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Rivian’s Future Hangs by a Thread: The Bearish Case for RIVN Stock

When electric-vehicle manufacturer Rivian stock (NASDAQ:RIVN) entered the scene, its debut represented a breath of fresh air. While Tesla (NASDAQ:TSLA) remains the sector leader, its designs have arguably become predictable and therefore stale. On the other hand, Rivian effortlessly blended classic lines with modern accoutrements, thus bolstering the case (at the time of its debut) for Rivian stock.

Unfortunately, reality has impacted the sector. To be sure, the fallout isn’t a problem exclusive to Rivian stock. Notably, Tesla cannot gain any traction this year, losing more than 31% of equity value since the beginning of January. But during the same period, RIVN incurred red ink to the tune of nearly 57%.

Fundamentally, Rivian suffers from a range of problems. However, the biggest headwind may be that RIVN is as an all-or-nothing proposition. It’s a pure-play EV maker, meaning that if the EV ship sinks, RIVN has nowhere to go. Simply based on realities, I have to adopt a bearish stance on Rivian stock.

Sector Woes Greatly Cloud Prospects for Rivian Stock

It doesn’t take much research to discover the many outside problems clouding the upside prospects for Rivian stock. From the higher upfront price point of EVs to how long they charge to the myriad frustrations associated with public charge points, you can take your pick. However, what is arguably the most impactful for RIVN and its peers is the sector-wide price war.

Started by Tesla, the price war stemmed from an understandable directive. By lowering prices on a desired brand, the company could boost its own sales while slowing the advance of its rivals. Management must have thought that it could even kill momentum permanently for some troublemakers. Still, the counterargument at the time was that it was a war Tesla couldn’t win.

As InvestorPlace’s Louis Navellier pointed out, that early assessment appears to have turned true. Navellier mentioned that Tesla’s fourth-quarter earnings report reflected the damage that its own initiative imposed. So if TSLA is hurting – the one EV enterprise with massive social cachet – then Rivian stock likely stands no chance.

Of course, the problem for RIVN is that it can ill afford margin killing dynamics in its core industry. As of Dec. 31, 2023, Rivian’s retained loss comes out to nearly $18.6 billion. To be fair, the idea here is that eventually, the company will become richly profitable. When it does, these retained losses will become retained earnings.

However, investors of Rivian stock likely understand that because of the price war, the pathway to profitability will take longer than expected. For fiscal 2024, analysts previously anticipated a loss per share of $4.03. For fiscal 2025, this metric could improve to a loss of $2.53 per share.

Now, we just don’t know what may materialize.

Electrification or Bust

Moving forward, what could really do Rivian stock in might not necessarily be the price war. Rather, it could be the previously mentioned all-or-nothing approach that pure-play EV manufacturers must take. Unlike legacy automakers, Rivian and its ilk can’t pivot to combustion-powered cars and hybrids.

In my opinion, that’s where an automotive giant like General Motors (NYSE:GM) enjoys a key advantage. Here’s what I stated about the company’s product portfolio last week:

If you want an affordable SUV that can carry groceries and the kids, GM has your back with the Chevy Equinox or the Blazer. Should you prefer something more upscale, the company gives you the Cadillac brand. And if you want to experience the thrill of premiere automotive performance, you have the mid-engine Corvette, America’s supercar.

What makes it worse for Rivian stock is that when conditions normalize – if they normalize – then the legacy automakers who have scaled back their EV ambitions can then pivot back into the space. With GM, it has the opportunity with its Ultium battery and EV platform to “electrify” its most-popular models. In the meantime, legacy players will continue to soak up consumer dollars that could have gone to RIVN.

Perhaps the biggest threat here is Toyota (NYSE:TM). For the longest time, the Japanese automaker refused to wholeheartedly embrace EVs. Company President Akio Toyoda went so far as to suggest that the industry’s “silent majority” had questions about the full-throated transition to electrification.

