People skip over tobacco stocks for several reasons. For some, the stigma of companies that sell a harmful product turns them away. Others want more upside than what tobacco stocks have delivered in recent years. However, open-minded investors may be surprised to learn what British American Tobacco(NYSE: BTI) can offer.
Don’t expect the stock to double or triple anytime soon. In fact, the share price is down more than 30% from a decade ago.
But despite its poor past performance, there are many reasons to love the stock today and in the future. Here are four reasons to buy British American Tobacco like there’s no tomorrow.
1. An 8.3% dividend yield
Tobacco stocks haven’t produced much capital gains over the past decade, but the dividends are famous. British American Tobacco yields a whopping 8.3% at its recent share price, more than what investors will find from other sources. High yields are a common warning sign for most stocks, but tobacco companies are an exception because they generally don’t need much reinvestment and can pass most of their profits along to shareholders.
Analysts estimate that British American Tobacco will earn approximately $4.60 per share this year and pay $2.93 in dividends. That’s a dividend payout ratio of 63%, which leaves a big cushion in case profits dry up unexpectedly. Still, that’s unlikely; nicotine’s addictive properties have made tobacco companies quite resilient. Investors can use the dividend to pay for living expenses or reinvest it to buy more shares of British American Tobacco or another stock.
2. Rate cuts
The dividend is the primary reason to own British American Tobacco, and changes in the economy’s interest rates impact that dynamic. The Federal Reserve recently announced a 50-basis-point reduction to the federal funds rate, the benchmark interest rate for the U.S. economy. Depending on how the economy performs, there could be more rate cuts in the future.
When interest rates fall, it impacts the yield people can generate in places like high-yield savings accounts. Lower interest rates could make high-yield dividend stocks, like British American Tobacco, more appealing. A dependable, high-yield stock has more value when rates are low.
3. Success in smokeless products
As smoking gradually declines, tobacco companies are shifting to smokeless products, including electronic cigarettes (vapes), heat-not-burn tobacco devices, and oral nicotine pouches. It’s essentially a race to transition from the past to the future, and British American Tobacco is doing well. Smokeless products were 17.9% of total sales in the first half of 2024.
I’d say competitor Philip Morris International boasts better smokeless product brands, such as Zyn and Marlboro-branded Iqos, but that’s OK. British American Tobacco is making genuine strides with its brands and is faring far better than Altria, which still depends primarily on combustible products for its business.
4. The price makes a ton of sense
Eventually, British American Tobacco may grow faster as the company’s composition shifts from its declining cigarette business to its growing smokeless group. That transition will take years, so it’s not something that needs to be top of mind today. Short-term growth matters, though, and British American Tobacco can deliver. Analysts expect the company to grow earnings by about 4% annually over the next three to five years. It matters because that can fuel annual dividend increases without changing the financial math.
Additionally, it helps justify buying the stock at its current price. British American Tobacco trades at a price-to-earnings ratio (P/E) of 7.6 using 2024 earnings estimates. The S&P 500 has a P/E ratio of 21, so the market has meager expectations for British American Tobacco.
Slow growth is OK when the price makes sense.
Which sounds like a better deal:
Company B is Costco Wholesale. I don’t know about you, but I’d rather buy Company A, British American Tobacco.
Putting it all together
All stocks are risky to some degree, but the fact that British American Tobacco trades at a valuation appropriate for its pedestrian growth reduces the odds that investors endure a catastrophic price decline.
British American Tobacco won’t be the right stock for everyone. It’s unlikely to turn modest sums of money into millions, and you must have dividends pretty high on your priority list to have interest here. That said, the right investor will struggle to find a better high-yield dividend stock they can buy and hold without losing sleep.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,006!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,905!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $388,128!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Justin Pope has positions in Philip Morris International. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool recommends British American Tobacco P.l.c. and Philip Morris International and recommends the following options: long January 2026 $40 calls on British American Tobacco and short January 2026 $40 puts on British American Tobacco. The Motley Fool has a disclosure policy.
LIMERICK, Ireland, Oct. 08, 2024 (GLOBE NEWSWIRE) — kneat.com, inc. KSIKSIOF, a leader in digitizing validation and quality processes, is pleased to announce that a global pharmaceutical company has signed a three-year Master Services Agreement with Kneat to digitize its validation processes.
Headquartered in Germany with over 11,000 employees across more than a dozen facilities, the company is a trusted maker of household consumer health care brands and generic and specialty pharmaceuticals for customers in over 120 countries. The company selected Kneat as their corporate solution after a comprehensive evaluation process. The company’s goal is to enhance the efficiency, accuracy, and compliance of complex validation processes across its global operations, starting with Computer System Validation (CSV).
