Pfizer: Big Pharma
Pfizer Inc. (NYSE: PFE) turned in a total return of 11.5% in 2017, rather than a return of 19.8% expected a year ago. The pharmaceutical giant may have outpaced Merck, but analysts feel like the outperfomance will be by a lower margin in 2018. Pfizer’s year-end price of $36.22 comes with a consensus price target of $38.29 and a yield of 3.75%, for an expected total return of about 9.5% in 2018, if they are right.
Procter & Gamble: Will Activist Pressure Matter?
Procter & Gamble Co. (NYSE: PG) may have wasted an entire year while it fought activist investor Nelson Peltz. P&G generated a return of 9.3% in 2017 rather than the 11.1% expected. With a year-end price of $91.88, the consensus target price of $93.53 and the 3.0% dividend yield would imply a coming return of about 4.8% in 2018.
Travelers: The Forgotten Dow Stock
Travelers Companies Inc. (NYSE: TRV) may be the stock everyone forgets is a Dow stock, but its gain of 10.8% in 2017 was far better than the expected of −2.2% return. The insurance and financial giant closed out 2017 at $135.64, and the $135.31 consensus price target and 2.12% dividend yield would imply a return of almost 1.9% in 2018.
United Tech: Can M&A Make More Change?
United Technologies Corp. (NYSE: UTX) posted a return of 16.4% in 2017, better than the expected return of 7.5%. The conglomerate closed out 2017 at $127.57, and the consensus target price of $128.07 and dividend yield of 2.19% would imply an expected total return of just 2.58% in 2017. With it wanting to do M&A and with it willing to pare off assets if needed, is it possible that Wall Street in general is greatly underestimating this well-run company?
United Health: What Health Insurance Problems?
UnitedHealth Group Inc. (NYSE: UNH) managed to generate a total return of 37.8% in 2017, blowing away the start of the year’s forecast of just 13.5%. This came at a time that UnitedHealth has been under the same fire as other health insurers over higher premiums charged, but the company continues to look for domestic M&A opportunities outside of the insurance field and for international bolt-on deals within the health insurance space. Shares were at $220.46, and the consensus target price of $243.76 and the 1.36% dividend yield combine for an expected total return of 11.9% in 2018, if the analysts are right.
Verizon: Top Dividend of the Dow
Verizon Communications Inc. (NYSE: VZ) generated a slight drop, with a return of −0.8% in 2017 rather than its expected return of 2.8%. After closing at $52.93 in 2017, the consensus price target of $51.83 and the whopping 4.46% dividend yield would imply an expected return of about 2.4% in 2018. Verizon would have been far worse in 2017 had it not risen 18% in the second half of the year. Is it possible that Verizon is being underestimated again?
Visa: Riding Credit Card Transaction Game
Visa Inc. (NYSE: V) was already expected to generate a return of 21.6% in 2017, but it came in with a high return of 46% instead. With shares at $114.02 at year’s end, the consensus target price of $124.38 and 0.68% dividend yield would imply that investors should expect a return of almost 9.8% in 2018.
Walmart: The Anti-Amazon Threat
Wal-Mart Stores Inc. (NYSE: WMT) was already expected to get back on the growth wagon with a 10.9% return in 2017, but the world’s largest retailer (and one of the few likely Amazon-proof retailers) managed to generate a return of 42.9% instead. After closing out 2017 at $98.75 and having a $101.33 consensus analyst target, the 2.07% yield would imply a much more muted total return of just 4.7%, if analysts are correct at the start of 2018.
Walt Disney: Big M&A Changes on Top of Star Wars
Walt Disney Co. (NYSE: DIS) was expected to generate a return of just 5.6% in 2017, and it disappointed with a return of just 3.2%. Now the company is making even larger media moves with a huge acquisition and with the entrance into its own streaming service ahead. After closing out 2017 at $107.51, its consensus target price of $112.11 and the 1.56% dividend yield would imply a total return of just over 5.8% in 2018, if the analysts are correct.
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