Forget Nvidia: These 2 Stock-Split Stocks Could Be Better Buys

Stock splits don’t do anything to change the fundamentals of a business, but it’s not hard to see why some investors have been paying attention to them lately. By dividing its stock into a larger number of shares, a company brings the price per share down and makes investing more psychologically appealing and accessible for some investors. Sometimes, this can help power substantial valuation gains, but that’s not always the case.

On the heels of recent sell-offs, Nvidia stock is actually now trading below its closing price on the day of its 10-for-1 split in June. While the artificial intelligence (AI) leader could come roaring back, investors may want to diversify their positioning and look into some other stock-split investment opportunities.

With that in mind, read on to see why two Motley Fool contributors think that Super Micro Computer (NASDAQ: SMCI) and Williams-Sonoma (NYSE: WSM) are stock-split stocks that have attractive upside potential at today’s prices.

A contrarian bet on Super Micro Computer could have big payoffs

Keith Noonan: Super Micro Computer’s stock price has been highly volatile lately. The server technologies specialist had been riding high this year thanks to demand for AI processing, but the company’s share price tumbled in August after gross margins in its most recent quarterly report missed expectations. Soon after, Hindenburg Research published a short report on the company alleging serious issues with its accounting as well as fundamental business weakness. The very next day, Supermicro (as it is also known) announced that it was delaying the filing of its annual 10-K report.

Supermicro stock still trades up roughly 37% year to date, but the company’s share price is now down roughly 67% from its high set in March. Even with the valuation pullback, the stock is still headed for a 10-for-1 split that will become effective on Oct. 1. For risk-tolerant investors, buying Supermicro shares could be worthwhile on the heels of recent sell-offs.

Supermicro is coming off of fantastic growth in fiscal 2024 (ended June 30). Annual sales rose roughly 110% to hit $14.94 billion, and non-GAAP (adjusted) earnings per share rose 87% to $22.09 per share. Strong momentum looks poised to continue in the near term.

For the first quarter of fiscal 2025, Supermicro is guiding for sales to come in between $6 billion and $7 billion — good for growth of roughly 207% year over year at the midpoint of the guidance range. Meanwhile, adjusted earnings per share are projected to be between $6.69 per share and $8.27 per share — representing growth of 118% at the midpoint.

Supermicro stock trades at just 11.3 times this year’s expected earnings — a level that looks cheap even with the understanding that the business will be subject to cyclical demand trends and moderating sales and earnings momentum. Crucially, the company recently reaffirmed that it doesn’t expect to have any material revisions for the sales and earnings results it reported last year when it files its delayed 10-K report.

While there’s some uncertainty on the horizon, Supermicro’s dramatic valuation pullback could present a worthwhile entry point ahead of its stock split next month.

Short-term factors create a long-term opportunity

Jennifer Saibil: If you’re looking for a good investment deal, Williams-Sonoma stock is a great candidate on any day. A recent stock split just confirms that the company sees more good times ahead.

Williams-Sonoma stock split in two in July after gaining 136% in one year. However, it disappointed investors with its earnings update right after, and its stock trades down about 10% since the split. Fear not, though. This is a reaction to short-term factors and doesn’t discredit the long-term potential.

Just three months earlier, the company wowed investors with a strong first-quarter earnings report. It reported incredible profitability despite a sales decline, and that continued into the second fiscal quarter (ended July 30). However, this time, revenue and guidance came in below analyst expectations. The market ignored the positives in the quarter, including a 5.5 percentage-point increase year over year in gross margin to 46.2%, a 1.6 percentage-point increase in operating margin, and an 11% increase in earnings per share (EPS) of $1.74. Management lowered full-year revenue guidance but raised operating margin guidance to 18.2% at the midpoint.

Williams-Sonoma is operating in a tough environment. The housing market is still down in the dumps, and in general, shoppers are still holding off on non-essential and expensive purchases. In other words, that’s exactly what Williams-Sonoma sells. It targets an affluent, resilient customer, but even wealthier consumers are feeling inflation fatigue so late in the game, and Williams-Sonoma draws some of its business from the upper levels of the mass market. If the Federal Reserve does indeed lower interest rates later this month, Williams-Sonoma should easily bounce back.

The stock should bounce back as well, but right now, you can get it on sale. It trades at a price-to-earnings ratio of only 16, as compared with Nvidia’s 50, and it even pays a dividend while you wait for the stock to climb higher.

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 $630,099!*

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

Jennifer Saibil has no position in any of the stocks mentioned. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Williams-Sonoma. The Motley Fool has a disclosure policy.

Forget Nvidia: These 2 Stock-Split Stocks Could Be Better Buys was originally published by The Motley Fool

MEI INVESTOR ALERT: Robbins Geller Rudman & Dowd LLP Files Class Action Lawsuit Against Methode Electronics, Inc. and Announces Opportunity for Investors with Substantial Losses to Lead Class Action Lawsuit

SAN DIEGO, Sept. 08, 2024 (GLOBE NEWSWIRE) — The law firm of Robbins Geller Rudman & Dowd LLP announces that purchasers of Methode Electronics, Inc. MEI common stock between June 23, 2022 and March 6, 2024, inclusive (the “Class Period”), have until October 25, 2024 to seek appointment as lead plaintiff of the Methode Electronics class action lawsuit. Captioned Salem v. Methode Electronics, Inc., No. 24-cv-07696 (N.D. Ill.), the Methode Electronics class action lawsuit charges Methode Electronics as well as certain of Methode Electronics’ top former executive officers with violations of the Securities Exchange Act of 1934.

