It’s hard to believe, but there are just over two months left in 2017, and barring a big sell-off in the final 65 days of the year, 2017 will be another outstanding year for stock investors. One thing’s for sure, with the potential for tax cuts to stimulate the economy, a growing sense of positive business momentum and few alternatives to stocks as investments, the companies that release solid numbers and give good guidance can continue the incredible run we have been on.
In a series of new reports, Deutsche Bank carves through some of the results that already have been presented by some large cap technology companies the firm covers, as well as previews some results soon to be released. Three stocks look like great plays for the rest of 2017, and should be poised for solid results in 2018. All are rated Buy at Deutsche Bank.
Crown Castle International
This top tower company’s stock offers incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) is one of the largest U.S. wireless tower companies, with over 40,000 towers across the country. Its core business is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.
The company recently announced its intention to acquire private fiber company Lightower for $7.1 billion. Wall Street applauded the purchase, with most analysts citing the accretive transaction as a huge positive for the company’s growth metrics. SunTrust feels that the company could grow 2018 EBITDA by 8.7%, versus the current 6.7% estimate, and that excludes the Lightower numbers.
Deutsche Bank is very bullish on the acquisition and cited the company’s huge asset portfolio, which is number one in the United States with 40 sites and over 60,000 route miles of fiber. The analyst also likes the potential for upside to 2018 numbers and the solid dividend investors receive. The report noted this:
We view Crown Castle as our top thematic play on US wireless data growth and ongoing evolution to 5G, with use cases (ie: autonomous vehicles) likely to leverage the company’s broad suite of network infrastructure tools. Our 12-month target implies 19% total return from current levels.
Investors receive a 4.03% distribution. The Deutsche Bank price objective for the stock is $117, while the Wall Street consensus target is $111.25. The stock traded early Thursday at $104.85.
This is the printer and personal computer businesses of the old Hewlett-Packard. HP Inc. (NYSE: HPQ) provides products, technologies, software, solutions and services to individual consumers and small- and medium-sized businesses, as well as to the government, health and education sectors worldwide.
The company’s Personal Systems segment offers commercial personal computers (PCs), consumer PCs, workstations, thin client PCs, tablets, retail point-of-sale systems, calculators and other related accessories, software, support and services for the commercial and consumer markets.
The Printing segment provides consumer and commercial printer hardware, supplies, media, scanning device and software and services, as well as LaserJet and enterprise, inkjet and printing, graphics, and software and web services.
The analysts noted this in a recent report:
As a legacy tech company exposed to end markets that are challenged for growth, we believe HP Inc. should trade at similar valuations to other legacy hardware peers. This peer group includes names like IBM, Hewlett Packard Enterprise, NetApp, Cisco and Xerox. Based on peer group valuations, we believe HP Inc. should trade at 13x our fiscal year 2018 EPS, which is in line with the peer group. With shares trading below these levels, we rate the company a Buy.
HP investors receive a 2.45% dividend. Deutsche Bank has a $23 price target, and the consensus estimate is $22.76. The shares traded Thursday at $21.75.
This leader in semiconductors is working hard to scale away from dependence on personal computers, and the Internet of Things is a big part of the shift. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide.
The company’s platforms are used in various computing applications comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.
The Deutsche Bank team’s estimates are in line with Wall Street for the quarter, and they expect Intel to come in slightly higher. While they only see gains in personal computers of 3%, noting some competition from AMD, they see some upside to the company’s share at Apple for modems, while iPhone 8 and iPhone X build could offset the gains. The company reports results after the close on Thursday.
Intel investors are paid a 2.67% dividend. The $43 Deutsche Bank price target compares with the consensus price objective of $40.80 and the most recent close at $40.78.
These three top stocks make sense for growth accounts that like a dividend kicker. All should be great holdings into 2018 and beyond, and they are suitable for accounts with a somewhat higher risk tolerance.