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Tag: NYSE

  • Meet the self-made billionaire who bought a nearly bankrupt company off Warren Buffett for $1,000 and turned it into a $98 billion giant | Fortune

    A small investment made at the right moment has the power to launch ordinary people to millionaire status. All it took was $1,000 and an out-there idea for Jeffrey Sprecher, the founder and CEO of Intercontinental Exchange, to set his business on a path to becoming a $98 billion behemoth.

    “I had this idea that you should be able to trade electric power, buy and sell electric power, on an exchange,” Sprecher recalled recently at the Rotary Club Of Atlanta. But there was a huge caveat: He “had no idea how to do that. I’d never worked on Wall Street, I never traded.” 

    At the time, Sprecher had heard that Continental Power Exchange—owned by Warren Buffett’s electric utility company, MidAmerican Energy—was about to go bankrupt. Despite Buffett’s business pumping $35 million into it, the company was still struggling. And so Sprecher saw this as an opportune moment to swoop in and pursue his entrepreneurial vision. 

    “I bought the company for a dollar a share, and there were a thousand shares. So I bought it for $1,000, and I used that as the basis to build Intercontinental Exchange.”

    Thanks to his quick thinking and business savvy, Sprecher now boasts a net worth of $1.3 billion. But the journey to the top was not very glamorous. 

    Living in a 500-ft studio and driving a used car while scaling the business 

    That measly $1,000 investment made back in 1997 served as the launchpad for Intercontinental Exchange, founded just three years later. A small team of nine employees set off to build the technology in 2000; setting up shop in Atlanta, Georgia, Sprecher and his staffers went all-in on building the business up from its former demise. 

    It was all hands on deck, and even as the founder and CEO, Sprecher was doing the menial labor to keep everything in order. With money being tight, the entrepreneur lived in a small apartment and drove a used car to the office to keep Intercontinental Energy afloat.

    “I bought a 500-foot, one room studio apartment in Midtown…I bought a used car that I kept and I’d go into the office from time to time,” Sprecher explained, adding that he “took the trash out, shut the lights out, answered the phone, bought the staplers and the paper for the photocopier. That was the way the company started.”

    Nearly 26 years later, the company boasts a market cap of $98 billion and a team of more than 12,000 employees—and has proudly owned the NYSE for over a decade. 

    Entrepreneurs who made a key investment at the right moment

    Some of the wealthiest entrepreneurs made their billions by spotting the perfect window to invest small and earn big. 

    Take Kenn Ricci as an example: the serial American aviation businessman and chairman of private jet company Flexjet is a billionaire thanks to his intuition to buy a struggling business four decades ago. After being put on leave from his first pilot job out of the Air Force, he turned a sticky situation into a 10-figure fortune.

    “I worked for [airline] Northwest Orient for a brief period of time. I get furloughed. Unemployed, back living with my parents,” Ricci told the Wall Street Journal in a 2025 interview, reminiscing on how he made his first $1 million.

    But instead of throwing in the towel, he spotted a golden opportunity. Ricci took a contract pilot job at Professional Flight Crews, and one of the companies he flew for was private aviation company Corporate Wings. The budding businessman was intrigued when its owners put the business up for sale at $27,500 in 1981—and jumped on the opportunity to buy it. By the early 1990s, the business was pulling in $3 million a year.

    But people don’t need to buy and scale a company to make a worthwhile investment; millennial investing wiz Martin Mignot became a self-made millionaire thanks to his ability to spot unicorn companies before they make it big. One of his biggest wins was an early investment in Deliveroo—back when the business was just a small, London-based operation. 

    “They had eight employees. They were in three London boroughs. Overall, they had a few 1000 users to date, so it was very, very early,” Mignot told Fortune last year. “They didn’t have an app. Their first website was pretty terrible and ugly, if I’m frank, but the delivery experience was incredible.”

    Lo and behold, Deliveroo grew to become a $3.5 billion company with millions of global customers. And as a partner at Index Ventures, Mignot is part of a team reaping billion-dollar rewards from forward-thinking investments in tech businesses including Figma, Scale AI, and Wiz. Aside from his day job, Mignot has also strategically put money towards iconic European start-ups including Revolut, Trainline and Personio. Before he was even 30, he solidified himself as a notable investor—and advised others that “It’s about owning equity, that is the key.”