If you suffered substantial losses and wish to serve as lead plaintiff of the Methode Electronics class action lawsuit, please provide your information here:

https://www.rgrdlaw.com/cases-methode-electronics-inc-class-action-lawsuit-mei.html

You can also contact attorneys J.C. Sanchez or Jennifer N. Caringal of Robbins Geller by calling 800/449-4900 or via e-mail at info@rgrdlaw.com.

CASE ALLEGATIONS: Methode Electronics designs, engineers, and produces mechatronic products for Original Equipment Manufacturers (“OEMs”).

The Methode Electronics class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Methode Electronics had lost highly skilled and experienced employees during the COVID-19 pandemic necessary to successfully complete Methode Electronics’ transition from its historic low mix, high volume production model to a high mix, low production model at its Monterrey facility; (ii) Methode Electronics’ attempts to replace its General Motors center console production with more diversified, specialized products for a wider array of vehicle manufacturers and OEMs, in particular in the electric vehicle (“EV”) space, had been plagued by production planning deficiencies, inventory shortages, vendor and supplier problems, and, ultimately, botched execution of Methode Electronics’ strategic plans; (iii) Methode Electronics’ manufacturing systems at its critical Monterrey facility suffered from a variety of logistical defects, such as improper system coding, shipping errors, erroneous delivery times, deficient quality control systems, and failures to timely and efficiently procure necessary raw materials; (iv) Methode Electronics had fallen substantially behind on the launch of new EV programs out of its Monterrey facility, preventing Methode Electronics from timely receiving revenue from new EV program awards; and (v) as a result, Methode Electronics was not on track to achieve the 2023 diluted earnings-per-share guidance or the 3-year 6% organic sales compound annual growth rate represented to investors and such estimates lacked a reasonable factual basis.

The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud. You can view a copy of the complaint by clicking here.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Methode Electronics common stock during the Class Period to seek appointment as lead plaintiff in the Methode Electronics class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Methode Electronics class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Methode Electronics class action lawsuit. An investor’s ability to share in any potential future recovery of the Methode Electronics class action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER: Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities fraud cases. Our Firm has been #1 in the ISS Securities Class Action Services rankings for six out of the last ten years for securing the most monetary relief for investors. We recovered $6.6 billion for investors in securities-related class action cases – over $2.2 billion more than any other law firm in the last four years. With 200 lawyers in 10 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. Please visit the following page for more information:

https://www.rgrdlaw.com/services-litigation-securities-fraud.html

Attorney advertising. 
Past results do not guarantee future outcomes. 
Services may be performed by attorneys in any of our offices. 

Contact:
        Robbins Geller Rudman & Dowd LLP
        J.C. Sanchez, Jennifer N. Caringal
        655 W. Broadway, Suite 1900, San Diego, CA 92101
        800-449-4900
        info@rgrdlaw.com


Primary Logo

Market News and Data brought to you by Benzinga APIs

Dude, maybe you should have gotten a Dell

This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning along with:

Each week is full of surprises when you are involved in media.

I guess that’s part of the adrenaline-inducing rush of being in the game, so to speak.

To that end, I was personally surprised by two things this week.

One, not everyone 30 years old and under has heard of Compaq.

As a brief refresher, they made large desktop computers that once connected to a phone jack that connected to the wall that connected to this thing called the World Wide Web (or internet…).

Once all plugged in, you turned on the Compaq (the most popular model was the Compaq Presario) via a switch in the back, logged into something called an AOL (America Online) account, listened to loud techy noises come from the computer, and poof, you were magically connected to friends you just saw in school and complete strangers in faraway lands.

You then got to posting sad songs on your MySpace account because, chances are, you just broke up with your high school sweetheart for the ninth time in a week (or was that just me…).

Hewlett Packard, now split into PC maker HP Inc. (HPQ) and AI server play Hewlett Packard Enterprise (HPE), bought its rival Compaq for about $19 billion in a 2002 deal. (Also check out my recent chat with the CEO of HP and another chat with the CEO of Hewlett Packard Enterprise.)

HP went on to discontinue the Compaq brand in 2013.

That part of the history lesson done.

Compaq Computers Corp. President Rod Canion poses with some of the products that put the company on the fast track, in Houston, Texas, July 27, 1988. Six years after the first product was sketched on a napkin, Compaq continues to take the computer industry by storm. (AP Photo/Gayland Wampler)

Compaq Computers Corp. then President Rod Canion poses with some of the products that put the company on the fast track, in Houston, Texas, July 27, 1988. (AP Photo/Gayland Wampler) (ASSOCIATED PRESS)

The next surprise for me this week is that not everyone under the age of 30 years old remembers the iconic “Dude, you are getting a Dell” TV commercials. These commercials dominated the airwaves when I was in college, and I would argue they put Dell on the map with consumers that barely knew how to use a computer.