“This announcement further demonstrates Kneat’s leadership position across the full Validation spectrum,” said Eddie Ryan, Chief Executive Officer of Kneat. “We look forward to supporting this company to achieve harmonization for all their validation processes on a single platform.”
About Kneat
Kneat Solutions provides leading companies in highly regulated industries with unparalleled efficiency in validation and compliance through its digital validation platform Kneat Gx. We lead the industry in customer satisfaction with an unblemished record for implementation, powered by our user-friendly design, expert support, and on-demand training academy. Kneat Gx is an industry-leading digital validation platform that enables highly regulated companies to manage any validation discipline from end-to-end. Kneat Gx is fully ISO 9001 and ISO 27001 certified, fully validated, and 21 CFR Part 11/Annex 11 compliant. Multiple independent customer studies show a 40% or more reduction in validation cycle times, nearly 20% faster speed to market, and 80% reduced changeover time.
Cautionary and Forward-Looking Statements
Except for the statements of historical fact contained herein, certain information presented constitutes “forward-looking information” within the meaning of applicable Canadian securities laws. Such forward-looking information includes, but is not limited to, the relationship between Kneat and the customer, Kneat’s business development activities, the use and implementation timelines of Kneat’s software within the customer’s validation processes, the ability and intent of the customer to scale the use of Kneat’s software within the customer’s organization and the compliance of Kneat’s platform under regulatory audit and inspection. While such forward-looking statements are expressed by Kneat, as stated in this release, in good faith and believed by Kneat to have a reasonable basis, they are subject to important risks and uncertainties. As a result of these risks and uncertainties, the events predicted in these forward-looking statements may differ materially from actual results or events. These forward-looking statements are not guarantees of future performance, given that they involve risks and uncertainties.
Kneat does not undertake any obligation to release publicly revisions to any forward-looking statement, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Continued reliance on forward-looking statements is at an investor’s own risk.
CHICAGO, Oct. 8, 2024 /PRNewswire/ — JLL Income Property Trust, an institutionally-managed daily NAV REIT (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX) with approximately $6.6 billion in portfolio equity and debt investments, announced today that it has fully subscribed JLLX Grand Prairie, DST. The $65 million program was structured as a Delaware Statutory Trust designed to provide 1031 exchange investors the opportunity to reinvest proceeds from the sale of appreciated real estate while also deferring taxes.
JLLX Grand Prairie, DST consisted of two Class A industrial distribution facilities located in Grand Prairie, TX, a submarket of the Dallas-Fort Worth metropolitan area. Both properties are 100% leased to and occupied by Fruit of the Earth, Inc., a leading provider of skin care, sun care, and health care products.
“We are pleased to have fully subscribed JLLX Grand Prairie, DST,” said Drew Dornbusch, Head of JLL Exchange. “The continued demand we see from 1031 exchange investors and their advisors is a testament to the success of the program to provide solutions that can facilitate the transfer of generational wealth, while mitigating the significant tax consequences associated with the sale of appreciated investment real estate.”
“JLLX Grand Prairie, DST provided 1031 exchange investors access to the industrial property sector – one of the strongest performing property types over the past several years due to the continued acceleration of e-commerce, supply change configuration and strong consumer demand,” said Allan Swaringen, President and CEO of JLL Income Property Trust. “We’re proud that institutional-quality investment solutions like ours have proven to be an attractive avenue for wealth management firms and their clients who are seeking to reinvest proceeds from the sales of appreciated investment real estate while deferring taxes.”
Since its inception in 2019, JLLX has attracted more than $1.5 billion across 24 DST offerings from property owners seeking to maintain a meaningful allocation to real estate in a tax efficient manner. JLL Income Property Trust has completed 13 full cycle UPREIT transactions totaling $900 million to date.
For more information on JLL Income Property Trust, please visit our website at www.jllipt.com.
About JLL Exchange The JLL Exchange program offers private placements through the sale of interests in Delaware Statutory Trusts (DSTs) holding core real estate investment properties. For more information, visit www.jllexchange.com.
About JLL Income Property Trust, Inc. (NASDAQ: ZIPTAX; ZIPTMX; ZIPIAX; ZIPIMX) JLL Income Property Trust, Inc. is a daily NAV REIT that owns and manages a diversified portfolio of high quality, income-producing residential, industrial, grocery-anchored retail, healthcare and office properties located in the United States. JLL Income Property Trust expects to further diversify its real estate portfolio over time, including on a global basis. For more information, visit www.jllipt.com.
About LaSalle Investment Management | Investing Today. For Tomorrow. LaSalle Investment Management is one of the world’s leading real estate investment managers. On a global basis, LaSalle manages US$84.8 billion of assets in private and public real estate equity and debt investments as of Q2 2024. LaSalle’s diverse client base includes public and private pension funds, insurance companies, governments, corporations, endowments and private individuals from across the globe. LaSalle sponsors a complete range of investment vehicles, including separate accounts, open- and closed-end funds, public securities and entity-level investments. For more information, please visit www.lasalle.com, and LinkedIn.