    Emma Burleigh

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  • Wall Street rises on Big Tech gains and approaches records

    By DAMIAN J. TROISE, AP Business Writer

    NEW YORK (AP) — Stocks rose on Wall Street Tuesday morning and approached more all-time highs.

    Associated Press

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  • These 4 Dividend Stocks Are Money-Printing Machines

    • Coca-Cola has paid nearly $100 billion in dividends over the past 15 years.

    • ExxonMobil returned $36 billion in cash to shareholders last year, the fifth-most among S&P 500 members.

    • Johnson & Johnson generated $20 billion in free cash flow last year, easily covering its dividend outlay.

    • 10 stocks we like better than Coca-Cola ›

    Some companies excel at generating cash. They operate mature businesses that produce significantly more profit than they need to support their continued expansion. That gives them lots of money to pay dividends.

    Here are four top money-printing dividend stocks.

    Image source: Getty Images.

    Coca-Cola (NYSE: KO) owns an iconic portfolio of soft drinks, water, teas, and other beverage brands that generate substantial cash. Last year, the company produced $10.8 billion in free cash flow, $8.5 billion of which it paid out in dividends. Over the last 15 years, it has distributed nearly $100 billion in cash dividends to shareholders.

    The company’s durable and growing cash flows have enabled it to steadily increase its dividend payment. Coca-Cola raised it by 5.2% earlier this year, the 63rd straight year it has increased its payout. That puts the beverage giant in the elite group of Dividend Kings, companies with at least 50 years of consecutive annual dividend increases.

    The company expects to produce even more cash in the future. Its long-term target is to organically grow its revenue by 4% to 6% annually, which should drive annual growth in earnings per share in the mid to high single digits. Coca-Cola plans to convert 90% to 95% of its growing earnings into free cash flow, which should support continued dividend increases.

    ExxonMobil (NYSE: XOM) runs a large-scale global energy business that consistently produces significant cash flows. Last year, Exxon generated $55 billion in cash flow from operations, marking its third-best year in a decade, even though oil and gas prices were around their historical averages.

    The company produced $36.2 billion in free cash flow and returned $36 billion to shareholders via dividends ($16.7 billion) and share repurchases ($19.3 billion). Those cash returns led the oil sector and ranked as the fifth-highest among S&P 500 companies.

    The oil giant expects to invest $165 billion into major growth projects and its Permian Basin development program through 2030. These high-return investments should grow its annualized cash flows by $30 billion by 2030, assuming stable oil prices.

    That has it on pace to produce a huge gusher of $165 billion in cumulative surplus cash over the next five years, which should support continued payout increases. With 42 straight years of dividend growth, Exxon has reached a level that only 4% of companies in the S&P 500 have achieved.

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  • Afraid of a Bear Market? 3 High-Yield Stocks That Could Be Your Safe Haven in a Storm.

    Afraid of a Bear Market? 3 High-Yield Stocks That Could Be Your Safe Haven in a Storm.

    There’s increasing uncertainty these days. The economy is starting to show some signs of slowing, and the possibility of an escalating conflict in the Middle East is creating anxiety. On top of that is the upcoming presidential election.

    All this uncertainty has investors rattled, with the market recently having its worst day since early last year.

    These factors might have you fearing that another bear market could be around the corner. One potential way to help shelter your portfolio against a future market storm is to insulate it with high-quality, high-yielding dividend stocks. WEC Energy (NYSE: WEC), Enbridge (NYSE: ENB), and Northwest Natural Holding (NYSE: NWN) stand out to these Motley Fool contributors as great safe havens.

    A boring utility with impressive dividend growth

    Reuben Gregg Brewer (WEC Energy): One of the most attractive things about WEC Energy is that it flies under the radar. As a fairly traditional regulated electric and natural gas utility serving around 4.7 million customers in parts of Wisconsin, Illinois, Michigan, and Minnesota, its business is very straightforward.

    And because of the importance of energy to modern life (and the monopoly WEC has been granted in the regions it serves), its customers are going to keep using power no matter what the market is doing.

    Sure, interest rates are high, and that’s going to be a headwind for WEC Energy, which like most utilities makes heavy use of debt to fund its business. And it is dealing with an adverse regulatory ruling in Illinois with regard to natural gas. But these problems have depressed the share price and increased the attractiveness of the stock for income investors, given that it now yields a historically high 4% or so.

