According to the US Energy Information Administration (EIA), in the last five years, refinery utilization rates have increased. Lower demand for crude oil as a result of excess supply is hurting the oil producers, leading to weaker business for midstream and downstream oil players. On the other hand, both in the US and globally, refinery investment has been supported by high gasoline crack spreads.
Many investors wrongly believe that refinery utilization is the refinery’s capacity to solely produce gasoline. Therefore, they base their investment choices on a sole percentage. It is important to remember that refinery utilization is based on the operation of the crude distillation unit (CDU), one of numerous process units in a refinery, and that the production of gasoline is... Read more
Market cap is a company’s total (dollar) value based on its outstanding shares. Many investors choose their investments based on the market cap indicator, thinking that large caps (companies with a dollar value above $10 billion) have a greater ability to ensure higher gains and dividend growth than mid-caps (companies with a dollar value between $2 billion and $10 billion) or small caps (companies with a dollar value below $2 billion). But, is this true?
Small-cap stocks are viewed as good investments due to their growth potential. It is estimated that small caps represent nearly 52.2% of publicly traded stocks, drawing much of the analysts’ attention. On the other hand, not all large caps absorb the risk involved and therefore investing in large caps may be riskier... Read more
Nearly 67% of the U.S. gross domestic product (GDP) comes from retail consumption and therefore, how many retail stores open and close during the year is a key indicator of the overall performance of the U.S. economy. As a result of the recent financial crisis, volatility in the financial markets and shifting in consumer preferences, a significant number of retail stores have ceased operations in 2015. On the upside, according to U.S. Census Bureau, total annual U.S. retail sales have increased 4.4% on average in the period 1993-2015.
According to the 2015 Global Powers of Retailing report, 76 of the largest retailing companies in the world are based in the U.S, operating both domestically, and internationally with a strong retail presence. Two of these companies are discussed in... Read more
Stocks that pay monthly dividends can be a great choice for investors seeking a steady income. In spite of the market volatility, there are several companies trading in the Real Estate industry that can meet the criteria of income-focused investors, mainly due to the wide range of investment opportunities that these companies can take advantage of. Furthermore, the Real Estate Investment Trusts (REITs) can reinvest their earnings, thus delivering shareholder value to their stockholders.
This article discusses three large cap companies trading in the REIT industry. With an average dividend yield of 3%, and an average payout ratio of 126%, well-above the industry average payout ratio of 31.67 %, all three companies invest in a diversified portfolio of properties across the United... Read more
In the current economic climate, investors are reducing their exposure to volatile equity markets in favor of natural resources and commodities that offer better capital protection and income generation. One of the key natural resources for this cause is timber.
Timber is often used as a hedging tool against inflation. In fact, over the last century, timber investments outperform the inflation rate by nearly 3%, thus becoming a perfect low risk inflation hedge. What distinguishes timber from other commodities is that, when harvesting conditions are bad, it is possible to let the trees grow and wait for a more profitable time to sell the wood. This is not possible with corn or wheat, which have to be harvested each year. Therefore, timber makes a great investment because it is less... Read more
There are a lot of dividend-paying stocks across all sectors of the U.S financial markets. Yet, a significant portion of the total dividends paid are derived from a relatively small group of blue chip stocks. For example, the Technology sector with Google, Microsoft, Apple and other leading tech companies, pays out about $51 billion in annual dividends, thus edging out all other sectors, mainly Consumer Discretionary with $50 billion and Financials with $48 billion.
This article discusses three small cap tech stocks. Perhaps their most impressive indicator is their D/E ratio of 0.00 as all three companies have no long-term debt. Furthermore, their average dividend yield is 7.04%, when the average dividend yield of the sector is 2.05% and their average payout ratio is 83%, compared to... Read more
Large-caps usually deliver high dividends because such companies don’t use all their retained earnings to fund growth, so instead of reinvesting their earnings in the company, they are paying a percentage of it to their shareholders. On the other hand, there are also small-and mid-caps that also present strong financial results, leaving room for higher dividend yields and dividend payments.
The largest companies on the Toronto Stock Exchange (TSX) are listed in the S&P/TSX Composite Index, an index that mirrors the stock prices of remarkable dividend-paying stocks that usually yield more than 3%. In fact, by covering 95% of the equities market in Canada, the S&P/TSX Composite Index offers investors a solid insight on the trends and activity in these markets.
This... Read more
The residential construction industry offers plenty of options to make good money in the stock market. Generally, demand is driven by population growth, whereas the profitability of the largest homebuilders primarily depends on securing favorable building locations. However, to fully capitalize on the industry’s growth potential, investors should have an idea of how the housing market works.
For example, many analysts believe that, currently, the U.S housing market is in an expansion phase due to favorable supply of existing properties and a convenient supply of new homes available for sale. During an expansion phase, occupancy increases and as unoccupied buildings become scarce, homeowners raise the rents. The cycle reaches a point where rent growth is accelerating and... Read more
One of the most extensively used strategies of passive growth investing is selecting small- and mid- cap stocks with a strong growth potential. The main advantage of passive investing is that it allocates market risk over different assets, thus offsetting the losses of a dramatic market decline in a particular sector or company. On the other hand, passive investing cannot protect investors against broad market declines, as it follows the trend of the market. To anticipate market risk, investors should have an insight into growth prospects and be able to obtain better estimates of expected growth.
Small- and mid-caps with growing revenues and increasing margins are often good investment choices. Of course, there has to be an indication that will entice investors in selecting a... Read more
The Australian Securities Exchange (ASX) is one of the leading financial market exchanges around the world, providing a full range of services, including listings, trading, clearing and settlement, across a comprehensive array of asset classes. With a total market cap of approximately $1.5 trillion, the ASX is home to some of the world’s leading resource, finance and technology companies, while the $47 trillion interest rate derivatives market is prime in Asia and among the largest in the world.
Australian investors favor high-yielding dividend paying stocks, primarily because many stocks in the ASX generate far higher returns than expected or higher than what government bonds would deliver. Furthermore, when a stock is consistently delivering a dividend payment, it becomes... Read more