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Best Stock for the Next Ten Years: Amazon or Alphabet?

The following is an excerpt from Amazon.com, Inc. (AMZN) vs Alphabet Inc (GOOGL) – The Best 10-Year Bet

If there has been one investment theme in 2017, it would have to be the “Amazon effect.” Amazon.com’s (AMZN) relentless push forward really went into overdrive this year with its planned purchase of Whole Foods Markets, Inc. (WFM), which gives the online giant a large brick-and-mortar presence. But the company continues to expand on all fronts with no end in sight.

Of course, Google parent Alphabet (GOOGL) is no growth slouch either. Despite being the second-largest company in the world by market cap, GOOGL stock continues to grow at a dizzying pace.

Last year, Alphabet grew its revenues by over 20%, which is no small feat given that the company finished 2015 with annual revenues of nearly $75 billion.

So, if you had to choose only one of these tech giants to hold for the next decade, which would it be? Let’s take a deeper look at each.

Profitability

For years, AMZN was snidely called the “river of no returns” by bears that were put off by the company’s focus on growth over profitability. And frankly, the bears had a point. Last year, Amazon’s net margins amounted to a whopping 1.7%, and that was the highest it has been since 2010.

Alphabet’s net margins are consistently over 20%. And by most other traditional profitability metrics (return on equity, return on assets, etc.) Alphabet utterly trounces Amazon.

Again, the numbers are pretty straight forward here. Sure, AMZN’s profitability is consistently lowered by its constant reinvestment. And retail companies generally have lower margins than software or technology companies. But no matter how you spin it, GOOGL is the far more profitable company.

Winner: Alphabet

To finish reading the article, please see Amazon.com, Inc. (AMZN) vs Alphabet Inc (GOOGL) – The Best 10-Year Bet

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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Stocks That Would Survive the End of Days

 

The following is an excerpt from 7 Top Stocks That Would Survive an Apocalypse:

My new Samsung Galaxy smartphone is waterproof … or at least the box says it is. I’m not so sure, myself. While I’m sure a little splash of water won’t hurt the phone, I’m not planning on taking it on any deep-sea adventures any time soon. We’ll call it “water resistant” rather than fully “waterproof.”

Along the same lines, there is no such thing as a truly apocalypse-proof stock.

But the very top stocks come close.

They have durable competitive “moats,” bulletproof balance sheets and business models that are future-proof (or at least as future-proof as you can ever reasonably hope to be). Nothing short of nuclear war or the plot line from the Terminator coming true could reasonably be expected to put these companies at risk.

Federal Reserve Chairwoman Janet Yellen might prove to be correct when she says that we won’t see another major financial crisis in our lifetime. But it’s nice to have stocks in your portfolio that you know would be able to survive one were it to happen.

Today, we’re going to look at seven of the top stocks that would likely sail through the next major crisis unscathed. None are particularly sexy, but that’s a good thing. When it comes to building a durable portfolio, boring is beautiful.

So with no further ado, here are seven stocks that would survive the apocalypse … or come awfully close!

If Skynet ever becomes self-aware and decides to eliminate the human race, I have a feeling that McDonald’s (MCD) would somehow find a new menu item that Terminator robots would buy and eat. The company is just thatadaptable.

Think about how much the world has changed since McDonald’s was founded in the mid-1950s and how diets have evolved. Yet McDonald’s is still here and still going strong. The company has been extremely successful in updating its menu and keeping it in sync with with current diet trends.

Just a few years ago, it was widely believed that the rise of “fast casual” chains like Chipotle Mexican Grill (CMG) would be the end of McDonald’s. Americans were eating healthier, after all, and the McDonald’s brand was looking a little passé.

Well, that’s not how it turned out. Today, it’s Chipotle that is struggling — thanks to yet another health scare, ironically enough — and McDonald’s that is delighting investors and trading near all-time highs.

The McDonald’s format gets stale about once every 10 years, and then the company has to reinvent itself. Might there come a time when this cycle breaks down and McDonald’s simply fails to reboot?

Maybe. But the company has been flipping burgers for 60 years, and it hasn’t happened yet.

To read the rest of the article, please see 7 Top Stocks That Would Survive an Apocalypse

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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Best Stocks For 2017 Contest: I have some catching up to do…

 

Well, halfway through 2017, I have a little catching up to do. My pick — General Motors (GM) — is sitting in 8th place with a year-to-date return of 4%.

Of course, we still have a lot of time left in 2017… and I’ve come back from larger deficits in the past. So, we shall see what the second half brings.

InvestorPlace’s Jessica Loder did a solid recap of the contest here: The 10 Best Stocks for 2017 Contest – The Experts Lead at Halftime!

The year is just more than half over, and our Best Stocks for 2017 contest has just climbed over its midpoint. And if there’s one thing I know about the competition for sure, it’s that I wouldn’t want to have to guess the eventual winner.

We’ve already seen some early laggards shoot up by double digits to reach the top spots, while some front-runners have struggled in the second quarter.

The sometimes-unpredictable headlines associated with the Donald Trump administration haven’t always helped either — for instance, banking stocks are still watching for some of the surge that many hoped would come on looser regulations.

While the markets have slowed somewhat, competition is still fierce, and it could be anybody’s game.