    WEC Chart

    WEC Chart

    That dividend, meanwhile, is backed by 21 consecutive annual increases. The average yearly increase over the past decade was roughly 7%, which is pretty attractive for a utility. Meanwhile, management expects earnings growth to fall between 6.5% and 7% a year for the foreseeable future.

    If history is any guide, the dividend will follow earnings higher. And given the regulated nature of the business, the good news should continue to flow even through a bear market. But jump quickly or you might miss the opportunity here.

    A model of stability and durability

    Matt DiLallo (Enbridge): Enbridge has one of the lowest-risk business models in the energy sector. The Canadian pipeline and utility operator gets 98% of its earnings from stable cost-of-service or contracted assets, like oil and gas pipelines, natural gas utilities, and renewable energy facilities. These assets produce such predictable cash flow that Enbridge has achieved its financial guidance for 18 straight years.

    The company took a notable step to further enhance the stability of its cash flow over the past year by acquiring three natural gas utilities. When it sealed the deal in late 2023, CEO Greg Ebel said, “These acquisitions further diversify our business, enhance the stable cash flow profile of our assets, and strengthen our long-term dividend growth profile.”

    The transaction will increase its earnings from stable natural gas utilities from 12% to 22% of its total. The company partly funded that deal by selling Aux Sable, which operates extraction and fractionation facilities for natural gas liquids.

    Enbridge also has a strong investment-grade balance sheet and a conservative dividend payout ratio. It has billions of dollars in annual investment capacity after paying its dividend (which yields an attractive 7%).

    That gives it the flexibility to fund its roughly $18 billion backlog of secured capital projects. It also has the capacity to make opportunistic acquisitions and approve more expansion projects.

    The company’s secured growth drivers and initiatives to reduce costs and optimize its assets should grow its cash flow per share by around 3% annually through 2026 and 5% per year after that. Its visible earnings growth and strong balance sheet suggest it should have no trouble increasing its dividend, which it has done for 29 straight years.

    That high-yielding and steadily rising payout supplies a very strong base return, providing investors with some shelter amid a future financial storm.

    68 consecutive years of dividend increases, and counting

    Neha Chamaria (Northwest Natural Holding): If you haven’t heard about Northwest Natural, the company’s dividend track record will stun you. Utilities often pay regular and stable dividends, and Northwest Natural is no different.

    What sets it apart, though, is that Northwest Natural has increased its dividend every year for the last 68 consecutive years. That’s one of the longest streaks among Dividend Kings.

    Northwest Natural provides natural gas and water services through its subsidiaries, including NW Natural, NW Natural Water, and NW Natural Renewables.

    NW Natural provides natural gas to nearly two million people in Oregon and southwest Washington State, while NW Natural Water serves around 180,000 people. As is typical with regulated utilities, Northwest Natural can earn and generate stable earnings and cash flows, which is why it not only can afford to pay a regular dividend but also grow it with time.

    It’s a great dividend stock for several reasons. The utility expects to invest $1.4 billion to $1.6 billion in its natural gas business over the next five years, which could boost its rate base by 5% to 7%.

    Management believes this investment, combined with its spending on water infrastructure, could boost its earnings per share by a compound annual growth rate of 4% to 6% between 2022 and 2027. Since the company prioritizes dividend growth, earnings growth should mean bigger dividends for shareholders year after year.

    Its 68-year streak, of course, is the biggest testimony to how reliable Northwest Natural’s dividends are. With its high yield of 4.8%, this is the kind of stock that will let you sleep even during bear markets.

    Should you invest $1,000 in Enbridge right now?

    Before you buy stock in Enbridge, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Enbridge wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $657,306!*

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

    See the 10 stocks »

    *Stock Advisor returns as of July 29, 2024

    Matt DiLallo has positions in Enbridge. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has positions in Enbridge and WEC Energy Group. The Motley Fool has positions in and recommends Enbridge. The Motley Fool has a disclosure policy.

    Afraid of a Bear Market? 3 High-Yield Stocks That Could Be Your Safe Haven in a Storm. was originally published by The Motley Fool

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  • The Best Energy Stock to Invest $1,000 in Right Now

    The Best Energy Stock to Invest $1,000 in Right Now

    Chevron (NYSE: CVX) stock has been at the back of the pack performance-wise over the past year, with a gain of just 2%. ExxonMobil (NYSE: XOM) is up 8% over that span, and Shell (NYSE: SHEL) has gained around 17%. But don’t count Chevron out if you are looking at the energy sector. In fact, that laggard performance might actually make it the most attractive integrated energy stock you can buy today.

