Tag Archives: ABBV

Top 5 Warren Buffett Stocks To Invest In 2019

In this segment of the Motley Fool Money podcast, host Chris Hill asks Million Dollar Portfolio’s Jason Moser, Hidden Gems Canada’s David Kretzmann, and Total Income’s Ron Gross about the companies they’re most intrigued by this week and why.

Top 5 Warren Buffett Stocks To Invest In 2019: AbbVie Inc.(ABBV)

If you typically don’t invest in healthcare, you might not know that shares in the biopharma giant AbbVie fell out of favor last month, following disappointing news on its solid-tumor cancer drug, Rova-T.

AbbVie had hoped definitive midstage trial data for Rova-T could allow it to file for accelerated approval from the Food and Drug Administration, but unfortunately, the data wasn’t good enoughfor that to happen. Instead, the company will need to wait until results from future trials are available before it submits Rova-T for approval, and that could mean a wait of a year or more.

The setback caused AbbVie’s shares to fall by more than 20%, but it’s far from a deal-breaker for the company. Importantly, the sell-off could be creating a great opportunity to add this top dividend stock to your income portfolio.

AbbVie inherited Abbott Labs’ dividend track record when it was spun off in 2013, so it’s considered a Dividend Aristocrat. It appears to take that badge of honor seriously, because its quarterly dividend has increased to $0.96 from $0.40 since its initial public offering.

Following the drop in its shares, its forward dividend yield has increased to almost 4%. That’s a healthy dividend for any company, but what really makes AbbVie an interesting buy is that its dividend could continue climbing because of double-digit revenue growth. In Q1 2018, sales grew 21% year over year. And since generic biosimilars to its best-seller, Humira, aren’t expected in the U.S. until 2023, there’s plenty of opportunity for investors to own AbbVie and pocket increasingly larger dividend checks.

Top 5 Warren Buffett Stocks To Invest In 2019: Berkshire Hathaway Inc.(BRK.B)

Warren Buffett’s Berkshire Hathaway is already worth nearly a half-trillion dollars. But it’s not crazy to think that the stock could double over the next 10 years. A doubling over a decade requires a compound annual growth rate of just about 7.2%. That’s a little more than one-third of the historical growth rate of both Berkshire’s book value and its stock price.

In other words, Berkshire doesn’t need to hit home runs for the stock to double from here. It just needs to keep doing what it’s been doing. Under Buffett’s leadership, the conglomerate has built up a collection of high-quality businesses with durable competitive advantages that should throw off increasing amounts of cash as time goes on. That cash can be invested in even more high-quality businesses, picked by Buffett or his eventual successors.

Of course, if the broader market goes nowhere over the next decade, perhaps because valuations today are historically high, Berkshire could follow suit and fall short of doubling. But Berkshire’s earnings will likely rise substantially over that time, making the stock more attractive and planting the seeds of future gains.

Top 5 Warren Buffett Stocks To Invest In 2019: Leju Holdings Limited(LEJU)

Leju Holdings Ltd (ADR) (NYSE:LEJU) has gotten some attention over the years because it’s one of China’s largest online and offline real estate companies.

When real estate was hot in China, and the tech firms were rolling out like donuts off a Krispy Kreme line, LEJU was one of the speculative darlings that were getting a fair amount of attention in the U.S.

It still has a $149 million market cap, which isn’t huge, but is decent for a tech start-up.

However, the real estate boom is China has cooled and the government is looking to keep things on the cool side moving forward until it can sort out the strength of the recovery. LEJU is off 65% in the past year as a result.

There are plenty of better ideas out there now to take advantage of China’s long-term growth.

Top 5 Warren Buffett Stocks To Invest In 2019: PDL BioPharma, Inc.(PDLI)

PDL Biopharma stock is up 18% over the last 12 months, a performance that beats the S&P 500index of large-cap stocks. Like Novavax, though, PDL was up a lot more at one point. An attempt to buy Neos Therapeutics that was later abandoned contributed primarily to the stock pullback.

It wasn’t long ago that PDL Biopharma claimed one of the biggest healthcare dividend yields on the market, with the company receiving royalties from blockbuster drugs including Avastin and Herceptin. However, the company’s patents expired, its royalties dwindled, and PDL was forced to eliminate its dividend and try to reinvent itself.

