Published Tue, 02 Jul 2019 14:12:38 -0400 on Seeking Alpha
Finding Growth In A No-Growth Market
With the second quarter earnings cycle underway the question arises, what sectors should dividend growth investors be targeting? Growth in the second quarter is expected to be negative, estimates for future quarters has fallen and there is a risk the earnings recession that began in the first quarter could extend itself to three quarters.
My criteria for this analysis is simple: which sectors have the best outlook for growth this quarter, the clearest outlook for future earnings growth, and an expectation for earnings growth acceleration next year based on data compiled by and from FactSet Insight.
The impact of tariffs has had a terrible impact on earnings potential and nowhere is that more apparent than with companies whose revenue comes from abroad. During the first quarter cycle, S&P 500 (SPY) companies with more than 50% of their revenues from abroad saw their EPS fall double digits while those with most of their revenue from domestic sources saw their EPS increase.
While the trajectory of earnings growth is positive for the next six quarters, consensus estimates are falling and that is a weight that will keep stock market valuations in check. This makes dividends even more attractive as they may be the only positive returns investors get over the next few months.
From the technical perspective, an extreme bearish peak in MACD set last December and a wicked divergence in the same, coincident with the new... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|SABRA HEALTHCARE REIT||22.49||204.4||0.11||1.80||8.28|
|SPDR S&P 500 ETF||301.29||0.0||0.00||5.42||1.82|
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