    What’s Chevron’s problem?

    The one word that should be on investors’ lips right now is probably “why.” As in, why is Chevron trailing other integrated energy companies by such a wide margin? One big part of the answer is that Chevron recently inked an agreement to buy Hess (NYSE: HES). But Hess is in a partnership with Exxon on a big capital investment in the oil space. Exxon is attempting to throw a wrench into Chevron’s acquisition by saying it can buy Hess out of that partnership.

    CVX Chart

    CVX Chart

    That would make Chevron’s acquisition much less desirable and could even lead to the deal being canceled. Another problem here is that figuring out who’s right could lead to material delays and might require some legal wrangling, which would be costly. This uncertainty has left a cloud over Chevron’s stock, as investors generally don’t like uncertainty.

    But that’s not all bad news, since it has left Chevron with a fairly large dividend yield of 4.2% relative to its closest peer Exxon, which is yielding just 3.4%. And while Exxon has increased its dividend for 42 years, it is hard to complain about Chevron’s impressive 37-year streak of annual dividend hikes. Simply put, they are both reliable dividend stocks.

    Chevron is better prepared for adversity

    That said, while Exxon isn’t financially weak by any stretch of the imagination, Chevron is currently in a better financial position than any of its closest competitors. Notably, Exxon’s debt-to-equity ratio is roughly 0.2 times, while Chevron’s ratio is around 0.15 times. European peers make much greater use of leverage. Chevron has the strongest balance sheet among integrated energy majors. Leverage is important because the energy sector is highly cyclical and prone to dramatic price swings.

    CVX Debt to Equity Ratio ChartCVX Debt to Equity Ratio Chart

    CVX Debt to Equity Ratio Chart

    Basically, when oil prices fall, companies like Chevron tend to take on extra debt to keep funding their businesses. In the case of Chevron and Exxon, that cash is used to support the dividend. When oil prices improve, Chevron pays off the debt it took on, so it is prepared for the next industry downturn. The chart below shows this pretty clearly.

    CVX Debt to Equity Ratio ChartCVX Debt to Equity Ratio Chart

    CVX Debt to Equity Ratio Chart

    So, buying Chevron today will leave you owning the strongest company, financially speaking, in the energy sector. And it has a more attractive yield than its closest peer, Exxon. But there’s one more factor to consider, and that’s the Hess deal. Even if Chevron doesn’t end up acquiring Hess, it is large enough and financially strong enough to simply go out and find another company to buy. In other words, the negative sentiment here is largely based on a short-term issue.

    Don’t be afraid to buy this industry laggard

    At the end of the day, Chevron is a well-run energy company with a rock-solid financial foundation. Sure, there’s a very public negative hanging over the stock right now, but it won’t last forever, and Chevron is more than capable of dealing with the problem. For investors who want to own an energy stock and that think long-term, Chevron is probably the best place for $1,000 (or more) today.

    Don’t miss this second chance at a potentially lucrative opportunity

    Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

    On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

    • Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,765!*

    • Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,798!*

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    Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

    See 3 “Double Down” stocks »

    *Stock Advisor returns as of June 24, 2024

    Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.

    The Best Energy Stock to Invest $1,000 in Right Now was originally published by The Motley Fool

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  • Genting Is Still Considering NYSE or Nasdaq NY Listing

    Genting Is Still Considering NYSE or Nasdaq NY Listing

    Genting Malaysia, a casino & hospitality giant, is still considering going public in New York. As a result, the company’s shares could potentially appear on the Nasdaq or New York Stock Exchange (NYSE).

    The matter was once again discussed at the recent annual meeting where Tan Kong Han, the casino giant’s president and chief operating officer, said that Genting has not given up on listing in New York. The president pointed out that this move could potentially unlock value for the company and its shareholders.

    Tan concluded that Genting will continue to consider this matter and evaluate the economic environment in the United States.

    In any case, Genting is likely to tread lightly, considering the disastrous listing of its Empire Resorts brand. For context, the group had taken the brand public on the Nasdaq market. However, Empire Resorts failed to achieve the desired success and instead neared bankruptcy, forcing Genting to take it private once again.