Turns out, Toyoda was right, at least in terms of consumer demand (I’m not sure about the silent majority part). Toyota is on course to post record net profit thanks to booming sales of its hybrid vehicles. That’s the benefit of having options.

The Takeaway: RIVN Doesn’t Control its Fate

In conclusion, the bearish case against Rivian stock may be summed up as follows: the underlying company doesn’t control its fate. Because it is a pure-play EV manufacturer, it doesn’t have expertise in other mobility platforms. And if the sector leader is struggling, that leaves little room for optimism for RIVN. Therefore, as a matter of practicality, investors probably should avoid Rivian until there is more clarity in the industry.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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3 Warren Buffett Stocks That Analysts Love and So Should You

Many investors are hearing that we are in a stock picker’s market. If that’s the case, then why not take your lead from Warren Buffett? After all, Buffett is one of the world’s best stock pickers.

What do you know about these stocks? If you follow the Buffett playbook, then these stocks will have wide moats that protect them from competition, they are financially sound companies, and they have a proven history of returning capital to investors in the form of dividends and share buybacks.  

Another thing you know about Warren Buffett’s investing style is that his preferred timeline for holding stocks is forever. That means that these are stocks that scare investors easily and can help you sleep well at night. That’s also why analysts love these stocks too. Here are three Warren Buffett stocks to consider.  

Visa (V) 

Source: Kikinunchi / Shutterstock.com

Visa (NYSE:V) was a fintech (financial technology) stock before the turn went mainstream. The company is one of Warren Buffett’s favorite stocks, and there are many reasons for that.

To begin with, the company has a wide moat. Along with Mastercard (NYSE:MA), Visa has a virtual duopoly in the payment processing space. And the volume of those transactions, on which Visa collects a fee for each, translates into strong revenue and earnings.  

This creates a gigantic network effect that is only growing as the world continues to move away from cash. And as the economic data shows, consumers have not been shy about using their credit cards. How long can that last? It’s hard to say. But the fact that many people have been asking the question for over a year should tell you something. 

Among the list of Warren Buffett stocks, Visa doesn’t pay an eye-popping dividend. The yield is just 0.76% and the current payout per share is $2.08. But it has increased its dividend for 16 consecutive years and the payout ratio of just 23.9% makes the dividend, and its growth, sustainable.  

Bristol-Myers Squibb (BMY) 

Bristol-Myers Squib (BMY) logo displayed on a phone screen

Source: IgorGolovniov / Shutterstock.com

With much of the attention in the biopharmaceutical industry focusing on GLP-1 weight loss drugs, Bristol-Myers Squibb (NYSE:BMY) presents a profitable alternative. BMY stock is down 28% in the last 12 months. The concern is the patent cliff impacting its currently available drugs. 

Reylimid, the company’s multiple myeloma drug, is the first example. Revenue fell 39% due to generic competition. Two other major revenue contributors, Eliquis and Opdivo, face expiring patent protection in 2026 and 2028 respectively.

But the company has a deep pipeline. Analysts expect that many new drugs will be approved before their current drugs face the patent cliff. Of course, the company has paid for some of these drugs through acquisitions, which could impact earnings in the short term.  

However, Buffett has long expressed his belief that debt is useful when it leads to growth as seems to be the case with Bristol-Myers Squibb. And you can combine that with a dividend that currently pays a 4.76% yield. So, you can understand why this is one of the Warren Buffett stocks to buy now.  

Occidental Petroleum (OXY)

Occidental Petroleum (OXY) Company logo seen displayed on smart phone

Source: IgorGolovniov / Shutterstock.com

The April 10, 2024 reading of the March CPI showed that the rate of inflation is expanding. The biggest reason for that is energy, specifically oil. This is a major story that is not going to go away anytime soon. And, if the Federal Reserve does cut rates, it will only accelerate demand for oil. 

