Jefferies Franchise Picks Still Crushing S&P 500: 5 to Buy Now

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Hasbro

Toys and games rarely go out of favor, and this top company is among the best in the business. Hasbro Inc. (NASDAQ: HAS) engages in the provision of children and family leisure time products and services with a portfolio of brands and entertainment properties. The company’s brand names include Littlest Pet Shop, Monopoly, My Little Pony, Nerf, Play-Doh and Transformers.

The Entertainment and Licensing segment conducts movie, television and digital gaming entertainment operations, including the operations of Hasbro Studios and Backflip, as well as engages in the out-licensing of trademarks, characters and other brand and intellectual property rights to third parties for digital gaming and consumer products.

The analysts said this about Hasbro:

The company partners with major content owners to license brands for toy and collectible products. The company’s licensing of its own brands to other CP category specialists has directly benefited consumer engagement and profitability. Partnerships with key media brands on a global basis imply multi-level growth. We expect greater franchise economics from investments in films/TV.

Investors receive a 3.19% dividend. The $120 Jefferies price objective compares to the $98.64 consensus estimate. The stock closed most recently at $86.03.

KeyCorp

This midcap bank makes good sense for the second quarter and the rest of 2019. KeyCorp (NYSE: KEY) operates as the bank holding company for KeyBank National Association, which provides deposit, lending, cash management and investment services to individuals, small and medium-sized businesses.

The company also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets banner.

The top managers are attracted to the larger regional banks, as valuations look very reasonable and cost-saving plans are helping to make forward estimates look very achievable. With overall credit remaining solid, earnings and loan deposit and fee growth all are positive metrics for the bank.

Jefferies has stayed bullish on the shares:

We believe KEY has the potential to become a higher growth story, driven by synergies related to its acquisition of First Niagara in 2015, and recently elevated business investment. The bank has an attractive valuation, trading at a ~2x discount to its peer average on consensus price to earnings.

KeyCorp investors receive a 4.14% dividend. Jefferies has set an $18 target price. The consensus price target is $19.34, and shares closed Thursday at $16.48.

Texas Instruments

This old-school chip tech play offers solid value at current levels is the lone semiconductor stock on the Jefferies Franchise Picks list. Texas Instruments Inc. (NASDAQ: TXN) is a broad-based supplier of semiconductor components, ranging from digital signal processors to high-performance analog components, to digital light-processing technology and calculators.

Some 65% of the company’s sales are exposed to the well-diversified, business-to-business industrial, automotive, communications infrastructure and enterprise markets. While the stock was hit hard recently as it is a big Apple supplier, the long-term outlook for this venerable leader makes it a safer bet for accounts with less risk tolerance.

Jefferies loves the potential for this long-time sector leader:

Texas Instruments is an Analog Renaissance and 4th Tectonic Shift in Computing beneficiary. The company benefits from secular and cyclical demand tailwinds over the next 5 years. A shift toward a Parallel Processing and IoT computing paradigm translates to secular demand growth for the company’s ICs sold into IoT devices, which will ship in the 10’s of billions of units. Continued consolidation of analog industry translates to better pricing and higher gross margins. The firm’s superior cost structure translates to higher gross margins and share gains.

The dividend yield is 2.72%. Jefferies has a $137 price target. The consensus target is $109.37, but shares were last seen trading at $113.24.

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These five outstanding picks from the Jefferies analysts all have solid upside the firm’s price targets. While better suited for more aggressive growth accounts, they all look like good picks for the rest of 2019 and beyond.