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Guess what folks? The market is at all-time highs. You can go ahead and rejoice now, thanking the FOMC for their upcoming easing. Now if we can get a trade deal done, there will be no stopping us at all. With all this momentum, it may feel like you can run out there and buy any stock that shows up on your computer screen. I’m going to warn you against that. Eventually, the momentum will die down and those stocks with strong earnings trends will hang in there. One way to find stocks with strong earnings trends is by leaning on the power of the Zacks Rank.
Today’s Bull of the Day is a stock in the good graces of the Zacks Rank. It’s Zacks Rank #1 (Strong Buy) General Mills. General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit, and savory snacks, as well as organic products, including refrigerated yogurt, nutrition bars, meal kits, salty snacks, ready-to-eat cereal, and grain snacks.
The reason for the favorable rank lies in the series of earnings estimate revisions to the upside. Over the last thirty days, three analysts have increased their estimates for the current year and next year. The bullish sentiment has pushed up the Zacks Consensus Estimate for the current year to $3.15 while next year’s number is up at $3.35.
You can see the strong move in earnings estimates on the Price, Consensus and EPS Surprise Chart. Estimates bottomed out late last year, then began to move upwards. You can see the upswing in not only 2018 estimates, but also a nice trend higher for 2019 and 2020. The gaps between these lines shows the year-over-year growth upcoming as well.
Finally, the market is back to trading at all-time highs. We can thank the FOMC for their contributions with their upcoming easing. Now if we can get a US-China trade deal done, there will be no stopping us at all. With all this momentum, it may feel like you can run out there and buy any stock that shows up on your computer screen. I’m going to warn you against that. Eventually, the momentum will die down and those stocks with weak earnings trends will come under pressure. One way to avoid these weak trends is by leaning on the Zacks Rank. Those stocks with favorable Zacks Ranks have very strong earnings trends. Those with weak ranks, have been coming under pressure.
Today’s Bear of the Day is a stock with a weaker earnings trend. I’m talking about Zacks Rank #5 (Strong Sell) Douglas Dynamics. Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment primarily in North America. It operates in two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light and heavy duty trucks, as well as various related parts and accessories.
The Automotive – Replacement Parts industry is in the Bottom 14% of our Zacks Industry Rank. Douglas Dynamics is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank lies in recent earnings estimate revisions to the downside coming from analysts. Looking at the next quarter number, analyst has dropped his number, bringing down our Zacks Consensus Estimate from 54 cents to 43 cents. That 43-cent number would represent a 2.2% contraction in earnings. Current year growth estimates are for 3.9%.
It’s important to point out that next year’s EPS growth looks better. In fact, over the last sixty days, analysts have increased their numbers for next year. That’s pushed up the Zacks Consensus Estimate from $2.35 to $2.42. While next quarter could be a little rough, things are looking much better over the long-term.
Investors looking for other stocks within the same industry with more favorable ranks are not going to find much. The best Zacks Rank in the industry is a Zacks Rank #3 (Hold).
Additional content:
3 Tech Stocks for Dividend Investors to Buy
Tech stocks are likely to remain some of the most desirable on the market for years to come. But investors who want to be a part of the technology industry don’t just have to search for high-flying growth stocks. Instead, tech-minded investors can take a page out of the income investing book and focus on companies with solid dividends.
Finding a strong dividend-yielding tech stock might seem difficult, but investors should not feel too intimidated. For example, Apple and some of the other biggest names in tech, pay dividends. And dividend-focused investors can search for the best tech stocks by using the Zacks Stock Screener, which is a great one-stop screening tool for investors of all kinds.
By limiting our search to companies in our “Computer and Technology” sector with Zacks Rank #2 (Buy) or better rankings, we can ensure that we are finding the highest quality stocks to buy right now. Throw in your preferred dividend yield and you will find some of the best tech stocks for dividend investors to target.