    Genting’s License Bid in NY Might Affect Its Decision

    Genting is the parent company of the Resorts World brand, which has a significant presence in the United States’ land-based sector.

    Speaking of Resorts World, the brand is currently a part of the race for the three downstate casino permits in New York. Should it grab one of the licenses, Resorts World would turn its local property, now offering only slots, into a full-fledged Vegas-style venue.

    Genting promised that it could boost its taxes to $1 billion or more if allowed to turn its Queens property into a casino-hotel. In addition to this promise, Genting also promised to invest an additional $5 billion in Resorts World New York.

    As one of the biggest competitors and a company with an existing presence in New York, Resorts World could well be among the winners, which could potentially affect Genting’s listing plans. The winners of the three licenses are expected to be announced in late 2025 or early 2026.

    In the meantime, Genting recently confirmed that it would be interested in opening an integrated resort in the United Arab Emirates, should the country legalize gambling. This followed the creation of a UAE regulatory body that would be in charge of games of chance.

    Genting isn’t the only casino giant interested in the prospects of gambling in the UAE, however, as Wynn Resorts is proceeding with its plans for Wynn Al Marjan Island.

    Fiona Simmons

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  • Nasdaq gains 33% efficiency through AI |Bank Automation News

    Nasdaq gains 33% efficiency through AI |Bank Automation News

    NEW YORK — The Nasdaq Stock Market index is using AI to streamline its efforts to investigate suspicious trading and anti-money laundering.  The New York-based exchange is using gen AI to identify behaviors like pump-and-dump or spoofing schemes in trading, Tony Sio, head of regulatory strategy and innovation at Nasdaq, said at this week’s AWS […]

    Vaidik Trivedi

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  • Flutter Shifts Primary Listing to NYSE, Promotes New CFO

    Flutter Shifts Primary Listing to NYSE, Promotes New CFO

    In a significant strategic move, Flutter Entertainment, the world’s largest online betting company and owner of FanDuel, has officially transferred its primary listing to the New York Stock Exchange (NYSE). Flutter also announced the appointment of Rob Coldrake as CFO, marking a pivotal moment in the company’s evolution as it heightens its focus on the promising US market.

    The US Market Remains a Primary Focus

    Since February 2023, Flutter has been actively engaging with US investors, existing and potential, as well as shareholders globally. The feedback has been highly supportive, prompting Flutter to shift its primary listing to the United States. The initial step in this process was completed on 29 January 2024, with the additional listing of Flutter’s ordinary shares on the NYSE.

    Earlier this month, Flutter shareholders overwhelmingly endorsed the shift during the Annual General Meeting in Dublin. This decision follows the company’s delisting from the Irish stock exchange, Euronext Dublin, earlier this year. Flutter CEO Peter Jackson remarked on this groundbreaking milestone, highlighting the rising importance of the US market to the business.

    We have a fantastic position in the US, with FanDuel the clear number one operator, and we look forward to this next step on our journey.

    Peter Jackson, Flutter Entertainment CEO

    The US primary listing is widely regarded as a natural fit for the group, reflecting the substantial opportunities within this expanding market. As more states legalize iGaming and online sports betting, Flutter remains primed to leverage its leading FanDuel brand to capitalize on new opportunities, pull ahead of competition, and achieve lasting value.

    Flutter’s New CFO Has a History of Success

    In tandem with its strategic shift, Flutter Entertainment announced the appointment of Rob Coldrake as the new group chief financial officer, effective immediately. He succeeds Paul Edgecliffe-Johnson, who is stepping down due to the extensive time required in the US and his family commitments in the UK. Coldrake, previously the chief financial officer of Flutter International, joined the group in 2020. 

    Coldrake’s career includes 14 years at hospitality company TUI in various financial roles, giving him substantial experience and honing his leadership skills. CEO Jackson lauded the new CFO’s exceptional expertise, highlighting Coldrake’s significant contributions during his time with Flutter. As Coldrake steps into his new position, he must help maintain Flutter’s trajectory, continuing the work of his predecessor.

    I am delighted that Rob will become our next group CFO. His skills and experience will help us to take advantage of the significant opportunities before us.

    Peter Jackson, Flutter Entertainment CEO

    With its new listing on the NYSE and a seasoned CFO at the helm, Flutter Entertainment is well-positioned to capitalize on the dynamic opportunities in the burgeoning US sports betting and iGaming market. Analysts maintain their positive outlook regarding the gaming giant, highlighting the positive impact of recent developments as the company gears up for sustained growth.

