This top financial services and insurance company also makes the Franchise Picks list at Jefferies. Prudential Financial Inc. (NYSE: PRU) has more than $1 trillion of assets under management as of December 31, 2014, with operations located in the United States, Asia, Europe and Latin America. Prudential’s strong and diverse sales force helps individuals and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management.
The company reported second-quarter earnings that beat Wall Street analysts’ estimates. Revenue rose by 12% year-over-year to $12.5 billion, also exceeding consensus estimates. The company reported net income of $1.4 billion, up by 29% as compared to the second quarter of the previous year. Prudential also is on track for an estimated $1 billion in buybacks for 2015, and an estimated $1.5 billion for next year.
Prudential shareholders are paid a 2.7% dividend. The Jefferies price target is $100, and the consensus target is $98.06. Shares ended Thursday at $84.89.
Packaging Corp. of America
This company has seen some insider selling recently. Packaging Corporation of America (NYSE: PKG) manufactures and sells containerboard and corrugated packaging products in the North America and Europe. The company’s Packaging segment offers various corrugated packaging products, such as conventional shipping containers used to protect and transport manufactured goods; multicolor boxes and displays that help to merchandise the packaged product in retail locations; and honeycomb protective packaging. This segment also produces packaging for meat, fresh fruit and vegetables, processed food, beverages and other industrial and consumer products. Two other segments also contribute significant revenue.
The company posted solid second-quarter revenues of $114 million, and had net income of $1.16 per share. The results topped Wall Street estimates. The Jefferies analysts also noted that the company’s Boise purchase in 2013 is still yielding benefits as they continue to improve operations.
Investors here are paid a solid 3.09% dividend. The Jefferies price target is posted at $82, and the consensus target is $79. The stock closed most recently at $71.15.
Boston Private Financial
This small cap financial company could hold solid upside for investors. Boston Private Financial Holdings Inc. (NASDAQ: BPFH) is a national financial services organization that owns wealth management and private banking affiliates with offices in Boston, New York, Los Angeles, San Francisco, San Jose, Atlanta and elsewhere. The company has a $7 billion private banking balance sheet and manages approximately $30 billion of client assets. It also provides strategic oversight and access to resources, both financial and intellectual, to support affiliate management, marketing, compliance and legal activities.
The company posted a solid second-quarter profit of $0.20 per share, beating the average estimate of five analysts. However, the bank holding company posted revenue of $87.7 million in the period, falling short of consensus forecasts. The Jefferies team likes the recent acquisitions and views the stock as a takeover target.
Boston Private investors are paid a 2.92% dividend. The Jefferies price target is $14.50, and the consensus figure is at $14. The stock closed Thursday at $12.24.
Clearly these are not momentum stocks that will go down in flames if the market has a huge correction. The Jefferies team has done solid work for growth and income investors looking for good total return potential.