3 Top High-Yield Utility Stocks to Buy in September
The utility sector tends to be sensitive to interest rates because utilities generally make heavy use of leverage. With Wall Street expecting rates to fall, utility stocks have started to rise. That has lowered the dividend yield for some of these utility stocks.
But don’t pass on the sector if you are looking for yield. There are still some attractive dividend options. The list includes Brookfield Renewable (NYSE: BEP)(NYSE: BEPC), Black Hills (NYSE: BKH), and WEC Energy (NYSE: WEC).
Here’s a quick primer on why these three high-yield utility stocks might make great buys in September.
1. Brookfield Renewable offers two ways to play
Brookfield Renewable hails from Canada and is backed by the investment powerhouse Brookfield Asset Management (NYSE: BAM). Essentially, it is a way for Brookfield Asset Management to raise additional capital for investment in the clean energy sector. However, Brookfield Renewable also allows smaller investors to invest alongside one of the largest and most experienced infrastructure investors in the world. Brookfield Renewable’s portfolio spans across the globe (North America, South America, Europe, and Asia) and across all of the major clean energy technologies (hydropower, solar, wind, and storage).
What’s interesting here is that Brookfield Renewable has two classes of stock. There’s the partnership unit with a distribution yield of 5.8% (BEP) and the corporate share class with a dividend yield of roughly 5% (BEPC). They represent the same entity; the difference in yield is based on demand for the corporate share class, which more investors are comfortable buying (some large investors, like pension funds, can’t buy partnerships). The dividend backing that yield has been increased annually at roughly 6% a year since 2001.
A big yield, a generous distribution growth rate, and a long runway for growth as clean energy becomes more and more important to the global energy pie. What’s not to like?
2. Black Hills is small but mighty
Black Hills is more of a traditional utility, offering regulated natural gas and electric services to 1.3 million customers in eight states. The stock yields roughly 4.4%, which is toward the high end of the stock’s yield range over the past decade. From this perspective, it looks like the utility is on sale. However, the average utility yields around 3%, using the Utilities Select Sector SPDR ETF (NYSEMKT: XLU) as an industry proxy, so Black Hills also looks cheap relative to its peers.
The really interesting thing here, however, is that this relatively small regulated utility (its market cap is a modest $4 billion or so) happens to have one of the best dividend records in the utility sector. Black Hills has increased its dividend annually for more than five decades, making it a highly elite Dividend King. Dividend growth of around 5% a year over the past decade or so isn’t too bad, either. And all of this from what is, basically, a very boring company. If you are looking for a utility that you can put on autopilot, Black Hills is one you need to look at today.
3. WEC Energy: Dividend growth and income
Last up is WEC Energy, which has the lowest yield of the three at roughly 3.6%. Don’t dismiss it out of hand, that’s still well more than the average utility. And the dividend has grown at a generous 7% a year over the past decade. The most recent increase, in January, was 7%. The company expects earnings to grow between 6.5% and 7% a year through at least 2028. The dividend is likely to grow at roughly the same pace as earnings.
That’s a great combination of yield and dividend growth for investors who are looking at low-yield dividend-growth-focused utility stocks like NextEra Energy (which has a below-average yield of 2.5%). WEC Energy is a simple and boring regulated electric and natural gas utility (NextEra mixes a regulated utility with a clean energy business), operating in parts of Wisconsin, Illinois, Michigan, and Minnesota with 4.7 million customers. The yield may be a bit low for some dividend investors, but if you are interested in killing two birds with one stone, this dividend growth machine (it’s increased its dividend annually for 20 years) should be on your radar.
If you look hard enough, you’ll find it
There’s no question that the utility sector has started to recover in price, but that doesn’t mean the opportunity to find good dividend stocks is over. You just need to be more selective. Brookfield Renewable, Black Hills, and WEC Energy are all examples of the strong high-yield dividend stocks you can find if you take the time to dig in.
Should you invest $1,000 in WEC Energy Group right now?