That’s the reason you should consider Occidental Petroleum (NYSE:OXY). Buffett has purchased the stock on a number of occasions in the last 12 months and now owns over 25% of the company. Buffett has said he’s a fan of OXY’s Chief Executive Officer (CEO) Vicki Hollum and the way she’s managed the company’s balance sheet. 

After slashing its dividend in 2020, OXY began to raise the dividend in 2022 and continues to raise it aggressively. Plus with a payout ratio of just 22%, there’s plenty of room for dividend growth to continue.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.

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3 Bargain Stocks to Buy Now: Q2 Edition

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Investing in underrated stocks can offer a higher margin of safety. These stocks can weather economic uncertainty and stock market volatility better than many corporations. 

While the current valuation is useful for determining if a stock is undervalued, it doesn’t tell the entire story. Also, bargain stocks offer compelling growth opportunities relative to their valuations. A low P/E ratio doesn’t matter if the corporation is losing market share and generating substantial losses. 

Therefore, investors looking for bargain stocks may want to consider these promising picks. They offer reasonable valuations and growth opportunities.

American Express (AXP)

Founded in 1850, American Express (NYSE:AXP) has delivered many years of double-digit revenue and net income growth rate. The company plans to hit both of those benchmarks beyond 2026 and maintain them in Q4 2023. During that quarter, American Express reported 11% year-over-year (YOY) revenue growth and 23% YOY net income growth. 

Further, the financial firm has a 19.5 P/E ratio, outperforming the stock market with a 16% year-to-date (YTD) gain. Also, the company has a 1.28% dividend yield and an impressive compounded annual growth rate of 10.43% over the past decade. 

Moreover, American Express stands to benefit as more people use credit and debit cards to make purchases. These cards are more convenient than paper currency and offer enticing rewards. Cardholders can receive cash back, points and the opportunity to improve their credit scores if they make purchases with credit cards. Thus, American Express is a leading company in the industry that trades at a reasonable valuation.

Alphabet (GOOG, GOOGL)

Alphabet (GOOGL) - Quantum Computing Stocks to Buy

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the most undervalued Magnificent Seven stock with a 29 P/E ratio. The company had a slow start thanks to some artificial intelligence (AI) miscues before rallying by 20% since the first week of March. Shares are up by 14% YTD, gaining 158% over the past five years.

Frankly, investors are getting excited about the company’s recent AI chip announcement. But Alphabet has more going for it than AI. Advertising and cloud computing revenue continue to grow along with profit margins. Alphabet reported 13% YOY revenue growth in Q4 2023. Advertising led the way, but cloud computing is growing at a faster rate. 

For instance, Alphabet is expanding its market share in the cloud computing industry which has resulted in higher profit margins. The company increased its net income by 52% YOY and secured a 24% net profit margin for the quarter. Currently, the stock is rated as a strong buy with a projected 5% upside from its current price.

UPS (UPS)

UPS (NYSE:UPS) hasn’t had the best stretch. Shares are down by 24% over the past year and have dropped by 8% YTD. The stock’s recent misfortune has resulted in an 18.5 P/E ratio and a 4.50% dividend yield. Investors can realize plenty of cash flow at current levels.

Impressively, UPS has been around for more than 100 years and owns an essential place in the supply chain. The CEO acknowledged the company’s hardships in the Q4 2023 earnings report. The company’s 2024 guidance indicates that it is turning a new leaf and fighting the headwinds. 

Furthermore, the logistics giant is projecting revenue to range from $92.0 billion to $94.5 billion. That range is a slight increase from the company’s $91.0 billion in full-year 2023 revenue. Although the increase is small, UPS doesn’t have to generate groundbreaking financial growth at its current valuation. Also, UPS expects the consolidated adjusted operating margin to range from 10.0% to 10.6%.

On this date of publication, Marc Guberti held a long position in GOOG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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The Fall of China’s Tech Giant: How Alibaba’s Woes Expose the Perils of Xi’s Crackdown

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Back in the last decade, I told anyone who would listen about the great news of Alibaba stock (NASDAQ:BABA). I even bought some shares.