Overall, our experts’ picks are largely looking good, with seven of the 10 outperforming the S&P 500 Index through the middle of the year, and all but one performing in the black. A lot can change between now and 2018, but if history is any indication, many of our experts’ best stocks have the legs to run further.

Thus far, while the rest of the markets have been moving upward (at greater or lesser rates), General Motors Company (GM) has been spinning its wheels. But as Sizemore says:

“I do expect to earn better than a 4.4% total annual return. And I expect that once the recent spate of bad headlines passes, GM will finish the year strong … and perhaps strong enough to win the contest.”

Headlines keep grinding traditional auto stocks down — many of them far harder than General Motors. But once people realize that maybe the sky isn’t falling for automakers, things should turn around. After all, its price-earnings ratio of under 6 is “not just cheap. That’s ‘going out of business’ cheap.”

And don’t forget, if you step into GM stock, you’ll be in good company, with Warren Buffett, David Einhorn and David Tepper all with significant holdings.

Charles here. You can read my full write-up here: General Motors Company (GM) Stock’s Engine Is Still Purring

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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10 Dividend Stocks That Will Deliver Double-Digit Returns Every Year

The following is an excerpt from 10 Dividend Stocks That Will Deliver Double-Digit Returns Every Year.

Today we’re going to take a look at 10 dividend stocks that look like solid bets to generate double-digit total returns every year, or at least every year on average.

A 10% annual return is obviously not get-rich-quick money. But at that rate, you’re still doubling your money every seven years, and that’s not too shabby.Claiming a stock will deliver a double-digit return every year is a bold statement. After all, the “Siegel constant,” named after Wharton Professor Jeremy Siegel, says the stock market as a whole delivers total returns of around 7% per year after inflation. So, a stock that delivered a double-digit return every year would be one that consistently beat the market.

You know the old refrain: Past performance is no guarantee of future results. I can’t promise you that every stock on the list will deliver a double-digit return, particularly if we have weakness in the broad market. But I can tell you this: Based on current prices and dividend yields, these stocks are definitely priced well enough to make double-digit returns possible, which is better than what I can say for the vast majority of other stocks.

You’ll notice some common themes among this list of dividend stocks to buy. They all pay dividends, and most a long history of raising those dividends. Also, tech stocks or other companies I see as being at risk of disruption are also mostly left off the list.

In no particular order, here’s a look at the picks:

Energy Transfer Equity LP (ETE)

I’ll start with one of my favorite long-term holdings, pipeline giant Energy Transfer Equity LP (ETE).

Let’s start with the dividend. At current prices, ETE yields 6.1%. Dividend growth has been a little tepid of late, as the company overextended itself during the go-go years of the 2010s energy boom and is in the process of slowly deleveraging by retaining more of its cash. But this is a company that, as recently as a couple years ago, was improving its dividend at a 30% annual clip.

With a dividend yield of more than 6%, ETE doesn’t have to hit any home runs to generate a double-digit annual return. Even being the tortoise rather than the hare, 4% share price appreciation should be doable, and I expect it to be much better than that.

New wells in the Texas Permian Basin are profitable at prices as low as $20 per barrel. That tells me that domestic oil and gas exploration is here to stay, and midstream operators like ETE are going to be major beneficiaries.

I’ll admit I’m partial to Energy Transfer, as it was my winning pick in last year’s Best Stocks contest with a 53% return. I can’t say I expect every year to be like that. And in fact, ETE’s massive run last year was only made possible because of the beating the stock took the previous year.

But at today’s prices, ETE is definitely priced to deliver double-digit returns annually for a long time to come.

To read the rest of the article please follow this link to 10 Dividend Stocks That Will Deliver Double-Digit Returns Every Year.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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Warren Buffett’s Letter: Valuable Lessons From the Oracle

The following is an excerpt from “Valuable Lessons from the Oracle.”

Warren Buffett published his annual letter to investors this past weekend, and when Buffett speaks, the rest of us mere mortals sit up and listen. At 86 years old, Mr. Buffett has a lifetime of insight to share. And seeing as how he won’t be with us forever, his letters get more and more valuable with each passing year.

So today, let’s go through the Oracle of Omaha’s letter to look for nuggets of wisdom.

Buffett started with a fair amount of self congratulation, but in fairness, I’d say it was deserved. After all, Berkshire Hathaway (BRK.A) shares are up almost 2 million percent since Buffett took the reins in 1964. Not a bad run.

But there were definitely some bumps in the road and some painful lessons learned, which brings me to Buffett’s first memorable quote about stock-funded mergers:

“Today, I would rather prep for a colonoscopy than issue Berkshire shares.”

Buffett recounted an incident back in 1998 in which he diluted his shareholders by 22% issuing new Berkshire stock to buy Swiss Re. While Swiss Re has been a solid holding for Buffett, the returns never quite justified the 22% dilution and Berkshire shareholders ending up giving “far more than they received.”

Think about it. Buffett effectively traded 22% of Berkshire Hathaway — one of the greatest wealth generators of all time — for a run-of-the-mill insurance company. That’s a bad trade. And likewise, investors would be wise to avoid companies that habitually use their stock like currency for acquisitions. If a stock is worth owning, you don’t want management trading it for something inferior.

You can read the read article here.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

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