Russia Vs Ukraine: Is General Dynamics Corporation Stock a Buy?

With the threats of war between Russia and Ukraine echoing through the world, countries are paying more attention to defense companies to boost their armories. Many stock traders have also remembered their defense stocks. Unsurprisingly, General Dynamics Corporation (Nasdaq: GD) stock has responded well.

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Source: Konrad Ciężki

General Dynamics operates two major segments: aerospace and defense. On the aerospace arm, the company designs, manufactures, maintains, and repairs business jets. And on the defense front, General Dynamics offers marine, combat, and defense tech services.

Signals and Forecast

Although the MACD signals that the General Dynamics Corporation stock is bullish with the appearance of a green bar, MACD divergence signals a potential reversal. And having touched the resistance line of its price channel at $218.8, there may be some downside soon.

However, GD stock has built up a steady upward trend since late 2020, and there’s nothing to suggest that the uptrend is ending time anytime soon.

Supports, Resistances, and Other Important Levels

GD is right in the middle of the $213 – $216 resistance level as we speak. The price temporarily broke out of this level on Friday the 18th, February, but quickly made a return to the middle of the support level on the same day.

While the breakout attempt on that day was unsuccessful, volume was on the rise in the previous 3 days. This suggests that there may be a successful breakout of this resistance level sometime this week. And if the stock breaks out of that level, there’s another hurdle awaiting it at the resistance trendline. GD would have to summon another breakout of this level to remain bullish.

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Otherwise, we could have a short-term bearish move that brings the stock down to the $209.85 level. And in the worst case, the price could further fall to the middle of the price channel as it has constantly done in the past.

Is General Dynamics Corporation stock a buy?

We believe GD stock is a buy for the long term. There may be a temporary bearish move that brings the stock lower in the short term, though. But there are good positive signals for the stock, including a healthy up price channel.

Hess Midstream Boasts Of High Dividend Yield. Buy Now?

Regardless of oil price fluctuations and supply and demand narratives, the world runs on oil and gas. And when we mention some top oil and gas companies, we think of Chevron, ExxonMobil, and the likes. Few would think of Hess Midstream (NYSE: HESM), and they could rightly be forgiven for that. The company does extract oil like the aforementioned companies. This explains why this high dividend yield stock has remained under the radar.

Stock Positives

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Source: Kindel Media

The first positive about Hess Midstream is its business. Hess does not own oilfields or do oil drilling. Rather, it owns crude oil storage, processing, and transport facilities. Regardless of whether the drilling company makes profits or losses with its crude oil, Hess gets paid as the intermediary between the market and the oil drilling companies.

Another positive on this stock is its dividend yield of 7%. The company announced in its Q3 FY 2021 report that its quarterly dividend payout would increase to $0.5167, keeping up with the consistent dividend payout increase history the company has built. This is a reason to smile for income investors.

If you need more positives, the company’s Q4 2021 report can provide that. Hess Midstream recorded a net income of $165.1 million (25% YoY growth), total revenue of $316.3 million (17% YoY growth), and Adjusted EBITDA of $246.6 million (24% YoY growth). These are all signs that the company is growing.

Those are things going well for the company. But before you jump at the stock, here’re some warning signs to be wary of.

Warning Signs

A 7% dividend yield is great! But when you take a closer look, you find out that the company has a payout ratio of over 100%. This means the company is giving out more than what it’s earning to shareholders as dividend. What then is left to run business with?

Combine this with the fact that the company has only been paying dividends for 5 years, the question of dividend sustainability comes under the magnifying glass.

Technical Analysis

HESM has been on an uptrend since March 2020, and there’s nothing to suggest that an end to the trend is near.

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In fact, there’s technical evidence that suggests that the stock is still very much in the territory of the bulls. You’ll notice that the price just broke out of and retested the $27.3 – $28.3 resistance level in recent weeks, and now rests on it as a support.