    Deyan Dimitrov

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  • Games Global Announces Milestone IPO Amidst Growth Ambitions

    Games Global Announces Milestone IPO Amidst Growth Ambitions

    Isle of Man-based gambling software company Games Global Ltd. is gearing up for its US initial public offering (IPO) with ambitious plans to raise approximately $254 million. The company plans to list on the New York Stock Exchange under the symbol GGL, with underwriters including J.P. Morgan, Jefferies, Macquarie Capital, and Barclays.

    The Move Reflects Games Global’s US Focus

    According to a late Thursday filing, Games Global plans to offer 14.5 million shares at an estimated price range of $16 to $19 per share. The IPO will commence trading on 13 May as the company is expected to achieve a market capitalization of around $2 billion. Games Global intends to sell 6 million shares out of its 14.5 million, while the existing shareholder, Zinnia Ltd., will offer the remaining 8.5 million shares. 

    Following the IPO, Zinnia Ltd. will retain approximately 85% ownership stake in Games Global, assuming underwriters exercise their option to purchase additional ordinary shares. The software company announced its plans to go global last month, hoping to capitalize on the increasing adoption of legalized gambling and enable new strategic partnerships.

    Games Global was incorporated three years ago with a strategic vision to become the largest and most innovative iGaming studio and distribution ecosystem globally. The company reported a robust full-year 2023 profit of €107.84 million ($116.29 million) and revenue of €306.93 million ($330.97 million) demonstrating significant growth from the previous year.

    The Company Remains an Industry Leader

    The move into the US market was facilitated by Games Global’s acquisition of assets of Digital Gaming Corp. in February. This move significantly expanded the company’s distribution coverage to states such as New Jersey, Pennsylvania, and Michigan. Games Global plans further expansion into Connecticut and West Virginia while also eyeing states considering online casino legislation in the coming years.

    Games Global remains at the forefront of innovation, securing three prestigious awards during ICE London for its continued excellence. CEO Walter Bugno reaffirmed the company’s commitment to delivering unmatched products and experiences for players while remaining ahead of industry trends. 2023 saw Games Global launch more than 240 titles, solidifying its position as a leading provider.

    The US represents a lucrative opportunity for Games Global, being the largest iGaming jurisdiction globally, with a projected addressable market of approximately $26 billion by 2028 for various online gaming segments. The company enters the market at the perfect time as more states consider legislation legalizing online wagering, paving the way for collaborations with leading operators.

    Deyan Dimitrov

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  • How Did Europe Get Left Behind?

    How Did Europe Get Left Behind?

    The privileged ability to spend through the dollar’s global reserve status, though amounting to a national debt of unprecedented size, has allowed the U.S. to run circles around Europe in public spending and crisis-time stimulus while subverting debt crises. USGS via Unsplash

    If the United Kingdom or France joined the United States, they would become the poorest states in the country, with a GDP per capita lower than even Mississippi. Germany would be the second poorest. For most of the second half of the 20th century, Europe and the U.S. rivaled each other in GDP. In 2008, the EU and U.S. had GDPs of $14.2 trillion and $14.8 trillion, respectively. Closing 2023, the EU has seen little growth, with a GDP of around $15 trillion, while the U.S. has marched ahead to a GDP of $27 trillion.

    The EU GDP growth clocked in at 0.1 percent for 2023’s last quarter, a small fraction of the U.S.’s 3.4 percent during the same period. The UK fell into recession in the back half of last year, but the French economy looks to an optimistic forecast of 0.9 percent growth for 2024 to put six months of stagflation in the rearview mirror. While inflation has come down to just above 3 percent, similar to the U.S., the European Central Bank’s rate hikes have taken a larger toll on the nation-states.

    One reason Europe has fallen behind? A spending handicap.