Before you buy stock in WEC Energy Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and WEC Energy Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $656,938!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 3, 2024
Reuben Gregg Brewer has positions in WEC Energy Group. The Motley Fool has positions in and recommends Brookfield Asset Management, Brookfield Renewable, and NextEra Energy. The Motley Fool recommends Bausch Health Companies and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
3 Top High-Yield Utility Stocks to Buy in September was originally published by The Motley Fool
ABR DEADLINE REMINDER: Arbor Realty Trust, Inc. Investors who Lost Money are Reminded to Contact BFA Law before Upcoming Securities Litigation Deadline (NYSE:ABR)
NEW YORK, Sept. 07, 2024 (GLOBE NEWSWIRE) — Leading securities law firm Bleichmar Fonti & Auld LLP announces that a lawsuit has been filed against Arbor Realty Trust, Inc. ABR and certain of the Company’s senior executives.
If you invested in ABR, you are encouraged to obtain additional information by visiting https://www.bfalaw.com/cases-investigations/arbor-realty-trust-inc.
Investors have until September 30, 2024 to ask the Court to be appointed to lead the case. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in ABR securities. The case is pending in the U.S. District Court for the Eastern District of New York and is captioned Lois Martin v. Arbor Realty Trust, Inc., et al., No. 24-cv-05347.
What is the Lawsuit About?
ABR is a nationwide real estate investment trust (“REIT”) and direct lender, providing loan origination and servicing for commercial real estate assets. The complaint alleges that during the relevant period, ABR misrepresented the health of the Company’s loan book. In truth, ABR used fake holding companies to help conceal that its loan book was distressed, and the underlying collateral was overstated.
On March 14, 2023, NINGI Research published a report which claimed, among other things, that “Arbor has been hiding a toxic real estate portfolio of mobile homes with a complex web of real and fake holding companies for more than a decade.” This news caused the price of ABR stock to decline by $0.87 per share, or almost 7%, to close at $12.12 per share on March 14, 2023.
Then, on December 5, 2023, Viceroy Research published an in-depth study of ABR’s Jacksonville, Florida properties. Viceroy found that the Company’s entire loan book is distressed and the underlying collateral is vastly overstated. This news caused the price of ABR stock to decline by $0.19 per share, or over 1%, to close at $13.67 per share on December 5, 2023.
Finally, on July 12, 2024, Bloomberg reported that ABR was “being probed by federal prosecutors and the Federal Bureau of Investigation in New York.” According to the news report, “[t]he investigators are inquiring about lending practices and the company’s claims about the performance of their loan book.” This news caused the price of ABR stock to decline by $2.64 per share, or almost 17%, to close at $12.89 per share on July 12, 2024.
Click here if you suffered losses: https://www.bfalaw.com/cases-investigations/arbor-realty-trust-inc.
What Can You Do?
If you invested in ABR, you have rights and are encouraged to submit your information to speak with an attorney.
All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The Firm will seek court approval for any potential fees and expenses. Submit your information by visiting:
https://www.bfalaw.com/cases-investigations/arbor-realty-trust-inc
Or contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619
Why Bleichmar Fonti & Auld LLP?
Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.
For more information about BFA and its attorneys, please visit https://www.bfalaw.com.
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3 Top Dividend Stocks to Buy in September
Are you looking for dividends? That’s a tough one today, given the market’s shockingly low 1.3% or so yield. But if you are willing to look, and perhaps make some reasonable risk/reward trade-offs, you can find great companies with yields well above that of the S&P 500 index.
Here’s why you might want to consider adding Federal Realty Investment Trust (NYSE: FRT), Realty Income (NYSE: O), and Toronto-Dominion Bank (NYSE: TD) to your dividend portfolio today.
Federal Realty is the only REIT Dividend King
For some investors, the most important things about a dividend are that it gets paid every single quarter and that it grows from year to year. In fact, for some retirees, that kind of consistency is just as important as the dividend yield because it helps them plan for the future.
Federal Realty has you covered, with 57 consecutive annual dividend increases (and counting) under its belt. That’s the longest streak in the real estate investment trust (REIT) sector and makes the company a highly elite Dividend King.