Valuations, Forward Looking Statements and Future Results This press release may contain forward-looking statements with respect to JLL Income Property Trust. Forward-looking statements are statements that are not descriptions of historical facts and include statements regarding management’s intentions, beliefs, expectations, research, market analysis, plans or predictions of the future. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. Past performance is not indicative of future results and there can be no assurance that future dividends will be paid.
What if a husband and wife own a home together that increases in value by $500,000. When one spouse dies and the other owns the property themselves, do they receive a step-up in basis? Or do they only receive a $250,000 capital gains exemption when they sell the property?
– Samuel
Your question deals with the rules surrounding both a step-up in basis of an inherited asset and the capital gain exclusion on the sale of a primary residence. These rules are independent of each other, so both are true: the surviving spouse receives a step-up in basis and they only receive a $250,000 exemption. That may sound a little confusing so let’s unpack it below.
If you have similar tax-planning questions or need help managing your investments, consider speaking with a financial advisor to see how they can help.
About the Step-Up in Basis
In finance, the term “basis” generally refers to the amount you pay for something. Basis matters because it’s the starting point from which you calculate taxable gains. For example, assume you buy something for $100,000 – that’s your basis. If the value of the asset grows to $150,000 and you decide to sell it, you’ll owe taxes on the $50,000 capital gain.
A step-up in basis occurs when the basis of an inherited asset is reset to its market value at the time the original (or co-owner’s) owner’s death. In other words, when a person inherits assets like stocks or real estate, the tax basis is adjusted to reflect the asset’s worth at the time of the owner’s passing, rather than the amount initially paid for it.
Returning to the example above, suppose you have an asset with a basis of $100,000, and by the time of your death, its value has increased to $150,000. Instead of inheriting your original basis, your heir receives a “stepped-up” basis. In this case, their new basis is $150,000, and they won’t realize a gain unless the property appreciates further.
(Accounting for the step-up in basis is an important component of tax planning and estate planning. A financial advisor with expertise in either area may be able to help you put this tax loophole to use.)
Capital Gains and the Sale of a Primary Residence
Section 121 of the tax code provides for a capital gains tax exemption that’s worth up to $500,000.
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The tax code allows you to reduce or avoid capital gains tax on the sale of a primary residence, provided that you’ve lived in it for two of the previous five years. This tax break is known as the Section 121 exclusion.
There are parameters you need to stay within to qualify for this tax break, but the broad strokes are as follows:
Individuals can exclude up to $250,000 of gains from the sale of a primary residence
Married couples that file a joint return can exclude up to $500,000 from the sale of a primary residence
So, assume the basis on your primary home is $300,000. If you’re single, you could sell it for up to $550,000 without incurring a capital gains tax obligation. A married couple could sell it for up to $750,00. This example ignores transaction costs to provide a simplified illustration. You’ll want to work closely with your tax professional to make sure you calculate your basis correctly. (And if you need help finding a financial professional, this free tool can connect you with you to three fiduciary advisors who serve your area.)
Combining the Two Rules
Samuel, to see how both rules apply in the situation you’re asking about, we need to think of them in order:
First, determine the stepped-up basis
Second, calculate the taxable gain considering the Section 121 exclusion
Step 1: Establish Basis
The surviving spouse receives a step-up in basis when the first spouse dies. However, the value of that adjustment depends on whether they live in a community property state. In a community property state, the surviving spouse receives a full step-up in basis. Meaning their basis becomes the fair market value of the asset at the time their spouse passed.
In a non-community property (common law) state, the surviving spouse only receives a step-up in basis for half of the property’s appreciation. For example, the couple’s joint basis is $300,000 but the home is worth $500,000 when the first spouse dies. Half of that $200,000 gain is added to the surviving spouse’s basis so they have a $400,000 basis on a home that’s worth $500,000.
Step 2: Calculate the Capital Gain and Apply the Exclusion
After the surviving spouse has determined the stepped-up basis of the inherited home, they can then calculate how much the taxable gain would be if they were to sell the property. And remember, they would only owe capital gains tax on the portion of that gain that exceeds the Section 121 exclusion.
Here’s a final example to tie it all together:
A couple that lives in a community property state owns a home that’s worth $500,000 after originally paying $300,000 for it. The first spouse dies and the surviving spouse’s tax basis is stepped up to $500,000. The surviving spouse can then sell the home for up to $750,000 without recognizing a taxable gain because of the $250,000 exclusion.
