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Super Micro Computer (NASDAQ: SMCI), one of the Nasdaq’s best performers this year, is offering investors a golden opportunity. The high-flying stock that even beat the first-half performance of market darling Nvidia, is splitting its stock in a few weeks. The idea is to lower the per-share price, making the stock more accessible to a broader range of investors.

This technology giant has soared over the past five years, advancing more than 2,200%, as it became a favorite of artificial intelligence (AI) customers. Companies focused on AI have been putting in their orders for Supermicro’s equipment, such as servers and full rack scale solutions, for their data centers. And this has helped the 30-year-old Supermicro report higher revenue in the latest quarter than it reported for the entirety of the 2022 fiscal year. The momentum continues, with the company forecasting as much as 230% revenue growth in the next quarter.

Considering all of this, Supermicro makes a great addition to any growth portfolio. But now the question is should you buy the stock before the upcoming split or wait? Let’s take a look at what history says.

The details of Supermicro’s stock split

First, a bit about stock splits in general and the details of Supermicro’s operation. Stock splits involve the issuance of additional shares to current holders to bring down the price of each individual share. They don’t change the total market value of the company or the total value of an investor’s holding. And they don’t change anything fundamental about the particular company so investors won’t go out and buy a stock just because it’s launching a split.

But there is something positive about a split. These operations make it easier for smaller investors to get in on a previously high-priced stock without turning to fractional shares. Fractional shares often are a good option, but they aren’t offered by every brokerage. So, a lower per-share price opens the door to all investors.

Supermicro announced a 10-for-1 stock split, meaning that for every share you own, you’ll receive nine additional shares. Considering the current price of about $430, the post-split price will be about $43 per share. The stock will begin trading at the split-adjusted price on Oct. 1.

Though Supermicro has been a top performer in recent years and even through the first half of this year, it’s had a rough couple of months. The stock has dropped more than 60% from its peak earlier this year. Investors frowned on a narrowing of gross margin and earnings per share that missed analysts’ expectations in the most recently reported quarter, delivered in early August.

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Bad news for Supermicro

On top of this, two other pieces of news hit the stock later in the month: Hindenburg Research released a short report, alleging troubles at Supermicro, and separately, Supermicro announced it would be late filing its 10-K annual report. So stock has lost its positive momentum over the past several weeks, but I think these are short-term troubles and won’t alter the company’s long-term growth story.

Now, before deciding whether to buy Supermicro before or after the split, let’s look at what history tells us. From 1980 through today, stocks that have split delivered an average total return in the 12 months following the announcement of more than twice the return of the S&P 500 — 25.4% versus 11.9% for the index. This is according to Statista, based on Bank of America‘s Research Investment Committee data.

If Supermicro follows this pattern, more gains could be ahead for this technology stock, and that means you could benefit by buying the stock now, ahead of the split.

Two points to keep in mind

That said, it’s important to keep a couple of things in mind. First, history offers us a general idea of what may happen — but nothing is guaranteed. Stocks and the market itself could surprise us at any point. Second, the recent news weighing on Supermicro might continue to impact the stock’s performance in the coming weeks. It may take the filing of Supermicro’s 10-K and even an additional earnings report to help the stock regain its positive momentum.

So, what should investors do? It’s time to look at valuation. Now is a great time to buy Supermicro because you can get in on a great long-term growth story for a song — the stock is trading for only 12x forward earnings estimates. If Supermicro follows historical patterns it could lift your portfolio in the coming year, but even if it doesn’t, you still have a solid chance of winning with this company that has what it takes to deliver earnings growth and stock performance over the long term.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, 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 Super Micro Computer 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 $731,449!*

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*.

See the 10 stocks »

*Stock Advisor returns as of September 3, 2024

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Nvidia. The Motley Fool has a disclosure policy.

Should You Buy Super Micro Computer Before its Upcoming Stock Split? Here’s What History Says. was originally published by The Motley Fool

You’ve heard the terms “upper class,” “middle class,” and “lower class” tossed around in conversations about money and society. But what do these labels mean? And, more importantly, where do you fit in?

Don’t Miss:

While there’s no perfect way to define economic classes, one common approach is to look at net worth. Your net worth isn’t just about how much cash you have in the bank – it’s the total value of everything you own minus what you owe. Think of it as a financial report card that shows your overall wealth.

According to recent data from the Federal Reserve, here’s how the numbers stack up:

If you’re in the upper class, you’re sitting pretty. The top 10% of earners have an average net worth of $2.65 million. Even if you’re squeaking into the upper class (the 80-90% range), you’re looking at about $793,000.

