5 Best Esports Stocks to Buy in 2022

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According to Grand View Research, the esports and gaming industry is growing rapidly. By the year 2027, it will be worth around $6.82 billion after enjoying a compound annual growth rate (CAGR) of more than 24%. 

Many esports and gaming enthusiasts who are looking for ways to exploit the stock market for financial freedom are starting to make investments. These investors know which companies in the space are the top dogs. The fact that most people enjoy video games makes research far less daunting when investing in esports than in other, less sexy industries like utilities. 

But with so many esports and gaming companies out there to choose from, how do you choose the best companies in the space to invest in? Here are some top stocks to consider.

Best Esports Stocks to Buy in 2022

The esports and gaming industry is booming, with much of the growth being a side effect from the recent pandemic. When COVID-19 took hold around the world, traditional sports halted, and consumers were looking for things to do while under lockdown orders. 

During this time, esports viewership grew rapidly. According to Statista, the growth in gaming interest is likely to continue. 

During the pandemic, those who were into video games had nothing better to do, and many who wouldn’t have considered playing them in the past found themselves picking up the controls and immersing themselves in the gaming ecosystem. 

Now, with a whole new wave of consumers in gaming and a growing esports audience, it’s time for the big players in the industry to capitalize. 

What stocks give you the biggest opportunities in the industry? Below you’ll find my top five picks, all of which are great options to consider.

1. Activision Blizzard, Inc. (NASDAQ: ATVI)

You Can’t Talk About Gaming Without Mentioning Activision Blizzard

  • Market Cap: Activision Blizzard is one of the largest gaming companies in the world, trading with a market cap of more than $54.5 billion. 
  • Earnings History: The company has a strong history of beating analyst expectations in terms of earnings, which it has done for the past four consecutive quarters. All told, the company has produced an average positive earnings surprise of over 9%. 
  • Dividend Yield: The current dividend yield on the stock is 0.67%. Over the past five years, the dividend yield on the stock has ranged from 0% to 0.88%, averaging 0.57%. 

Many who follow the esports and gaming industry closely will be surprised to see Activision Blizzard on this list, considering the wave of blues that has hit the company and the stock. To address the elephant in the room, the stock has recently seen a dramatic decline as a result of delays in the launches of Overwatch 2 and Diablo IV, leading analysts to downgrade the stock. 

On top of the delays, the company has been dealing with a PR nightmare after an employee walkout resulting from management’s tone-deaf response to allegations of sexual discrimination and harassment. Additionally, co-head Jen Oneal stepped down after a short run in the leadership role that began in August 2021. 

Nonetheless, there’s a strong probability that a significant undervaluation in the stock exists. 

The company is the owner of several esports leagues, hosting several esports events per year. Keep in mind, we’re talking about the company behind Call of Duty and Overwatch, two of the most popular video games ever made and the center of some of the most popular esports tournaments in the space.  

Although delays and discrimination are concerning, the stock has been thoroughly hammered, falling more than 32% from its highs in February. 

Keep in mind that these declines have happened even in the face of gains in revenue and earnings, and consistent earnings beats quarter after quarter. 

The bottom line is that even though the company is shrouded in bad press at the moment, general consumers and esports teams alike consider the company’s games to be legendary. 

Moreover, the biggest declines were seen shortly after the company announced delays in the launches of Overwatch 2 and Diablo IV. However, delays in game launches have become more commonplace these days, as the world’s leading producers of video games have begun focusing more on launching polished games free of glitches rather than rushing to market and patching bugs later. 

All told, there’s no question that Activision Blizzard will bounce back. The only real question is when it will happen. When it does, those who own the stock will be grinning from ear to ear. 


2. Electronic Arts Inc. (NASDAQ: EA)

Leader in Sports Gaming With Massive Franchises 

  • Market Cap: EA is another of the world’s largest esports and gaming companies, trading with a market cap of nearly $40 billion.  
  • Earnings History: EA has produced stellar earnings over the past four consecutive quarters, beating analyst expectations each step of the way. Over the past year, the average quarterly earnings surprise has been 18.7%. 
  • Dividend Yield: Like many others in the gaming and esports space, Electronic Arts currently pays no dividend. 

While Electronic Arts had its ups and downs throughout 2021, the stock has remained relatively flat, gaining less than 2% cumulatively. However, this is yet another company that many believe to be undervalued. 

Electronic Arts, better known as EA, isn’t just any game developer. It’s the developer that has signed into partnerships with the National Football League (NFL), Fédération Internationale de Football Association (FIFA), and several other massive sports franchises to develop a long line of games like Madden NFL and FIFA. The company is also the publisher behind non-sports-related hits like The Sims and Apex Legends. 

In the world of competitive gaming, there are few in the esports industry that have garnered nearly as much attention as EA. Gamers from all over the world dream of competing for six-figure prizes at some of the gaming industry’s most popular tournaments hosted by the company. 

If EA’s past is any indication, there will be plenty for investors to look forward to in the future. 

One of the biggest draws for investors has to do with the company’s coming game releases. Not only have EA’s sports-related titles done incredibly well, in November 2021 the company launched Battlefield 2042, another game in its popular Battlefield franchise. Many experts expect this to be the best-selling title from the franchise to date, setting the stage for strong Q4 revenues, as the game is likely atop many holiday shopping lists. 

All told, EA is a force to be reckoned with in the gaming industry, and thanks to a lackluster year of performance in the stock in 2021, a clear undervaluation is being born, setting the stage for a strong growth opportunity. 


3. Amazon.com, Inc. (NASDAQ: AMZN)

Yes, Amazon is in Gaming Too

  • Market Cap: Amazon is one of the largest companies in the world, currently trading with a market cap of nearly $1.8 trillion. 
  • Earnings History: Historically, the company has smashed earnings expectations, beating analyst projections in the past three out of four consecutive quarters. Even with a painful 32.75% miss in the most recent quarter, the average quarterly earnings surprise over the past year has clocked in at 38.2%. 
  • Dividend Yield: Throughout its history, Amazon hasn’t been a dividend-payer. Instead, it piles its profits back into the company in an effort to expand, and with the company being one of the largest in the world, those efforts have definitely been fruitful. 

You may be surprised to see Amazon on a list of the top gaming and esports companies, but it’s important to keep in mind that the company isn’t just an e-commerce powerhouse. It has its fingers in various areas of the tech industry as a digital conglomerate. 

The company isn’t a game publisher, although it does sell video games on its e-commerce platform. Nonetheless, the company is a key player in the gaming market even beyond its role in the retail distribution of video games.

Amazon acquired Twitch, one of the largest game-streaming platforms in the world, in August 2014. 

Twitch is a lot like YouTube. However, the big difference between the two is that while YouTube provides various types of streaming content, Twitch is a platform that focuses on streaming gameplay, giving players a way to show off their skills and esports teams a great venue for connecting with their audiences. This makes Twitch a top-pick among esports enthusiasts in terms of digital entertainment. 

However, when you purchase shares of this stock, you’re not just purchasing exposure to Twitch. You’re purchasing exposure to Amazon.com’s entire ecosystem of opportunities and enjoying the stability that comes along with investing in one of the world’s largest companies. 

At the end of the day, Amazon has grown from nothing to a dominant player in several high-value markets over the years and, by all accounts, that growth is far from over. 


4. Huya Inc. (NYSE: HUYA)

An Underdog That Could Become a Massive Winner 

  • Market Cap: Huya is the smallest company on this list by market cap, trading at an enterprise value of around $2.67 billion, and just making its way onto the large-cap playing field.  
  • Earnings History: As a smaller, newer company, Huya’s earnings have been interesting to follow. During a couple of the past four quarters, analysts didn’t even provide expectations. In the most recent quarter, analysts didn’t even expect that the company would produce a penny of profit, but it surprised investors by reporting earnings of $0.34 per share. 
  • Dividend Yield: Huya has not yet declared a dividend. 

