Main financial assets discussed: PepsiCo, Inc. stock (NASDAQ: PEP)
Top 3 key points:
1. North America contributes the most to PepsiCo's revenues and operating margin.
2. PepsiCo generates only 5% of its revenue from high-margin concentrate sales, compared to 56% for The Coca-Cola Company.
3. FritoLay is the most important contributor to PepsiCo's operating margin.
Recommended actions: **Sell** or **Hold**. The article suggests that PepsiCo's stock may be overvalued by about 32% and there is a more than 90% chance that the stock is overvalued at the current price. However, the article also acknowledges that many individual investors may hold the stock with a low-cost basis and may choose to continue holding it for dividend payments.
Goldman Sachs and Morgan Stanley analysts recommend stocks like Nvidia, Microsoft, Alphabet, Amazon, Meta Platform, Salesforce, and Apple, while companies like Zoom, Baidu, Campbell, Aramark, Hasbro, Intuit, Visa, GXO Logistics, Upstart, and SoFi receive price target updates or ratings changes from various financial institutions.
While Coca-Cola stock has not outperformed the market in recent years, its reliable dividend and strong brand make it a worthwhile investment for those seeking a stable addition to their portfolio.
In a potential bear market, British American Tobacco, Johnson & Johnson, and Coca-Cola are three stocks that have the potential to beat the market due to their defensive qualities and strong potential for continuing profitability.
Dividend investors often face a choice between high-yield stocks that offer more immediate income and low-yield stocks with faster dividend growth, but finding stocks that offer both can be challenging, with only a few rare "dividend unicorns" meeting these criteria, such as Arbor Realty Trust, Clearway Energy, NextEra Energy Partners, and VICI Properties.
### Summary
Wall Street analysts recommend dividend stocks as a defensive move against potential economic downturns, highlighting Brookfield Renewable Partners and Diamondback Energy as appealing options with promising outlooks.
Summary: As investors brace for the possibility of a bear market, three top stocks to consider are Hormel Foods, Walmart, and McDonald's, each of which has defensive businesses that can thrive in tough economic conditions.
Starbucks and Williams-Sonoma are both strong dividend stock candidates, with Starbucks offering a yield of 2.2% and Williams-Sonoma offering a yield of 2.4%, while both companies have shown resilience and the potential for future outperformance.
Large-cap companies that are taking market share, like Apple, Nvidia, and Urban Outfitters, have the potential to generate significant returns for investors due to their advantages in financing, brand recognition, and economies of scale.
Investors searching for undervalued stocks in the current expensive market may want to consider Morningstar's list of the 10 most undervalued stocks, which includes companies such as Yum! Brands, Estee Lauder, and Wells Fargo.
High-quality dividend stocks, which have been market favorites in recent years, are currently not receiving much respect but now may be a good time to buy.
The article highlights four top-tier growth stocks, including Amazon, PubMatic, AstraZeneca, and Starbucks, that investors may regret not buying following the Nasdaq bear market dip.
Summary: Many investors are predicting a new bull market for the S&P 500, and while it has yet to reach a new high, it is only 7% away; three stocks to consider buying are Amazon, which has a strong presence in the logistics market and opportunities in AI, Mastercard, which benefits from its business moat and growth in emerging markets, and Vertex Pharmaceuticals, which has potential catalysts in its pipeline and an attractive valuation.
Verizon, Medtronic, Hasbro, Dell, and Walmart are highlighted as attractive dividend stocks by Wall Street analysts, offering investors potential income and long-term returns.
Investing requires emotional control and long-term thinking, and Warren Buffett's top forever stocks for the long haul include Kraft Heinz, Coca-Cola, and American Express.
Amazon stock, Carvana, Uber Technologies, and General Electric are identified as stocks to watch in today's market as they have strong relative strength lines at new highs.
This article mentions Johnson & Johnson (NYSE:JNJ) as the stock being discussed. The author's recommendation is to buy this stock for portfolios with a lower risk tolerance.
The author's core argument is that despite recent challenges, Johnson & Johnson is attractively valued and well-positioned for long-term growth and increasing shareholder returns. They highlight the company's AAA-rated balance sheet, its mix of growth and value, and its ability to protect investors from market turmoil.