With all that said, check out these three dividend-paying tech stocks to buy right now:
1. CDW Corporation
CDW is a multi-brand technology solutions powerhouse that works with enterprise-level firms, governments, and more across the U.S., Canada, and the UK. The Lincolnshire, Illinois-based company’s portfolio is made up of over 1,000 brands and 100,000 products that range from security offerings to cloud computing solutions. CDW is coming off a better-than-projected first quarter of 2019 and has seen its stock price soar 37% in 2019. Shares of CDW opened at $106.48 on Thursday, not too far off their 52-week high.
Along with its strong first quarter and impressive price movement, CDW declared a new quarterly cash dividend of $0.295 per common share, which marked a 40% increase over last year’s dividend. The tech firm currently pays a $1.18 annualized dividend, with a 1.12% yield. Looking ahead, our current Zacks Consensus Estimates call for the company’s adjusted fiscal 2019 earnings to climb 11.6% on 7.3% revenue growth. Meanwhile, the firm’s price/sales ratio of 0.92 marks an impressive discount compared to its industry’s 2.15 average. And CDW has seen its earnings estimate revision activity trend completely upward recently for fiscal 2019 and 2020, which helps CDW earn a Zacks Rank #2 (Buy). The firm also sports an “A” grade for Momentum and “Bs” for both Value and Growth.
2. Applied Materials, Inc.
Chip stocks got a boost earlier this week on optimism regarding a possible resolution to the ongoing U.S.-China trade war. This helped lift shares of Applied Materials, which are now up roughly 31% in 2019. Despite the climb, AMAT stock still rests 14% below its 52-week high at $43.44 per share through late morning trading Thursday. Like many other chip firms, Applied Materials’ 2019 earnings and revenue are projected to fall, thanks to a multitude of factors within the historically cyclical semiconductor industry
Despite the current downturn, the semiconductor equipment maker’s long-term outlook is more positive. The firm’s 2020 revenues are projected to jump 8.5% above our current-year estimate to help lift earnings 18.3% higher than 2019’s estimate. Meanwhile, AMAT’s board recently approved a 5% increase to its quarterly cash dividend from $0.20 to $0.21 per share to help lift its yield to 1.98%. On top of that, Applied Materials’ P/E of 14.29 matches its industry’s average and its price/sales ratio of 2.52 represents a discount against its industry’s 3.07. AMAT is Zacks Rank #2 (Buy) right now, based, in large part, on its positive longer-term earnings estimate revision activity.
3. Microsoft
Microsoft stock counties to hit new all-time highs, which it did once again Thursday. Shares of MSFT are now up 37% in 2019 and touched $137.66 in morning trading. The tech titan is currently the world’s most valuable public firm, with a market cap just over $1 trillion. Microsoft’s legacy Windows and Office businesses have evolved and continue to drive growth. In recent years, however, MSFT’s cloud computing unit has grabbed Wall Street’s attention as the firm’s division, highlighted by Azure, has turned Microsoft into the second largest cloud player behind only Amazon.
In recent weeks, Microsoft has detailed some of its plans to enter the nascent cloud gaming market in an effort to expand its video game strength for the next era, as Google aims to break in this fall. This includes a partnership with gaming rival Sony. MSFT’s current full-year earnings are projected to climb 18% on the back of 13.1% revenue growth. Microsoft has paid out a $0.46 per share quarterly dividend throughout fiscal 2019, for an annualized payout of $1.84 a share. Microsoft’s current dividend represented a 9.5% jump from the prior year’s quarterly payout, while its yield sits at 1.36%. MSFT is a Zacks Rank #2 (Buy) that also rocks a “B” grade for Growth and an “A” for Momentum.
Will you retire a millionaire?