There looks to be a minor resistance in the $30 area. If the price could beat this level, we may see more upward momentum that will take the stock to $35 or above.

This potential upside makes HESM a good stock to consider for growth, and its high dividend yield presents a good case for dividend. You can buy HESM now if you don’t mind the caveat that it might not be able to sustain this dividend yield long term without reviewing its dividend payout.

After General Motors Survived The Grave, Now Is The Time To Buy

The automobile industry was one of the industries that had it the worst during the pandemic. Roads were completely deserted and looked like scenes from post-apocalyptic movies, albeit without extensive destruction of property.

As the world begins to emerge from the pandemic, many automobile brands are making a gradual return to pre-pandemic sales. Some haven’t quite gotten back on their feet yet, but General Motors Company (NYSE: GM) is not one of them.

Here’s the value stock case for GM stock.

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Source: Yuvraj Singh

General Motors is one of the biggest automakers in the US. The Cadillac maker was the biggest automaker in the US by market share, according to Statista. It gets the majority of its revenue from sales of popular brands, such as Chevrolet, Cadillac, Buick, and GMC. That we can find such statistics about a company that barely survived bankruptcy in 2009 is more than impressive.

GM stock jumped by over 50% to an all-time high of $65 in 2021 before ending the year on a 41% upside. Concerns about the shortage of semiconductors and the company’s late appearance in the EV party have weighed on the stock.

This shortage of semiconductors forced the company to reduce production later in 2021 but the company still managed to post strong earnings. And as the semiconductor shortage begins to ease long term, we expect GM to ramp up production while accruing more in earnings.

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In that year, the company recorded $127 billion in revenue for the year ended in 2021, a 3.7% increase from what it was in 2020. Earnings before Interest and Taxes (EBIT) also soared by 47% to $14.3 billion in the same period and diluted earnings per share grew by a substantial 55% to $6.7. These figures tell us that GM is not in a bad place financially.

Going forward, the company is plotting its transformation to electric vehicles. GM has a target of delivering 400,000 EVs by 2023 in North America. The company has been working really hard on its EVs to meet that end. And demand is already beginning to meet the company’s EV targets.

One of it’s popular brands Hummer, which had been discontinued, made a return as an EV brand late last year. The electric pickup & SUV models have already garnered 60,000 reservations.

But who are we kidding? GM is late to the EV party. It’s going to do a lot of convincing before it can begin to compete with brands like Tesla, who have had a major head start. But if any company can pull it off, it has to be GM. It already has the infrastructure for mass production. The company just has to work on making its EV products excellent.

Technical Analysis

The year 2021 saw the GM stock break out of the $45.5 – $48 resistance level to soar prices that the stock had never been worth previously. It created a new resistance level at $64 – $66 in the process, but the price is back to the $45.5 – $48 support level.

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The price looks to be in a range and if the current support level holds true, the stock could rebound and make about 30% upside. This is the value in the GM stock that value investors may look to take advantage of in the near future.

We believe GM is a buy as we speak for a potential 30% upside to $63. However, if the price falls below $40, this could serve as a better buy level for value investors.

Is Qorvo The Next Best Value Stock For 2022?

Growth stocks with aggressive volatility can be an exciting ride. But one may have to live with having their portfolios aggressively full one day and empty the next if they don’t learn to embrace the not-so-interesting value stocks.

This brings us to Qorvo, Inc. (Nasdaq: QRVO), which has been through rough times for a while. The dip has had more to do with the general tech industry sell-off amidst other external factors than the fundamentals of the company itself.  While Qorvo is your most exciting stock, there’s evidence to believe it is worth keeping an eye on for its value.

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Source: Polina Kovaleva

Qorvo Inc is a semiconductor chip maker that boasts Apple among its customers. The company primarily deals with the design and development of chips that make wireless and wired connectivity and communications possible. Think WiFi, telecoms, and the like.