Alibaba was one of China’s three “Cloud Emperors.” Its hyperscaled data centers, like those of Tencent (OTCMKTS:TCEHY) and Baidu (NASDAQ:BIDU), were serious threats to Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) in the cloud.

Now Alibaba stock is down 60% from 5 years ago and I wouldn’t touch it with a barge pole. It’s a story America and its tech investors should be very glad for.

The Empire Strikes Back

Chinese dictator Xi Jinping decided that technology was a threat to his regime. He cracked down on the industry in favor of car companies like Nio (NYSE:NIO). A manufacturing workforce is a compliant one. Tech workers ask questions.

Some of Xi’s actions might be applauded by American liberals. Higher taxes, an end to monopoly, and taking responsibility for what’s online are common political demands here. But Xi went further, demanding that technology serve him, not the market and not the people.

The result was predictable. I would have predicted it if I thought Xi really would kill his economy to retain absolute power. I was wrong. In this case, American conservatives were right.

The three years since the crackdown haven’t just cost China $1.1 trillion in market cap. They’ve let America lap China’s whole economy. China has missed the AI boom because, like all tech innovations, AI rides on the minds of empowered talent. Freedom is the price of competing in technology. If you want people to think differently you first must allow them to think freely.

Ma Comes Back

In the crackdown, Alibaba co-founder Jack Ma was Xi’s bete noir. Once China’s wealthiest man, Ma was driven from the country, eventually taking a position with Tokyo University.

Ma still visits China. He’s still a name. The stock jumped just this week after he praised the company’s reorganization. To hide itself from Xi’s wrath, Alibaba is splitting itself into six pieces. But even Alibaba insiders weren’t fooled. CEO Daniel Zhang quit.

Ma’s remarks praising management gave Alibaba stock a brief boost. But the stock is flat for 2024, down 26% over the last year. The company is not what it was. Even in e-commerce, Alibaba is being lapped by Pinduoduo (NASDAQ:PDD), whose Temu site offers cheap, customized goods from a network of online sweatshops.

Alibaba is distracted by the government and its internal turmoil. It is missing the entrepreneurship that once made it great. Sales for 2023 were down from 2022. Profit growth has stalled, and the company has missed several profit estimates.

Ma wants Alibaba to “grasp the opportunity of AI,” focusing their efforts on customers. Mistakes were made, he says, but Alibaba is now more “simple and agile.”

Fine words, but China’s smartest people aren’t fooled. They’re voting against Xi with their feet, taking their talent and money with them.

The Bottom Line

The gating factor to growth in our time isn’t resources like oil, or simple manufacturing prowess, as it was a century ago.

It’s people. Trained, empowered, and free minds are the gating factor to growth today. The more talent you can attract, and the more security you can give them, in their work and in their life, the more money you can make.

Alibaba stock can’t deliver that because Xi Jinping won’t let it. American policymakers are fighting a tariff war, seeking to limit China’s access to AI chips. But that isn’t why we’re winning this Cold War.

Freedom is what’s winning this Cold War. Xi won’t allow it, Ma can’t grant it, and Alibaba is stuck as a result.

On the date of publication, Dana Blankenhorn held LONG positions in AMZN, MSFT, and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his free Substack newsletter.

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Warren Buffett Collects $2.1 Billion Yearly From 3 Dividend Stocks

These are three Warren Buffett dividend stocks that have paid the most out in dividends this year

It’s no secret Warren Buffett loves companies that pay dividends. While he refuses to allow Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) to pay any to shareholders, he enjoys collecting those checks from the businesses he owns.

Buffett believes he can deliver superior returns for his shareholders if he allows them to make decisions for themselves. He’s probably right. Since becoming chairman of Berkshire Hathaway in 1964, he has generated overall returns of 4,384,748% by the end of 2023. In contrast, the S&P 500 achieved over 31,000% returns. That means Buffett’s compounded annual growth rate (CAGR) of 19.8% beat the benchmark index by nearly two-to-one. Most investors will have a tough time doing that in one year. Buffett’s done it for 60 years! 