The company owns a relatively small portfolio (around 100 properties) of extremely well-located strip malls and mixed-use assets. It is always buying and selling assets, to ensure that it has the best opportunity ahead of it. That includes the ability to redevelop a property to increase its value. It is a bellwether company in the retail niche.
There is one trade-off to factor in with this stock. Investors know how well-run the REIT is and generally afford it a premium price to its peers. That’s why the dividend yield is “just” 3.8%. However, that’s well above the market average, and for conservative investors, it might be worth the premium to own such a reliable dividend payer.
Realty Income is the 800-pound gorilla in net lease
If you are looking for a higher yield from a REIT, then you might want to consider Realty Income and its 5% yield. That’s well more than the 3.9% of the average REIT, using the Vanguard Real Estate Index ETF (NYSEMKT: VNQ) as an industry proxy. The really notable thing here, however, is the dominance that Realty Income has in its net lease niche. With a market cap of around $54 billion, it is about 4 times the size of its next closest peer. Don’t underestimate the importance of this.
Realty Income’s size and financial strength (its balance sheet is investment grade rated) afford it advantaged access to capital markets. This gives the REIT the leeway to bid aggressively on property deals and still turn a profit. Moreover, it can take on deals that would be too large for its smaller competitors to even consider. And it has the wherewithal to act as an industry consolidator. There’s no reason to believe that the 29-year streak of dividend increases at Realty Income is in any danger of being broken. Add in a globally diversified portfolio and there’s even more to appreciate here, for those who want a bit more yield from their REITs.
Toronto-Dominion Bank is turning things around
Switching gears to banks, one of the highest-yielding options is Canada’s Toronto-Dominion Bank, usually just called TD Bank. The bad news up front: TD Bank is in hot water with U.S. regulators because of weaknesses in its money laundering controls. There’s a big fine on the way (the bank has already set aside around $3 billion in anticipation) and it will probably take some time before the bank regains the trust of U.S. regulators. All in, TD Bank’s growth is likely to be slower than hoped for a bit. This is why investors have punished the stock, pushing the yield up to a historically high 5%.
If you think in decades and not days, TD Bank’s misstep is a long-term opportunity. First off, the bank is Canadian, where heavy regulation has insulated it from competition. Simply put, it has a very strong foundation. As for the U.S., the market in which the bank has been expanding its reach, time will eventually heal this wound and TD Bank will start growing again. It will just take time, but given the huge yield (the average bank yields just 2.5%), you are being paid very well to wait. It is also worth noting that TD Bank has paid a dividend every quarter since 1857, so this is a very reliable dividend stock. If you can handle a fairly low-risk turnaround story, TD Bank could be the dividend stock for you.
Dividend stocks are out there!
Don’t give up on dividend investing just because the market’s yield is pathetically low. You just have to work a bit harder to find the gems that will fit perfectly into your own portfolio. Dividend King Federal Realty, industry giant Realty Income, and turnaround story TD Bank are examples of the diamonds you can find if you take the time to look.
Should you invest $1,000 in Realty Income right now?
Before you buy stock in Realty Income, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $656,938!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 3, 2024
Reuben Gregg Brewer has positions in Federal Realty Investment Trust, Realty Income, and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Realty Income and Vanguard Real Estate ETF. The Motley Fool has a disclosure policy.
3 Top Dividend Stocks to Buy in September was originally published by The Motley Fool
Chief Executive Officer Of MasterCraft Boat Hldgs Makes $612K Buy
On September 5, a substantial insider purchase was made by Bradley Nelson, Chief Executive Officer at MasterCraft Boat Hldgs MCFT, as per the latest SEC filing.
What Happened: In a recent Form 4 filing with the U.S. Securities and Exchange Commission on Thursday, Nelson increased their investment in MasterCraft Boat Hldgs by purchasing 34,955 shares through open-market transactions, signaling confidence in the company’s potential. The total transaction value is $612,761.
The latest update on Friday morning shows MasterCraft Boat Hldgs shares up by 0.17%, trading at $17.65.