One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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General Mills, Douglas Dynamics, CDW, Applied Materials and Microsoft highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – June 21, 2019 – Zacks Equity Research Shares of General Mills (GIS - Free Report) as the Bull of the Day, Douglas Dynamics (PLOW - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on CDW Corporation (CDW - Free Report) , Applied Materials, Inc. (AMAT - Free Report) and Microsoft (MSFT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Guess what folks? The market is at all-time highs. You can go ahead and rejoice now, thanking the FOMC for their upcoming easing. Now if we can get a trade deal done, there will be no stopping us at all. With all this momentum, it may feel like you can run out there and buy any stock that shows up on your computer screen. I’m going to warn you against that. Eventually, the momentum will die down and those stocks with strong earnings trends will hang in there. One way to find stocks with strong earnings trends is by leaning on the power of the Zacks Rank.
Today’s Bull of the Day is a stock in the good graces of the Zacks Rank. It’s Zacks Rank #1 (Strong Buy) General Mills. General Mills, Inc. manufactures and markets branded consumer foods worldwide. The company operates in five segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet. It offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit, and savory snacks, as well as organic products, including refrigerated yogurt, nutrition bars, meal kits, salty snacks, ready-to-eat cereal, and grain snacks.
The reason for the favorable rank lies in the series of earnings estimate revisions to the upside. Over the last thirty days, three analysts have increased their estimates for the current year and next year. The bullish sentiment has pushed up the Zacks Consensus Estimate for the current year to $3.15 while next year’s number is up at $3.35.
You can see the strong move in earnings estimates on the Price, Consensus and EPS Surprise Chart. Estimates bottomed out late last year, then began to move upwards. You can see the upswing in not only 2018 estimates, but also a nice trend higher for 2019 and 2020. The gaps between these lines shows the year-over-year growth upcoming as well.
Bear of the Day:
Finally, the market is back to trading at all-time highs. We can thank the FOMC for their contributions with their upcoming easing. Now if we can get a US-China trade deal done, there will be no stopping us at all. With all this momentum, it may feel like you can run out there and buy any stock that shows up on your computer screen. I’m going to warn you against that. Eventually, the momentum will die down and those stocks with weak earnings trends will come under pressure. One way to avoid these weak trends is by leaning on the Zacks Rank. Those stocks with favorable Zacks Ranks have very strong earnings trends. Those with weak ranks, have been coming under pressure.
Today’s Bear of the Day is a stock with a weaker earnings trend. I’m talking about Zacks Rank #5 (Strong Sell) Douglas Dynamics. Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment primarily in North America. It operates in two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light and heavy duty trucks, as well as various related parts and accessories.
The Automotive – Replacement Parts industry is in the Bottom 14% of our Zacks Industry Rank. Douglas Dynamics is a Zacks Rank #5 (Strong Sell). The reason for the unfavorable rank lies in recent earnings estimate revisions to the downside coming from analysts. Looking at the next quarter number, analyst has dropped his number, bringing down our Zacks Consensus Estimate from 54 cents to 43 cents. That 43-cent number would represent a 2.2% contraction in earnings. Current year growth estimates are for 3.9%.
It’s important to point out that next year’s EPS growth looks better. In fact, over the last sixty days, analysts have increased their numbers for next year. That’s pushed up the Zacks Consensus Estimate from $2.35 to $2.42. While next quarter could be a little rough, things are looking much better over the long-term.
Investors looking for other stocks within the same industry with more favorable ranks are not going to find much. The best Zacks Rank in the industry is a Zacks Rank #3 (Hold).
Additional content:
3 Tech Stocks for Dividend Investors to Buy
Tech stocks are likely to remain some of the most desirable on the market for years to come. But investors who want to be a part of the technology industry don’t just have to search for high-flying growth stocks. Instead, tech-minded investors can take a page out of the income investing book and focus on companies with solid dividends.
Finding a strong dividend-yielding tech stock might seem difficult, but investors should not feel too intimidated. For example, Apple and some of the other biggest names in tech, pay dividends. And dividend-focused investors can search for the best tech stocks by using the Zacks Stock Screener, which is a great one-stop screening tool for investors of all kinds.
By limiting our search to companies in our “Computer and Technology” sector with Zacks Rank #2 (Buy) or better rankings, we can ensure that we are finding the highest quality stocks to buy right now. Throw in your preferred dividend yield and you will find some of the best tech stocks for dividend investors to target.
