All year long, the stock market has been batting its big green eyes at the world, drawing more and more people into its promising embrace. This is nothing new. For decades, North America's most alluring bazaar for capitalism has been making multitudes of steadfast investors wealthy, while causing heartbreak and loss for many others -- often, because of emotional decisions and the use of leverage.
But for all the headline-grabbing drama, when you get down to it, the stock market is simply an auction house for partial ownership in companies. As an owner, you share in the profits of a business through dividends and appreciation. Sometimes, the crowd is willing to bid higher and higher for a stake in these benefits, and sometimes, buyers are few and far between.
Pricing a bull market
Lately, buyers surround us, and we're witnessing history repeat itself. New market highs are earned as the population, businesses, and earnings grow. New highs can go on for years, as they did in the 1980s and '90s. Other times, the market hits a peak. and then doesn't touch it again for a decade or longer, as was the case after 2000. Where this fate is concerned, the stock market's price-to-earnings multiple is ultimately the largest determining factor.
Top 5 Bank Stocks To Watch For 2016: Sysco Corporation(SYY)
Sysco Corporation, through its subsidiaries, distributes food and related products primarily to the foodservice or food-away-from-home industry in North America and Europe. The company offers a line of frozen foods, such as meats, fully prepared entrees, fruits, vegetables, and desserts; a line of canned and dry foods; fresh meats, custom-cut fresh steaks, other meat, seafood, and poultry; dairy products; beverage products; imported specialties; and fresh produce. It also supplies various non-food items, including paper products, such as disposable napkins, plates, and cups; tableware, which include china and silverware; cookware comprising pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. In addition, the company offers personal care guest amenities, equipment, housekeeping supplies, room accessories, and textiles to the lodging industry. It serves restaurants, hospitals and nursing homes, schools and colleges, hotels and mote ls, lodging establishments, and other foodservice customers. Sysco Corporation was founded in 1969 and is headquartered in Houston, Texas.
Advisors' Opinion:- [By Dan Caplinger]
Next Monday, Sysco (NYSE: SYY ) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Top 10 Dividend Stocks To Buy For 2015: Public Service Enterprise Group Incorporated(PEG)
Public Service Enterprise Group Incorporated, through its subsidiaries, operates in the energy industry primarily in the northeastern and mid Atlantic United States. The company primarily operates as a wholesale energy supply company that integrates its generating asset operations through its wholesale energy, fuel supply, energy trading, and marketing and risk management activities. It operates nuclear, coal, gas, and oil-fired generation facilities. The company also involves in the transmission of electricity and distribution of electricity and natural gas to residential, commercial, and industrial customers, as well as invests in the development of solar generation projects and energy efficiency programs. In addition, it owns and operates domestic projects engaged in the generation of energy; and offers appliance services and repairs to customers. As of December 31, 2010, it owned approximately 13,538 megawatts of generation capacity. The company also owned and operated approximately 17,608 miles of gas mains, 12 gas distribution headquarters, and 2 subheadquarters, as well as 62 natural gas metering and regulating stations. Public Service Enterprise Group was founded in 1985 and is based in Newark, New Jersey.
Advisors' Opinion:- [By Jake L'Ecuyer]
Leading and Lagging Sectors
In trading on Wednesday, utilities shares were relative leaders, up on the day by about 0.61 percent. Top gainers in the sector included PPL (NYSE: PPL), Empresa Distribuidora y Comercializadora Norte SA (NYSE: EDN), and Public Service Enterprise Group (NYSE: PEG). Telecommunications services sector was the top decliner in the US market on Wednesday.