All You Need to Know About MasterCraft Boat Hldgs
MasterCraft Boat Holdings Inc designs, manufactures, and markets performance sport boats and outboard boats. The company is based in the United States and operates in three brand-specific segments. The MasterCraft segment generates the majority of the company’s revenue and includes inboard boats for water skiing, wakeboarding, and wake surfing. The Pontoon segment produces pontoon boats at its Owosso, Michigan facility. Pontoon boats are used for general recreational boating. The Aviara segment produces luxury day boats at its Merritt Island, Florida facility. Aviara boats are used for general recreational boating.
MasterCraft Boat Hldgs: A Financial Overview
Decline in Revenue: Over the 3 months period, MasterCraft Boat Hldgs faced challenges, resulting in a decline of approximately -59.67% in revenue growth as of 30 June, 2024. This signifies a reduction in the company’s top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Consumer Discretionary sector.
Insights into Profitability:
-
Gross Margin: The company shows a low gross margin of 12.18%, suggesting potential challenges in cost control and profitability compared to its peers.
-
Earnings per Share (EPS): MasterCraft Boat Hldgs’s EPS is below the industry average. The company faced challenges with a current EPS of -0.48. This suggests a potential decline in earnings.
Debt Management: MasterCraft Boat Hldgs’s debt-to-equity ratio is below the industry average. With a ratio of 0.27, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.
Evaluating Valuation:
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Price to Earnings (P/E) Ratio: MasterCraft Boat Hldgs’s stock is currently priced at a premium level, as reflected in the higher-than-average P/E ratio of 34.61.
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Price to Sales (P/S) Ratio: The P/S ratio of 0.82 is lower than the industry average, implying a discounted valuation for MasterCraft Boat Hldgs’s stock in relation to sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): The company’s EV/EBITDA ratio 10.41 is above the industry average, suggesting that the market values the company more highly for each unit of EBITDA. This could be attributed to factors such as strong growth prospects or superior operational efficiency.
Market Capitalization: Indicating a reduced size compared to industry averages, the company’s market capitalization poses unique challenges.
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Navigating the Impact of Insider Transactions on Investments
Investors should view insider transactions as part of a multifaceted analysis and not rely solely on them for decision-making.
When discussing legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
A new purchase by a company insider is a indication that they anticipate the stock will rise.
On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Breaking Down the Significance of Transaction Codes
Examining transactions, investors often concentrate on those unfolding in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of MasterCraft Boat Hldgs’s Insider Trades.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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Are You Looking for a Top Momentum Pick? Why Sylvamo Corporation is a Great Choice
Momentum investing is all about the idea of following a stock’s recent trend, which can be in either direction. In the ‘long’ context, investors will essentially be “buying high, but hoping to sell even higher.” And for investors following this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Sylvamo Corporation SLVM, a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Sylvamo Corporation currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
Set to Beat the Market?
Let’s discuss some of the components of the Momentum Style Score for SLVM that show why this company shows promise as a solid momentum pick.
Looking at a stock’s short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It’s also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For SLVM, shares are up 0.22% over the past week while the Zacks Paper and Related Products industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 12.59% compares favorably with the industry’s 4.25% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Sylvamo Corporation have risen 8.17%, and are up 87.92% in the last year. On the other hand, the S&P 500 has only moved 3.12% and 23.92%, respectively.
Investors should also take note of SLVM’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, SLVM is averaging 209,670 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score encompasses many things, including estimate revisions and a stock’s price movement. Investors should note that earnings estimates are also significant to the Zacks Rank, and a nice path here can be promising. We have recently been noticing this with SLVM.
Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. These revisions helped boost SLVM’s consensus estimate, increasing from $6.75 to $7.40 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that SLVM is a #1 (Strong Buy) stock with a Momentum Score of B. If you’ve been searching for a fresh pick that’s set to rise in the near-term, make sure to keep Sylvamo Corporation on your short list.
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Stock market today: Nasdaq, S&P 500 see worst week of the year in volatile start to September
US stocks sold off Friday following a weak jobs report for August. But one economist predicts market volatility will likely continue in the months ahead.