One last bit of nuance here: The exclusion amount depends on tax filing status. The “married filing jointly” status receives a $500,000 exclusion while “single” status receives a $250,000 exclusion. Widows and widowers are allowed to maintain their married filing jointly status in the year of death. So, the surviving spouse may still be able to exclude the full $500,000 if they sell the property in the same calendar year that their spouse dies. (But if you need additional help with your tax strategy, consider working with a financial advisor with tax expertise.)
Bottom Line
A senior couple reviews the rules of the step-up in basis.
When one spouse dies and the surviving spouse decides what to do with their jointly owned home, it’s important to understand the rules for the stepped-up basis and capital gains tax exclusion. A surviving spouse will receive a step-up in basis that could adjust the inherited home to its fair market value at the time of their spouse’s death. If they were to sell it, they could still apply the Section 121 exclusion and avoid paying taxes on up to $250,000 in capital gains – and in some cases, $500,000 – on the home sale.
Tax Planning Tips
If possible, consider delaying the sale of appreciated investments until you’re in a lower income tax bracket, like after retirement. Long-term capital gains are taxed more favorably, and if your income is low enough, you may qualify for a 0% capital gains tax rate. To see how much you may owe when you sell your assets, try our capital gains tax calculator.
A financial advisor with tax planning and/or financial planning expertise can potentially help you determine the best time to sell assets to minimize the tax implications of the sale. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.
Please note that Brandon is not an employee of SmartAsset and is not a participant in SmartAsset AMP. He has been compensated for this article.Some reader-submitted questions are edited for clarity or brevity.
Rescheduling is “not a Panacea to all the problems of the industry” and would not make the issue of oversaturation and lack of investor capital go away, Frank Segall, co-chair of cannabis practice at Blank Rome, told the crowd gathered at the Benzinga Cannabis Capital Conference in Chicago on Tuesday. He was part of the panel, “Consolidation Trends in the Wake of Cannabis Rescheduling: Identifying Winners and Losers.”
While it would impact positively the balance sheets of many operators by eradicating restrictions of Section 280E of the Internal Revenue Code and attracting some capital, the shift of cannabis to Schedule III would not result in big players like Wells Fargo crossing over to the marijuana industry, Segall said.
“Legalization is what they’re mandating for them to cross over,” he added.
Segall, alongside three other experts, joined the panel moderated by Scott Greiper, founder and president at Viridian Capital Advisors, to discuss broader market consolidation trends following cannabis’s shift to Schedule III.
Alongside Segall, Pablo Zuanic, managing partner at Zuanic & Associates LLC; Barbara Webb, tax partner at MGO and Laura Bianchi, co-founder of Bianchi & Brandt discussed which types of companies are positioned to thrive and which are not, as well as how investors can identify solid bets in the new regulatory landscape while avoiding pitfalls in a competitive market.
Zuanic & Associates’ Zuanic said that even though two presidential candidates favor rescheduling and a DEA hearing on the horizon — with signals the policy shift could happen next year — there’s a drop in investor interest in the space. That’s compared to the past four years.
“I think that we are getting all a bit ahead of ourselves in terms of optimism here,” he said.
Zuanic added the reason why consolidation is not taking place is that valuations are depressed in addition to uncertainty around what rescheduling would really bring. He said the main benefit of rescheduling is making 280E go away.
Get Benzinga’s exclusive analysis and the top news about the cannabis industry and markets daily in your inbox for free. Subscribe to our newsletter here. If you’re serious about the business, you can’t afford to miss out.
That said, MGO’s Webb highlighted many cannabis companies are not paying their taxes, which could be counterproductive for operators if cannabis rescheduling takes place. “It’s a temporary survival tactic, but you can’t do that forever,” she said, adding “the IRS eventually catches up.”
Consequences could seriously affect business growth in the long run.
“You might be able to get an installment plan once they do catch up with you,” Webb explained. “However, once on an installment plan, a cannabis business not only have to regularly, never miss a payment pay, but also stay current on your current year’s estimated taxes, which is a huge cash commitment.”
Webb added companies that are going to be “superstars” post-rescheduling are cash flow positive with 280E.
The tactic of not paying taxes will have serious consequences when it comes to M&A activity in the space, Bianchi & Brandt’s Bianchi said. “That’s going to have a drastic effect on M&A in the future because it’s already been an issue,” she said.
Speaking of acquisition targets, Bianchi said some buyers are looking at distressed assets, mainly businesses that have difficulties operationally and are not avoiding paying taxes.
She also said the trend of huge deals is over. “We’re dealing with more creative companies coming together and maybe joint ventures,” Bianchi added.
Zuanic & Associates’ Zuanic said that “there’s too much overlap” in deals where one multi-state operator is buying another one. Instead, he proposes brands as acquisition targets.
Brands are and will be a key point of M&A activity, especially in the scenario where interstate commerce is legal, he continued.