Of all companies on this list, Huya is definitely the smallest and one of the riskiest bets. However, many argue that the stock is significantly undervalued at current levels, and I happen to agree. 

Huya was one of the pioneers in the game streaming industry in China and has quickly grown to become the largest game streaming platform in the region. As a result, many have compared it to Twitch, calling it the Twitch of China. 

As a game streaming service, the company plays an integral role in the esports industry in the region, connecting fans with teams and setting the stage for the next wave of Chinese esports stars. 

While what the company is doing from an operational perspective has been impressive, the idea behind the investment is more of a political bet than one aimed at the company’s operations. 

Over the past year, the Chinese government has been flexing its muscles, enacting a wide range of laws that have hampered businesses in several sectors, including gaming. As a result, investment interest in companies in the region have faded amongst fears that new laws may impact corporate earnings capabilities. 

Unfortunately, the selloff has been significant for some stocks, and Huya is one of those stocks. In the past year, the stock has given up more than 50% of its value, with no real negative catalyst to speak of. At the same time, the stock had no real reaction to the recent and dramatic earnings beat announced by the company. 

Over time, political fears in the region are likely to subside, and when this happens, the hardest-hit companies in the recent Chinese stock selloff will look like heavily discounted gold nuggets. I believe Huya falls into this class of stock. 


5. Take-Two Interactive Holdings, Inc. (TTWO)

A Growing Company with Significant Upside

  • Market Cap: Take-Two Interactive may not be the largest company on this list, but its market cap of more than $20 billion is nothing to shake a stick at.  
  • Earnings History: The company isn’t just known for beating earnings expectations, it’s known for smashing them. Over the past year, the average earnings surprise produced by the company was over 100%. 
  • Dividend Yield: Like many in the tech industry, TTWO does not pay dividends. 

Take-Two Interactive Holdings is a game developer that has had some pretty significant hits in the past. Its portfolio of companies includes game publishers like Rockstar Games, 2k, and Firaxis Games. Companies under its umbrella are the developers behind wildly popular franchises like Grand Theft Auto, BioShock, Borderlands, and Civilization, plus a wide range of other games that capture consumer attention and imagination like nothing else. 

Beyond its activities as a game developer, Take-Two is also a major player in the esports industry. The company currently owns a 50% stake in the NBA 2K League, one of the most popular esports leagues in the world. 

Unfortunately, however, 2021 wasn’t a great year for the stock. While the company smashed expectations in all earnings releases all year, the investing community seems to have shunned the stock, leading to declines of 12%. 

Nonetheless, many argue that the declines are an opportunity. The company has produced stellar revenue and earnings all year, and experts suggest more growth is on the horizon with positive guidance. 

Many investors, like Warren Buffett, have made massive amounts of money buying stocks when companies were down on their luck or the stocks were simply undervalued. What we’re seeing from Take-Two Interactive stock suggests it might be one of these opportunities. 


Consider Exchange-Traded Funds (ETFs)

If you’re not interested in doing the research required to choose individual stocks — or simply don’t have the time or don’t know how — don’t worry. There’s another way to gain exposure to solid picks in the esports industry. 

One of the best ways is to buy into a themed exchange-traded fund (ETF) that’s centered around esports. A couple funds to look into in this category include the VanEck Video Gaming and eSports ETF (ESPO) and the Global X Video Games & Esports ETF (HERO). 

ETFs pool money from a large number of investors and use those funds to buy shares in esports companies. As the companies grow or pay dividends, the profits are enjoyed by all shareholders of the fund. 


Final Word

The esports industry is an exciting one. Whether you’re a gamer or esports enthusiast, or you don’t play games at all, it can be an incredibly lucrative investment opportunity. 

However, as is the case when investing in any sector, it’s important to do your research before risking your hard-earned money. After all, each company is unique, offering investors a different mix of opportunity and risks. 

Fortunately many people find researching gaming stocks to be fun. After all, you’ll have the opportunity to learn about the companies behind the games you play, find out about upcoming titles, and potentially earn a return for doing so. 

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Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

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Here’s How The Saver’s Credit Can Lower Your Tax Bill by $2,000

You might be eligible for 50%, 20% or 10% of the maximum contribution amount.
On the scale of great tax breaks, tax credits are the best. While deductions merely lower your taxable income, a tax credit reduces your actual tax bill dollar-for-dollar.
To be eligible for the Saver’s Credit, you must:
Seriously. Check this out.

What Is the Saver’s Credit?

Next, make your deposit.
Let’s say you do your taxes and discover you owe ,000. If you paid ,000 out of your paycheck to your retirement accounts over the course of the year and received a 0 Saver’s Credit, your tax bill would shrink to 0.
If you’re a low- or middle-income worker, you can claim the Saver’s Credit — also known as the retirement savings contributions credit — by adding money to a 401(k) or individual retirement account (IRA).
The Internal Revenue Service sets maximum adjusted gross income caps for the retirement savings contribution credit each year.
The IRS actually gives taxpayers until April 15, 2022, to make contributions to individual retirement accounts and include those investments on their 2021 taxes. Pretty cool, huh?
Not only do a lot of people forget about this credit, many low-income workers miss out on the sweet tax benefits of saving for retirement because they worry doing so will strain their tight budgets.

How Do You Qualify for the Saver’s Credit?

First, you’ll need to open a retirement account if you don’t have one already. You can open one with any brokerage firm or robo-advisor. Or, you can start contributing money to your workplace 401(k).
Your income determines the percentage of your retirement savings that will be credited to your tax bill.

  • Be 18 years or older and file a tax return.
  • Not claimed as a dependent on someone else’s tax return.
  • Not be a full-time student. (However, you’re still eligible for the Saver’s Credit if you’re enrolled in an online-only school or participating in on-the-job training).
  • Save some money in a retirement account, like an employer-sponsored 401(k).

It’s important to note that this government tax benefit is not a deduction, but a credit.
Here’s what eligible taxpayers need to do to take advantage of the Saver’s Credit.
How much the Saver’s Credit is worth depends on how much you contribute to your retirement account, your filing status and your AGI.

  • $66,000 for married filing jointly.
  • $49,500 for head of household.
  • $33,000 for a single filer or any other filing status.
Pro Tip
The maximum amount of the Saver’s Credit cannot exceed ,000 for single filers or ,000 for joint filers in 2022.

How Much Is the Saver’s Tax Credit Worth?

It’s called the Saver’s Credit, and it’s one of the most valuable tax credits available. But it’s also one of the most overlooked.

Pro Tip
Lastly, you need to file Form 8880: Credit for Qualified Retirement Savings Contributions with the IRS. If you’re using online tax software, like TurboTax, then it’s even easier to file this form with your tax return.

Finally, you must contribute new money to a retirement plan: Rollover contributions from an existing account — like a 401(k) rollover into an IRA — don’t count.
For example, a single filer earning ,000 who invests ,000 in a Roth IRA would receive a maximum credit for 50% of their contribution, or ,000.
One drawback about the Saver’s Credit is it’s nonrefundable. That means the tax credit can be used to offset income-tax liability but not as a refund. In other words if you owe no taxes but qualify for the Saver’s Credit, Uncle Sam won’t cut you a check. Bummer.

Keep reading to learn who is eligible for the Saver’s Credit and how it works.

Filing status 50% of contribution 20% of contribution 10% of contribution
Single Filers, Married Filing Separately, or Qualifying Widow(er) AGI of $19,750 or below AGI of $19,751 – $21,500 AGI of $21,501 – $33,000
Married Filing Jointly AGI of $39,500 or below AGI of $39,501 – $43,000 AGI of $43,001 – $66,000
Head of Household AGI of $29,625 or below AGI of $29,626 – $32,250 AGI of $32,251 – $49,500

When you file your 2022 taxes for the 2021 tax year, your adjusted gross income (AGI) must fall below the following thresholds to qualify for the Saver’s Credit:
If you earn too much to qualify for the Saver’s Credit, you can still receive a tax deduction by contributing to a traditional IRA.
It’s worth checking to see if you qualify for the Saver’s Credit, especially if you or your spouse were unemployed or experienced a reduction of income in 2021.