“I do think we’re probably in an environment now where volatility is going to stay elevated,” Michael Darda, chief economist and macro strategist at Roth Capital Partners, said on Yahoo Finance’s Stocks in Translation podcast. “The risk of a more material pullback and/or correction is quite high.”
Darda pushed back against the idea that the US economy will achieve a “soft landing,” a scenario in which higher interest rates lead to lower inflation without a major hit to economic growth.
“We’re skating on ice that’s a bit thinner than a lot of people presume,” he said.
Darda pointed to a rising unemployment rate and elevated earnings expectations, both of which contributed to the stock market routs seen at the start of August and September.
“It’s not unprecedented to have a slowdown period that looks like a soft landing, and then a recession ends up taking shape,” he said. “That’s sort of unexpected now because many have been lulled into this idea that the soft landing is going to be a permanent state of affairs for the business cycle. Equity market valuations reflected that coming into the summer.”
“But there’s been some cracks in the business cycle,” he cautioned, noting expectations for the economy, corporates, and the stock market have remained at “super high” levels.
But it hasn’t just been earnings. The jobs market is also telling a particular story.
Last month, the July jobs report spooked markets after unemployment unexpectedly rose to 4.3%, its highest level in nearly three years. The move higher also triggered a closely watched recession indicator known as the Sahm Rule.
Although unemployment ticked slightly lower to 4.2% in August, Darda warned that the accelerated rise in unemployment is still “a bit concerning.”
“4.3% is still an incredibly low unemployment rate level that looks quite good in the historical context,” he explained. “The problem, if there’s a problem, is that we’re up to 4.3% from a cyclical trough of 3.4%.”
“Those kinds of movements and the level tell us that the economy, if it’s still growing, is growing below trend or below the growth rate of potential,” he said. “There’s an exceptionally fine line between that and an actual recession.”
Wall Street Sighs In Relief As August Jobs Numbers Ease Recession Fears: Small Caps Outperform, Dollar Trims Weekly Losses
Wall Street breathed a sigh of relief Friday after the August jobs report signaled economic resilience, calming recession fears that had escalated following weak labor data in July and earlier this week.
The U.S. economy added 142,000 nonfarm payrolls in August, up from the previous month’s downwardly revised 89,000 but falling short of the expected 160,000.
The unemployment rate dropped to 4.2%, meeting expectations, while wage growth showed strength. Average hourly earnings advanced by 0.4% to $35.21, surpassing the 0.3% forecast. On a year-over-year basis, wages rose 3.8%, beating July’s 3.6% and the 3.7% consensus estimate.
Market Reactions
Initial market reactions saw the dollar swing lower and traders increasingly bet on a potential 50-basis-point rate cut from the Federal Reserve, driven by the headline payrolls miss. A deeper dive into the report — which revealed stronger wage growth and a dip in unemployment — helped ease recession concerns.
Expectations for a 50-basis-point rate cut surged to 59% by 9 a.m. in New York before retreating to 45%, as per CME Group‘s FedWatch tool.
- S&P 500: The S&P 500, tracked by the SPDR S&P 500 ETF Trust SPY, was down 0.19% shortly before 10 a.m. Friday.
- Tech Stocks: The Invesco QQQ Trust, Series 1 QQQ, which monitors tech-heavy Nasdaq stocks, is down 0.95%.
- Semiconductors: The iShares Semiconductor ETF SOXX is down 2.24%, pressured by a 9.65% slump in Broadcom Inc. AVGO following its earnings report.
- Small Caps: The iShares Russell 2000 ETF IWM gained 0.14%, buoyed by strength in smaller companies.
- Dollar Index: The Invesco DB USD Index Bullish Fund ETF UUP rose 0.25%, reversing early losses.
- Treasury Yields: Yields on 10-year Treasury notes edged up by 2 basis points to 3.75%.
- Gold: The SPDR Gold Trust GLD fell 0.21%, as the dollar firmed and risk sentiment improved.