    After the 2008 Global Financial Crisis (GFC), which originated in the U.S. real estate debt and loaning markets in 2007 and triggered a recession in Europe in the second quarter of 2008, the U.S. and Europe increased stimulus spending and access to liquidity. This increased the debt-to-GDP percent in the U.S. from 61.8 percent in 2007 to 82.0 percent in 2009 and from around 60 percent to 73 percent for the average EU government in the same time period. Because the U.S. benefits from the dollar’s reserve currency status, it can comfortably borrow large amounts at relatively low rates due to the high demand and liquidity of the U.S. treasury market. Europeans cannot take advantage of the same privilege, and thus saw a growing debt crisis in the years following the GFC in countries like Ireland, Greece, Portugal and Spain, which were having trouble paying back the debt their governments had borrowed. The crisis peaked in 2010 when Greece’s sovereign debt was downgraded to junk by rating agencies. Numerous European countries required bailouts from the IMF and EU and instituted new austerity policies that limited public spending.

    Such austerity policies became handicaps in dealing with future crises: during the COVID pandemic, the U.S. distributed $5 trillion in stimulus, while the U.K. and Germany spent $500 billion, France spent $235 billion, and Italy $216 billion, as per Moody’s. Though controversial then and a contributor to the steep inflation that followed, the cash cascade likely helped the U.S. spend itself out of a recession. Household savings were at dramatic highs following the pandemic, allowing consumer spending—contributing to 70 percent of the U.S. GDP—to be strong through the Federal Reserve rate hikes. Post-pandemic, the U.S. has continued its public investment streak with the Infrastructure Investment and Jobs Act, CHIPS Act and Inflation Reduction Act, contributing another $2 trillion to its manufacturing and construction sectors and far exceeding EU contributions.

    The privileged ability to spend through the dollar’s global reserve status, though amounting to a national debt of unprecedented size, has allowed the U.S. to run circles around Europe in public spending and crisis-time stimulus while subverting debt crises.

    A variety of other factors

    The explanation of why the U.S. economy has outpaced Europe cannot be reduced to just one reason. Broad structural differences are at play: the U.S. enjoys a large single free trade zone, where capital and labor can unquestionably cross state boundaries without additional tax, tariff or currency conversion costs. Brexit and many other hurdles have tested the EU’s free trade zone. The U.S. is also unusually entrepreneurial: more start-ups are founded in the U.S. than in the European Union, and the U.S. leads the world in VC funding. Eight of the ten largest companies globally by market cap are American; none are European. The U.S. is also the globe’s most attractive place for investment, making the New York Stock Exchange larger than every European stock exchange combined (and that is just one of the U.S.’s equity exchanges). Recent events also serve as obstacles: energy embargos on Russia have been far more taxing on Europe, with the cost of electricity far higher than in the U.S. and not yet returning to pre-sanction levels.

    Recent events also serve as obstacles: energy embargos on Russia have been far more taxing on Europe, with the cost of electricity far higher than in the U.S. and not yet returning to pre-sanction levels.

    What’s next?

    European leaders are eager to act. “We’re in danger of falling out of touch. There is no time to waste. The gap between the European Union and the U.S. in terms of economic performances is becoming bigger and bigger,” former Italian Prime Minister Enrico Letta admitted in a recent report.

    Last week, European leaders gathered to discuss the “European Competitiveness Deal,” aimed at helping the continent catch up to the U.S. and China. The policy would upskill workers, make Europe more attractive for capital, reduce the cost of energy and strengthen trade, as per the European Commission. Among Europe’s long-term challenges is that its leaders ultimately need to make their markets an attractive place for Europeans to invest their savings; French President Emmanuel Macron noted that “Europe has more savings than the United States of America … and every year, around 300 billion euros of these savings go to finance the American economy.”

    The U.S. greatly benefits from a stronger Europe, giving it an ally to help curtail Chinese and Russian influence. However, the U.S. has recently levied tariffs against Europe while implementing trade and subsidy policies. European leaders have criticized it as protectionist, reducing Europe’s global competitiveness and growth potential.

    How Did Europe Get Left Behind?

    Shreyas Sinha

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  • 3 Absurdly Cheap Stocks to Buy and Hold for Years

    3 Absurdly Cheap Stocks to Buy and Hold for Years

    The stock market has been showing some softness of late. And while that may be discouraging to investors, a pullback can make for a great buying opportunity, especially when you’re holding on for the long haul. There is no shortage of deals out there for investors to consider.

    Three stocks trading at incredibly cheap valuations today are CVS Health (NYSE: CVS), Carnival Corp. (NYSE: CCL), and Toronto-Dominion Bank (NYSE: TD). Here’s a closer look at why you’ll want to consider loading up on these stocks right now.

