The Senate passing a tax reform package was huge news for the market, and while there remains a lot of work between the Senate and the House of Representatives to come to a final agreement on the bill, there is a good chance that something could be on the president’s desk and signed before the end of the year. Not only will individual taxpayers get some decent relief, but U.S. corporations look to benefit in a big way as well.
The current U.S. corporate tax rate is among the highest in the developed world, and if it drops down to 20%, it could mean a huge increase in S&P 500 earnings in 2018 and beyond. In fact, the chief strategist at Deutsche Bank, Binky Chadha, estimates earnings could increase by as much as 12% next year.
Deutsche Bank has a basket of high-tax stocks that could see some big benefits from a tax cut. We found five that are rated Buy that would be great additions to growth accounts.
This top pharmaceutical and med-tech stock has very solid growth potential. Abbott Laboratories (NYSE: ABT) manufactures and sells health care products worldwide. Its Established Pharmaceutical Products segment offers branded generic pharmaceuticals to treat pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptoms; gynecological disorders; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière’s disease and vestibular vertigo; pain, fever and inflammation; migraines; anti-infective clarithromycin; cardiovascular and metabolic products; and influenza vaccines, as well as to regulate physiological rhythm of the colon.
Its Diagnostic Products segment provides immunoassay and clinical chemistry systems; assays used to screen or diagnosis cancer, cardiac, drugs of abuse, fertility, infectious diseases, and therapeutic drug monitoring; hematology systems and reagents; diagnostic systems and cartridges; instruments to automate the extraction, purification and preparation of DNA and RNA from patient samples, and detects and measures infectious agents; genomic-based tests; informatics and automation solutions; and a suite of informatics tools and professional services.
Abbott investors receive a 1.94% dividend. The Deutsche Bank price target for the stock is $62, and the Wall Street consensus target is $61.47. The shares traded early Tuesday at $54.85.
This was a huge player in the fiber build-outs in the 1990s and may be ready to ramp back up for new deployments. Corning Inc. (NYSE: GLW) is one of the world’s leading innovators in materials science. For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics and optical physics.
Its products enable diverse industries such as consumer electronics, telecommunications, transportation and life sciences. They include damage-resistant cover glass for smartphones and tablets; precision glass for advanced displays; optical fiber, wireless technologies and connectivity solutions for high-speed communications networks; trusted products that accelerate drug discovery and manufacturing; and emissions-control products for cars, trucks and off-road vehicles.
Many see the company as a winner in not only the new 5G wireless, but also strong Internet of Things applications. Most see both areas as infrastructure opportunities for the company given the robust demand for IoT connectivity and 5G infrastructure builds.
Corning investors are paid a 1.92% dividend. Deutsche Bank has a $35 price target, and the consensus target is $31.21. Shares traded at $32.25 Tuesday morning.