That reinvention effort resulted in PDL Biopharma investing in income-generating opportunities. In 2016, the company bought Noden Pharma, picking up blood pressure drug Tekturna with the deal. PDL’s long-term success hinges on its ability to make more strategic deals that generate solid returns.

PDL Biopharma claims one distinction that few companies can: Its cash stockpile is roughly the same as its market cap. The company reported cash, cash equivalents, and marketable securities totaling $405 million at the end of the first quarter. At the time of this writing, PDL’s market cap is $407 million.   

Top 5 Warren Buffett Stocks To Invest In 2019: International Paper Company(IP)

Despite the misconception, the paper industry is one of the most environmentally friendly and energy efficient industries on the planet. Most pulp is sourced from responsibly managed forests, fibers are often recycled into new products, wastewater is often managed efficiently, and wood liquid wastes from the pulping process provides most of the energy needed for industrial mills. In fact, wood products and wood liquids generated nearly as much electricity in the United States in 2017 as utility scale solar facilities.

International Paper (NYSE: IP) wants to take things even further. The company, a leading producer of cardboard that’s cashing in on online shopping trends, has a laundry list of efficiency goals aimed at helping the business and the environment. That includes increasing fiber recycling an additional 15% (the United States boasts a 64% recovery rate), improving energy efficiency of purchased power by 15% (it generates 75% of its energy from wood wastes on site), and improving water management.

The cost-saving moves should help bolster the company’s already-strong $2 billion in annual free cash flow — cementing International Paper as a blue chip dividend stock. 

Top Growth Stocks To Watch For 2019

You see, certain dividends are taxed at a much lower rate than other gains, thereby protecting a portion of your income. This is the case with qualified dividends – dividends earned from stocks you’ve held for at least 60 days before the ex-dividend date.

Instead of being taxed at the normal income rate, like short-term gains, qualified dividends are taxed at a significantly lower rate – up to nearly 50% less, depending on your tax bracket. With qualified dividends, you not only get reliable returns – you get to keep more while the tax man gets less.

As Keith notes, dividend stocks are the perfect insurance against market downturns. According to Keith, dividend stocks are "fantastic insurance against market corrections, and they’re indispensable when the U.S. Federal Reserve is punishing savers and income investors by keeping interest rates near zero."

The only real question about dividend stocks is knowing which ones to buy for the best gains. As Keith points out, there are over 200 great dividend stocks on the Nasdaq alone.

In order to help readers buy only the best dividend stocks, the Money Morningteam has compiled a list of most promising dividend stocks to buy. These stocks have spectacular growth potential – plus, some pay out a whopping yield of up to 15%.

With strong growth potential and dividend payouts, these stocks will be able to provide investors with reliable returns for many years to come, no matter what they do after an earnings report.

Here are our top dividend stocks to buy right now…

Top Growth Stocks To Watch For 2019: JD.com, Inc.(JD)

JD.Com Inc(ADR) (NASDAQ:JD) has a very definitive chart, with support at $36 and resistance at $49.

Resistance has done its part and now it’s almost time for support to kick in. With JD stock about a buck above this one-year level of support, I would consider this a must-hold level. If it breaks, it gives bears a great risk/reward to push it lower. Likewise, bulls have a solid risk/reward should it hold.

Top Growth Stocks To Watch For 2019: AbbVie Inc.(ABBV)

This favorite stock of Wall Street has been trading above its 50-day simple moving average (SMA) since November 2016. Even the February sell-off did not cause the price to violate support at the 50-day SMA. This tells me one thing: Big money is watching the primary technical indicator and buying every pull back!

Fundamentally, the pharmaceutical company is reliable, as evidenced by a recent 35% dividend raise, a $10 billion stock buyback program and a 2017 patent suit victory.

Top Growth Stocks To Watch For 2019: Ecopetrol S.A.(EC)

Ecopetrol is a petroleum company focused on identifying opportunities primarily in Columbia and northern Peru. EC is holding a Zacks Rank #2 (Buy), as well as an “A” grade for Value. The stock is also a nice growth pick, as Ecopetrol is projected to improve its earnings at an annualized rate of 43% over the next three to five years. Shares have risen more than 0% over the past month and could be attractive to momentum investors looking to make a play on rising oil prices.