The Oracle of Omaha collected around $6 billion in dividends last year. That’s without doing anything but holding onto the shares of companies he already owns. But that’s only from his publicly traded stocks. In Buffett’s 2020 Berkshire Hathaway shareholder letter, he revealed that his wholly owned railroad, BNSF, paid him $41.8 billion in dividends since it was acquired in 2010. 

So, which are Buffett’s best dividend stocks? Based on the amount collected, Bank of America (NYSE:BAC) will generate nearly $1 billion in dividends this year. Apple (NASDAQ:AAPL) will deliver another $860 million. Yet I’m looking for the top stocks, so I wanted dividends that yielded at least twice the average yield of the S&P 500’s 1.4% yield. BAC stock just missed the cut at 2.7%, while AAPL pays a miserly 0.5%.

The following three Warren Buffett dividend stocks yield over 3% each and, in return, will mail Oracle $2.1 billion in checks this year.

Kraft Heinz (KHC)

Source: Casimiro PT / Shutterstock.com

Packaged food stock Kraft Heinz (NYSE:KHC) is the seventh largest holding in Berkshire Hathaway. Buffett owns 325.6 million shares worth $11.8 billion. With a yield of 4.4%, it is the highest-yielding stock in the portfolio, which is set to deliver $520.5 million in dividends.

That’s not too shabby for a stock Buffett to consider a mistake. His holdings are the result of Buffett helping private equity firm 3G Capital Management to take control of H.J. Heinz in 2013 and then helping engineer the ketchup maker’s acquisition of Kraft Foods two years later. While Buffett believes the Heinz deal was good, he feels he “overpaid” for Kraft.

Since acquiring Heinz, Buffett’s total return on the stock has been less than 18% compared to a 344% return by the S&P 500. The company owns a portfolio of top name brands like Kraft and Heinz and Jell-O, Kool-Aid and Maxwell House coffee. Half a million dollars a year in dividends can soften the blow of paltry returns and Buffett says he will never sell KHC stock.

Coca-Cola (KO)

ko stock coca cola life

Source: Coca-Cola

It’s likely no surprise Coca-Cola (NYSE:KO) is on the list since it’s been known for years as a cash-producing machine. Buffett famously bought the beverage giant’s stock after Coca-Cola sent him a can of Cherry Coke in the 1980s. He ended up selling out of his Pepsico (NASDAQ:PEP) holdings and today owns 400 million shares of Coke worth $23.5 billion. That’s a 9.3% share of the company, accounting for over 6% of Berkshire Hathaway.

KO stock yields 3.3%, so Buffett will receive dividend checks this year amounting to $775.6 million from the soda king. Of course, Coca-Cola is much more than just a soda jerk today; it has a broad swath of the beverage market, including water, tea, juices and energy drinks.  

Although Buffett doesn’t really buy and sell the company’s shares anymore, preferring to just hold for the long term, Coke tends to be an all-weather stock. Cans of soda and other beverages are indulgences consumers will enjoy regardless of economic conditions. This is why it continues to thrive, and Buffett will likely never sell his holdings.

Chevron (CVX)

Here's Why Investors Should be Bullish on Chevron Stock at Current Levels

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The brightest dividend star in Berkshire Hathaway has to be oil and gas giant Chevron (NYSE:CVX). Buffett owns over 126 million shares valued at $20.5 billion. That puts the oil stock fifth in the portfolio. 

Buffett was selling shares of the energy company last year as he scooped up more shares of Occidental Petroleum (NYSE:OXY) because of its position in the Permian basin. But in last year’s fourth quarter, he became a buyer again. Chevron is also a giant in the oil-rich Permian and its pending acquisition of Hess (NYSE:HES) will give it access to the lucrative Guyana market (that is, if Exxon Mobil (NYSE:XOM) doesn’t muck it up).

