With earnings reporting mostly complete, investors are turning their eyes toward the rest of the first quarter, and how it likely is shaping up. Things are looking positive as fourth-quarter results from the great majority of the S&P 500 are now in the books, and the numbers are encouraging. Earnings are on pace to increase 7% to 8% for the quarter, which will end up being the fastest rate of growth in two years.
The UBS Dividend Ruler portfolio continues to outperform the overall market on a long-term basis, and we continue to think that the outperformance will stay in place for the rest of this year and into 2018. The analysts focus on stocks with solid dividends that have consistently grown over time, and their performance this year is outstanding. Last year the portfolio slightly underperformed the S&P 500 on a total return basis, but since inception the outperformance is stunning.
Making its debut on the Dividend Rulers list (replacing Exxon Mobil) is a top Canadian energy play for investors to consider. Suncor Energy Inc. (NYSE: SU) operates as an integrated energy company. It primarily focuses on developing petroleum resource basins in Canada’s Athabasca oil sands; explores, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally; transports and refines crude oil; markets petroleum and petrochemical products primarily in Canada; and markets third-party petroleum products.
Suncor investors are paid a 2.8% dividend. The Wall Street consensus target is $37.46. The shares closed trading on Wednesday at $30.72.
We also screened for the current highest yielding members in the in the Dividend Rulers portfolio. Here are the top four.
This integrated giant is a safer way for investors looking to stay long the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is an integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. It sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas (LNG). Some on Wall Street estimate the company will have a compound annual growth rate of over 5% for the next five years.
Chevron investors are paid a very nice 3.82% dividend. The consensus price target is $126.25, and shares closed Wednesday at $111.58.
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 almost eight-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 are paid a very rich 3.67% dividend. The consensus target is set at $33.09. The shares closed Wednesday at $30.52.
The fast-food giant has been on a roll since early November, but it still remains a solid pick for investors seeking dividends and a degree of safety. McDonald’s Corp. (NYSE: MCD) is the world’s leading global foodservice retailer, with over 36,000 locations serving approximately 69 million customers in over 100 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local business persons.
The company reported earnings and revenue that outpaced analysts’ estimates, but a drop in U.S. comparable restaurant sales sparked some concerns. In the fourth quarter, earnings excluding items were higher than in the same period of last year, but revenue fell 5%.
McDonald’s shareholders are paid a tasty 3.03% dividend. The consensus price target is $131.17. The stock closed most recently at $124.67.
This is among the world’s largest pharmaceutical drug makers by sales and remains a top international pick across Wall Street. Novartis AG (NYSE: NVS) develops, manufactures, and markets a range of healthcare products worldwide. It operates through three segments.
The Pharmaceuticals segment offers patented prescription medicines for oncology, neuroscience, retina, immunology and dermatology, respiratory, cardio-metabolic, established medicines and cell and gene therapies. The Alcon segment provides eye care products, while the Sandoz segment offers generic prescription medicines.
Shareholders are paid a 3.15% dividend. The consensus price objective is $91.20. The shares closed Wednesday at $74.60.
All these companies make good sense for investors seeking solid total return. While earnings have grown smartly, the market remains expensive and investors may want to scale capital in over the next 90 days and see if we don’t get a sell-off.