How Do I Claim the Saver’s Credit?

As you can see, people with the lowest income benefit most from the Saver’s Tax Credit.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
But a single filer earning ,000 who contributed ,000 to a Roth IRA would receive a credit of just 10% of the amount they invested, or 0.

  • Traditional or Roth IRA
  • Traditional or Roth 401(k)
  • SIMPLE IRA
  • SEP IRA
  • ABLE account (if you’re the designated beneficiary)
  • 403(b) plan
  • 457(b) plan
  • A federal Thrift Savings Plan

Ready to stop worrying about money?
First, you’ll need to meet some basic requirements.
Source: thepennyhoarder.com

Other Information About the Saver’s Tax Credit

The Saver’s Credit is worth up to ,000 for single filers, or ,000 for married couples filing jointly.
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It’s also worth noting that the Saver’s Credit can be claimed in addition to any tax deduction you receive by making qualified retirement savings contributions.
Keep in mind that the percentage of your retirement contribution you can receive as a credit decreases as your income increases.
The Saver’s Credit is a way to put money back in your pocket when you save for retirement.
Saver’s Credit Rate for 2022
So if you contribute to a traditional IRA or traditional 401(k), you could receive double tax savings: A reduction in your taxable income equal to the amount you kicked into your retirement account plus the Saver’s Credit (if you qualify). Believe it or not, the government will pay you to save. <!–

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Depending on your adjusted gross income and tax filing status, you can claim the credit for 50%, 20% or 10% of the first ,000 you contribute to a retirement account within a tax year.

Tax Loss Carryforward

A tax loss carryforward is a special tax rule that allows capital losses to be carried over from one year to another. In other words, capital losses realized in the current tax year can also be used to offset gains or profits in a future tax year.

Investors can use a capital loss carryforward to minimize their tax liability when reporting capital gains from investments. Business owners can also take advantage of loss carryforward rules when deducting losses each year.

Knowing how this tax provision works, and when it can be applied, is important from an investment tax-savings perspective.

What Is Tax Loss Carryforward?

Tax loss carryforward is the process of carrying forward capital losses into future tax years. A capital loss occurs when you sell an asset for less than your adjusted basis. Capital losses are the opposite of capital gains, which are realized when you sell an asset for more than your adjusted basis.

Adjusted basis simply means the cost of an asset, adjusted for various events (i.e. increases or decreases in value) through the course of ownership. Whether a capital gain or capital loss is short-term or long-term depends on how long you owned it before selling. Short-term capital losses and gains apply when an asset is held for one year or less, while long-term capital gains and losses are associated with assets held for longer than one year.

The Internal Revenue Service allows certain capital losses, including losses associated with personal or business investments, to be deducted from taxable income. There are limits on the amount that can be deducted each year, however, which depend on the type of losses that are being reported.

In order to allow taxpayers to claim the full capital loss deduction they’re entitled to, the IRS makes it possible to carry tax losses forward into future years.

Recommended: What to Know about Paying Taxes on Stocks

How Tax Loss Carryforwards Work

In general terms, a tax loss carryforward works by allowing you to report losses realized on assets in one tax year on a future year’s tax return. IRS loss carryforward rules apply to both personal and business assets. The main types of carryforwards allowed by the Internal Revenue Code are capital loss carryforwards and net operating loss carryforwards.

Capital Loss Carryforward

IRS rules allow investors to “harvest” tax losses, meaning they use capital losses to offset capital gains. An investor could sell an investment at a capital loss, then deduct that loss against capital gains from other investments, assuming they don’t violate the wash sale rule.

The wash sale rule prohibits investors from buying substantially identical investments within the 30 days before or 30 days after the sale of a security for the purposes of tax-loss harvesting.

If capital losses are equal to capital gains, they would offset one another on your tax return, so there’d be nothing to carry over. For example, a $5,000 capital gain would cancel out a $5,000 capital loss and vice versa.

If capital losses exceed capital gains, you can claim the lesser of $3,000 ($1,500 if married filing separately) or your total net loss shown on line 21 of Schedule D for Form 1040. Any capital losses in excess of $3,000 could be carried forward to future tax years. The IRS allows you to carry losses forward indefinitely.

Net Operating Loss Carryforward

A net operating loss (NOL) occurs when a business has more deductions than income. Rather than posting a profit for the year, the business operates at a loss. Business owners may be able to claim a NOL deduction on their personal income taxes. Net operating loss carryforward rules work similar to capital loss carryforward rules, in that businesses can carry forward losses from one year to the next.

For losses arising in tax years after December 31, 2020, the NOL deduction is limited to 80% of the excess of the business’s taxable income, according to the IRS. To calculate net operating loss deductions for your business, you first have to omit items that could limit your loss, including:

•   Capital losses that exceed capital gains

•   Nonbusiness deductions that exceed nonbusiness income

•   Qualified business income deductions

•   The net operating loss deduction itself

These losses can be carried forward indefinitely at the federal level.

Note, however, that the rules for NOL carryforwards at the state level vary widely. Some states follow the federal rules, but others do not.

How Long Can Losses Be Carried Forward?

According to the IRS, tax loss carryforward rules allowed losses to be carried forward indefinitely. That includes both capital losses associated with the sale of investments or other assets, as well as net operating losses for a business. Prior to the Tax Cuts and Jobs Act of 2017, business owners were limited to a 20-year window when carrying forward net operating losses.

It’s important to keep in mind that capital loss carryforward rules don’t allow you to simply roll over losses. IRS rules state that you must use capital losses to offset capital gains in the year that they occur. You can only carry capital losses forward if they exceed your capital gains for the year. The IRS also requires you to use an apples-to-apples approach when applying capital losses against capital gains.

For example, you’d need to use short-term capital losses to offset short-term capital gains. You couldn’t use a short-term capital loss to balance out a long-term capital gain or a long-term capital loss to offset a short-term capital gain. This rule applies because short- and long-term capital gains are subject to different tax rates.

Example of Tax Loss Carryforward

Assume that you purchase 100 shares of XYZ stock at $50 each. Thirteen months after purchasing the shares, their value has doubled to $100 each so you decide to sell, collecting a capital gain of $5,000. You also hold 100 shares of ABC stock, which have decreased in value from $70 per share to $10 per share over that same time period.

Your capital losses would total $6,000 (the difference between the $7,000 you paid for the shares and the $1,000 you sold them for). You could use $5,000 of that loss to offset the $5,000 gain associated with selling your shares in the first company. Per IRS rules, you could also apply the additional $1,000 loss to reduce your ordinary income for the year.

Now, say you also have another stock that you sold at a $5,000 loss. You could apply $2,000 of that loss to offset ordinary income, then carry the remaining $3,000 forward to a future tax year, per IRS rules. All of this, of course, assumes that you don’t violate the wash sale rule when timing the sale of losing stocks.

The Takeaway

If you’re investing in a taxable brokerage account, it’s important to include tax planning as part of your strategy. Selling stocks to realize capital gains could result in a larger tax bill if you’re not deducting capital losses at the same time. With tax-loss harvesting, assuming you don’t violate the wash sale rule, it’s possible to carry forward investment losses to help reduce the tax impact of gains over time. This applies to personal as well as business gains and losses. Thus, understanding the tax loss carryforward provision may help reduce your personal as well as investment taxes.

In order to understand the true impact of gains and losses, it may help to open an investment account with SoFi Invest®. Here you can trade stocks as well as ETFs and even cryptocurrency. Even better, as a SoFi Member you have access to financial professionals who can offer complimentary guidance and answer your most pressing investing questions.

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For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
SOIN1221541

Source: sofi.com

Wells Fargo Stock: Earnings Season Kicks Off With WFC in Focus

Here we go again. The earnings calendar is set to start filling up, with travel name Delta Air Lines (DAL, $41.76) and big banks BlackRock (BLK, $890.90) and Wells Fargo (WFC, $55.01) among the first companies slated to report fourth-quarter results.