Moving down to the middle class, things get a bit more varied. The upper-middle class folks have an average net worth of around $300,800. Your typical middle-class family comes in at $169,420. And if you’re in the lower-middle class, you’re looking at about $58,550.

Trending: The average American couple has saved this much money for retirement — How do you compare?

Now, for the lower class, the numbers take a sharp dive. The average net worth here is just $16,900. That’s a pretty dramatic contrast to the millions at the top.

But here’s the thing – these are just averages. Your situation might look very different. Maybe you’re a recent college graduate with a mountain of student debt but a high-paying job. Or perhaps you’re retired with a modest income but a paid-off house and hefty savings. Life’s complicated, and so are finances.

It’s also worth noting that net worth isn’t everything. Your day-to-day life is probably more affected by your income and cost of living. A teacher in a small town might have a lower net worth than a struggling actor in New York City, but who’s better off?

See Also: Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.

So, what can you do with this information? First, don’t panic if your net worth isn’t where you want it to be. Remember, building wealth takes time. If you’re young, you’ve got plenty of years to grow your nest egg.

If you want to boost your net worth, here are a few tips:

• Pay off high-interest debt. It’s hard to build wealth when you’re bleeding money on interest payments.

• Save and invest regularly. Even small amounts add up over time.

• Consider buying a home. Home equity is a big part of many people’s net worth.

• Invest in yourself. Learning new skills can lead to higher-paying jobs.

• Live below your means. The less you spend, the more you can save and invest.

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Trending: Are you rich? Here’s what Americans think you need to be considered wealthy.

If you’re nearing retirement or already enjoying your golden years, here are a few moves to boost your financial comfort:

• Think about downsizing your home, too. This can unlock some of your equity and reduce your living costs. Also, if you’re still in the workforce, maxing out your retirement accounts with catch-up contributions is a smart way to pump up your savings as you approach retirement.

• Don’t overlook Health Savings Accounts (HSAs), either. They offer triple tax advantages and are an excellent way to stash away funds for those inevitable medical expenses that tend to pop up as we age.

• Remember, your experience is invaluable. Many professionals with years of experience thrive in consulting or mentoring, turning decades of know-how into rewarding side jobs or even new careers.

Your value goes way beyond your bank balance! Remember, being ‘upper class’ or ‘lower class’ is just one way to slice it. What’s truly important is how you’re moving toward your own financial goals. Everyone’s journey is different, and chatting with a financial advisor could be a great move if you’re aiming for some tailored advice to hit those targets. They can help you map out a plan that fits just right for what you need.

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This article How Rich Are You? Here’s The Net Worth That Defines Upper, Middle, and Lower Class originally appeared on Benzinga.com

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Investing.com — Shares of Super Micro Computer, Inc (NASDAQ:SMCI) were down on Wednesday following a downgrade from Barclays.

Super Micro Computer shares were down 3% in pre-market trading at 8:18 am (1214 GMT)

Barclays’ analysts have raised concerns about SMCI’s future prospects, prompting a downgrade to an equal weight rating and a revised price target of $438. This is mainly due to the company’s declining gross margins, persistent customer losses, and issues with internal controls.

One of the key factors behind the downgrade is SMCI’s recent performance in terms of gross margins. In the June quarter, the company’s overall gross margin fell significantly to 11.3%, marking a 430 basis point decline from the previous quarter.

The gross margin for AI servers was reported to be in the high single digits, while Dedicated Liquid Cooling (DLC) server margins were even lower.

“MCI has been giving away DLC components for free to match or price below the air-cooled rack pricing provided by Dell (NYSE:DELL),” said analysts at Barclays.

The pricing strategy, combined with supply chain constraints, has pressured margins, leading to concerns about potential P/E multiple compression and diminished investor confidence.

“SMCI has been ceding shares in its top two customers: Musk entities and Coreweave (private, not covered, except for TSLA),” the analysts said.

Previously, SMCI had an exclusive supplier relationship with Musk Inc., but recent developments have seen the business split evenly between SMCI and Dell.

This shift has resulted in a drop in SMCI’s market share, to around 50% by June 2024 from 100% in 2023. Coreweave, another major customer, has also reduced its reliance on SMCI, a trend analysts attribute to improved GPU supply and Dell’s strengthened competitive position.

Adding to these challenges is the uncertainty surrounding the new GB200 server platform. Barclays’ analysts worry that SMCI might hold a smaller market share in GB200 servers compared to its position with Hopper-based servers.

The expected lower margins for GB200 servers could further pressure SMCI’s profitability. Additionally, the absence of definitive customer orders for the GB200 platform exacerbates the uncertainty, especially as competition heats up and margins could potentially shrink.