Read Next:
Photo: Benzinga Cannabis Conference “Consolidation Trends in the Wake of Cannabis Rescheduling: Identifying Winners and Losers,” Photo by Wendy Davis.
Making $180,000 a month without owning a single property? That’s what some young entrepreneurs are pulling off, thanks to an Airbnb arbitrage strategy. It’s a trend quickly catching on with Gen Z and young millennials who see real estate as a way to escape the traditional 9-to-5 grind without needing massive startup cash. Here’s how it works, why it’s attracting so many and why it’s not without risks.
Don’t Miss:
What Is Airbnb Arbitrage?
The basic idea behind Airbnb arbitrage is to rent a home from a landlord long term and then rebook it for a higher nightly rate on short-term websites like Airbnb ABNB. The key to making money is the difference between what you pay the landlord each month and what you make from short-term renters. You’re essentially running a hotel business without actually buying any real estate.
Hailie Anderson, a 21-year-old TikTok influencer, has become the face of this trend, making as much as $180,000 a month by renting out nearly 50 properties she doesn’t own. She’s part of a group of young hosts who not only leverage arbitrage to earn big but also flaunt it on social media, showing off their lavish lifestyles and selling courses on how others can do the same.
The biggest reason Airbnb arbitrage is booming is that it’s much cheaper to get started than buying a house. You usually just need to cover the first and last month’s rent and a security deposit to rent a property. Let’s say that’s around $6,000 – way less than a down payment to buy a house, which could cost tens of thousands of dollars.
As Hailie puts it simply: “I make $180,000 a month off properties I don’t even own.” For people like her, this was the ticket. According to Business Insider, she started when she was just 19, renting three apartments in Austin.
With sleek furniture, clever photos and smart marketing, she quickly expanded her business to almost 50 properties in multiple cities. She made enough to pocket big monthly bucks while traveling the world and working from poolside cabanas.
Of course, this “golden goose” strategy has some serious downsides. Tony and Sarah Robinson, real estate investors who run their own YouTube channel, have doubts about arbitrage. They own all their short-term rentals and believe that’s the better approach in the long run.
For instance, you don’t have full control if you don’t own the property. Landlords can decide not to renew your lease or sell the property, leaving you scrambling. You’re building a business on someone else’s property, which is risky.
In their video, the Robinsons explain that when you own property, you get various tax perks, like mortgage interest deductions, cost segregation and even tax deferral when you sell and reinvest. With Airbnb arbitrage, you don’t get these benefits because you’re just renting.
There’s also the question of equity. Real estate owners build wealth through equity – the difference between what they owe and what the property is worth. When you arbitrage, all that equity goes to the landlord.
Despite the downsides, Airbnb arbitrage can be an attractive option for young people looking to build cash flow quickly without huge upfront investments. It’s a great way to get into real estate if you don’t have the money to buy. But it’s not without its challenges – you must be comfortable with the idea that you’re always one landlord or regulation change away from having to pack up your entire business.
That said, Hailie acknowledges that she’s in a great spot to buy real estate now, saying, “Because I started Airbnb arbitrage, I am now in a position to be able to afford to buy real estate … which is obviously the end goal.”
(Bloomberg) — It’s no secret that betting on defense suppliers when geopolitical tensions ratchet higher pays off — at least in the short term. But Wall Street says there’s more to this latest rally.
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Escalating tensions in the Middle East sent shares of weapons and plane makers to records last week, and the group continued to hold near an all-time high on Monday. A key gauge of the sector is now poised for its biggest annual jump in five years.
Yet the Federal Reserve’s easing cycle, the promise of lucrative deals for aerospace firms as airlines spruce up their fleets and the sector’s relatively low risk when it comes to the US presidential election are among a string of catalysts set to push the stocks even higher, according to analysts. Global instability is just the wildcard that often swings sentiment in their favor.
“This is more than just a geopolitical play,” said David Wagner, portfolio manager at Aptus Capital Advisors. He sees further upside in the defense and aerospace areas, despite current rich valuations.
The S&P 500 Aerospace & Defense Industry Index has already climbed 20% this year and is hovering near a record. If the advance holds through the end of 2024, that would mark the largest such increase since 2019. Top performers this year include Howmet Aerospace Inc., General Electric Co. and Axon Enterprise Inc. For all three, war-related military supplies comprise a relatively smaller share of revenue, though they benefit from defense spending.
Cash has poured into the $6.3 billion iShares US Aerospace & Defense ETF this month as well. The fund is already looking at its biggest inflow since April and trades a whisker away from an all-time high.
The stocks, often touted as haven assets, are comprised of two major sub-groups — defense and aerospace — offering investors a relatively diversified profile.