I have no idea why the commercials left an impression, but they did.

All in all, these reminded me that I was now moving closer to being a grey-beard at work. I have no actual beard; it just means you are this elder statesman. Weird to be in that place, but you can’t outrun Father Time — even my bionic self. I envy the youth.

Having laid that all out, I actually have a surprise for YOU! That is, did you really know that Dell has totally transformed itself? Just read the company’s annual report here and keep scrolling below.

Dell was founded in 1984 by then-University of Texas student Michael Dell. It made PCs, a lot of them.

Through the years, the company has morphed into part PC maker, part tech player integral to the fabric of the world’s tech infrastructure. Think servers, storage, and other components for entire countries and companies that I won’t bore you listing.

The company is well beyond integrating its behemoth 2016 acquisition of EMC.

I got to spend 25 minutes with Michael Dell this week in NYC at the Citi TMT conference (video above) and was really blown away by what the company is working on. Was I surprised, full-stop? No, because I still read all of the company’s earnings reports and earnings call transcripts. But I was a little surprised to hear how deep the transformation runs at Dell.

On Friday, S&P Global announced that Dell will join the S&P 500, replacing Etsy, on Sept. 23. The move boosted its shares in extended trading, as the company will soon be in index funds that track the S&P 500.

Michael Dell, Chairman and CEO of Dell Technologies, is speaking at the ''New Strategies for a New Era'' keynote at the Mobile World Congress 2024 in Barcelona, Spain, on February 27, 2024. (Photo by Joan Cros/NurPhoto via Getty Images)

Michael Dell, chairman and CEO of Dell Technologies, is speaking at the ”New Strategies for a New Era” keynote at the Mobile World Congress 2024 in Barcelona, Spain, on Feb. 27, 2024. (Joan Cros/NurPhoto via Getty Images) (NurPhoto via Getty Images)

It’s embarking on its latest transformation for the age of AI. Dell said it secured $3.1 billion of AI server sales in the second quarter, almost double the $1.7 billion netted in the preceding quarter.

Sales in the company’s Infrastructure Solutions Group surged 38% to $11.65 billion. AI sales are captured in this segment.

Dell’s Client Solutions Group — which includes sales of PCs and laptops — did see sales drop 4% to $12.41 billion. Consumer sales declined 22% to $1.86 billion, while the commercial business was flat at $10.6 billion.

Dell tells me the AI PC uptake has been pushed out a bit, but he has 200 million-plus Dell computers (aka the installed base). They will need the AI-powered replacements, and that cash will soon start rolling in.

“What organizations are seeing is this is a historic opportunity to make their businesses way more productive and efficient [with AI], while, at the same time, kind of reimagining them given all this capability,” Dell told me.

Another surprise — at least to me — is how cheap the company is being valued at by the market.

Shares of Dell trade on a 13.5x forward PE multiple, according to Yahoo Finance data, well below the S&P 500’s 22.5x. I am not saying the company should be valued on par with Nvidia (NVDA) or even a Salesforce (CRM). But assign Dell a reasonable 15x PE multiple on a reasonable $9.40 a share profit estimate for fiscal 2026 (which would represent about 20% earnings growth), and you have a $141 stock.

Dell’s stock currently trades at $107.

Head-scratching for a company clearly playing a key role in the AI future. Maybe it’s a function of its PC exposure.

Before I venture off to begin shopping for an AI PC, I’d like to note I will be live on Yahoo Finance Monday and Tuesday from the Goldman Sachs Communacopia + Technology Conference at the Palace hotel in San Francisco. This is one of my favorite conferences to cover each year, and we have a ton of big ticker-moving interviews lined up. So tune in, as your wealth could depend on it.

I am sure Dell will come up somewhere in the chats too, dude.

Three times each week, I field insight-filled conversations with the biggest names in business and markets on Yahoo Finance’s Opening Bid podcast. Find more episodes on our video hub. Watch on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.

In the Opening Bid episode below, State Street head of equity research Marija Veitmane reveals how she picks tech stocks with success for clients.

Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

Click here for the latest technology news that will impact the stock market

Read the latest financial and business news from Yahoo Finance

Zurich Cannabis Study Shows Positive First-Year Results, Approach Focused On Consumer Health

It’s been one year since the Zurich launched its cannabis study “Züri Can – Cannabis with Responsibility,” enabling adults to legally obtain marijuana products and the first results are positive. The study enabled people aged 18 and older to access THC-containing hash and flower products from approved outlets, including pharmacies, social clubs, and the Zurich Drug Information Center.

“Initial results show high satisfaction with the product and prevention offerings at distribution points,” read the press release issued jointly by the City of Zurich, the University of Zurich and the Psychiatric University Hospital Zurich.

City councilor Andreas Hauri, head of Zurich’s Department of Health and Environment, commented, “With ‘Züri Can – Cannabis with Responsibility,’ Zurich is taking a bold and innovative approach to drug policy. Our approach focuses on the health of consumers and shows that modern prevention efforts can go hand in hand with controlled access to cannabis products. We are delighted that the project has been so well-received and will provide valuable insights for future drug policy.”