With all that said, check out these three dividend-paying tech stocks to buy right now:
1. CDW Corporation
CDW is a multi-brand technology solutions powerhouse that works with enterprise-level firms, governments, and more across the U.S., Canada, and the UK. The Lincolnshire, Illinois-based company’s portfolio is made up of over 1,000 brands and 100,000 products that range from security offerings to cloud computing solutions. CDW is coming off a better-than-projected first quarter of 2019 and has seen its stock price soar 37% in 2019. Shares of CDW opened at $106.48 on Thursday, not too far off their 52-week high.
Along with its strong first quarter and impressive price movement, CDW declared a new quarterly cash dividend of $0.295 per common share, which marked a 40% increase over last year’s dividend. The tech firm currently pays a $1.18 annualized dividend, with a 1.12% yield. Looking ahead, our current Zacks Consensus Estimates call for the company’s adjusted fiscal 2019 earnings to climb 11.6% on 7.3% revenue growth. Meanwhile, the firm’s price/sales ratio of 0.92 marks an impressive discount compared to its industry’s 2.15 average. And CDW has seen its earnings estimate revision activity trend completely upward recently for fiscal 2019 and 2020, which helps CDW earn a Zacks Rank #2 (Buy). The firm also sports an “A” grade for Momentum and “Bs” for both Value and Growth.
2. Applied Materials, Inc.
Chip stocks got a boost earlier this week on optimism regarding a possible resolution to the ongoing U.S.-China trade war. This helped lift shares of Applied Materials, which are now up roughly 31% in 2019. Despite the climb, AMAT stock still rests 14% below its 52-week high at $43.44 per share through late morning trading Thursday. Like many other chip firms, Applied Materials’ 2019 earnings and revenue are projected to fall, thanks to a multitude of factors within the historically cyclical semiconductor industry
Despite the current downturn, the semiconductor equipment maker’s long-term outlook is more positive. The firm’s 2020 revenues are projected to jump 8.5% above our current-year estimate to help lift earnings 18.3% higher than 2019’s estimate. Meanwhile, AMAT’s board recently approved a 5% increase to its quarterly cash dividend from $0.20 to $0.21 per share to help lift its yield to 1.98%. On top of that, Applied Materials’ P/E of 14.29 matches its industry’s average and its price/sales ratio of 2.52 represents a discount against its industry’s 3.07. AMAT is Zacks Rank #2 (Buy) right now, based, in large part, on its positive longer-term earnings estimate revision activity.
3. Microsoft
Microsoft stock counties to hit new all-time highs, which it did once again Thursday. Shares of MSFT are now up 37% in 2019 and touched $137.66 in morning trading. The tech titan is currently the world’s most valuable public firm, with a market cap just over $1 trillion. Microsoft’s legacy Windows and Office businesses have evolved and continue to drive growth. In recent years, however, MSFT’s cloud computing unit has grabbed Wall Street’s attention as the firm’s division, highlighted by Azure, has turned Microsoft into the second largest cloud player behind only Amazon.
In recent weeks, Microsoft has detailed some of its plans to enter the nascent cloud gaming market in an effort to expand its video game strength for the next era, as Google aims to break in this fall. This includes a partnership with gaming rival Sony. MSFT’s current full-year earnings are projected to climb 18% on the back of 13.1% revenue growth. Microsoft has paid out a $0.46 per share quarterly dividend throughout fiscal 2019, for an annualized payout of $1.84 a share. Microsoft’s current dividend represented a 9.5% jump from the prior year’s quarterly payout, while its yield sits at 1.36%. MSFT is a Zacks Rank #2 (Buy) that also rocks a “B” grade for Growth and an “A” for Momentum.
Will you retire a millionaire?
One out of every six people retires a multimillionaire. Get smart tips you can do today to become one of them in a new Special Report, “7 Things You Can Do Now to Retire a Multimillionaire.”
Click to get it free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.