as they mainly deal in large-cap stocks with strong fundamentals, blue-chip stocks are suffering from oversupply in stock exchanges, a manager said. assets Mohammad Emran Hasan.

As soon as the sale of foreigners comes to an end, blue-chip stocks should recover from the current depressed price level, believes Emran Hasan, the managing director (CEO) of Shanta Asset Management Ltd – an asset management company of new generation managing over Tk 200 crore capital market funds.

“Prices of many blue chip stocks are depressed these days, despite companies growing,” he said on The Business Standard’s capital market show TBS Money on Saturday.

In the midst of high inflation, the wealth of savers may gradually erode as fixed income investment tools underperform actual inflation and investing part of savings in the stock market may drive up one’s wealth. long-term wealth, he said.

“Stock market investing should be done with the right approach and in a disciplined and informed manner to avoid the even greater risk of losing too much,” the asset manager said.

Starting small and continuing to learn how to prepare for calculated risk-taking that has the potential to generate huge returns over the years should be the approach any saver can take, Emran said.

And those who are unlikely to invest the time and effort to learn should turn to reliable investment professionals to manage their money, instead of making mistakes like sheepfolding, making decisions about investing based on fear and greed and repeating the same mistakes in the market. , he said.

Universally, the stock index is not always predictable, but the factors that push the market up or down are traceable, he said, adding that with the exception of bubble periods, one can gradually build up a position in fundamentally sound businesses for wealth creation.

The asset manager advised against selling good stocks during short-term market declines and taking the opportunity to buy after sharp corrections.

The winning habit requires overcoming one’s fear and greed which comes through continuous exercise as an investor, said Emran Hasan, adding that he thinks that is why tomorrow is always the right time to start trading.

When too many people lacking expertise or qualification dare to continue advising the market in social life, historically this tends to be a good time to take advantage of market rallies, while the best time to buy good stocks is when people barely like to talk about the stock market, he cited the lessons of Peter Lynch, a legendary Wall Street fund manager.

The Bangladesh stock market does not appear to be at any time right now, he added.

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