The most recent quarterly report, Q3 FY 2022, recorded many metrics that looked stable for the company. Revenues increased year on year to $1.11 billion, albeit by a meager 0.67%. However, earnings per share of $3.42 surprised analysts who had estimated $3.25 for the company. Net income also looked good, growing by 7.57% to $216.2 million over the same time compared to the previous year.

Another metric that we rely on to predict good value stocks are the price to earnings ratio. The price-to-earnings ratio help us compare stocks on a level playing field, regardless of the company size.

When a company has a P/E ratio that is lower than that of its industry average, it may be a signifier that the stock is trading cheaper than other stock in that industry.  This is the narrative of the Qorvo stock, which trails the US semiconductor market’s 24.1 average with its 12.3x.

How can we know that the relatively low cost doesn’t mean it’s the signs of a dying company then?

Looking at revenue, Qorvo has consistently increased it year-on-year in over 5 last quarters. With the continuous growth of 5G and Internet of Things, Qorvo looks to be in a sweet spot to reap from it.

Technical Analysis

The QRVO stock is approaching the $115.5 – $121 support level, having torn through other support levels before this one. However, this current support level has something other levels didn’t have. It has the backing of a price action chart pattern, the Head and Shoulders.

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Many analysts rely on the Head and Shoulders pattern to predict reversals, which has also played out on the Qorvo Stock. This $115.5 – $121 support level almost coincides where the bears who rode the pattern take their profits and, many times, relinquish their hold on the instrument.

While it is not a given that this reversal will end here, the dip may very well rest here. If the stock does break through this support level, there’s another support level at $84.5 – $90. Any of these levels could be where the stock makes its long anticipated U-turn. We can only be sure, however, when we keep an eye on the stock to gauge what the price does at any of these levels.

Our recommendation is to hold the QRVO stock for now and to buy when the price shows signs of ranging or reversing at any of those support levels.

Enjoy the Best of Growth and Dividend on Digital Realty

Growth and Dividend rarely come together in one stock. Many companies often have to sacrifice one for the other. But who says you can’t eat your cake and have it with both growth and dividend on Digital Realty Trust, Inc (NYSE: DLR)

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Source: Brett Sayles

When you hear the internet, the cloud, or anything digital, you probably don’t think of a physical structure, do you? But all the data that are carried through these metaphysical platforms don’t materialize from thin air. These data are stored in physical buildings called data centers. And Digital Realty Trust is a Real Estate Investment Trust (REIT) that owns about 300 of those in North and South America, Europe, Africa, and Asia.

There are some notable things about this stock, starting from its dividend. Being a REIT, Digital Realty is required to fill the pockets of its stockholders with a substantial part of its earnings. The data center provider has a dividend yield of 3.23% and a payout ratio at 76%, which is just enough to maintain a stable dividend payout while still having enough to re-invest in the business. And this brings us to the company’s stock growth.

If you invested $10,000 in Digital Realty at its IPO in 2005, you would have well over $100,000 today in total returns without counting dividends. All these from a stock whose main method of making paying its shareholders is through dividend payouts as a REIT.

A quick dive into the company’s Q3, FY2021 reports reveal that the company increased its funds from operations available to stockholders by 54% to $505 million.

Future growth opportunities for Digital Realty are also clear to see. The company announced that it has agreed to buy Teracco, the biggest data center operator in Africa. Recently, Africa has gradually become a battlefield for data center operators, as the continent goes though its digital transformation. And this talk of acquisition is great to help Digital Realty stay ahead of competition and the market.

Technical Analysis

There is a support trendline the underlines the stock on a slightly sloped uptrend. What this means is that DLR is not growing too fast, and it’s taking its time to make regular corrections, which is a good thing for long term investors.

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What makes this support trendline, and every other trendline, an interesting price action tool when analyzing the stock market is the tendency of the price to get repelled on contact with these lines. And now, the DLR stock has collided with this trendline.