Another concern for Barclays is SMCI’s internal controls and corporate governance. The delay in filing the 10-K report has raised red flags, highlighting issues related to transparency and governance. SMCI’s lack of detailed financial disclosures, including quarterly order intake and backlog, has been a point of contention.

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The company’s past history with regulatory issues and its previous delisting from Nasdaq have only intensified these concerns.

In light of these factors, Barclays has adjusted its price target for SMCI to $438, using a valuation multiple of 12x FY25E EPS of $36.48. This new target aligns more closely with Dell’s valuation multiple, reflecting a more cautious stance given the current margin trends and internal issues.

While Barclays remains optimistic about the long-term prospects of the AI sector, it has identified Flex (NASDAQ:FLEX) as a preferred alternative investment. Flex’s increasing involvement in switch tray and power components for GB200 systems, along with its gains in Google (NASDAQ:GOOGL) TPU server assembly, makes it a more attractive option in the current environment.

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Dividend stocks are proven wealth builders. The average dividend stock has delivered above-average annual total returns over the long term, with the highest returns coming from companies that consistently increase their dividends. The average dividend grower has delivered a 10.2% annualized total return over the last five decades compared to 7.7% for the average member of the S&P 500, according to data from Hartford Funds and Ned Davis Research.

That data is driving me to load my portfolio with dividend growth stocks. I try to buy several each month to help build my wealth. Topping my list this September is Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) and Rexford Industrial Realty (NYSE: REXR). Here’s why I plan to buy even more of these top dividend stocks this month.

A powerful income generator

Brookfield Renewable has done a stellar job increasing its dividend over the years. The leading global renewable energy producer has grown its payout at a 6% compound annual rate over the last 20 years. It has delivered at least 5% annual dividend increases for 13 straight years.

The company’s high yield, which currently sits around 5%, and its steadily growing dividend have helped give it the power to produce strong total returns. Over the last decade, Brookfield has generated a 10.8% average annual total return.

Brookfield Renewable should have ample power to continue increasing its dividend in the future. It expects to grow its funds from operations (FFO) by more than 10% annually through 2028. Several factors power that forecast. Brookfield expects organic growth drivers like inflation-linked contractual rate increases, margin enhancement activities, and its massive renewable energy project development pipeline to drive 7% to 12% annual FFO per share growth through 2028. Meanwhile, it anticipates accretive acquisitions pushing its growth rate above 10% annually. This forecast easily supports its plan to grow its dividend by 5% to 9% annually over the long term. Add its high yield to its high growth rate, and Brookfield Renewable could generate average annual total returns in the mid-teens from here.

Focusing on a prime location continues to pay big dividends

Rexford Industrial Realty has been a dividend growth juggernaut. The industrial REIT has increased its payout every year since coming public in 2013. It has delivered a blistering 18% compound annual dividend growth rate over the last five years, nearly double the 10% compound annual growth rate of its peers. That has helped drive a roughly 15% compound annual total return for its shareholders since it came public.

The REIT has grown briskly by focusing on the high-demand, supply constrained Southern California industrial market. Those market fundamentals keep occupancy rates high, which drives robust rent growth. Rexford Industrial Realty further capitalizes on that market by making accretive acquisitions.

Rexford Industrial Realty recently bought a high-quality portfolio of 48 properties from Blackstone in a $1 billion deal. Those properties come with embedded growth upside from future rental increases. That acquisition helped drive a 20.9% increase in the REIT’s net operating income in the second quarter and an 11.1% jump in its core FFO per share.

The company has lots of embedded growth ahead from that baseline. It sees a combination of repositioning and redevelopment projects, embedded annual contractual rental increases, mark-to-market rent growth as legacy leases expire, and recent investments growing its net operating income by 35% over the next three years. Meanwhile, future accretive acquisitions would further enhance its growth rate. With a fortress-like balance sheet, Rexford has ample liquidity to capitalize on accretive acquisition opportunities as they arise. Those visible growth catalysts should enable the REIT to continue increasing its dividend, which currently yields more than 3%.

Wealth-building dividend growth stocks

Brookfield Renewable and Rexford Industrial Realty have done fantastic jobs increasing their dividends over the years. That’s enabled them to grow value for shareholders by delivering strong total returns. They both have lots of visible growth ahead and should have no trouble increasing their payouts and generating strong total returns in the future. That’s why I plan to add to my positions in each one again this month.

Should you invest $1,000 in Brookfield Renewable right now?

Before you buy stock in Brookfield Renewable, 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 Brookfield Renewable 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 $731,449!*

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*.