“Earnings are expected to grow 20% in the fourth quarter – which, while down from prior quarters, is still quite strong – and end the year with nearly 40% growth,” says Brad McMillan, chief investment officer for Commonwealth Financial Network.

And if this metric exceeds that 20% estimate in Q4, it will mark the fourth straight quarter of earnings growth above 20%, according to John Butters, senior earnings analyst at FactSet Research Systems.

Still, “Analysts and companies have been less optimistic compared to recent quarters in their earnings estimate revisions and earnings outlooks for the fourth quarter to date,” Butters adds. As of mid-December, 56 S&P 500 companies had issued negative earnings per share (EPS) guidance, compared to 37 that had issued positive guidance, on average, for the quarter.

Analyst Sees Solid Q4 Earnings for Wells Fargo

Big banks will dominate the earnings calendar early on, and these lower earnings estimates are found throughout the industry. 

“All the large banks show the upcoming fourth quarter as the lowest estimated revenue and EPS to date in 2021,” says CFRA Research analyst Kenneth Leon. “We are likely to see continued low-to-moderate credit risk to credit cards, commercial and industrial loans, commercial real estate and trading and counterparty losses.”

However, for Wells Fargo, which is slated to unveil its fourth-quarter results ahead of Friday’s open, Leon is confident the big bank will deliver a turnaround that will result in higher capital returns. 

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“We think WFC should benefit from favorable industry trends, and management’s focus on execution has improved. While the pandemic remains uncertain, we expect Q4 2021 and 2022 to show improved loan activity and higher net interest income than the first half 2021.”

Leon also expects “a rebound in consumer loan demand, card activity, and higher loan balances, as well as personal and small business loans,” and points to Wells Fargo’s technological innovations, including its mobile, cloud-based consumer banking platform, as reasons to be upbeat toward the big bank. 

He has a Buy rating on the financial stock and he’s certainly not alone. According to S&P Global Market Intelligence, 11 analysts say Wells Fargo is a Strong Buy and five call it a Buy. This compares to 11 Holds and not a single Sell or Strong Sell.

As for WFC’s fourth-quarter results, the Wall Street pros, on average, are targeting a 4.3% year-over-year (YoY) improvement in revenues to $18.7 billion. Earnings are expected to arrive at $1.09 per share, up 70.3% from the year prior.

BlackRock Stock Choppy Ahead of Earnings

BlackRock is another large financial institution set to report ahead of the Jan. 14 open. Shares of the world’s largest exchange-traded fund (ETF) operator have been choppy over the past six weeks or so, but still remain up roughly 22% on a 12-month basis.

Can a strong earnings report be the catalyst for BLK stock’s next leg higher?

Analysts are a little scattered on the subject. On average, the pros expect BLK to report fourth-quarter revenues of $5.1 billion, a 14.5% YoY improvement. Earnings, on the other hand, are expected to decline 1.4% from the year-ago period to $10.04 per share – though analysts’ Q4 EPS estimates range from a low of $9.50 to a high of $10.45.

Still, there are several analysts who see reason for optimism. “BLK remains well-positioned for growth across a broad array of products (ETFs, Aladdin and Private Markets) and themes (sustainability, China, retirement gap and democratization of alternatives),” says BMO Research’s James Fotheringham. He has a Market Perform rating on the financial stock, which is the equivalent of a Hold. 

“We expect BLK to continue to steal share from its traditional asset management peers,” he adds.

And CFRA Research’s Catherine Seifert (Strong Buy) thinks favorable fund flow trends, like the nearly $328 billion of net inflows BLK recorded in the first nine months of 2021, will lead to a 15% rise in revenues for fiscal 2021. 

“BLK shares trade at a premium to peers and we expect the firm’s dominance in the asset management industry, coupled with its solid execution, and growing technology services division, to enable the shares to retain this premium,” she adds.

Analyst Estimates Vary for Delta Air Lines Earnings

It’s not only about big banks this week. Airline giant Delta Air Lines will unveil its fourth-quarter results ahead of the Jan. 13 open.

DAL stock sold off sharply in late 2021, falling from its mid-November peak around $45.50 to an early December low near $33.50, though it has since recovered back up to the $42 per-share price point.

This selloff was in part related to uncertainty surrounding the omicron variant of COVID-19. However, Raymond James analyst Savanthi Syth believes “the indiscriminate selling” created buying opportunities for investors looking to “gain exposure to high-quality airline stocks,” such as Strong Buy-rated DAL.

For DAL’s fourth quarter, Syth is expecting the airline to record a per-share loss of 40 cents – a vast improvement over the $2.53 per-share loss it suffered in Q4 2020. 

The consensus estimate among Wall Street pros, though, is for DAL to swing to a fourth-quarter profit of 12 cents per share. Revenue, meanwhile, is expected to land at $9.1 billion (+130% YoY).

Source: kiplinger.com

3 Stocks I Bought This Week – The Motley Fool

This past week was pretty challenging for investors, but that didn’t stop me from putting money to work as the markets got wobbly. I bought back into AT&T (NYSE:T) on Monday, added to my Pinterest (NYSE:PINS) position on Tuesday, and finally become a Twilio (NYSE:TWLO) investor on Wednesday.

Step inside my shopping bag. I want to show you my haul. If you have the time, allow me to break down the reasons I was attracted to these three stocks during a week that probably scared off a lot of other investors. 

Someone celebrating while on the mobile phone.

Image source: Getty Images.

AT&T

It’s been eight months since I sold my stake in AT&T. I was’t a fan when it announced it was spinning off its WarnerMedia arm, combining it with another media mogul. When the stock moved higher on the news — even after the company announced it would lower its quarterly payouts — that was all I needed to get out.

Now I’m back. Ma Bell has sold off sharply since I bailed, and I was able to buy back in for 23% less than where it was when I sold — and that’s with the general market trading higher. I can appreciate AT&T’s core business. The stock’s current 8% yield will be closer to 5% later this year, when it completes the shift in assets, and its business won’t be as dynamic. However, with the stock now fetching just eight times forward earnings, it’s worth a shot. 

With the market’s recent volatility, it’s also a good thing that telco has been marching to the beat of a different drummer. This week dented a lot of portfolios, but AT&T rose in four of the five trading days — up nearly 7% for the week. The bullish thesis for a pickup in AT&T’s wireless business once the 5G revolution starts to gain traction makes sense, and sentiment for telco stocks may finally be turning positive again.

Someone sharing what's on their phone with someone else.

Image source: Getty Images.

Pinterest

The visual search engine has been hit hard in recent months. Pinterest stock is down 64% since peaking in February 2021. It suffered through the reopening of the economy last year, as folks were no longer as interested in finding new recipes to try in the kitchen or sharing home decor tips. We ventured out into the real world and spent less time on Pinterest.

Pinterest still reaches a massive audience, though. It had 444 million global monthly active users in its latest quarter, a big number but slightly less than its reach a year ago. The number of domestic users has declined sequentially in back-to-back quarters. One welcome byproduct of the reopening of the economy is that advertisers are willing to spend more to reach engaged Pinterest users. Revenue rose 43% in Pinterest’s latest quarter despite the 1% year-over-year decline in active users. Net income and adjusted earnings more than doubled. 

Pinterest isn’t one of my highest-conviction stocks, but when it was one of my biggest losers on Tuesday, it felt right to double up on what was one of my smaller positions. The stock continued to drop as the week played out, so I’m off to a bad start with this portfolio move. 

A masked delivery driver dropping off a package.

Image source: Getty Images.

Twilio

I’ve been a fan of Twilio for years, and I finally bought in when I saw it plummeting along with many falling tech darlings on Wednesday afternoon. Twilio’s the leader of in-app communication solutions. It’s working behind the scenes of some of your favorite apps to let you know that the driver’s at your door with your food order or that your desired vacation villa rental is available for booking. Other solutions include real-time password resets or marketplace authentication solutions. 

