Jefferies Has 4 Solid Stocks to Buy in a Very Rich Market
The Trump rally has been a beautiful climb for most investors, and recently all four major indexes closed at 52-week highs, an event that hadn’t happened since 1999. While equities still look like the way to go for most investors, it may be time to look for stocks rated Buy that have better upside potential. Chasing hot names now could lead to some big losses if the market takes a tumble.
A recent Jefferies research report focuses on some stocks rated Buy that have some value for investors at current trading levels. While some have lagged their peers, they could be just the ticket for investors looking to put some cash to work who are wary of the long rally.
Twenty-First Century Fox
This stock has trailed its peers and the broader market and could be a great buy at current levels. Twenty-First Century Fox Inc. (NASDAQ: FOXA) is a diversified international media/entertainment company with balanced and high growth assets.
The company’s operating segments include: Filmed Entertainment (20th Century Fox), TV (FOX Broadcast Network and owned and operated Stations) and Cable Networks like Fox News Channel and FX. It also has a significant equity investment in direct-to-home satellite TV provider BSkyB.
The analysts noted in their report:
We believe the company is well positioned to outperform in calendar 2017. We expect international growth to outpace overall growth and where international contributed 17% of EBITDA in 2016, we see that expanding to 28% in calendar 2020. Our new fiscal 2018 EBITDA estimate is 2% ahead. Stock is trading at 7.8x 2017 EBITDA, below average of 10.2x and a 16% discount to peers.
Shareholders are paid a 1.27% dividend. The Jefferies price objective for the stock is $35, and the Wall Street consensus target is $31.61. The shares closed Friday at $28.36.
With the potential for a very cold winter on tap, this company may look to extending 2016 gains into next year. DTE Energy Inc. (NYSE: DTE) is a Detroit-based diversified energy company involved in the development and management of energy-related businesses and services nationwide.
The company’s operating units include an electric utility serving 2.1 million customers in Southeastern Michigan and a natural gas utility serving 1.2 million customers in Michigan. The DTE Energy portfolio includes non-utility energy businesses focused on power and industrial projects, natural gas pipelines, gathering and storage, and energy marketing and trading.
DTE recently declared an $0.825 per share dividend on its common stock payable. That is a 7.1% increase from the previous quarterly dividend and reflects the board’s confidence in the company’s growth plans. This hike continues DTE Energy’s consistent dividend history, having issued a cash dividend for more than 100 years.
DTE shareholders receive a 3.51% dividend. Jefferies recently initiated the stock at a Buy, citing the company as a best-in-class utility, with a price target of $102. The consensus target is $100.13. The stock closed Friday at $94.03.