See the 10 stocks »

*Stock Advisor returns as of September 3, 2024

Matt DiLallo has positions in Blackstone, Brookfield Renewable, Brookfield Renewable Partners, and Rexford Industrial Realty. The Motley Fool has positions in and recommends Blackstone, Brookfield Renewable, and Rexford Industrial Realty. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

2 Top Dividend Stocks I Plan to Buy Even More of This September was originally published by The Motley Fool

Global demand for liquefied natural gas (LNG) could surge more than 50% by 2040, according to an estimate by Shell. Fueling that rosy outlook is the expectation that China will switch its power plants from coal to gas and that LNG will fuel the economic growth engines of South Asian countries.

Tellurian (NYSEMKT: TELL) had hoped to cash in on the global LNG boom by building its proposed Driftwood LNG facility. That had made it a popular LNG stock. However, with Tellurian agreeing to sell itself to Woodside Energy in a $1.2 billion cash deal, investors will need to look elsewhere to cash in on the LNG boom. Here are two alternatives to consider.

The U.S. LNG leader

Tellurian had hoped to build a leading pure-play LNG export company in the United States. Its proposed Driftwood LNG terminal could eventually export 27.6 million tonnes per annum (MTPA) once fully developed in 2028. The company estimated that the facility could produce over $3 billion in annual cash flow once it reached that point. Meanwhile, Tellurian owns enough land to build a second site capable of producing another 30 MTPA of LNG per year.

In a sense, Tellurian sought to replicate Cheniere Energy (NYSE: LNG). It became the first company to export LNG from the lower 48 states when its Sabine Pass terminal began commercial operations in 2016. Today, Cheniere operates two sites, Sabine Pass and Corpus Christi, with a combined capacity of 45 MTPA. The company has invested over $38 billion to build the country’s largest LNG producer and second biggest globally.

Cheniere Energy is on track to produce $3.1 billion to $3.5 billion of distributable free cash flow this year, something Tellurian wouldn’t have delivered for many years, if ever. The company is using the cash to invest in growing its LNG export capacity, repay debt, and return money to shareholders through repurchases and dividends. It recently authorized an additional $4 billion in share repurchases through 2027 and boosted its dividend payment by another 15%. It’s also building more LNG export trains at Corpus Christi and working on future expansion projects at both sites to continue growing its production capacity and cash flow.

Feeding gas to LNG facilities

LNG export terminals need a steady supply of natural gas. Because of that, they rely on pipeline companies to bring gas into their facilities. Few companies are in a better position to supply more gas to LNG export terminals along the U.S. Gulf Coast than Kinder Morgan (NYSE: KMI). It currently transports a little less than half of all the feed gas into U.S. LNG export terminals.

The company’s extensive pipeline network, particularly in Texas and Louisiana, puts it in a strong position to capture opportunities to supply more gas to LNG export facilities. The company currently has contracts to move 7 billion cubic feet per day (bcfd) of gas to LNG terminals. It sees that growing to 10 bcfd by the end of next year as more capacity comes online. Meanwhile, it’s pursuing 13 bcfd of additional opportunities to supply gas to LNG export facilities.

LNG exports are just one of Kinder Morgan’s many growth drivers. The company is also supplying more gas to support the country’s growing power demand and exports to Mexico. In addition, it’s investing to support the growth of lower carbon energy like renewable natural gas and renewable fuels.

Kinder Morgan currently produces about $5 billion in annual free cash flow. It pays about half that cash in dividends. It uses the rest to invest in high-return expansion projects, repurchase shares, and maintain its financial flexibility to make accretive acquisitions when opportunities arise. The company currently has $5.2 billion of growth capital projects in the backlog that provide visibility into its ability to grow its cash flow through 2028. That number should rise as it captures additional LNG-related expansion opportunities.

Cash in on the LNG boom right now

Tellurian offered investors the dream of potentially cashing in on the global LNG boom one day when it finished building its proposed Driftwood facility. Unfortunately, it couldn’t turn that dream into a reality.

However, while Tellurian couldn’t deliver on its LNG promise, Cheniere Energy and Kinder Morgan are already cashing in on the boom. They’re generating billions of dollars in cash flow from their LNG-related operations, which should continue growing in the future. That’s giving them more money to return to shareholders through repurchases and growing dividends. They’re great alternatives for those seeking to cash in on the growth ahead for LNG demand.

Should you invest $1,000 in Tellurian right now?

Before you buy stock in Tellurian, 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 Tellurian 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 $731,449!*

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*.

See the 10 stocks »

*Stock Advisor returns as of September 3, 2024

Matt DiLallo has positions in Kinder Morgan and Woodside Energy Group. The Motley Fool has positions in and recommends Cheniere Energy and Kinder Morgan. The Motley Fool has a disclosure policy.

With Tellurian on the Verge of Disappearing, Here are 2 Alternative Ways to Cash in on the LNG Boom was originally published by The Motley Fool