Read Next:
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KKR Real Estate Surges 5.7%: Is This an Indication of Further Gains?
KKR Real Estate Finance KREF shares soared 5.7% in the last trading session to close at $12.24. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 8.4% gain over the past four weeks.
Shares of KREF witnessed a strong price increase as long-term bond yields have declined with the Fed’s announcement of an interest rate cut starting this month. This resulted in a decline in mortgage rates. Housing affordability challenges are expected to decline with a fall in mortgage rates.
Also, rate cuts will likely increase net interest spreads. This will ease earnings pressure for real estate companies, which are currently reeling under high funding costs. Hence, the investors turned bullish on real estate sector stocks, driving KREF higher.
This real estate finance company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of -34%. Revenues are expected to be $39.52 million, down 11.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For KKR Real Estate, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock’s price usually doesn’t keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on KREF going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy).
KKR Real Estate is part of the Zacks REIT and Equity Trust industry. Ladder Capital LADR, another stock in the same industry, closed the last trading session 0.3% lower at $12. LADR has returned 4% in the past month.
For Ladder Capital, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.26. This represents a change of -16.1% from what the company reported a year ago. Ladder Capital currently has a Zacks Rank of #3 (Hold).
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Box Is Up 14.51% in One Week: What You Should Know
Momentum investing is all about the idea of following a stock’s recent trend, which can be in either direction. In the ‘long’ context, investors will essentially be “buying high, but hoping to sell even higher.” And for investors following this methodology, taking advantage of trends in a stock’s price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Box BOX, a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It’s also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Box currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
Set to Beat the Market?
Let’s discuss some of the components of the Momentum Style Score for BOX that show why this online storage provider shows promise as a solid momentum pick.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For BOX, shares are up 14.51% over the past week while the Zacks Internet – Software industry is down 0.23% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 20.19% compares favorably with the industry’s 1.42% performance as well.
While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Over the past quarter, shares of Box have risen 26.51%, and are up 26.21% in the last year. On the other hand, the S&P 500 has only moved 3.12% and 23.92%, respectively.
Investors should also pay attention to BOX’s average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. BOX is currently averaging 2,399,009 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with BOX.
Over the past two months, 3 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost BOX’s consensus estimate, increasing from $1.57 to $1.63 in the past 60 days. Looking at the next fiscal year, 3 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Taking into account all of these elements, it should come as no surprise that BOX is a #2 (Buy) stock with a Momentum Score of A. If you’ve been searching for a fresh pick that’s set to rise in the near-term, make sure to keep Box on your short list.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
All You Need to Know About VistaGen Therapeutics Rating Upgrade to Buy
VistaGen Therapeutics, Inc. VTGN could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates — one of the most powerful forces impacting stock prices.
The sole determinant of the Zacks rating is a company’s changing earnings picture. The Zacks Consensus Estimate — the consensus of EPS estimates from the sell-side analysts covering the stock — for the current and following years is tracked by the system.
Since a changing earnings picture is a powerful factor influencing near-term stock price movements, the Zacks rating system is very useful for individual investors. They may find it difficult to make decisions based on rating upgrades by Wall Street analysts, as these are mostly driven by subjective factors that are hard to see and measure in real time.
As such, the Zacks rating upgrade for VistaGen Therapeutics is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.
Most Powerful Force Impacting Stock Prices
The change in a company’s future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for VistaGen Therapeutics imply an improvement in the company’s underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate Revisions
As empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988.
Earnings Estimate Revisions for VistaGen Therapeutics
For the fiscal year ending March 2025, this company is expected to earn -$1.78 per share, which is a change of -17.1% from the year-ago reported number.
Analysts have been steadily raising their estimates for VistaGen Therapeutics. Over the past three months, the Zacks Consensus Estimate for the company has increased 11.1%.
Bottom Line
Unlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of ‘buy’ and ‘sell’ ratings for its entire universe of more than 4000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a ‘Strong Buy’ rating and the next 15% get a ‘Buy’ rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
The upgrade of VistaGen Therapeutics to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
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