“Of the last four easing periods, defense has outperformed the S&P 500 by an average of 23%,” according to Ken Herbert, an RBC Capital Markets analyst.
Commercial aerospace stocks usually outperform the broader market by low-to-mid single digits during the first six months of Fed easing, though relative underperformance often follows after the end of the first year, Herbert wrote in a note to clients last week.
But, this time around he expects aerospace companies to be buffered by order activity for commercial aircraft from major planemakers, such as Boeing and Airbus.
Both companies are working through higher-than-usual levels of backlog after years of supply-chain snarls. Airline operators, shaken by the lack of demand for air travel during the pandemic, have only recently resumed their usual expansion plans.
Even if an economic slowdown leads carriers to place fewer aircraft orders, the current backlog means any impact on production is likely negligible, Herbert noted.
Soaring values threaten to dent some of that optimism. The average aerospace stock in the S&P 500 trades at 28 times forward 12-month earnings, compared to 22 for the broader benchmark’s, and 27 for the tech-heavy Nasdaq 100.
“Valuations are rich for the group, so that may cap the upside,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “If the economy slows down more than expected or we see a short-term de-escalation in the Middle East that could also weigh on the group.”
If the Oct. 1 jump in aerospace stocks on Iran’s plan to launch a ballistic missile attack against Israel is any indication, investors aren’t largely pricing in a full-fledged escalation in the Middle East. Another flare-up could spur more share gains. On Monday, which marked one year of war, Israel Defense Forces said most of a barrage of rockets fired toward Tel Aviv by Iran-backed Hamas were intercepted.
“Unfortunately we are in a cycle of high and growing conflict around the world,” said Cole Wilcox, portfolio manager at Longboard Asset Management. “This is driving increased demand for defense spending that is likely to persist for a very long time.”
American Centrifuge Operating, LLC is one of six awardees
BETHESDA, Md., Oct. 8, 2024 /PRNewswire/ — Centrus Energy LEU announced today that its subsidiary, American Centrifuge Operating, LLC (“ACO”), has won an award from the U.S. Department of Energy to support deployment of technology and equipment to deconvert High-Assay, Low-Enriched Uranium (HALEU) from uranium hexafluoride (UF6) to uranium oxide and/or uranium metal forms, a key step in the nuclear fuel production process.
“This award is a critical piece of the puzzle in building an advanced nuclear fuel supply chain to support the next generation of reactors,” said Amir Vexler, Centrus President and CEO. “More broadly, this award is an important step toward expanding and diversifying the capabilities of our Ohio facility. As the only U.S.-owned, U.S.-technology enrichment company, Centrus looks forward to leading the effort to reclaim America’s nuclear fuel leadership — with American technology, built by American workers.”
ACO is one of six awardees being announced today for deconversion, with a minimum contract value of $2 million and a maximum value for all awardees of $800 million. The ultimate dollar amount associated with this award will depend upon what task orders ACO is subsequently issued and their value.
About Centrus Energy
Centrus Energy is a trusted supplier of nuclear fuel and services for the nuclear power industry. Centrus provides value to its utility customers through the reliability and diversity of its supply sources – helping them meet the growing need for clean, affordable, carbon-free electricity. Since 1998, the Company has provided its utility customers with more than 1,750 reactor years of fuel, which is equivalent to 7 billion tons of coal. With world-class technical and engineering capabilities, Centrus is also advancing the next generation of centrifuge technologies so that America can restore its domestic uranium enrichment capability in the future. Find out more at www.centrusenergy.com.
Forward Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements mean statements related to future events, which may impact our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will”, “should”, “could”, “would” or “may” and other words of similar meaning. These forward-looking statements are based on information available to us as of the date of this news release and represent management’s current views and assumptions with respect to future events and operational, economic and financial performance. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control.