Top 10 Dividend Stocks To Buy For 2015: Consolidated Edison Company of New York Inc. (ED)
Consolidated Edison, Inc., through its subsidiaries, provides electric, gas, and steam utility services in the United States. It provides electric service to approximately 3.3 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County, as well as provides steam service to office buildings and apartment houses in parts of Manhattan. The company also provides electric service to approximately 0.3 million customers in southeastern New York and in adjacent areas of northern New Jersey, and northeastern Pennsylvania; and gas service to approximately 0.1 million customers in southeastern New York and adjacent areas of northeastern Pennsylvania. In addition, Consolidated Edison involves in the sale and related hedging of electricity to wholesale and retail customers; operation of generating plants; participation in other infrastructure projects; and provision of energy-efficiency services, including the design and installation of lighting retrofits, high-efficiency heating, ventilating and air conditioning equipment, and other energy saving technologies to government and commercial customers. It serves residential, industrial, and large commercial customers. The company was founded in 1884 and is based in New York, New York.
Advisors' Opinion:- [By David Dittman]
The primary risk facing Consolidated Edison Inc (NYSE: ED) right now is an ongoing review of the regulatory regime in its primary market, New York.
- [By Justin Loiseau]
Natural NYC
Consolidated Edison (NYSE: ED ) announced earlier this week that it plans to spend around $100 million extending its New York City natural gas infrastructure. The decision is based on a variety of factors but can be most directly linked to environmental regulation compliance and cheaper costs for both Con Ed and customers.
Top 10 Dividend Stocks To Buy For 2015: Seadrill Limited(SDRL)
Seadrill Limited, an offshore drilling contractor, provides offshore drilling services to the oil and gas industries worldwide. It also offers platform drilling, well intervention, and engineering services. As of March 31, 2011 the company owned and operated 54 offshore drilling units, which consist of drillships, jack-up rigs, semisubmersible rigs, and tender rigs for operations in shallow and deepwater areas, as well as in benign and harsh environments. Seadrill Limited was founded in 1972 and is based in Hamilton, Bermuda.
Advisors' Opinion:- [By Ben Levisohn]
The beatings that Seadrill (SDRL),�Transocean�(RIG),�Diamond Offshore Drilling (DO),�Atwood Oceanics (ATW) and Rowan (RDC) have taken this year has left them looking attractive to some value investors. Barclays, however, doesn’t think the stocks are as cheap as they look.
ReutersShares of Transocean have dropped 16% this year, while Seadrill and Rowan has declined 15% and Diamond Offshore and Atwood Oceanics have fallen 13%, leaving them with valuations as low as 6.1 times 2015 earnings forecasts for Atwood Oceanics to 9.8 times for Diamond Offshore.
Barclays’ James West and Zachary Sadow explain why the drillers aren’t as enticing as they might appear.
Despite a series of negative data-points recently for the offshore drillers, including lower-than-expected dayrates for floating rig fixtures, further signs that the jackup market is slowing, and the inability of uncontracted newbuilds to find long-term commitments, interest is beginning to be piqued by value investors. While we continue to remain constructive on the long-term outlook for the drillers, we believe the seemingly compelling valuations for the offshore driller srepresent a value trap as we see more near-term earnings risk. Based on current market dayrates for various asset classes, we estimate there is over 30% downside to our current EPS estimates on an adjusted fully-delivered basis.
The offshore drillers look relatively cheap on our forward-year P/E and EV/EBITDA estimates, at 7.6x and 6.2x (below the ten-year averages of 12.0x and 6.9x, respectively). However, based on various recent data points which include lower market dayrates, we think there is substantial scope for further downside earnings revisions to consensus numbers…we estimate that on an adjusted fully delivered basis, the group is trading at nearly 12.0x and 7.5x P/E and EV/EBITDA, respectively…
How does this analysis impact the valuation of individual stocks?
- [By Ben Levisohn]
Shares of Atwood have dropped 1.9% to $45.45 at 3:38 p.m. and pulled down other offshore players. Noble has fallen 1.4% to $48.68, Transocean has declined 1.9% to $41.60,�Rowan�(RDC) is off 0.8% at $31.41 and�Seadrill (SDRL) has dropped 1.8% to $35.53.
- [By Ben Levisohn]
Morgan Stanley’s Ole Slorer and Jacob Ng recently met with Seadrill’s (SDRL) chairman John Fredriksen and came away feeling optimistic. In a note released yesterday, they explain why:
Zuma PressWe recently hosted Chairman Fredriksen and Seadrill�� senior management in a few investor group meetings. Discussions centered around Seadrill�� high payout ratio, rig market outlook vs. Seadrill�� positioning, cash flow and funding; as well as the Chairman�� commitment to the company.