The stock has never been cheap. Quality high-growth companies are rarely in the bargain bin. However, with Twilio shedding nearly half of its value since peaking 11 months ago, it’s a compelling time to kick the tires. Twilio’s still stepping on the gas. Revenue rose 65% in its latest quarter. Acquisitions padded top-line growth, but organic revenue still rose 38%. Developers swear by Twilio, and that explains why its dollar-based net expansion rate is a healthy 131%. Put another way, developers on the platform for more than a year are spending 31% more than they were a year earlier.  

Twilio’s expected to turn profitable next year. Trading at an enterprise value of 15 trailing revenue is the lowest we’ve seen with Twilio. I missed the chance to buy Twilio early. Now let’s see if I didn’t get in too late. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Source: fool.com

Can Your Craft Become Your Livelihood? A Conversation with Grant Ginder

That creative thing you love—writing, painting, designing, composing—that’s what you do for pleasure. To relax, unwind, escape. Many of us hold a belief that the thing we love to do and the thing we get paid to do can’t be one and the same. Unless, of course, you’re Lizzo or Stephen King. 

But what if that assumption is wrong? What if there's a way to add a small revenue stream, or even make a full-time career, out of the creative thing you love?

Becoming a creative begins with creating.

I sat down with novelist Grant Ginder (author of The People We Hate at the Wedding and Honestly, We Meant Well) who boldly shares his advice on how he turned his writing hobby into a profession and how he believes you can follow his lead down any artistic path you choose.

What makes someone an artist?

When I asked Grant what makes someone an artist, he chuckled before confessing that even as a published author, he struggles to claim the title out loud.

"I think … so much of it is just a matter of taking ownership. [We tend to believe] you're not allowed to call yourself a painter unless you've sold paintings. But a painter is someone who paints. …I spend a lot of my day writing, and so I'm a writer. Getting anyone else to take you seriously is to take yourself seriously. And part of taking yourself seriously is calling yourself what you are."

Addressing the mindset of art as a hobby or creative pursuit only

Many of us carry a creative wish or talent inside of us. And yet so many believe that our art—the creating—is the thing we must do after the “real job” is done. Being creative happens separately from being a professional.

"My parents… encouraged me to follow those [writing] ambitions. And if I would've told them after I graduated college ‘I'm going to go be a writer’… they would have [said] ‘Maybe you won't be doing that.’

"When my first book came out, my parents had a celebration for me and my dad was giving a speech. He said ‘Grant said he was going to write a book and we didn't believe it!'"

Then, after Grant’s second book was published, his parents (supportively) expressed the same surprise.

"It was a mixed message. It’s not just your parents [sending you this message]—I think you have pressures from all sides; from school, from media, from just looking at the world around you. It’s like the only [artists] that matter are the ones who make a lot of money. I think it’s a very skewed way of looking at art."

Making the move from amateur to creative professional

It's all well and good to say that we should all support creative pursuits as a means to an income. But how do you actually get started on making it official? The answer, perhaps unsurprisingly, is that becoming a creative begins with creating.

"For me, the creating part was learning to set aside time, and to protect that time, to engage in this particular craft… I would write on the weekends a lot. [I had to learn] to say no to things… [because] this is the time that I've set aside to engage in this process, and I'm going to engage in this process now. Holding yourself to that and getting other people to recognize and take that seriously [is essential]."

He also speaks to the importance of consuming the art form you want to produce. For Grant, that’s the novel. But he acknowledges that it's probably the same for other creative arts like painting or music. The process involves analysis and self-reflection.

"You read a novel and you want to write one of these things. [What do you like about it? Why do you like that? And how is that writer doing that thing? And so, [you're] coming at it as… someone who's trying to train themselves in a particular craft. I think that's kind of step one in producing something [creative]."

Finding inspiration and motivation

Sometimes you don't have the luxury of waiting for inspiration to strike you. You have a job to do.

What about inspiration? Do you wait for it to strike or do you just have to start?

Grant believes the artist simply has to start.

"I don't believe that I have to wait for inspiration to strike. I actually think that this comes from my training as a speechwriter, and from writing under deadlines. Sometimes you don't have the luxury of waiting for inspiration to strike you. You have a job to do."

He pointed to an idea he paraphrased from novelist Taffy Brodesser-Akner:

"You write a sentence. Just write that sentence. And it might be a really bad sentence, but the next one will probably be a little bit better."

"I'm also a fan of super messy first drafts. I think my writing is at its worst and my process is at its worst when I get way too precious. Am I in the mood? Is the light in the apartment just right? It's like, no, just roll up your sleeves and start."

Getting your creation out into the world

Once you’ve written or painted or composed the thing, is there a clear, step-by-step roadmap to getting it out into the world? Grants recommendations were refreshing. And relatable.

1. Do your research

"I used Google. When I wrote my first novel, I Googled ‘how many words are in a novel?

"I've always loved writing. I've always loved reading. And so, on breaks [from my speechwriting job], I would write. And, I kept that up. And then… when I reached that magic number [of novel words], I Googled ‘how to publish a novel.

"My path was like a Google Commercial."

Grant's googling led him to conclude that he needed to find a literary agent. And, of course, he then used Google to find out what a literary agent was. 

"Your research is really important [in figuring out] what the next steps are and how to prepare yourself for those steps."

2. Be scrappy

"I started realizing I'd never really read the acknowledgments in the backs of books before. So I started reading the acknowledgments… and authors thank their agents. So if I really liked the book, I would read the acknowledgments and keep a list of who the agents were.

"When it was time for me to query agents… I reached out to those agents. Some of them didn’t respond, but some did. It takes a while. You get a lot of rejections. But I told myself that for every rejection, I was going to send it out to two more people. You just chip away."

I told myself that for every rejection, I was going to send it out to two more people. You just chip away.

3. Make connections

"I assume this would translate to other fields—developing a network of other writers, painters, musicians helping each other … to navigate the landscape."

Grant had no prior knowledge of the steps to take in getting a book published. He had no connections. He had only a book, a wish, and a decent internet connection. And this is how he would advise any creator to figure things out as they go.

How do you handle rejection?

Grant mentioned rejection. And I wasn’t letting him off the hook. How, I asked, do you deal with rejection?

"There is this incredible vulnerability in putting something out in the world. It's something that you've sat with for years. And it's just [been] you, engaging with [it]. Then all of a sudden it's in the hands of everyone and they're allowed to think whatever they want about it.

"I think you have to get to this state—and I'm not there yet—[but] I imagine [it’s] like the author's Nirvana… where I’ve made this thing that belonged to me while I was making it. And I am now putting it forth for interpretation… [but] texts are meant to be read and processed in a variety of different ways. And I think that… the more you can lean into that belief, the happier, and probably the better writer you can be."

Grant's advice to budding creatives

I wrapped our interview with this question: What’s the one piece of advice you wish you could give your younger self?

Here’s a (slightly paraphrased) summary of the pep talk Grant wished he'd received.

"Just sit down and do it. Trust the process. One sentence will lead to the next sentence, which will lead to the next. Don't worry so much. Just write the book you want to write."

Source: quickanddirtytips.com

11 Super-Simple Ways to Build Wealth in 2022

A wealthy couple
Jacob Lund / Shutterstock.com

To paraphrase William Shakespeare, some people are born wealthy and others achieve wealth. If you weren’t lucky enough to be in the first group, then it’s time to get going on your self-made fortune.

Think that can’t happen? You’re wrong. Pathways to wealth are everywhere. Why shouldn’t you take them?

Some of these smart choices will save you money upfront. Next, use that money to make more money through strategies like fractional investing and online wealth management.

Want to put yourself on the road to riches? These tactics can help.

1. Used Chevy or new Mercedes?

Save $100 a month, earn 1% on it and after 20 years you’ll have $26,545. Enough for a used Chevy.