Top Growth Stocks To Watch For 2019: Government Properties Income Trust(GOV)

While Government Properties Income Trust (NASDAQ:GOV) has not raised its dividend over the last five years, income investors can’t complain about the stock’s generous 8% average dividend yield during this time.

GOV current yields more than 12%, but unlike recent years, the stock is increasingly looking like a yield trap. In fact, Simply Safe Dividends assigns the company an extremely low Dividend Safety Score of 3.

Dividend Stocks to Avoid: Government Properties Income Trust (GOV)

GOV is a real estate investment trust which owns over 100 properties leased primarily to the U.S. government and state governments.

Unfortunately, governments are looking to become much more efficient with their spending, including reducing the amount of office space per employee.

Analysts expect GOV’s adjusted funds from operations (AFFO) per share to slip more than 15% over the next 12 months, which will push the company’s AFFO payout ratio to nearly 130%.

When combined with the firm’s substantial amount of debt, a meaningful dividend cut could be on the horizon.

Top Growth Stocks To Watch For 2019: Celgene Corporation(CELG)

Growth at bargain-basement prices is a bit of an oxymoron because value stocks usually aren’t double-digit growers. That’s not the case for Celgene, though.

A light bulb illuminated above a person's head in front of a blackboard covered by diagrams.

IMAGE SOURCE: GETTY IMAGES.

Even though Celgene reported 20% year-over-year sales growth last quarter, its shares are trading at a forward P/E ratio of only 8.1. That’s a cut-rate valuation for a company that expects to deliver sales of at least $19 billion in 2020, up from $13 billion in 2017.

The low valuation is a result of a big setback Celgene suffered on a lead drug candidate in its pipeline, ozanimod. Celgene had filed for FDA approval of ozanimod for multiple sclerosis, a mega-blockbuster indication, but the FDA rejected the application, and that pushes out the timeline for a potential green light.

Celgene says it will refile for approval early in 2019, and if so, then ozanimod could begin chipping away at sales in the indication in 2020. Until then, there’s plenty going on at the company that could spark a rally in its share price again.

For instance, the company recently acquired Juno Therapeutics to get its hands on a pipeline of chimeric antigen receptor T-cell gene therapies (CAR-Ts). CAR-Ts represent one of the biggest recent advances in treating blood cancer, and depending on trial results, the first CAR-T from this collaboration could be filed for approval next year. Similarly, Celgene is partnering with bluebird bio (NASDAQ:BLUE) on bb2121, a CAR-T for multiple myeloma. So far, bb2121 is delivering 90%-plus response rates in heavily pre-treated patients, and if that success continues, it could end up on regulators’ desk for approval next year, too.

In 2018, Celgene thinks sales will be $14.8 billion, and that adjusted EPS will be $8.45. In 2017, sales and EPS were $13 billion and $7.44, respectively, so the guidance reflects a company that’s far from struggling. Given the sell-off and the potential for sales to climb significantly through 2020, buying Celgene’s shares could be smart.

Top Canadian Stocks To Buy Right Now

Technology stocks are staples in growth portfolios because of their eye-popping revenue growth, but technology isn’t the only sector of the stock market that boasts fast-growing companies. For example, many healthcare stocks are growing at rates that Silicon Valley would envy. In fact, these stocks all reported year-over-year sales growth north of 100% in the first quarter of 2018.

Are these stocks worth including in your portfolio?

Top Canadian Stocks To Buy Right Now: AbbVie Inc.(ABBV)

Our first pick is AbbVie Inc (NYSE:ABBV). This North Chicago, IL-based company has an Earnings ESP of +0.24% and a Zacks Rank #3.

The stock has seen the Zacks Consensus Estimate for first-quarter 2018 earnings being pegged at $1.78 per share. Besides this, the company boasts an encouraging earnings track record, exceeding expectations in all the last four quarters with an average beat of 1.81%.