With CVX stock yielding 4% a year, Buffett stands to receive $822 million in dividends this year. This will be an income stream that goes on for years and years as fossil fuel demand continues to grow.

On the date of publication, Rich Duprey held a LONG position in KO, XOM and CVX stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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3 Pharma Stocks That Are Money-Printing Machines in 2024

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The future of the U.S. economy appears promising, with robust growth and strong corporate performance. This economic strength has propelled the stock market to record highs, signaling confidence in the economy’s resilience. The well established pharmaceutical industry continues to assert its economic dominance through resolute financials. In 2022, pharma stocks brought in $510.5 billion, with forecasts for the sector to reach $863.6 billion in revenue by 2030. Between 2023 and 2030, the industry is expected to hold a solid CAGR of 7.8%. Investing in pharma stocks is very beneficial, especially for these top three companies.

Bristol-Myers Squibb (BMY)

Bristol-Myers Squibb (NYSE:BMY) is one of the world’s largest pharmaceutical companies. In Q4 2023, Bristol exceeded analyst expectations for the top and bottom lines. The company saw revenue increase 1% year-over-year (YOY) to $11.48 billion. And, BMY reported EPS of $1.70 adjusted versus $1.53 expected. This was primarily driven by a staggering $1.07 billion in sales for its new product portfolio, which was up 66% YOY. Finally, management is optimistic for the future, forecasting single-digit 2024 revenue growth and full-year adjusted earnings of $7.10 to $7.40 per share. 

Furthermore, a bundle of three recent multi-billion-dollar acquisitions, RayzeBio, Mirati Therapeutics and Karuna Therapeutics, will continue to boost the company’s growth. CEO Chris Boerner expressed particular excitement over the Karuna deal, emphasizing its potential to accelerate Bristol’s business in neuropsychology. Karuna’s KarXT, used to treat schizophrenia and psychosis in Alzheimer’s patients, poses a commercially attractive opportunity which could allow BMY to enter the neurodegeneration market. 

Novo Nordisk (NVO)

Novo Nordisk (NYSE:NVO) is a Danish pharmaceutical company focused on developing hemostasis and hormone regulation medicine. In Q4 2023, NVO reported significant financial figures number-wise and YOY growth compared to 2022. In revenue, NVO’s yearly total reached $232.3 billion. Similar success is also in net income and diluted EPS, with NVO earning $22 billion and $4.91, respectively.

The largest catalyst behind NVO’s cause comes from their headline drug, Ozempic, which they released in 2017 for diabetic use. In the past year, Ozempic uses have skyrocketed due to its use for weight loss-related purposes. In a year of drug shortages in 2023, Ozempic sold $13.9 billion worth of sales, with 66% located in the U.S. alone. As Ozempic reaches a more extensive patient base and an increase in medical ingredients, expect revenue to skyrocket for NVO.

AstraZeneca (AZN)

AstraZeneca (NASDAQ:AZN) is a global biopharmaceutical company focused on discovering, developing and commercializing prescription medicines. AZN’s largest market, Oncology, accounts for 30% of its revenue. The Oncology market in the U.S. expects to grow at a CAGR of 13.55% from 2022 to 2028, showing tremendous opportunity for AstraZeneca’s profits to grow.

AstraZeneca ended the fiscal year 2023 with a revenue of $45.811 billion, a 3.29% increase from the previous year. Net income and Diluted EPS grew to $5.955 billion and $3.81. The company became well known after its vaccine development for Covid-19, shooting its revenue figures to insane heights.

Moreover, AstraZeneca dominates drug development market. It has one of the world’s largest research and development pipelines. The company aims to focus on an innovation-driven strategy in research and development. Combining its solid financial figures and market edge, AZN is one of the best pharma stocks currently available. 

On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.