The point of collision of the price with the trendline happens to fall right in the middle of the $127 – $131 and $163 – $167 support and resistance levels, respectively. And on a closer look (you’ll see this better on the daily chart), you will notice that a level has existed at this mid point.

All these make the currenct position of DLR quite interesting. If the stock behaves as it has in the past, we might see an upside of at least 21% as the price breaks the $163 – $167 resistance level to create a higher high above its all-time high of $178. This would make Digital Realty Trust a good dividend stock but also a fair growth stock for the long term.

This Once Expensive Stock Now Sells For A Scarce Discount!

We might have in our hands an opportunity that only presents itself once in a while, thanks to this massive dip in the stock price of Meta Platforms, Inc (Nasdaq: FB).

What Happened

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Source: Brett Jordan

Following the release of the company’s quarterly reports on the third of February, Meta stock dipped by 30%.

So What?

Fears have grown about the dwindling popularity of Meta platforms, WhatsApp, Instagram, and Facebook, among the younger generation. The reduction in the number of daily active users on Facebook in that quarter served to confirm those fears, and the stock dipped accordingly.

The guidance for the next quarter was also weaker than what analysts expected from the hugely successful company. Apple’s latest ad policy also had an impact on the company’s stock price.

Now What?

Meta is a company that has proven it can always make money. Despite that dip, the company still recorded $12.5 billion in net income and revenues still went up by 20% to $33 billion year-on-year.

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Going forward, the company has its eyes set on the metaverse, a future where everything goes virtual. In fact, this goal inspired the company to change its name from Facebook to Meta to better accommodate its ambitions. While that future is still some decades away, it is a relatively safe bet that Meta would be a part of that future.

Overall, this dip presents investors with the opportunity to get in on Meta for growth and for value. This dip brought the company’s price-to-earnings ratio 16.4x to its lowest since it went public in 2012, trailing the Interactive Media and Services industry by 9.3x. In other words, the stock is at its cheapest.

Technical Analysis

Slightly over four months ago, we did a review of the Meta stock (then, Facebook), and we recommended our first buy level of $332 – 340. We said if the stock had a major correction, we recommended a buy level of $296 – $305.

In the past week, our major correction happened. What’s more, the major correction places us at an even bigger discount than we anticipated. FB has dropped by 30% so far, bringing the stock price to $226 as we speak. The closest support level at $214 – $222 may serve as the resting place for the price if the sock doesn’t dip further down to the $164 – $172 level.

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This is good news for potential growth investors who thought buying at $332 – 340 or $296 – $305 was too expensive. And for value investors who are scouting for undervalued stocks, Meta fits.

As for when to buy the dip for all investors, the time is now. However, you may wait until the stock finds a support level to settle before you click the “buy” button.

This Simple Dividend Stock Is Sure To Be Irresistible

There comes a time in the journey of a stock investor when the rollercoaster volatility of growth stocks no longer cuts it. Instead, they want the stability and the peace of mind that some stocks bring. And there’s hardly a stock that offers peaceful sleep as Verizon Communications Inc. (NYSE: VZ) does.

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Source: Aaditya Hirachan

There are two things that the Verizon stock guarantees you: Stability and sizable dividend payout.

Verizon has a history of dividend payouts that have consistently increased going many years back. And with a current dividend yield of 4.8% and a payout ratio of only 48%, investors have no reason to fear a dividend cut. Even the company’s enormous debt is under control with its plentiful cash flow.

The rest of Verizon’s balance sheet also tells a story of stability, rather than growth. Total quarterly revenue, for instance, dropped by 1.8% to $34.1 billion year-on-year, while total annual revenue increased by 4.1% to $133.6 billion in the same period.

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Source: Verizon

Business revenue also dropped by 3% year-on-year on the quarterly front, but gained 0.3% on the annual front at the same time. Adjusted earnings per share and consumer revenue, though, grew quarterly and annually from the previous year.