Read Also: First Insights From Swiss Pilot Cannabis Sales Show Shift To Safer Consumption Trend, Fewer Purchases At Illegal Market

Initial Results

The project, set to run until October 2026, currently has around 2,100 participants. Two percent of applications were rejected for health reasons. So far, around 150 participants have left the study for various reasons, such as failing to complete the biannual survey or deciding to stop using cannabis.

Per the report, more than half of the participants consume cannabis at least four times a week and most participants report good health. The distribution points offer advice and guidance, promoting safer consumption methods. Participants are satisfied with the services, as 90% rate the staff at the outlets as competent.

“Individual counseling on harm reduction and health promotion is particularly important. We are pleased that the free consultations are being well-received,” stated project manager Barbara Burri.

In the first 12 months, approximately 36,000 sales were made at the distribution points, amounting to around 300 kg of cannabis products sold. As many as 88% of participants are satisfied with the quality of the products offered. However, some participants expressed a desire for more variety and options. To meet this demand, four new flower products will be introduced in the second year, bringing the total to 13 cannabis products available.

Upcoming surveys will examine whether participants’ knowledge and behavior regarding safer consumption have improved and how their health and social situations evolve in the long term.

Read Next:

Photo generated with AI

Market News and Data brought to you by Benzinga APIs

U.S. debt is so massive, interest costs alone are now $3 billion a day

With U.S. debt now at $35.3 trillion, the cost of paying the interest on all that borrowing has soared recently and now averages out to $3 billion a day, according to Apollo chief economist Torsten Sløk.

And that includes Saturdays and Sundays, he pointed out in a note on Tuesday.

The daily interest expense has doubled since 2020 and is up from $2 trillion about two years ago. That’s when the Federal Reserve began its campaign of aggressive rate hikes to rein in inflation.

In the process, that made servicing U.S. debt more costly as Treasury bonds paid out higher yields. But with the Fed now poised to start cutting rates later this month, the reverse can happen.

“If the Fed cuts interest rates by 1%-point and the entire yield curve declines by 1%-point, then daily interest expenses will decline from $3 billion per day to $2.5 billion per day,” Sløk estimated.

Meanwhile, the federal government closes out its fiscal year at the end of this month, and the year-to-date cost of paying interest on U.S. debt was already at $1 trillion months ago.

But even if Fed rate cuts lighten the burden on interest payments, the next president is expected to worsen budget deficits, adding to the pile of total debt and offsetting some of the benefit of lower rates.

In fact, a recent analysis from the Penn Wharton Budget Model found that the deficit will expand under either Donald Trump or Kamala Harris.

But there’s a big difference between the two.

Under Trump’s tax and spending proposals, primary deficits would increase by $5.8 trillion over the next 10 years on a conventional basis and by $4.1 trillion on a dynamic basis that includes the economic effects of the fiscal policy.

Under a Harris administration, primary deficits would increase by $1.2 trillion over the next 10 years on a conventional basis and by $2 trillion on a dynamic basis.

Still, JPMorgan analysts called the outlook unsustainable, regardless of who wins the presidential election, while acknowledging the prospect of bigger deficits with Trump.

“Irrespective of the election outcome, the trend since the pandemic has been profligate fiscal policy that is absorbing substantial amounts of capital and is incentivizing additional private investment,” the bank said. “At the same time, the en masse retirement of baby boomers is shifting a substantial share of the population from a high-savings period in life to a low-savings period, depressing the supply of capital.”

This story was originally featured on Fortune.com

Dow Jones Futures: Stock Market Has Worst Week In Over A Year; Apple iPhone 16 On Deck

Dow Jones futures will open Sunday evening, along with S&P 500 futures and Nasdaq futures. Apple (AAPL) will unveil the iPhone 16, headlining key AI events along with earnings from Oracle (ORCL) and Adobe (ADBE). All three tech giants are close to buy points.





X



NOW PLAYING
Stocks Slammed As Selloff Intensifies; Palantir, CubeSmart, ResMed In Focus



The stock market rally suffered its worst weekly losses in more than year, sending highly bearish signals. The S&P 500 went from the cusp of record highs to clearly below its 50-day line. The Nasdaq plunged below the low of its Aug. 13 follow-through day.

Investors are worried the economy is sputtering and that the Federal Reserve may be behind the curve. Meanwhile, the sell-off in artificial intelligence stocks, led by Nvidia (NVDA), intensified.

A number of stocks holding up or showing strength crumbled in the past week, while others are just hanging on.

Tesla (TSLA), which bucked the trend with a strong Thursday, gave it all back Friday and then some.

Investors should be scaling back exposure and largely steering clear of AI and tech names.

Nvidia stock is on IBD Leaderboard, though the position is hedged.


Palantir, Dell Will Finally Join S&P 500. The Stocks Are Jumping.


Dow Jones Futures Today

Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.


Join IBD experts as they analyze leading stocks and the market on IBD Live


Stock Market Rally

The stock market rally suffered sharp losses in a holiday-shortened week.

The Dow Jones Industrial Average slumped 2.9% in last week’s stock market trading and the S&P 500 index tumbled 4.25%, their worst weekly losses since March 2023. The Nasdaq composite plunged 5.8%, its worst week since January 2022. The small-cap Russell 2000 shed 5.7%.