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3 Stocks That Will Be Hit Hardest by the 2024 Baltimore Bridge Disaster

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As the state of Maryland works to recover from the Baltimore bridge disaster, potential long-term financial consequences are becoming present. With each passing day, the gargantuan task of recovering and removing debris from the seafloor slows Baltimore’s local economy. Currently, the major hurdle for the Unified Command handling the situation consists of removing enough containers from the sunken cargo ship to re-float it.

While catastrophic, both the government and the businesses that rely on the Port of Baltimore have started establishing workarounds. For automobile importers and exporters, which made up 20% of the port’s daily traffic, the fix has been as simple as rerouting to other East Coast ports. For others, the narrow channels the U.S. military has helped create have been enough to allow around 68 ships to pass through in the last few weeks.

Unfortunately, some companies will be unable to avoid the greater ramifications of the port’s near-complete closure. Ultimately, this might put some stocks at risk.

C. H. Robinson Worldwide (CHRW)

A cornerstone of the East Coast’s logistics industry, C. H. Robinson Worldwide (NASDAQ:CHRW) specializes in supply chain connectivity. The company’s direct service logistics platform connects businesses with transportation providers, allowing for a streamlined process of freight distribution. While CHRW does not own any form of freight-moving vehicle, its profits exist in the margins of providing the best possible service to customers.

Therefore, it’s concerning that CHRW’s abilities to operate in the Baltimore-Washington D.C. metro area are heavily impacted. The loss of the bridge and port access in Baltimore is a major blockage in a vital artery for shipping routes. With both land and sea traffic complicated on the Eastern seaboard, much of the simplification CHRW offers cannot be achieved.

Thus, it may be likely that CHRW, which has already seen a significant 19% loss in share value in the last 6 months, may see further dips.

CSX (CSX)

A key rail freight company, CSX’s (NASDAQ:CSX) limited access to coal through the Port of Baltimore could result in losses. With a vast rail network across the East Coast, CSX can route many trains around the Baltimore bridge disaster. However, despite donations and opening routes for existing customers, CSX is bracing for decreased coal shipping revenues as a result of the port’s inaccessibility. 

For reference, last year CSX generated over $14 billion in revenue, with 16% of that being from coal shipping. Though it’s hard to say exactly how much revenue the company could lose due to delayed coal deliveries, the risk is present. Moreover, the company has opted to keep its Curtis Bay coal pier operational, despite the bridge collapse.

Ultimately, the complication of resource access at a vital intersection for CSX’s shipping routes could have unpredictable downstream effects and make CSX one of the stocks at risk thanks to the Baltimore bridge disaster.

Carnival (CCL)

For Maryland and the surrounding area, the Baltimore bridge disaster may make cruise vacations harder to get to. This is especially the case for customers of Carnival (NYSE:CCL), as Baltimore represented one of its year-round service ports. For the company, the port offered a centrally located start for voyages due to the surrounding airports and large populations.

Considering the company reported a loss in February of $214 million for fiscal Q1, this disaster hurts even more. The cruise line will now have to send customers out of other nearby ports. This will likely increase operating costs, and such an increase could add strain to the already decreasing profitability of the company.

As such, investors in CCL stock should be cautious of how this major port closure could further damage the company. Though Carnival may be one of the largest cruise ship companies, it already has significant financial storms to contend with.

On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.

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The 3 Best Stocks to Buy to Survive the Coming S&P 500 Crash

The S&P 500 is doing great this year after last year’s historic run higher. The broad index is up almost 9% in 2024. And though that’s down a bit from the all-time it hit at the end of March, performance still looks robust. That can only mean a crash is coming. It’s only a matter of the timing. 

Historically speaking, this should be another good year. More times than not the stock market will post two straight years of growth after a sharp downturn like the one we had in 2022. But signs are building this could be an off year.

Inflation data just came in hot again finally killing off the slim hope the Federal Reserve would cut interest rates in June. Yields on 10-year Treasuries shot to a five-month high as a result, which is a bad sign for households as mortgage rates and other loans will likely rise. Now as corporate earnings season begins anew, will the results be as strong as they were in the first quarter?