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Source: Verizon

Verizon is one of the three telecom giants in the US. Although it faces fierce competition from the other two, there’s no fear of new competitors kicking them off the top three anytime soon. The reason is that the industry is infrastructure-intensive. Any potential competitor must have billions of dollars to invest, lose, and re-invest.

This oligopoly is a good thing for Verizon and its shareholders, as they won’t have to constantly look over their shoulders, other than to keep an eye on the other two competitions.

The continuing rollout of 5G also exposes the VZ stock to a huge potential upside. 5G on its own is packed full of possibilities, some of which we can’t even begin to imagine. And once 5G becomes mainstream and 4G becomes obsolete, the providers of the network are definitely going to benefit from it.

As mentioned, Verizon is not one to give you massive returns, but its consistent dividends is definitely a great reason to keep it.

Technical Analysis

At first glance nothing looked spectacular with Verizon when looking at it on the weekly chart. In fact, the stock looked rather all over the place. However, a shift to the monthly chart revealed that the stock may be at a point of reversal, having dipped below a support trendline with roots that go all the way back to 2008.

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For all we know, this dip below the support trendline could be a mere late pullback which is common when trendlines are being redefined. So, to find out what exactly is going on, we take another look at the weekly chart.

What once looked a picture of incoherence now tells a story. A level that served as support at $52.6 –  $54.0 has now turned to resistance. Unsurprisingly, it is the same drop that broke the support trendline that broke this support level.

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Here’s the long and short of these: These are all telltale signs of a reversal. This could be the end of the 12-year uptrend for Verizon, and there’s no telling what would happen from here.

But not to be a prophet of doom, though. This may be a false breakout for all we know. We’ll have to see how things play out.

This potential downside, however, should not affect the fundamentals of Verizon.

This Stock May Help You Hit Your Growth and Dividend Targets

If a high dividend yield is what you’re after, this stock is not for you. But if what you want is a stock that has proven to be consistent and promises the same going forward, you might want to consider Target Corporation (NYSE: TGT).

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Source: Andrea Piacquadio

Target is a retail company with apparel, home, hardline, food, beverage and beauty products in its stores. The company has made itself a one-stop-shop for shoppers in need of those essentials, with supply chain facilities to facilitate deliveries. With its same-day retrieval feature, it has continued to attract customers to its goods, albeit digitally.

While a 1.63% dividend yield is not the most attractive yield on the market, a closer look at the company’s dividend story reveals some favorable news. Target pays 21.4% of its income on dividends. The rest is reinvested into growing the company, which is not a bad thing for investors, as they can rest assured that the company pays attention to growing the business.

In return, investor shares can grow in worth as the company stock grows, and dividend yields may even go up with it. After all, Target already has a history of increasing dividend per share for the last 50 years. This low payout ratio also means the company can easily keep up with dividend payments, which is good news for investors who need consistent dividends.

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Source: Target

The retail stock had a great quarter in its Q3 FY 2022, recording digital comparable sales growth of 155% and store comparable sales growth of 9.7% year-on-year. Earnings before interest, tax, depreciation, and amortization increased to Even GAAP earnings-per-share went up by 51.6% to $3.04 year-on-year.

Long term, Target is a stock you expect to remain profitable. It has shown good performance, even during the pandemic, when we were all forced indoors. It has since opened new stores and supply chain facilities.

Technical Analysis

Bullish for 53 months until it reached its all-time high of $269, TGT gives investors reasons to invest in it other than its dividends.

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Right now, the stock is going through a long-overdue correction, having fallen below the previous low. The stock might find rest on the $199.2 – $205 support level before either rallying for the next bullish run or even dipping further. And if the latter scenario prevails, we may see a further correction to the $165.3 – $170.6 support level.

If a high dividend yield stock is more to your liking, then you’ll want to check this analysis out.