Key information and data include the underperformance of JNJ shares compared to the S&P 500, the uncertainty surrounding baby powder lawsuits, the company's future growth opportunities in MedTech and Pharmaceuticals, its commitment to R&D and innovation, and its shareholder distribution strategy, including a 3.0% dividend yield. The article also discusses the company's valuation and suggests that it may be trading below its fair value.
Summary: While the ups and downs of the stock market can be frustrating, history has shown that investing in strong companies like Amazon can lead to significant returns, while companies like Peloton face uncertain long-term growth prospects.
Coca-Cola is currently a hold, as it holds a dominant position in the beverage industry with a strong market share and brand value, but its projected growth rate and valuation are not compelling enough for investment compared to alternative options like the U.S. 5-year treasury bond.
Despite uncertainty in the stock market, three stocks that are well-positioned to weather a market crash are Berkshire Hathaway, Walmart, and PepsiCo. Berkshire Hathaway's strong financial results and diversified business make it resilient, while Walmart benefits from its discount retail status and reputation as the largest grocery retailer in America. PepsiCo's steady earnings growth, pricing power, and long history of increasing dividends make it a reliable choice.
Johnson & Johnson (JNJ) recently spun off its consumer healthcare products division in an effort to unlock value in its pharmaceutical business, but while this move may lead to slightly better growth, analysts are skeptical that it will deliver market-beating returns over the next decade. The author divested their JNJ investment due to underperformance and a low dividend growth rate, but still considers it a good choice for those seeking stability and safe income.
The Southern Company, Oneok, and Public Storage are exceptional dividend stocks that have consistently paid stable dividends and increased their payouts, making them highly attractive for investors looking for reliable and growing income.
To prepare for a bear market, consider investing in Berkshire Hathaway and other defensive stocks such as Albertsons, Target, Archer-Daniels-Midland, Campbell Soup, and General Mills that offer reasonable valuations and income-generating opportunities.
Four growth stocks that investors should consider buying in the wake of the Nasdaq bear market dip are Meta Platforms, JD.com, BioMarin Pharmaceutical, and Pinterest, all of which offer appealing valuations and strong growth potential.
Three dividend stocks worth considering now are American Electric Power (AEP), Dominion Energy (D), and RTX, as they offer steady dividend payments, lower volatility, and attractive yields, making them suitable choices for passive income and capital preservation during a bear market.
Three stable dividend stocks that can be solid investments for retirement are Bristol Myers Squibb, Apple, and Verizon Communications, with Bristol Myers Squibb offering a high yield and a diverse business, Apple having potential for future dividend increases, and Verizon Communications having the highest yield and a track record of increasing dividends.
Long-term investors have an opportunity to invest in growth stocks like Visa, Western Digital, Jazz Pharmaceuticals, and Nio amidst the bear market dip in the Nasdaq.
Costco Wholesale and Coca-Cola are two stocks that have a track record of outperforming in both bear and bull markets, with Costco's membership model and potential for international expansion and Coca-Cola's strong brand, global distribution network, and diverse product portfolio making them attractive investment options.
Amid the unpredictability of the stock market, investors can find stability and passive income through the steady dividends offered by certain dividend stocks, such as Verizon Communications Inc. and Energy Transfer LP, which both boast yields of over 8% and have been recommended by financial giant Morgan Stanley.
Dividend stocks are a good option for investors seeking stable income or a hedge against inflation, but it's important to choose stocks with above-market dividend yields and strong dividend growth rates for optimal capital appreciation and income generation.
Despite challenges such as surging Treasury yields and Federal Reserve hawkishness, the equity-investing landscape has shown resilience, with the S&P 500 posting modest gains and the Nasdaq 100 up for the week. Investors remain optimistic about the economy's ability to withstand higher borrowing costs and anticipate positive revenue and earnings growth. Credit markets have remained stable, while volatility has remained muted and profit strength in Corporate America is expected to drive stocks.
Dividend-paying stocks, such as Exxon Mobil, Coterra Energy, Brookfield Infrastructure Partners, American Electric Power, and Darden Restaurants, are being recommended as attractive options for investors due to their strong earnings, cash flows, and dividend growth.