Boost that percentage to 15%, and you’ll end up with $124,569 after 20 years. That’s nearly $100,000 more: enough for a new Mercedes.

Of course, earning 15% isn’t easy (the stock market’s average return is about 10%) and never guaranteed, but here’s something that is guaranteed: You won’t be earning big returns at the bank.

If you want to super-charge your savings, you’ve got to invest.

Plenty of people grow up thinking that “investing” is something only rich people do. Not so! You can start your investing journey with as little as $1, without paying a dime in fees, thanks to an investing app called Public.

With the Public app, you take part in “fractional investing,” which means buying little slivers of companies, funds or crypto assets. Take your choice from among thousands of exchange-traded funds (ETFs) and stocks.

Start by signing up and telling the app what investing experience (if any) you have and what your investing goals are. According to Public, 90% of users are in it for the long haul.

There’s no charge to join, although you’re allowed to leave tips on transactions. And again: You can start with as little as $1. What else can you get for a buck these days? Even dollar stores are raising their prices!

Download the app now, and take the first step toward getting rich instead of just getting by.

2. Chop your car insurance bill by $700 a year

Auto insurance is a must. You know what isn’t a must? Paying too much for coverage.

People who switch to Progressive for their auto insurance can save up to $700 – not just initially, but every year. Imagine what you could do with an extra $700 in your budget.

Emergency fund? Extra payment against your mortgage? Retirement planning? It’s your call. Point is, those are dollars that are now working for you instead of for someone else.

Incidentally, a cheaper premium doesn’t mean you’re cheaping out on protection. Progressive is known for its strong coverage. Request your free quote now and see how much you can save this year, and every year.

3. Let mortgage savings put your kids through college

If you’re currently paying about 4% on your mortgage, refinancing could lower your rate to as low as 2.376%.

Not much of a difference, right?

Well, if your mortgage is $300,000, that lower rate would mean paying about $94,000 less in interest over the life of the loan. That’s enough to put your kids through college, start your own business or retire earlier.

Maybe you know the savings would be significant, but haven’t refinanced yet because it seems so complicated. It isn’t. A direct lender called Better will make it child’s play.

The simplifying starts with a near-instant rate quote, and continues through the refinancing process. Better doesn’t charge origination fees or lender fees, and you can get a mortgage interest rate lock if you like.

Millions of homeowners around the country are saving every month because they refinanced. But the experts are saying these low rates won’t last. It’s do-it-or-lose-it time.

Get your new, personalized rate today, and make strides toward a better tomorrow.

4. Stop worrying about expensive household breakdowns

For most of us, our home is our most valuable asset. We put a lot of money down to buy it and pay a lot of money each month to keep it. Sometimes we’re stretched pretty thin financially, so when things break down it can be tough to cover the fixes.

The heating/cooling system grinds to a halt. A major appliance gives up the ghost. And why are the lights flickering — could it be the electrical panel?

What you need is a full-time maintenance person.

The next best thing? A home warranty from America’s 1st Choice Home Club. You can choose from among several coverage plans that cover issues with appliances, plumbing, heating, electrical systems and more. You can use your own technician or let America’s 1st Choice send someone over.

A breakdown happens in the middle of the night? Doesn’t matter. The in-house service team is available 24/7.

All this starting for as little as $390 a year.

Homeownership is great. But when things go wrong — and they will! — we can no longer call the landlord. We are the landlord, and we might go into debt just to keep things running smoothly.

Stop worrying about household breakdowns, and the high costs that come with them. Get a free quote in 30 seconds.

5. Get paid to watch videos and take surveys

Think of all the time you spend waiting somewhere. Waiting for the spin cycle in the laundromat. Waiting at the auto shop until the mechanic can give you an estimate. Waiting for your kid’s sports practice to be over. Waiting in an exam room for the doctor, who’s running 20 minutes late.

You could spend that time watching funny cat videos — or you could use that time to make some money. Our friends at InboxDollars can help you with the latter.

InboxDollars is a rewards site that pays you actual cash to watch videos and take surveys. Seriously: Why not use your downtime to make money?

Those aren’t the only ways to earn money with InboxDollars, however. You can also do some online shopping, click on daily emails, scan your grocery receipts into the “Magic Receipts” function, complete special offers (especially those for things you’d planned to buy anyway), play games and even help others by making donations to various causes.

From now on, get paid for waiting. It takes seconds to sign up, and you’ll get a $5 welcome bonus just for joining.

6. Find cheaper homeowners insurance in 60 seconds

Again, our homes are usually our most valuable asset. It’s essential to make sure they’re protected in the event of an emergency. But how do you know whether you’re overpaying for homeowners insurance?

Simple: You ask Lemonade for an estimate. It takes only a few seconds to find out whether you could be keeping more of your hard-earned money each month. Lemonade’s coverage starts from just $25 a month.

Homeowners insurance isn’t just about fixing things up after a fire, though. The dog bit the mailman? Lemonade can help with legal and medical payments.

A thief steals your stuff? Lemonade has your back, even if the theft happened away from home.

Your home rendered unlivable due to that fire? A homeowners insurance policy through Lemonade will cover expenses until you can get back into your home sweet home.

Why overpay with your current carrier? Find cheaper home insurance in seconds.

7. Add $1.7 million extra to your retirement

A recent Vanguard study indicated that a self-managed $500,000 investment would grow into $1.69 million in 25 years, on average. Sounds pretty good, huh?

However, with professional help, that same $500,000 would have turned into $3.4 million. In other words, a quality financial adviser could double your retirement nest egg!

At least talk to a pro, especially when finding one is free and easy. SmartAsset is a free service that will match you with a qualified money manager who can help you put your money where it will do you the most good.

Bank interest rates don’t beat inflation, so the value of your savings erodes over time. Stocks and other investments have historically beaten inflation, but a lack of knowledge and experience leaves you vulnerable to dodgy advice or financial scams.

SmartAsset will put you in touch with up to three local, experienced professionals, all of whom are fiduciaries, meaning they’re required to put your best interests over their own. They can give you a clear picture of where you are now, and help you develop the right plan for the long term.

Since the first appointment is often free, what have you got to lose? If you’re ready to at least consider a local adviser, check it out.

8. Protect your wealth with a gold IRA

Not everyone is comfortable with traditional retirement investments. Some people are opting for a “gold IRA,” which is just what it sounds like: gold, gold and more gold. This can be bullion (coins or bars) only, or also include gold stocks, ETFs and mutual funds. Gold is one of the few commodities that the Internal Revenue Service approves as an IRA investment. It’s a finite resource, rather than one that can be controlled by governments or banks.

Sound intriguing? Time to educate yourself, with help from American Hartford Gold.

This family-owned company can help you set up a gold IRA that meets all IRS standards. Chief among them: The gold must be kept at an approved depository. (No, you can’t bury it in your backyard.)

There may be less than 20 years’ worth of mineable gold remaining in the ground. As the saying goes about real estate, they ain’t making any more of it. Demand for gold is rising all over the world, especially in the electronics industry, so your IRA has a great chance to increase its value until you’re ready to retire.

American Hartford Gold has an A+ rating with the Better Business Bureau, and a 5-star rating with TrustPilot. Get your free investors kit now.

9. Diversify your portfolio with art collected by billionaires

Billionaires didn’t become billionaires by making bad investment choices. And billionaires have been collecting art for generations; for example, the Rockefellers amassed a collection that sold for an eye-popping $835 million in 2017.

But it isn’t just the ultra-rich who can invest in art by Banksy, Warhol and Picasso. With a new investing app called Masterworks, you can invest in iconic artworks as well – right alongside deep-pocketed folks like Bill Gates, Oprah Winfrey and Jeff Bezos.

Blue-chip art outpaced the S&P 500 from 1995-2021, which is impressive considering that historic bull run we’re now witnessing. The Wall Street Journal recently reported that art is “among the hottest markets on Earth.”