The S&P 500, which entered a power trend on Aug. 30 and seemed poised for record highs entering this past week, fell decisively below its 50-day line. The Russell 2000 also broke below that key level.

The Dow Jones fell from record highs to just above its 50-day.

The Nasdaq is leading the sell-off, plunging below its 50-day line on Tuesday and starting to near its 200-day line. On Friday, the tech-heavy index knifed below the low of its Aug. 13 follow-through day.

 

The Invesco S&P 500 Equal Weight ETF (RSP) fell 3.1%, dropping below its 21-day line and testing its 10-week.

U.S. crude oil futures plunged 8% to $67.67 a barrel last week, the lowest price since June 2023. Gasoline futures dived 9.4% to a three-year low.

The 10-year Treasury yield plunged 20 basis points to 3.71%. The yield hit 3.65% Friday morning, undercutting its low from the Aug. 5 global sell-off. The two-year yield dived 27.5 points to 3.65%, as the yield curve finally stopped being inverted.

Despite a slew of weak economic reports, capped by Friday’s jobs report, the odds of a half-point Fed rate cut on Sept. 18 are about 30% after briefly topping 50% early Friday. Fed Gov. Christopher Waller, a more hawkish member, backed a September rate cut but signaled he’d favor a smaller move for now. Expectations of a quarter-point rate cut heighten concerns that the Fed is behind the curve.

Investors do see 100-125 basis points of cuts before year-end.

This coming week’s CPI and PPI inflation reports could give policymakers leeway to take bolder action this month.


Time The Market With IBD’s ETF Market Strategy


ETFs

Among growth ETFs, the iShares Expanded Tech-Software After Worst Week In Over A Year, Here’s What To DoSector ETF (IGV) slumped 4%, with Adobe and Oracle big members.

The VanEck Vectors Semiconductor ETF (SMH) dived 11.7%. Nvidia stock, the dominant SMH holding, plummeted 13.9% to 102.83 for the week after tumbling 7.7% in the prior week. The 100 level is a key area for NVDA and by extension the chip and AI sectors.

SPDR S&P Metals & Mining ETF (XME) plunged 9.8% last week. SPDR S&P Homebuilders ETF (XHB) skidded 4.4%. The Energy Select SPDR ETF (XLE) shed 5.8% and the Health Care Select Sector SPDR Fund (XLV) gave up 2.1%.

The Industrial Select Sector SPDR Fund (XLI) retreated 4.2%. The Financial Select SPDR ETF (XLF) sank 3.2%.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) sold off 7.2% last week and ARK Genomics ETF (ARKG) gave up 8.15%. Tesla is a major component across Ark Invest’s ETFs. Nvidia stock is also a key holding.

Apple To Unveil iPhone 16

Apple will show off its iPhone 16 smartphone at a Monday product launch event at 10 a.m. PT. This will be the first iPhone with AI tech, which the Dow tech giant has branded Apple Intelligence. There’s hope that the AI-enhanced handset will trigger a huge wave of new iPhone upgrades.

Apple also should show off its latest Apple Watch smartwatches and new AirPods wireless earbuds.

Apple stock fell 3.6% last week to 220.82, back below its 50-day line. AAPL stock has forged a V-shaped cup-with-handle base with a 232.92 buy point. It’s a base-on-base formation to a prior cup base.

The Apple iPhone event, and the AAPL stock reaction, will be key for iPhone chipmakers as well as AI plays generally.


What’s On Tap: Apple To Unveil iPhone 16; Adobe, Oracle Earnings Due


Oracle, Adobe Earnings

Oracle earnings are due Monday night. The database software giant likely will discuss AI wins on the earnings call or at a conference later in the week.

ORCL stock just edged up 0.4% to 141.81, but held above its key moving averages. Oracle is working on a 146.59 consolidation buy point.

Adobe earnings are Thursday night, with the software maker’s generative AI offerings in focus.

ADBE stock tried to clear a 580.55 cup-with-handle base on Tuesday, but reversed lower. Shares fell 1.9% for the week to 563.41, but held above their 21-day line.

The Oracle and Adobe earnings will offer hints about software makers’ ability to generate revenue from costly AI investments.

Tesla Stock Round-Trips

Tesla stock rallied on Wednesday and especially Thursday, buoyed by robust China sales and the EV giant’s FSD rollout plans. On Thursday, shares popped above their 50-day line and cleared a 238.22 short-term high. That offered an aggressive entry for TSLA stock, but the weak market added to the risks.

On Friday, Tesla plunged 8.45%, back below the 50-day line. Shares lost 1.6% to 210.73 for the week.

Tesla stock has a 271 cup-base buy point, according to MarketSurge.


DoorDash Leads 5 Stocks Near Buy Points Amid Market Sell-Off


What To Do Now

The stock market rally is looking weak. While some sectors are holding up better than others, most are still heading down.

Investors should have slim or modest exposure. They should largely be out of tech aside from big long-term winners if they have conviction in those names.

Don’t get excited by a strong open or even one strong session. After so much selling, the market may be “due” for a bounce, but it doesn’t have to happen right away and it doesn’t have to last.

Look for stocks holding key levels and showing relative strength. Those will mostly be in defensive and defensive growth sectors, along with a few traditional growth names.