We remained convinced of the Chairman�� commitment to Seadrill: Fredriksen purchased 2mm Seadrill shares ~at $28 on Sept 23rd, and remains open to raising his current 23.3% stake at today�� price. More importantly, we believe Seadrill�� Chairman is ready for the company to make a big expansion move into a likely 2015/16 industry trough, should the right ��odern rig��opportunity become available…
While the current dividend run rate can be maintained into 2016, investors were divided when debating optimal dividend versus balance sheet strategy: Seadrill financial flexibility in the event of an extended downturn, as a result of the Chairman�� unique relationships with Asian yards and major lending banks, was an enlightening debate, in our view. Nevertheless, we believe consensus feedback that a lower payout ratio would be more optimal, might resonate with the board.
Shares of Seadrill have gained 1.2% to $23.16 at 10:50 a.m., while Seadrill Partners (SDLP) has fallen 1.8% to $27.29.
Top 10 Dividend Stocks To Buy For 2015: Waste Management Inc.(WM)
Waste Management, Inc., through its subsidiaries, provides waste management services to residential, commercial, industrial, and municipal customers in North America. It offers collection, transfer, recycling, and disposal services. The company also owns, develops, and operates waste-to-energy and landfill gas-to-energy facilities in the United States. Its collection services involves in picking up and transporting waste and recyclable materials from where it was generated to a transfer station, material recovery facility, or disposal site; and recycling operations include collection and materials processing, plastics materials recycling, and commodities recycling. In addition, it provides recycling brokerage, which includes managing the marketing of recyclable materials for third parties; and electronic recycling services, such as collection, sorting, and disassembling of discarded computers, communications equipment, and other electronic equipment. Further, the company e ngages in renting and servicing portable restroom facilities to municipalities and commercial customers under the Port-o-Let name; and involves in landfill gas-to-energy operations comprising recovering and processing the methane gas produced naturally by landfills into a renewable energy source, as well as provides street and parking lot sweeping services. Additionally, it offers portable self-storage, fluorescent lamp recycling, and medical waste services for healthcare facilities, pharmacies, and individuals, as well as provides services on behalf of third parties to construct waste facilities. The company was formerly known as USA Waste Services, Inc. and changed its name to Waste Management, Inc. in 1998. Waste Management, Inc. was incorporated in 1987 and is based in Houston, Texas.
Advisors' Opinion:- [By John Persinos]
One dominant company in the handling, treatment, and disposal of solid waste is Waste Management (WM). With this industry leader, investors are paying for market dominance, relative predictability, good dividends, and high cash flow.
Top 10 Dividend Stocks To Buy For 2015: ONEOK Inc.(OKE)
ONEOK, Inc., a diversified energy company, operates as a natural gas distributor primarily in the United States. The company operates in three segments: ONEOK Partners, Distribution, and Energy Services. The ONEOK Partners segment engages in gathering, processing, fractionating, transporting, storing, and marketing natural gas and natural gas liquids (NGL) principally in the Mid-Continent and Rocky Mountain regions, which include Anadarko Basin of Oklahoma, Fort Worth Basin of Texas, Hugoton and Central Kansas Uplift Basins of Kansas, Williston Basin of Montana, and North Dakota and the Powder River Basin of Wyoming. This segment offers its services to oil and gas production companies; natural gas gathering and processing companies; petrochemical, refining, and NGL marketing companies; Local distribution companies (LDCs) and power generating companies; and natural gas marketing and NGL gathering companies, and propane distributors. The Distribution segment provides natural gas distribution services to residential, commercial, industrial, and transportation customers, as well as public authority customers, such as cities, governmental agencies, and schools in Oklahoma, Kansas, and Texas. The Energy Services segment delivers physical natural gas products and risk management services through its network of contracted transportation and storage capacity, and natural gas supply. This segment?s customers primarily comprise LDCs, electric utilities, and industrial end users. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.