Art also has one of the lowest correlations to stocks that you can find. In other words, art’s value doesn’t have anything to do with the stock market’s wild swings, which makes it a good hedge.

Masterworks is an invitation-only art investment platform. So if you want to invest like a billionaire, request your invitation to join here.

10. Borrow $50,000 to erase your debt

Ever feel like you’ll never get out from under your credit card debt? Consumer debt is way too easy to get into, yet sometimes feels impossible to escape. You pay as much as you can each month, but the high interest rate just keeps piling on the dollars.

AmOne is a free service that matches people like you with loan providers. When you fill out one simple form online, AmOne finds lenders who want to fund your loan of up to $50,000.

Once you’ve been approved and agree on the terms, it can take as little as 24 hours to get the cash. Use the money to erase all your debt at once, then pay back the personal loan at a lower interest rate than those credit cards were charging you.

The service does only a “soft” credit pull, rather than have you going directly to lenders and getting “hard” credit pulls that affect your credit score. And speaking of your credit score: You don’t need an “excellent” rating to be considered, since AmOne’s lending partners are willing to work with people of varying credit ratings.

AmOne has a 4.7-star rating (out of 5) on TrustPilot. It’s free to check your rate online, and it literally takes just one minute.

11. Pay no interest until 2023 with a better card

Another way to deal with high credit card balances? Get another credit card. Specifically, get a 0% APR card, transfer those balances and get charged no interest while you’re paying down the debt.

There’s another good reason to get a 0% APR card: to get free financing on a big-ticket item.

Suppose your HVAC system goes out or your car needs a few thousand bucks’ worth of repairs. Rather than deplete your emergency fund, pay with that new 0% APR card to give yourself some breathing room while you pay it off.

How much breathing room? Anywhere from 15 to 21 months, depending on the card you choose.

You’ll need a plan to go along with that new card: no more using the other cards with unnecessary splurges while you pay off the 0% APR card. It doesn’t make sense to run up more debt while you’re paying off old debt.

But with a 0% card, you’ll pay no interest. Think of all the interest you’d been paying, and what those dollars could have done for your long-term financial security. With a 0% APR card, you won’t have to waste any more of your hard-earned dollars on interest.

Compare these top cards and discover the best one for you.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Dogs of the Dow 2022: 10 Dividend Stocks to Watch

The start of the new year means a fresh chance for yield-seeking investors to get in on one of the easiest market strategies in the book:

The Dogs of the Dow.

Investment manager Michael B. O’Higgins popularized the idea in his 1991 book Beating the Dow. And it doesn’t get much simpler: At the beginning of the year, buy the 10 highest-yielding Dow Jones Industrial Average components in equal amounts. Hold them until the end of the year. Rinse. Repeat.

While the Dogs of the Dow sounds like a dividend strategy, it has its roots in value. O’Higgins’ proposed that firms with high dividends relative to their stock price in the index would be near the bottom of their business cycle and represent bargains compared to components with lower dividend yields.

And why the DJIA? The Dow Jones has long been considered one of the leading stock-market gauges of America’s economy. While the S&P 500 has more components and is more diversified, the Dow still covers most sectors. Not to mention, its components are extremely liquid and there are reams of research available on all 30.

But buyer beware. While the Dogs of the Dow have posted a respectable 8.7% annual total return since 2000, the Dogs have trailed the DJIA in each of the past four years. Analysts have proposed that the shift to growth investing has hurt the strategy’s performance; but with value stocks predicted to regain their mojo, the Dogs could again have their day.

Without further ado, here are the 2022 Dogs of the Dow.

Data is as of Dec. 31, 2021, the date on which the Dogs of the Dow are identified. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks listed in reverse order of yield.

1 of 10

Intel

Intel building signIntel building sign
  • Sector: Technology
  • Market value: $209.5 billion
  • Dividend yield: 2.7%

Oh, how the tables have turned.

A decade ago, Intel (INTC, $51.50) was the leading name in chips, while Advanced Micro Devices (AMD) and Nvidia (NVDA) were promising yet still relatively minor players – combined, the two were worth less than a tenth of Intel by market capitalization.

But Nvidia is now several times Nvidia’s size, and AMD isn’t too far behind Intel’s $210 billion market value. That’s because in recent years, Intel has missed the boat on a variety of fronts. From mobile computing and productions capabilities for faster/smaller chipsets, Intel has stumbled … and its rivals have eaten its lunch.

But while Intel might be down, it’s hardly not out.

Intel’s Alder Lake 12th-generation core processor chips have started to eat away from AMD’s high-end processors, and Intel recently announced the latest line of Alder Lake chips that include what the company says is “the fastest mobile processor. Ever.” The next two years should see its 13th-gen (Raptor Lake) and 14th-gen (Meteor Lake) chips come live.

Intel also could squeeze some value out of Mobileye, the autonomous vehicle-chip stock that it acquired back in 2017. INTC in December announced its intent to spin the company off in an initial public offering (IPO) while maintaining controlling interest – allowing Intel to enjoy both an immediate windfall while still realizing gains as Mobileye grows.

In keeping with the Dogs of the Dow’s value bent, Intel trades at just 14 times the coming year’s earnings estimates, significantly less than both the S&P 500 (21) and technology sector (28). INTC’s 2.7% yield is also much better than what you typically get out of tech shares.

2 of 10

Coca-Cola

Coca-Cola With Coffee can sitting in a pocket of snowCoca-Cola With Coffee can sitting in a pocket of snow
  • Sector: Consumer staples
  • Market value: $255.8 billion
  • Dividend yield: 2.8%

In today’s low-carb and keto-friendly world, sugary soft drinks and sodas are practically verboten. And in recent years, that has largely muted the returns of giant Coca-Cola (KO, $59.21), which has produced roughly half the total returns (price plus dividends) of the S&P 500 over the past half-decade.

But KO is doing a better job of ensuring it has the goods to shift with consumer tastes.

Coca-Cola has spent a few years moving its portfolio into healthier options. That includes teas, milk and sparkling water, among others. It also unveiled new zero-sugar versions of soda brands such as Sprite and Coca-Cola, which fueled about 25% of the Coca-Cola brand’s growth in the third quarter.

KO is also looking toward athletics and fitness fanatics for growth. Back in November, Coca-Cola purchased sports beverage group BodyArmor – which it already had a 15% stake in – for $5.6 billion. This instantly gives it a meaningful presence in the industry. “BodyArmor is currently the #2 sports drink in the category in measured retail channels, growing at about 50% to drive more than $1.4 billion in retail sales,” the company says.

And you don’t get more dependable than Coca-Cola’s dividend, which has been growing uninterrupted for 59 consecutive years. That easily puts it among the longest-tenured Dividend Aristocrats.

3 of 10

3M

Scotch tapeScotch tape
  • Sector: Industrials
  • Market value: 102.4 billion
  • Dividend yield: 3.3%

Unlike most of Wall Street, 3M (MMM, $177.63) was already getting crushed by the time the COVID bear market came around. The U.S.-China trade war and other difficulties were already weighing on the industrial name when COVID cramped demand for many of the company’s products (except its N95 masks and filtering division, of course).

But 2022 could be another year of recovery for 3M.

3M makes more than 60,000 products, from consumer products such as sponges and packing tape to industrial diamond-coated grinding disks and orthodontic supplies. In normal times, this wide product portfolio provides insulation from specific shocks to its various businesses. And it allows 3M to enjoy in numerous facets of a broad economic recovery.

The company grew third-quarter revenues 7.1% year-over-year and generated more than $1.5 billion in free cash flow. 3M is benefiting from continued cost cutting and development programs, as well as from selling chronically underperforming business lines.

3M’s forward P/E of 16 makes it one of the more expensive 2022 Dogs of the Dow, and yet it still trades for much cheaper than the S&P 500 and industrial sector (20) alike.