The number of leading stocks that are still relatively healthy is a positive sign. However, just because stocks have been resilient so far doesn’t mean they’ll continue to do so. Tesla’s quick round-trip is an obvious example. ServiceNow (NOW), Meta Platforms (META), DoorDash (DASH) and Netflix (NFLX) also started to break key levels on Friday.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.

YOU MIGHT ALSO LIKE:

Want To Get Quick Profits And Avoid Big Losses? Try SwingTrader

Best Growth Stocks To Buy And Watch

IBD Digital: Unlock IBD’s Premium Stock Lists, Tools And Analysis Today

When It’s Time To Sell Your Favorite Stock

Tesla Vs. BYD: EV Giants Vie For Crown, But Which Is The Better Buy?

Trump Or Harris Election Sweep? Prepare For Huge Impact On Taxes, Stocks

Dividend Investor Earning $70,000 a Year Shares His Portfolio: Top 7 Stocks

Dividend Investor Earning $70,000 a Year Shares His Portfolio: Top 7 Stocks

Dividend Investor Earning $70,000 a Year Shares His Portfolio: Top 7 Stocks

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

Can you live entirely off dividends? This is perhaps the most common question asked on Reddit dividend discussion boards, where hundreds of people share their income investing experience and seek advice. About nine months ago, someone asked /dividends, a community on Reddit with over 570,000 members, whether it’s possible to live off your dividend investments. While there were many interesting responses, one caught our attention.

A Redditor responded that he’s 59 and invested about $250,000 in dividend stocks after the COVID-19 pandemic-led crash. He said that the market rebound buoyed his portfolio and he invested about $200,000 more. He claimed that he rakes in about $70,000 per year in dividend income. Most of the stocks in his initial portfolio were from the oil and gas industry, but he later diversified into other sectors. The Redditor was generous enough to mention the specific stocks in his portfolio. Let’s take a look at these companies.

Don’t Miss Out:

These stocks are based on an income report publicly shared by an investor on Reddit. This is not investment advice or a recommendation.

Sunoco LP

Sunoco LP (NYSE:SUN) is a Texas-based MLP energy company with a dividend yield of about 6.8%. Last month, the company reported strong second-quarter results that beat estimates for both earnings and revenue. In May, Sunoco completed its $7.3 billion acquisition of NuStar. In June, Citi increased its rating on SUN shares to Buy from Neutral with a $65 price target.

Exxon Mobil 

With over 40 years of consecutive dividend increases and a 3.4% dividend yield, Exxon Mobil Corp (NYSE:XOM) is one of the top dividend stocks in the Redditor portfolio, earning $70,000 a year in dividend income. Exxon Mobil continues investing in fossil fuel opportunities, believing that over 50% of the global energy demand will be fulfilled by oil and gas even by 2050. However, the company is investing in carbon capture and clean energy. Exxon expects to produce 40 million tons of LNG annually by 2030, more than double its current production.

Crossamerica Partners LP

Crossamerica Partners LP (NYSE:CAPL) distributes motor fuels with a dividend yield of about 10%. The company reported second-quarter results in August, in which GAAP EPS beat Wall Street estimates. However, revenue fell 1.7% year over year and missed the Street’s forecasts by $140 million.

Trending Now:

Crestwood Equity Partners (now part of Energy Transfer)

Crestwood Equity Partners was an energy infrastructure company that was acquired by Energy Transfer for about $7.1 billion last year. The Redditor said he bought this stock in 2020, and it was later merged into Energy Transfer (ET).

Altria Group

With a 7.5% yield and more than 50 years of consecutive dividend growth, Altria Group Inc. (NYSE:MO) is one of Redditors’ top favorite income plays. Despite concerns about the future of its smokeable products amid a decline in smoking worldwide, Altria continues to be a reliable dividend stock. In August, it upped its dividend by 4.1%. The company’s latest quarterly results show its smoke-free and oral tobacco products have started to offset declines from smokeable products.

Pfizer
Pfizer Inc. (NYSE:PFE) has a dividend yield of over 5% and has increased its payouts for 15 straight years. With a strong pipeline and strengths in the pharmaceutical market, Pfizer is a reliable dividend stock for any portfolio. Pfizer spends about $2.5 billion to $3 billion on research and development every quarter and has over 110 candidates in its pipeline.

The Redditor claiming to earn about $70,000 per year in dividends said he added Pfizer quite later in his investment journey for added diversification.

Johnson & Johnson

Johnson & Johnson (NYSE:JNJ) is one of the top dividend stocks, with over six decades of consistent payout growth. Despite headwinds related to lawsuits, the sheer scale and diversity of its revenue stream make Johnson & Johnson an attractive income play. In July, Johnson & Johnson posted strong quarterly results, beating estimates on both revenue and EPS. MedTech and Oncology businesses posted decent YoY revenue growth.

Lock In High Rates Now With A Short-Term Commitment

Leaving your cash where it is earning nothing is like wasting money. There are ways you can take advantage of the current high interest rate environment through private market real estate investments.

EquityMultiple’s Basecamp Alpine Notes is the perfect solution for first-time investors. It offers a target APY of 9% with a term of only three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and funding obligations with no missed or late interest payments. With a minimum investment of $5,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio.