Dividend and Value: The Case For Annaly

As a stock market investor, there are three reasons a stock may interest you. You may want the stock for its positive future outlook. A stock that’s also trading below its fair value could also entice you with its value. You may also want the stock for the security of its consistent dividends. And depending on who’s looking at the stock, Annaly Capital Management (NYSE: NLY) may tick two of those three boxes.

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Source: Jessica Bryant

As a mortgage real estate investment trust (mREIT), Annaly borrows from lenders at the lowest possible rates and purchases mortgage-backed securities (MBS) that have higher yields than the interest rates from the lender. This interest margin is how it makes its profit. So, the lower the interest rate, the more Annaly makes.

A concern that immediately comes to mind is that the Fed is planning to hike interest rates, potentially denting the profits of Annaly. But Annaly has been around for a quarter of a century and has survived many various interest rate hikes in the past. One of the strategies used in the past was diversification into other credit and capital structures.

Perhaps what best attracts investors to Annaly is its high dividend yield of 11.19%. Although this yield has gone from as low as 9.25% to 11.59% in the past year and may return to sub-10% once the interest rate hikes begin, we expect the figures to still look fair.

That’s the dividend case for Annaly. The stock also makes a fair value case as it has a price-to-earnings ratio of 4.1 in a US mortgage REITs industry average of 9.3 and a US market average of 16.3.

Technical Analysis

NLY stock is worth $7.87 as we write this, right above the $6.1 – $7.1 support level which is also its lowest support level ever.

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With where it is at the moment, NLY is perhaps one of the biggest darlings of value investors in addition to being the best friends of income investors. From this point, it is about 50% from the closest resistance level at $11.6 – $12.4.

The price once dipped below the $6.1 – $7.1 support level, but that proved to be a false breakout. Beyond that, the level has looked to hold steady. If the stock does break below the support level again, and for real, there’ll be no way to tell where the stock may find support from its price history.

By the way, if you’re an income investor who seeks another REIT to keep, here’s one for you.

Is It Time To Reconsider Investing Priorities?

Growth stocks have done well in recent times, with many of them doing double-digit growths in the past few years. But with the looming interest rate hike, inflation, plus other factors, it might be wise for inventors to reconsider their priorities and fill their coffers with more value stocks. The value stock we have for you today is Petróleo Brasileiro (NYSE: PBR), or Petrobras.

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Source: Jan-Rune Smenes

The world is starting to emerge post-pandemic, and more importantly the lockdowns that accompanied them. What this means is that economies are starting to reopen fully, and people are going back to their lives as they did pre-pandemic. This is good news for Petrobras.

Petrobras operates in the Brazilian energy sector, drilling, refining, and processing some of the earth’s most precious liquids, crude oil, and its by-products. And with economies back open, the demand for these energy sources will only rise, and very likely taking PBR with it.

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Source: Petrobras

Every financial metric is looking good for Petrobras at the moment. In the quarterly report it released for Q3 FY2021, the company lowered its gross debt to $59.6 billion, hitting a target of <$60 billion that was originally set for 2022. Its free cash flow increased by 20% from $7.5 billion. Recurring adjusted EBITDA also increased to $12.2 billion from 6.9 billion in the same period last year.

Petrobras is a steal right now with a PE ratio of 3.1, less than a third of the market, and a quarter of the oil and gas industry in Brazil.

Technical Analysis

PBR looks to be making a breakout from the $12.1 – $12.8 resistance level, with a clean supporting trendline holding it aloft. If this breakout isn’t a false breakout and that resistance level becomes support, the next resistance level is 33% away from the support level at $17 – $17.5. That’s a positive outlook for the stock.

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But as we all know, nothing is certain stock market. The stock could make a reversal to the $9 – $9.5 support level, breaking the support trendline in the process. Although that may cause us to take another look at the stock, it only means PBR is giving investors better buying opportunities as long as the fundamentals remain as good as they have been