Insert the shrug emoji here but it’s why investors need to prepare for the coming downturn. Protecting the gains you’ve made during the current bull market is a smart decision. Don’t go to an all-cash position because the market can be irrational for long periods of time. Just choose your investments more wisely.

Remember, you’re seeking protection not looking for momentum. The three companies below should provide your portfolio with sufficient cushion as they are stocks to buy before the market crash.

Altria (MO)

Source: Kristi Blokhin / Shutterstock.com

One of the best ways to protect your portfolio during a bear market is to buy dividend stocks. The income they generate offsets any loss suffered from declining stock prices. It’s why tobacco giant Altria (NYSE:MO) is one of the best stocks to buy in this scenario. 

Even in the best of times you’re not buying Altria stock for capital appreciation. Over the past five years, the stock lost 25% of its value. Instead, the Marlboro owner rewards its investors with generous dividend payments. If you look at Altria’s total return since 2019, it’s a different story as MO generated over 12% growth. 

So if the market is going to head south, Altria stock is the one you want. The dividend yields a whopping 9.4% annually but with an 83% earnings payout ratio. Even its free cash flow (FCF) payout ratio of 74% gives investors jitters. However, management has made the conscious decision to return most of its profits to investors as dividends and is targeting that range for its payout. And tobacco is a profitable business!

The dividend has grown 7% annually for the past decade (Altria’s raised it for 55 straight years) while FCF has grown 8%. Net income has risen 6% annually. In short, the payout is well supported and will serve investors as a market crash buffer.

Procter & Gamble (PG)

A photo of a number of Procter & Gamble (PG) products.

Source: monticello / Shutterstock.com

Consumer products giant Procter & Gamble (NYSE:PG) is no slouch when it comes to paying dividends either. It has made a payout to investors for some 133 consecutive years, one of the longest streaks of any stock on the market. Moreover, the owner of Pampers, Tide and Crest toothpaste has increased its dividend for 68 years running, making it a Dividend King.

While you get the security of Procter & Gamble stock’s dividend payment during a downturn, you also receive the consistency that comes from a company selling dominant consumer product brands. P&G products often hold the No. 1 or No. 2 selling position in their respective markets. That’s because consumers know that no matter where they are in the world, they can reach for a Procter & Gamble product and know the quality and reliability they are getting.

Now brand names do come under pressure during high inflation, high interest rate periods. P&G is no different. The stock has lagged the market for the past year or so as a result but recently turned higher.

Also, Procter & Gamble is a steady performer. Revenue is steadily rising along with profits, while the company’s share count steadily decreases. That gives each dollar of dividend more potency and worth holding onto whether the market crashes or not.

Johnson & Johnson (JNJ)

A red Johnson & Johnson (JNJ) sign hangs inside in Moscow, Russia.

Source: Alexander Tolstykh / Shutterstock.com

The last of our trio of stocks to buy before the market crashes is drug developer Johnson & Johnson (NYSE:JNJ). Like Procter & Gamble, the pharmaceutical giant has trailed the market, but recently spun off its slow-growing Kenvue (NYSE:KVUE) consumer products division so it can focus on its more profitable healthcare business. Revenue growth is expected to accelerate now.

Johnson & Johnson owns a portfolio of billion-dollar treatments including Stelara and Tremyfa for plaque psoriasis, Darzalex for cancer and Simponi for rheumatoid arthritis. Revenue is forecast to grow between 7% and 8% annually with 12% to 13% adjusted profits growth.

Not surprisingly, the pharma stock also has an extended dividend history. JNJ has paid a dividend to shareholders every year since 1944. It has increased the payout for 61 consecutive years and will probably announce yet another raise in the next few weeks.

The dividend currently yields 3.2% annually making buying Johnson & Johnson stock one you will want to buy ahead of any market storms.

On the date of publication, Rich Duprey held a LONG position in MO and JNJ stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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