Don’t miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga’s favorite high-yield offerings.

This article Dividend Investor Earning $70,000 a Year Shares His Portfolio: Top 7 Stocks originally appeared on Benzinga.com

This Overlooked Utility Outshines NextEra. Is It Time to Buy?

There’s no question that NextEra Energy (NYSE: NEE) is a well-run company. But that fact is so well known that investors have bid the shares up to levels that, likely, fully reflect the information. If you are trying to find a good mix of dividend income and dividend growth, you may want to consider buying WEC Energy (NYSE: WEC) instead of NextEra. Here’s why.

NextEra Energy’s value is fully priced in

NextEra Energy is a solid dividend growth utility, with a strong regulated utility core (largely Florida Power & Light) and a fast-growing renewable power operation. That combination has allowed the utility to increase dividends annually for three decades. But the real treat for investors is that the rate of dividend growth has been an attractive 10% a year over the past decade.

A line of 100 dollar bills planted in the ground.

Image source: Getty Images.

Ten percent dividend growth for a utility, an industry known for being slow and boring, is incredible. Half that level would be considered a good number. Notably, management is calling for dividend growth of 10% a year through at least 2026, too, so this trend isn’t expected to end. That figure is backed by an earnings growth projection of 6% to 8%. If you are a hard-core dividend growth investor it would be understandable if you wanted to buy NextEra Energy.

The problem is valuation. NextEra Energy’s success and positive outlook are well known. That generally leaves the shares priced at a premium to the utility sector. For example, NextEra’s dividend yield is currently around 2.6%. The average utility’s, using Utilities Select Sector SPDR ETF as a proxy, is roughly 3%. That may not seem like a huge difference on an absolute basis, particularly when you consider the S&P 500 index’s yield is a scant 1.2%, but it means collecting roughly 13% less income each year.

WEC Energy gives you more income

By comparison, WEC Energy is offering a 3.6% dividend yield today. That works out to 20% more than the average utility and 33% more than what you’d collect if you owned NextEra Energy. That sounds pretty attractive if you are trying to maximize the income your portfolio generates.

But what about dividend growth? WEC Energy hiked its dividend roughly 7% in January. It has increased its dividend annually for two decades. The average increase over the past decade has been around 7%. That’s a bit slower than NextEra Energy, but the starting yield is so much higher that investors looking for a better mix of yield and dividend growth might find it more appealing.

That said, WEC Energy is not as large or diverse as NextEra. WEC provided natural gas and electricity to 4.7 million customers in parts of Wisconsin, Illinois, Michigan, and Minnesota. It is a far more boring utility, but it still has big plans. Its five-year capital spending goal is $23.7 billion and is expected to push earnings higher by 6.5% to 7% a year through 2028. If history is any guide, the dividend will grow roughly in line with earnings.

WEC Chart

WEC Chart

Once again, that’s nearly as good as NextEra, but with a notably higher starting yield. And that’s the big story here. NextEra is a great utility, but one that is usually fully priced. WEC Energy is a very good utility that appears to be trading at a more attractive level. Notably, the dividend yield, even after a recent stock rally, is still near the high end of WEC Energy’s 10-year yield range.

WEC Energy is worth a closer look

Nobody would fault you for buying an industry leader like NextEra Energy. However, that doesn’t mean it is the best option for all investors. If you are willing to accept a little less dividend growth potential for a utility with a still strong earnings growth profile and a much higher yield, you should put WEC Energy on your short list today. And if you already own NextEra Energy, consider augmenting that position with a new one in WEC Energy.

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*.

See the 10 stocks »

*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 NextEra Energy. The Motley Fool has a disclosure policy.

This Overlooked Utility Outshines NextEra. Is It Time to Buy? was originally published by The Motley Fool

Why Trump Media Stock Sank to a New All-Time Low This Week

Trump Media & Technology (NASDAQ: DJT) stock fell again this week. The company’s share price closed out the stretch down 12.3% from the previous Friday’s closing price, according to data from S&P Global Market Intelligence. The S&P 500 index closed out the week down 4.3%, and the Nasdaq Composite index ended the period down 5.8%.

Trump Media stock lost ground as rising fears that the U.S. economy could slip into a recession prompted sell-offs for the broader market. In addition to macroeconomic factors, the company’s share price likely moved lower due to competition from other social media platforms and the lock-up expiration on insider stock sales set to take place later this month.

Investors worry economic conditions could turn bearish

Bearish sentiment surrounding the U.S. economy increased this week. Tracking released on Tuesday showed that the country’s manufacturing sector had declined again in August, and Friday’s jobs report from the Labor Department arrived with weaker-than-expected results. The average Wall Street target had called for 160,000 jobs to be added last month, but only 142,000 jobs were added in the period. Job growth numbers for June and July were also revised downwards.

The Labor Department’s data further raised concerns that the economy could be headed for recession in the not-too-distant future. Investors had hoped the Federal Reserve’s anticipated rate cut this month would create bullish macro conditions for stocks, but these concerns could dash those hopes.

Trump Media stock hits a new record low

Former President Donald Trump is Trump Media’s majority shareholder, and Truth Social is currently the centerpiece of the company. The social media platform shares similarities with X, formerly known as Twitter. Trump was previously banned from Twitter, but his status was reversed after Tesla CEO Elon Musk purchased the platform.

