5 Jefferies Franchise Picks Pay Solid Dividends and Can Whip Inflation Now


This is one of the top picks across Wall Street in its sector and an outside way to play the electric vehicle trend. Freeport-McMoRan Inc. (NYSE: FCX) is the world’s largest publicly traded copper and moly producer, as well as the eighth largest gold producer. Its key operating and development assets are in Indonesia, North America, South America and Africa.

Highly leveraged toward copper mining, the company could be a big player in a scenario of rebuilding and repairing old and battered projects, and it clearly would benefit from stronger demand and higher prices for industrial commodities.

Trafigura’s Chief Economist Sadd Rahim recently told analysts that he remains bullish on the current commodity cycle and sees room for significant further upside potential to commodity prices over the next one to three years. In particular, this is due to accelerating demand growth, excluding China and supply constraints. He believes that this cycle is in the very early stages, as key demand drivers, such as pent-up consumer demand, accelerating global capital expenditures and massive stimulus in the United States, have yet to fully kick in.

Investors receive just a 0.68% dividend. Jefferies has set its price target at $55. The posted consensus target for Freeport-McMoRan stock is $42.33. The shares were last seen on Friday trading at $38.28 apiece.

Gilead Sciences

This stock is trading a very reasonable 9.53 times estimated 2021 earnings and has big-time upside potential. Gilead Sciences Inc. (NASDAQ: GILD) is a research-based biopharmaceutical company that discovers, develops and commercializes medicines in the areas of unmet medical need in the United States, Europe and elsewhere.

The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/Eviplera, Stribild and Atripla products for the treatment of human immunodeficiency virus (HIV) infection; Veklury, an injection for intravenous use, for the treatment of coronavirus disease 2019; and Epclusa, Harvoni, Vosevi, Vemlidy and Viread for the treatment of liver diseases. It also offers Yescarta, Tecartus, Trodelvy and Zydelig products for the treatment of hematology, oncology and cell therapy patients.

In addition, Gilead provides Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; Ranexa, an oral formulation for the treatment of chronic angina; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections. Gilead Sciences has collaboration agreements with Arcus Biosciences, Pionyr, Tizona, Tango Therapeutics, Jounce Therapeutics, Galapagos, Janssen, Japan Tobacco, Gadeta, Bristol-Myers Squibb, Merck and Novo Nordisk.

A 4.13% dividend is one reason Jefferies analysts have loved this name for some time. Their $80 price objective on Gilead Sciences stock compares with the $76.45 consensus target and Friday’s closing print of $68.69.

Financial services, a top REIT, health care that has lagged dramatically and one of the biggest gold and copper miners in the world, all of which tend to feel little if any pressure for rising inflation. Given the massive run-up in the market, taking profits on momentum and high-flyers might be a good idea now while using the proceeds to shift to these five top companies.

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