Advisors' Opinion:- [By Rich Duprey]
Ahead of an announced increase due in July 2013, diversified energy company ONEOK (NYSE: OKE ) announced yesterday that it will be paying a quarterly dividend of $0.36 per share on May 15 to�shareholders of record at the close of business�April 30. The dividend remains unchanged from the previous quarter.
- [By Marc Bastow]
Diversified energy services company Oneok (OKE) raised its quarterly dividend 40% to 56 cents per share.
Payout Date: May 15
Ex-Dividend Date: April 28
OKE Dividend Yield: 3.67% - [By Jim Jubak, Senior Markets Editor, MoneyShow.com]
Third, on July 25, ONEOK (OKE) said that it would spin off its natural gas distribution business into a publicly traded company. I think this has left some investors confused. Notice that this is a spin off by ONEOK OKE and not ONEOK Partners OKS. Before the spin off, ONEOK was engaged in two businesses—natural gas distribution (to homes and factories) and natural gas gathering and transportation through pipelines. The company has decided to spin off the natural gas distribution business into a new company called One Gas, early in 2014. ONEOK will keep its natural gas gathering and transportation business, which amounts to a 43.4% ownership stake in ONEOK Partners and control of the general partnership for the ONEOK Partners MLP. In other words, the spin off will have no effect on the assets that ONEOK Partners owns. Which isn't to say that it hasn't had any effect on the share price for ONEOK Partners. First of all, I think the confusion, created by the spin off, may have led some investors in the MLP to sell. Second, I think that removing the very stable cash flow of the natural gas distribution business from ONEOK has raised fears—made less abstract by alerts from the ratings companies—that ONEOK could see a credit rating downgrade that might increase its cost of capital. The worry for ONEOK Partners is that could raise the cost of capital for ONEOK Partners too. I think that's unlikely or that the increase would be small. And finally, the yield on ONEOK has hovered near 3% recently. (It was 2.93% on August 23.) That creates some competition for investment dollars between ONEOK and ONEOK Partners.
Top 10 Dividend Stocks To Buy For 2015: SPX Corporation(SPW)
SPX Corporation provides flow technology products, test and measurement products, thermal equipment and services, and industrial products and services worldwide. The company?s Flow Technology segment provides products and solutions that are used to process, blend, filter, dry, meter, and transport fluids. This segment?s primary offerings include engineered pumps, mixers, process systems, heat exchangers, valves, and dehydration and drying technologies for food and beverage, general industrial, and power and energy markets. Its Test and Measurement segment provides diagnostic service tools, fare-collection systems, and portable cable and pipe locators for the transportation, telecommunications, and utility industries. The company?s Thermal Equipment and Services segment engineers, manufactures, and services cooling, heating, and ventilation products, including dry, wet, and hybrid cooling systems for the power generation, refrigeration, HVAC, and industrial markets, as well as boilers, heating, and ventilation products for the commercial and residential markets. This segment also provides thermal components and engineered services. Its Industrial Products and Services segment designs, manufactures, and markets power systems; industrial tools and hydraulic units; precision machine components for the aerospace industry; crystal growing machines for the solar power generation market; television, radio, and cell phone and data transmission broadcast antenna systems; communications and signal monitoring systems; and precision controlled industrial ovens and chambers. SPX Corporation markets its products through various channels, including stocking distributors, manufacturing representatives, third-party distributors, direct sales, and retailers. The company was formerly known as Piston Ring Company and changed its name to SPX Corporation in 1988. SPX Corporation was founded in 1911 and is headquartered in Charlotte, North Carolina.
Advisors' Opinion:- [By Ben Levisohn]
The big question now: What impact will the closure happen to the fund’s biggest stock holding? As an activist investor, Relational doesn’t take many small positions. It holds 1.5% of Hewlett-Packard (HPQ) shares, for instance, 15% of SPX Corp. (SPW), 3.5% of B/E Aerospace (BEAV) and 4.6% of Timken (TKR).
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