Despite X being a competitor to Truth Social, Trump has returned to posting on the rival platform to aid his presidential campaign. While the former president is still posting far more messages on Truth Social than on X, being active on both platforms takes away some of Truth Social’s value proposition.

In addition to those concerns, investors also appear worried that a large amount of stock will soon be sold on the open market. The lock-up period preventing insider selling is set to expire on Sept. 25, although it could happen five days earlier due to previously announced stipulations. The company’s valuation could plummet if Trump or other large insider owners wind up selling a large amount of shares, and this risk pushed Trump Media stock to a new record low this week.

Should you invest $1,000 in Trump Media & Technology Group right now?

Before you buy stock in Trump Media & Technology 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 Trump Media & Technology 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 $630,099!*

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

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Trump Media Stock Sank to a New All-Time Low This Week was originally published by The Motley Fool

4 REIT Stocks That Are Screaming Buys in September

Real estate investment trusts (REITs) buy a lot of properties, lease them out, and split the rental income with their investors. U.S. REITs are also required to pay out at least 90% of their taxable income as dividends to maintain a favorable tax rate.

That simple business model usually makes REITs a sound investment for most income investors, but rising interest rates weighed down the sector for two reasons. First, higher rates made it more expensive to purchase new properties. Second, REITs lost their luster as income plays as the yields of risk-free CDs and T-bills soared above 5%.

A happy person throws handfuls of cash.

Image source: Getty Images.

But with interest rates set to decline in the near future, shrewd investors should pivot back toward REITs before the yield-starved bulls rush back. I believe these four resilient REITs are worth buying right now: Realty Income (NYSE: O), Vici Properties (NYSE: VICI), STAG Industrial (NYSE: STAG), and Digital Realty Trust (NYSE: DLR).

1. Realty Income

Realty Income is one of the world’s largest REITs. It owns 15,450 properties in the U.S., U.K., and Europe, and it leases them out to over 1,500 tenants across 90 industries. Its top tenants include recession-resistant retailers like Walmart, 7-Eleven, Walgreens, and Dollar Tree.

Some of its top tenants struggled with store closures in recent years, but it still maintained a high occupancy rate of more than 96% over the past three decades. It pays its dividends on a monthly basis, and it’s raised its payout 126 times since its IPO in 1994. It currently pays an attractive forward yield of 5%, and its stock looks like a bargain at 16 times last year’s adjusted funds from operations (AFFO) per share.

2. Vici Properties

Vici is a REIT that mainly owns casino and entertainment properties in the U.S. and Canada. Its top tenants, which it tightly locks into multidecade contracts, include Caesar’s Entertainment, MGM Resorts, Penn Entertainment, and Century Casinos. It’s also maintained an impressive occupancy rate of 100% ever since its IPO in 2018.

Vici reduced its dividend during the peak of the pandemic in 2020 and 2021, but it’s raised its payout over the past two years. It pays a high forward yield of 4.9% on a quarterly basis, and its stock still looks cheap at 16 times its trailing AFFO.

3. STAG Industrial

STAG Industrial is an REIT that owns 573 industrial properties across 41 states. Its top tenants include Amazon, FedEx, and XPO, and it ended 2023 with a high occupancy rate of 98.2%. Many of its properties are used as e-commerce fulfillment centers, and that foundation could make it a less macro-sensitive play than brick-and-mortar retail or commercial REITs.

STAG pays monthly dividends, and it’s consistently increased its payout every year since its IPO in 2011. It currently pays a forward dividend yield of 3.7% and trades at just 18 times last year’s core FFO per share.

4. Digital Realty Trust

Digital Realty Trust is an REIT that leases data centers to over half of the Fortune 500 companies. Its top customers include tech giants like IBM, Oracle, and Meta Platforms. It operates more than 300 data centers in 50 metro areas across the world, and the secular expansion of the cloud and artificial intelligence (AI) markets should continue to drive its long-term growth.

Digital Realty’s year-end occupancy rate slipped from 84.7% in 2022 to 81.7% in 2023 as high rates and other macro headwinds throttled the expansion of the cloud market. It trades at 23 times last year’s core FFO per share, which makes it a bit pricer than the other REITs on this list, and it pays a lower forward dividend yield of 3.3% on a quarterly basis. It also didn’t raise its dividend last year as its growth cooled off.

But despite those challenges, Digital Realty could still represent a good way to simultaneously profit from the REIT sector’s recovery and the expansion of the data center market.

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 $630,099!*

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

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Leo Sun has positions in Amazon, Meta Platforms, Realty Income, and Vici Properties. The Motley Fool has positions in and recommends Amazon, Digital Realty Trust, FedEx, Meta Platforms, Oracle, Realty Income, Stag Industrial, and Walmart. The Motley Fool recommends International Business Machines, Vici Properties, and XPO. The Motley Fool has a disclosure policy.

4 REIT Stocks That Are Screaming Buys in September was originally published by The Motley Fool

background

Stay Ahead with StockBurger!

Real-time meme stock trends powered by social media insights. Be the first to know about new market waves.

hand