It’s been almost 600 days since the election cycle for the 2016 presidential race started. Investors, and almost everybody else, are just ready for it to be over. With the race in many battleground states too close to call, one thing is for sure. There will be a winner, and the uncertainty that some companies pointed to during third-quarter results presentations also soon will be over.
Some top Wall Street strategists feel that financial and consumer discretionary companies could benefit from the conclusion of the election, as far more of them noted the uncertainty during conference calls than other sectors. We screened the Merrill Lynch research data base for companies in the two sectors that look solid and are rated Buy. We found five that investors may want to add to portfolios now, all of which pay outstanding dividends.
This company remains a top Warren Buffet holding and offers not only safety, but an incredible strong worldwide brand. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands.
Led by Coca-Cola, its portfolio features 20 billion-dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade and Minute Maid. Globally, it is the top provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy its beverages at a rate of more than 1.9 billion servings a day.
The company reported solid third-quarter results that beat the Merrill Lynch estimates. The firm also noted that with margin expansion growing and headwinds from currency starting to abate, things are looking up for the beverage giant. And remember that the company owns 31.5% of Monster Beverage, which continues to deliver big numbers.
Coca-Cola investors receive a 3.3% dividend. The Merrill Lynch price target for the stock is $50. The Wall Street consensus target is $46.89. The stock closed Friday at $42.23.
This financial services leader has strong positions in both equity exchange traded funds (ETFs) and actively managed equity and debt mutual funds. Invesco Ltd. (NYSE: IVZ) looks to be very well-positioned to capitalize on inflows into both segments, as well as higher asset prices, as many on Wall Street see a continuation of the seven-year bull market.
Invesco PowerShares is the boutique investment management firm that manages a family of exchange traded funds (ETFs). The company has been part of Invesco, which markets the PowerShares product, since 2006. The incredible growth and popularity of the product is why many on Wall Street remain so bullish on the stock.
The analysts see the company as one that is best positioned to compete for share, given mix, product offerings and attractive relative performance.
Invesco investors receive a 3.92% dividend. Merrill Lynch has a $36 price target, and the consensus target is $34.23 Shares closed Friday at $28.54.
This stock trades at a very low 10.8 times estimated 2017 forward earnings and could respond well in a rising rate scenario. JPMorgan Chase & Co. (NYSE: JPM) is expected to continue to benefit from commercial loan growth and an upturn in capital spending. Wall Street analysts agree that the stock seems attractively valued on estimated price-to-earnings and a very solid price-to-book value. Some on Wall Street have cautioned that last year’s divestiture of the physical commodities business could provide earnings headwind throughout this year.
The company reported outstanding third-quarter results, and Merrill Lynch thinks the results are sustainable going forward. The firm raised its estimates for 2017 and feels JPMorgan can earn as much as $7 a share by 2018. Despite being a crowded trade, Merrill Lynch also feels that the bank’s superior earnings growth should continue the stock’s outperformance.
Improvement in loan growth, terrific equity capital markets and a steady increase in deposits will be a solid plus. Trading at a discount to many of the large cap banks on 2016 earnings estimates helps upside potential as well. With $2.6 trillion in assets on a worldwide basis, and one of Wall Street’s savviest leaders in Jamie Dimon, the stock is a solid buy for investors.