For Centrus Energy Corp., particular risks and uncertainties (hereinafter “risks”) that could cause our actual future results to differ materially from those expressed in our forward-looking statements and which are, and may be, exacerbated by any worsening of the global business and economic environment include but are not limited to the following: risks related to the U.S. Department of Energy (“DOE”) not awarding any contracts to the Company in response to the Company’s remaining proposals; risks related to our ability to secure financing to expand our plant; risks related to our ability to increase capacity in a timely manner to meet market demand or our contractual obligations; risks related to laws that ban (i) imports of Russian LEU into the United States, including the “Prohibiting Russian Uranium Imports Act” (“Import Ban Act”) or (ii) transactions with the Russian State Atomic Energy Corporation (“Rosatom”) or its subsidiaries, which includes TENEX; risks related to our potential inability to secure additional waivers or other exceptions from the Import Ban Act or sanctions in a timely manner or at all in order to allow us to continue importing Russian LEU under the TENEX Supply Contract or otherwise doing business with TENEX or implementing the TENEX Supply Contract; risks related to TENEX’s refusal or inability to deliver LEU to us for any reason including because (i) U.S. or foreign government sanctions or bans are imposed on LEU from Russia or on TENEX, (ii) TENEX is unable or unwilling to deliver LEU, receive payments, receive the return of natural uranium hexafluoride, or conduct other activities related to the TENEX Supply Contract, or (iii) TENEX elects, or is directed (including by its owner or the Russian government ), to limit or stop transactions with us or with the United States or other countries; risks related to the increasing quantities of LEU being imported into the U.S. from China and the impact on our ability to make future LEU or SWU sales or ability to finance any buildout of our enrichment capacities; risks related to whether or when government funding or demand for high-assay low-enriched uranium (“HALEU”) for government or commercial uses will materialize and at what level; risks related to (i) our ability to perform and absorb costs under our agreement with the DOE to deploy and operate a cascade of centrifuges to demonstrate production of HALEU for advanced reactors (the “HALEU Operation Contract”), (ii) our ability to obtain new contracts and funding to be able to continue operations and (iii) our ability to obtain and/or perform under other agreements; risks related to reliance on the only firm that has the necessary permits and capability to transport LEU from Russia to the United States and that firm’s ability to maintain those permits and capabilities or secure additional permits; risks that (i) we may not obtain the full benefit of the HALEU Operation Contract and may not be able or allowed to operate the HALEU enrichment facility to produce HALEU after the completion of the HALEU Operation Contract or (ii) the output from the HALEU enrichment facility may not be available to us as a future source of supply; risks related to the fact that we face significant competition from major LEU producers who may be less cost sensitive or are wholly or partially government owned; risks related to the potential for demobilization or termination of the HALEU Operation Contract;.
Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results. Readers are urged to carefully review and consider the various disclosures made in this news release and in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023, under Part II, Item 1A – “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and in our filings with the SEC that attempt to advise interested parties of the risks and factors that may affect our business. We do not undertake to update our forward-looking statements to reflect events or circumstances that may arise after the date of this news release, except as required by law.
OTTAWA, ON, Oct. 8, 2024 /CNW/ – Everyone deserves a place to call home. However, for many across the country, home ownership and renting is out of reach due to the unprecedented housing crisis Canada is facing. We need to build more homes, faster, to get Canadians into homes that meet their needs, at prices they can afford. That’s why in Budget 2024 and Canada’s Housing Plan, the federal government announced the most ambitious housing plan in Canadian history: a plan to build 4 million more homes.
As part of this plan, the Government of Canada is identifying properties within its portfolio that have the potential for housing, and is actively adding them to the Canada Public Land Bank. Wherever possible, the government will turn these properties into housing through a long-term lease, not a one-time sale, to support affordable housing and ensure public land stays public.
Today, the Honourable Jean-Yves Duclos, Minister of Public Services and Procurement, joined by the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and the Honourable Terry Beech, Minister of Citizens’ Services, announced that 14 new properties have been added to the Canada Public Land Bank.
A total of 70 federal properties have now been identified as being suitable to support housing. This list will continue to grow in the coming months, with further details on listed properties available soon.
As part of the initial launch of the Canada Public Land Bank in August 2024, the Canada Lands Company, in partnership with the Canada Mortgage and Housing Corporation, issued a call for proposals for 5 properties located in Toronto, Edmonton, Calgary, Ottawa and Montréal. The call for proposals for the properties in Toronto and Montréal closed on October 1, 2024, and evaluations have begun. The call for proposals for the Edmonton, Calgary and Ottawa properties will close on November 1, 2024.
To provide feedback on the land bank and its properties, the Government of Canada launched a call for housing solutions for communities: a secure online platform.
To date, the Government of Canada has already received interest and feedback from provinces, territories and municipalities, as well as developers, housing advocates and Indigenous groups. This information will be used to develop and bring more properties to market starting this fall.
To solve Canada’s housing crisis, the federal government is using every tool at its disposal. The Government of Canada is accelerating its real property disposal process to match the speed of builders and the urgency of getting affordable homes built for Canada.
Quotes
“Safe, accessible and affordable housing options are out of reach for far too many Canadians. The launch of the Canada Public Land Bank in August 2024 laid the foundation for our efforts to unlock public lands for housing at a pace and scale not seen in generations. We are delivering on our promise to continue to add more properties to the land bank and meet the deliverables outlined in Budget 2024 to support a new, ambitious Public Lands for Homes Plan. In doing so, we can build strong communities and more affordable housing across the country.”
The Honourable Jean-Yves Duclos Minister of Public Services and Procurement
“We must use every possible tool to build more homes and unlock homeownership for every generation of Canadians. That’s why we announced the most ambitious housing plan in Canada’s history: a plan to build 4 million new homes. Today, we are identifying another 14 federal properties suitable for housing, and making those properties available to homebuilders in the Canada Public Land Bank.”