4 of 10

Amgen

Amgen needleAmgen needle
  • Sector: Healthcare
  • Market value: $126.7 billion
  • Dividend yield: 3.5%

Patent expirations are a hurdle most pharmaceutical and biotechnology companies have to face, and that’s no different for established biotech Amgen (AMGN, $224.97). Top drugs such as Enbrel, Neulasta and Otezla will fall off the patent cliff in coming years.

The good news? The earliest drug in that cohort to fall off patent won’t do so until 2025. And often, U.S. drug manufacturers can kick the can down the road by making minor changes to drugs or adding more indications for the therapy. Not to mention, expirations go both ways – AbbVie’s (ABBV) blockbuster drug Humira is set to lose patent protection in the U.S. in 2023, and Amgen has already gained approval to sell Amjevita, a biosimilar form of the drug.

Another big reason AMGN shareholders shouldn’t panic is its potential-packed pipeline. The biotechnology firm has more than 20 drugs in Phase 2 or 3 trials. And recently, the FDA approved Amgen severe-asthma medication Tezspire, a potential blockbuster drug.

Nearer-term, another reason to like Amgen is its dividend. Namely, it’ll be 10% bigger in 2022, at $1.94 per share quarterly, the company announced in December.

5 of 10

Merck

Merck buildingMerck building
  • Sector: Healthcare
  • Market value: $193.6 billion
  • Dividend yield: 3.6%

Merck (MRK, $76.64) has been doing a lot of evolving in recent years. It has gone on an impressive pipeline-buying spree, which continued in late November with its $11.5 billion buy of Acceleron. And Merck also recently spun off its legacy generic drug and off-patent medicines into a separate company, Organon (OGN).

The resulting Merck is one of the top growth-oriented drug producers in the world.

Sales of oncology blockbuster drug Keytruda jumped 22% year-over-year during Q3, to $4.5 billion. Some analysts believe Keytruda will soon be the world’s best-selling drug, overtaking AbbVie’s Humira. That’s in part because Merck intends to seek approval for other indications of the drug. But Merck has other major drugs in the tank, including Gardasil, whose sales grew 68% to $2 billion in Q3. And its pipeline includes dozens of products in Phase 2 and 3 trials.

A low forward P/E of around 10, and a yield well above 3%, make MRK a model example of the income and value found in the Dogs of the Dow.

6 of 10

Walgreens Boots Alliance

Walgreens pharmacyWalgreens pharmacy
  • Sector: Consumer staples
  • Market value: $45.2 billion
  • Dividend yield: 3.7%

Walgreens Boots Alliance (WBA, $52.16) wasn’t the COVID winner you might have thought. COVID prompted a shift in the company’s sales mix to lower-margin items, and it dragged heavily on foot traffic in the company’s Boots U.K. stores.

So, like many other retailers, an escape from the pandemic should help Walgreens, which used COVID as an opportunity to cut nearly $2 billion in costs from its operations.

Partnerships will be essential too. For instance, Walgreens has been opening branded primary-care clinics with VillageMD, who staffs these locations with physicians, allowing them to cater to more than ear infections and sniffles. Walgreens plans to open 1,000 of these clinics at its stores by 2027.

Also in play is the potential divestiture of its Boots business; several reports in December said Walgreens was mulling the move.

With foot traffic on the rebound and new avenues for growth opening up, WBA could be a productive Dow Dog. A forward P/E of around 10 doesn’t hurt, either.

7 of 10

Chevron

A Chevron gas stationA Chevron gas station
  • Sector: Energy
  • Market value: $226.2 billion
  • Dividend yield: 4.6%

COVID was downright miserable for the energy sector – even integrated oil-and-gas giants such as Chevron (CVX, $117.35).

However, while numerous companies closed, and many more were forced to cut jobs, slash capital expenditures and pull back on their dividends, Chevron managed to keep its dividend running and even used an all-stock deal to acquire Noble Energy.

Chevron’s acquisition of Noble at fire-sale prices boosted its overall presence in low-cost fields in the Permian Basin, allowing the company to better leverage a rebound in energy prices, which came in spades in 2021.

Energy stocks of all sorts went bananas in 2021, making it the S&P 500’s top sector. Chevron returned 46% amid a complete rebound in its operations. For instance, its third quarter saw Chevron earn $6.1 billion versus the $207 million it lost in the year-ago quarter.

However, despite its massive 2021 move, CVX stock yet again finds itself among the Dogs of the Dow.

Chevron’s 4.6% current yield isn’t as generous as the 6% or so it offered at this same time last year, but it’s still one of the top yields in the Dow. Meanwhile, it’s value-priced at just 12 times earnings estimates.

8 of 10

International Business Machines

IBM buildingIBM building
  • Sector: Technology
  • Market value: $119.9 billion
  • Dividend yield: 4.9%

International Business Machines (IBM, $133.66) has been nothing short of a disappointment in recent years.

Big Blue has struggled to remain relevant in the age of cloud computing while rivals chipped away market share. At one point, the firm recorded 22 consecutive quarters of declining revenue, then restarted that streak shortly after breaking it. Even including dividends, IBM shares returned just 1% between 2017 and 2021.

But IBM might finally be getting itself together.

Its 2019 purchases of open-source software firm Red Hat boosted the company’s operations. Fast-forward to 2021, and the company cut loose some dead weight, spinning off its legacy IT infrastructure services as Kyndryl (KD).

A now leaner, meaner IBM is focused once again on growth.

We saw signs of this in the company’s third quarter, where overall cloud revenues grew 14% year-over-year. It’ll still be a while before IBM can report its post-separation numbers, but analysts are generally expecting IBM to start heading in the right direction once again.

Better still: IBM didn’t give away any of the dividend game with Kyndryl. International Business Machines remains a Dividend Aristocrat whose 4.9% yield is among the best of 2022’s Dogs of the Dow.

9 of 10

Verizon Communications

Verizon storeVerizon store
  • Sector: Communication services
  • Market value: $215.1 billion
  • Dividend yield: 4.9%

Verizon (VZ, $51.96) spent the last few years trying to build out a communications and media empire. Wireless communication has become a commodity; there isn’t much difference between carriers, plans or offerings at this point. The U.S. market is saturated. The major carriers can’t rely on their legacy businesses for growth.

But Verizon’s ventures, which included buying Yahoo! And other media properties, simply didn’t pan out. Several write-offs later, and VZ is just getting back to basics: improving its giant network and providing services that utilize said network.

The 5G transformation is a major tailwind for Verizon. It’s not just consumer devices; smart vehicles, the Internet of Things and other applications will be a big driver for its network. Also, Verizon has started to transition toward more enterprise customers, which includes fleet management software and applications to data security. These should also provide a runway for growth.

A forward P/E under 10 and a nearly 5% dividend, meanwhile, provide some of the best features of the Dogs of the Dow.

10 of 10

Dow

Dow buildingDow building
  • Sector: Materials
  • Market value: $42.0 billion
  • Dividend yield: 4.9%

Dow has had a wild and transformative few years that saw it spin off assets before merging with rival DuPont (DD), then the chemical giant split into three separate firms. The remaining Dow contains the materials sciences chemicals, including adhesives, polyurethanes, silicones, resins and waxes, among others.

Like most other materials stocks, Dow struggled right alongside the broader economy during the COVID recession. For instance, during Q3 2020, the company lost 4 cents per share on $9.7 billion in sales. By Q3 2021, Dow had recovered considerably, posting $2.23 per share in earnings on $14.8 billion in revenues.

The omicron and future variants could throw more hurdles at the Dow recovery, but in general, a growing global economy should mean continued growth in demand for Dow’s products.

You can buy into that recovery on the cheap through Dow. Shares trade at a svelte nine times future earnings and yield nearly 5% at today’s prices. That’s roughly four times the income you’ll pull from the broader market, and at a much better valuation. A fair dividend payout ratio of 45% of earnings leaves Dow ample room to raise that payout further.

Aaron Levitt was long AMGN and MRK as of this writing.

Source: kiplinger.com