Top Canadian Stocks To Buy Right Now: Amazon.com, Inc.(AMZN)

Hey, I’m as big a fan of Jeff Bezos and Amazon.com Inc. (NASDAQ:AMZN) as anyone, but how on earth did the world’s biggest e-commerce company beat analyst estimates by 157%?

I’ll admit I love using analysts for sound bites in my coverage of public companies but there’s something definitely wrong when a business on as big a roll as AMZN gets a Q1 2018 estimate of $1.27, 21 cents lower (!?!) than the year before.

Are these men and women not reading Amazon’s financial reports?

If you are an Amazon shareholder, the one thought you should have after examining its first-quarter results is: Please keep losing money internationally — the unit had a $622 million operating loss in the quarter, 29% higher than a year earlier — because we know what happened with its North American e-commerce business after losing lots of money; it’s now making lots of money.

Throw in its AWS business which grew operating margins by 140 basis points year-over-year while pulling down $1.4 billion in operating profits and I’m not sure there’s an argument against owning its stock for the next 10-30 years.

Top Canadian Stocks To Buy Right Now: Facebook, Inc.(FB)

Following iRobot, Facebook reports its first-quarter results on Wednesday. As usual, the bar is high for Facebook. In Facebook’s fourth quarter, revenue climbed 47% and adjusted earnings per share surged 83%. In addition, Facebook’s user base grew to 2.1 billion people using it every month and 1.4 billion people using it daily. The results capped off a year of excellent financial performance.

But Facebook also admitted during the last earnings call that 2017 "was also a hard year" in some ways. "We’ve seen abuse on our platform, including interference from nation states, the spread of news that is false, sensational and polarizing, and debate about the utility of social media," said Facebook CEO Mark Zuckerberg in the company’s fourth-quarter earnings call. Problems were exacerbated in March when Facebook announced that a third-party developer had mishandled user data.

In 2018, Facebook will most likely try to renew user and advertiser confidence. Beyond looking for more strong revenue growth, look for Facebook to comment on how recent developments will impact its guidance for spending on security and safety.

Top Canadian Stocks To Buy Right Now: Clarke(T)

With its big yield, history of delivering regular dividend growth, and a non-prohibitive valuation, AT&T is a stock that’s worth building a super-long-term position in. The telecom giant’s yield comes in at 5.7%, and a 34 year history of delivering annual payout growth and massive cash flow suggest there’s a good chance the company will continue to raise its payout. 

The company’s stock performance has been tepid in recent years due to pressures in both the wireless and television spaces. Competition from budget priced rivals like T-Mobile has put pressure on mobile service sales and the rise of cord-cutting and skinny bundles is impacting the performance of its DirecTV subsidiary. AT&T has been leveraging its advantage when it comes to bundling mobile, internet, and television services to create meager sales growth, but it’s also taking hits when it comes to its margin.

The good news is that the company may be able to reclaim pricing strength and create new revenue streams with the introduction of 5G networks. 5G is the next generation of wireless internet technology, and it’s on track to deliver dramatic speed increases that will pave the way for better consumer-level service and a range of new technologies including connected cars, augmented-reality hardware, and smart-city devices.

Another positive catalyst on the horizon is its pending acquisition of Time Warner — so long as it survives an antitrust suit from the Department of Justice. If AT&T is allowed to integrate the entertainment company, it’ll diversify into a new space and open up new bundling and advertising opportunities that could do a lot to brighten its long-term earnings trajectory.

Shares trade at just 10 times forward earnings estimates and nine times this year’s projected free cash flow. With its top-notch dividend profile and the company making some smart moves to fortify its business, AT&T looks like a smart long-term play.

Top Canadian Stocks To Buy Right Now: Lam Research Corporation(LRCX)

Lam Research is a designer and manufacturer of semiconductor processing equipment used in the fabrication of integrated circuits. The company is recognized as a leading supplier of front-end wafer processing equipment to the worldwide semiconductor industry. Despite this existing leadership position, LRCX is slated to witness massive earnings and revenue growth soon.

Based on current consensus estimates, we expect Lam Research to post EPS growth of 75.8% and net sales growth of 38.0% this fiscal year. Meanwhile, the firm is generating cash flow growth of 45.8% and RoE of 41.1%. LRCX is also sporting a Zacks Rank #1 (Strong Buy) right now.