The Honourable Chrystia Freeland Deputy Prime Minister and Minister of Finance
“We need to build more homes in Canada, and one of the largest costs in building is land. With 14 more properties being added to the land bank, we’re growing the list of potential public lands where new homes can be built.”
The Honourable Sean Fraser Minister of Housing, Infrastructure and Communities
Quick facts
In Budget 2024 and Solving the Housing Crisis: Canada’s Housing Plan, the federal government announced an ambitious whole-of-government approach to addressing the housing crisis by building more homes, making it easier to rent or own a home, and helping Canadians who cannot afford a home.
A key component of Canada’s Housing Plan is the new Public Lands for Homes Plan. This plan aims to partner with all levels of government, homebuilders and housing providers to build homes, faster, on surplus and underused public lands across the country.
The Public Lands for Homes Plan supports the government’s goal of unlocking 250,000 new homes by 2031.
Budget 2024 also provided $500 million, on a cash basis, to launch the new Public Lands Acquisition Fund. This fund will buy land from other orders of government to allow the federal government to acquire more land for housing to help build middle-class homes. Work on the fund is already underway, and more details will be released in the coming weeks.
In August 2024, a new tool for builders called the Canada Public Land Bank was launched with an initial 56 properties under the Public Lands for Homes Plan.
As of October 8, 2024, there are 70 properties listed in the Canada Public Land Bank, representing a total of 385 hectares of land, which is the size of approximately 2,500 hockey rinks or almost 750 Canadian Football League football fields.
As we enter the final quarter of 2024, some investors might be thinking about how they want to position their portfolio heading into 2025. This includes assessing winners and losers, and if you bought Nvidia (NASDAQ: NVDA) stock at the start of the year, you’re sitting on some nice gains.
With the stock rising around 150% so far in 2024, investors would be forgiven for thinking that it couldn’t rise any higher. However, some hints on other companies’ conference calls indicate that 2025 will be just as good a year for the company as 2024 has been. The question is, will the stock see the same benefit?
Meta is going to buy a bunch more GPUs in 2025
Nvidia’s incredible rise has been tied to the artificial intelligence (AI) arms race. Its primary product is the graphics processing unit (GPU), which can be used to perform multiple calculations in parallel. Additionally, companies don’t just buy one or two of these units. Instead, they buy them by the thousands. This gives AI researchers ridiculous computing power and allows them to train AI models quickly.
As these models get more complex, the amount of time it takes to train them rises exponentially. Take Meta Platforms‘ (NASDAQ: META) Llama generative AI model, for instance. The current iteration is Llama 3.1, but Meta has already started training Llama 4. However, CEO Mark Zuckerberg noted that the training time for Llama 4 will likely be 10 times as long as it took to train Llama 3. Beyond Llama 4, the training time will likely increase again.
This isn’t just a Meta problem. OpenAI’s ChatGPT, Alphabet‘s Gemini, and other generative AI models will experience the same phenomenon as these models improve and become more complex.
Do you think these AI innovators will just wait 10 times longer for their next AI model to train? Probably not. Instead, they’ll increase their computing power to speed up the process, significantly benefiting Nvidia.
In its Q2 earnings release, Meta also commented that its infrastructure cost expense will significantly rise in 2025. This is clearly tied to its computing power build-out to create the best AI model it can. Nvidia will be a primary beneficiary of this, making it an intriguing stock for 2025.
Nvidia should have strong growth in 2025
Nvidia also has some tricks up its sleeve for 2025. Its Blackwell technology is expected to launch and, according to CEO Jensen Huang, provides 3 to 5 times more AI throughput in a power-limited data center than Hopper, Nvidia’s current architecture. That’s a big deal, and Blackwell could become a new source of revenue growth for Nvidia. Currently, demand for Blackwell is “well above supply,” according to management.
This is just part of the reason why Wall Street analysts believe that Nvidia can grow fiscal year 2026 (ending January 2026) revenue by 42%. It also expects strong earnings growth, with earnings per share (EPS) expected to rise from $2.84 in fiscal 2025 to $4.02 in fiscal 2026. At today’s prices, that would value the stock at around 30 times fiscal 2026 earnings.
Considering Nvidia’s growth, that’s not a terrible price to pay for the stock if it can keep up its business past fiscal 2026.
Looking one year out is hard enough, but looking two years out is considerably harder. The major question is whether the demand for Nvidia’s GPUs will last past fiscal 2026. If it won’t, then Nvidia’s not worth buying here. But if it does, Nvidia’s stock could be a great purchase right now.
Should you invest $1,000 in Nvidia right now?
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