Dividend.com analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.
Coca-Cola captures the first spot in the list this week, as the company’s stock has been trading at record highs. Second in the list is Nvidia, whose stock declined despite reporting another set of robust results. Third is pharma giant Johnson & Johnson, which is one of the best-positioned healthcare stocks despite legal battles. The list is closed by telecom company Verizon, which raised its dividend.
Don’t forget to read our previous edition of trends here.
Coca-Cola Shares Trade at Record Highs
Coca-Cola (KO) has taken the top spot in the list this week, with an increase in viewership of 18%. This is for good reason. Coca-Cola shares have been trading at record highs as the company has been reporting strong revenue growth and profits. For the latest quarter ended in June, Coca-Cola revenues grew more than 3%, while Ebitda was up more than 6%.
More importantly, Coca-Cola has done better than its arch-rival PepsiCo, which saw its revenue rise by only 1% in the most recent quarter. The stocks have also diverged. PepsiCo shares are up just 3% this year, while Coca-Cola shares shot up 20%.
On top of the good performance, Coca-Cola pays a dividend that yields 2.7%, slightly lower than PepsiCo’s.
However, Coca-Cola might be facing some near-term troubles. Coca-Cola has been in a dispute with the tax authorities in the U.S. and could potentially owe to the government as much as $16 billion in unpaid taxes, or about seven quarters of profits.
Source: Barchart
Nvidia Reports Blowout Results Again, but Stock Disappoints
Chipmaker Nvidia (NVDA) is second in the list with an advance in viewership of 17%, close to Coca-Cola. Nvidia has reported another set of blowout results in the quarter ended July 31, with revenues growing 122% and net income surging by 170% to $16.6 billion. Sequentially, revenue rose by about $4 billion, while net income by a little less than $2 billion.
And Nvidia guided for continued revenue growth in the next quarter, by about $2.5 billion. At the same time, the company squashed fears of substantial delays of its next chip Blackwell, saying it expects to start shipping in the fourth quarter.
Investors, however, were unimpressed, with the stock declining about 20% following the results, before recovering some losses. The stock might have gotten ahead of itself a little, along with investor expectations that the company will continue to grow revenue at a higher rate than it actually did.
Nvidia, which has been supplying the chips behind the generative AI revolution, currently trades at a P/E ratio of 50, which is not that high, considering it grows revenues at a rate of 20% quarter-over-quarter.
Source: Barchart
Johnson & Johnson Performs Well Despite Legal Battles
Johnson & Johnson (JNJ) has placed third in the list with an advance in viewership of 12%.
Johnson & Johnson has been a strong performer in recent months, even as it battles with potential settlements and lawsuits that are worth billions. Shares in the company are up 4% year-to-date, underperforming the S&P 500 Index by about 10 percentage points. Revenue in the most recent quarter was up 4.3%, while net income was down 9% to $4.7 billion.
It is not bad for a company fighting legal battles on many fronts. It recently proposed to add more than $1 billion to a settlement related to its talcum powder that was cancerous. At the same time, the company lost a legal battle with Auris Health, a medical robotics company it acquired in 2019, and was ordered to pay $1 billion in compensation to investors.
Despite these headwinds, Johnson & Johnson appears to be in great financial shape. It has been increasing its dividend for 63 consecutive years, with the dividend currently yielding a little less than 5%. It is expected the company will continue to increase its dividend in the coming years.
Source: Barchart
Verizon increases dividend
Verizon (VZ) has taken the fourth position in the list with an advance in traffic of 7%. Verizon has been in the news after it increased its dividend by 1.25 cents per share to a quarterly 67.75 cents.
The company’s shares are up 26% over the past 12 months, as they recovered from a peak-to-trough decline of 50%. The stock remains down 30% from its peak. A key reason for the fall in the stock price has been stagnating revenue growth. In the latest quarter, for instance, revenue was up by a meager 0.6% and is likely to be flat for the year. At the same time, net income has been falling.
Source: Barchart
The Bottom Line
Coca-Cola has been outperforming its arch-rival PepsiCo. Nvidia shares have been falling, despite another blowout earnings report. Johnson & Johnson has been performing well considering the myriad of legal battles it is involved in. Verizon has increased its dividend, even as revenue growth has been stagnating in recent years.
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