Top Growth Stocks To Buy For 2019

The recipe for successful long-term investing is simple in theory but difficult in practice: Buy shares of high-quality companies; pay reasonable prices for those shares; and hold on to them for many years, unless there are legitimate reasons to sell. Failing at any one of those steps will cause trouble.

Any stock could double over the next decade, but only some have an above-average shot at doing so. These Motley Fool investors think following are these such stocks. Here’s what you need to know.

Top Growth Stocks To Buy For 2019: Clarke(T)

Telecom giant AT&T reported first-quarter earnings on April 26, and the market was none too pleased with the results. Sales for the period dipped 3.6% year over year to come in at $38.04 billion, missing the average analyst estimate of $39.37 billion. Earnings per share of $0.85 also fell short of the estimate target of $0.87, and the top- and bottom-line misses prompted the company’s biggest intraday share price decline in nearly a decade. By market close, the stock had dipped roughly 7%.

AT&T also reported that it lost 187,000 pay-television subscribers despite growth for its DirecTV Now skinny-bundle service. The company faces pressure amid changes in the television and mobile industries, but opportunities like the expansion of 5G networks and the pending merger with Time Warner give it avenues via which to growth that I expect will come to fruition. I purchased AT&T shares following the post-earnings sell-off and plan to hold the stock for the long term.

The company now trades at just 10 times this year’s expected earnings and packs a roughly 6% dividend yield. Shareholders can look for AT&T’s payout to continue growing. The telecom leader has a 33-year history of delivering annual dividend raises, and the business’s strong cash flow puts it in good position to deliver slow, but steady payout growth down the line. Even though the company distributed roughly $13 billion in dividend payouts over the last year, its $18 billion in free cash flow over that stretch had it in a good position to keep that streak alive.  

With a great yield backed by a solid business and enticing earnings multiples, AT&T is an underappreciated dividend stock that deserves your attention.

Top Growth Stocks To Buy For 2019: AbbVie Inc.(ABBV)

Worry that its best-selling drug would soon face competition because of expiring patents may have caused you to remove AbbVie from your radar. However, the likelihood of competition to Humira has fallen considerably, and that suggests income investors ought to be looking at it again.

Humira is a widely used autoimmune disease drug. In 2017, its sales of more than $18 billion accounted for about 65% of AbbVie’s revenue. Patents protecting Humira have already begun to expire, but a favorable patent decision last fall prompted competitor Amgen (NASDAQ:AMGN) to ink a nonexclusive deal with AbbVie that should keep Humira copycats at bay in the U.S. until 2023.

The extra time is great news because AbbVie has a lot of late-stage drugs that could reach the market before Humira’s sales begin to drop. Over the next year, it plans FDA filings for Rova-T, a solid-tumor cancer drug; upadacitinib, a rheumatoid arthritis drug; and risankizumab, a psoriasis drug. All three of those drugs target multibillion-dollar indications and thus could be blockbusters.

AbbVie has FDA approvals pending for an endometriosis drug, Elagolix, and a chronic lymphocytic leukemia drug, Venclexta, that have billion-dollar potential, too.

The company has increased its dividend by 77% since it was spun out of Abbott Labs (NYSE:ABT) in 2013. Since management expects its effective tax rate to fall to 9% in 2018, from over 30% last year, and thinks new drugs could increase non-Humira sales from $9 billion to as much as $35 billion in 2025, there’s reason to think even more dividend increases are coming.

Top Growth Stocks To Buy For 2019: II-VI Incorporated(IIVI)

 II-VI, Inc. (NASDAQ:IIVI) provides engineered materials and optoelectronic components worldwide.

The company’s total revenue reached $972 million as of fiscal year ending June 2017. This is 88.2% higher than the $516 million achieved in fiscal year June 2012. II-VI’s top-line growth has ranged from 6.7% to 24.0% over the last five fiscal years.

Going forward, Wall Street forecasts that II-VI’s total revenue will reach $1,839 million by fiscal year 2022 representing a five-year CAGR of 13.6%.

Shares of the company are up 23.0% over the last year. The stock last traded at $47.25 as of March 20th and 8 separate valuation analyses imply that the stock is trading near its fair value.