    CVS Health

    CVS Health has evolved over the years from a pharmacy retailer into a much broader healthcare business. And the company continues to focus on getting bigger and more diverse. Last year, it acquired home health company Signify Health as a way to get deeper into healthcare and help meet the growing needs of seniors through in-home care options.

    And in 2023, the company reported a profit of $8.3 billion on revenue of nearly $358 billion. This truly massive business is going to get bigger in the future. And while its margins may not be huge, there’s enough there to fund the company’s dividend, which yields 3.8%, and for CVS to pursue growth opportunities. Its free cash flow last year totaled $10.4 billion and CVS paid out just $3.1 billion in dividends.

    At a dirt cheap forward price-to-earnings multiple (based on analyst estimates) of just 8.4, shares of CVS Health today could look like a steal in a few years.

    Carnival Corp.

    Another good long-term option for investors to consider is cruise line operator Carnival Corp. If not for the shutdowns during the pandemic, the company wouldn’t have needed to accumulate so much debt and its share price would likely be much higher today.

    The good news, however, is that Carnival’s financials are improving and the company is in a position to pay down its debt, particularly as demand for cruises remains resilient. In March, the company reported record revenue and booking levels for its fiscal first quarter, ended Feb. 29. Revenue during the period rose by 22% year over year to $5.4 billion, and the company recorded an operating profit of $276 million (versus a loss of $172 million a year earlier).

    Carnival has long-term debt totaling $28.5 billion on its books, which may spook some investors given its more modest cash balance of $2.2 billion. But with its financials trending in the right direction and the company having liquidity totaling more than $5.2 billion, Carnival is in strong shape and should be able to chip away at its debt over time.

    At just 13 times its estimated future profits, investors are getting the growth stock at a good discount to help compensate for the risk that comes with its high debt load. But the risk may be overblown as the cruise ship company is doing exceptionally well at a time when many businesses are struggling.

    Toronto-Dominion Bank

    Top Canadian-based bank Toronto-Dominion rounds out this list of cheap stocks. At just 10 times its future profits and less than 1.4 times book value, investors can add this solid bank stock to their portfolios at a very reasonable valuation. Over the past 10 years, TD has averaged a price-to-book multiple of nearly 1.7.

    The stock has fallen more than 5% in the past 12 months but this isn’t a risky bank stock that’s in danger of running into liquidity issues like some regional banks. TD is among the safest bank stocks you can own.

    In the company’s most recent quarter, which ended on Jan. 31, TD’s revenue totaled 13.7 billion Canadian dollars and rose 12% year over year. Its net income of CA$2.8 billion was up an impressive 79% and its diluted earnings per share of CA$1.55 was far higher than the CA$1.02 that the company pays in dividends per share.

    At a cheap price and a high yield of 5.2%, TD makes for a fantastic dividend stock to buy right now.

    Should you invest $1,000 in CVS Health right now?

    Before you buy stock in CVS Health, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CVS Health wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $505,010!*

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

    See the 10 stocks »

    *Stock Advisor returns as of April 22, 2024

    David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends CVS Health and Carnival Corp. The Motley Fool has a disclosure policy.

    3 Absurdly Cheap Stocks to Buy and Hold for Years was originally published by The Motley Fool

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  • 5 Dividend Stocks Yielding Over 5% to Buy Now for a Potential Lifetime of Income

    5 Dividend Stocks Yielding Over 5% to Buy Now for a Potential Lifetime of Income

    The S&P 500’s dividend yield is currently around 1.4%, which isn’t very attractive if you desire to collect passive income. However, many stocks offer much higher yields, with several presently paying dividends yielding 5% or more. Here are five stocks with payouts above that level that should generate income for their investors for years to come.

    Agree Realty

    Agree Realty (NYSE: ADC) yields 5.3% these days. Even better, the real estate investment trust (REIT) pays a monthly dividend. Those two characteristics make it great for those seeking to collect passive income.

    The REIT supports that dividend with a portfolio of income-producing retail properties. It focuses on owning properties net leased or ground leased to financially strong national and super-regional retailers resistant to disruption from e-commerce. It therefore collects very durable and stable rental income. It pays out about 75% of that income in dividends and uses the rest to help fund new acquisitions. Its steadily expanding portfolio has supplied it with the rising income to grow its dividend at a 6.1% annual rate over the last decade. With a strong balance sheet and long growth runway, Agree Realty should be able to continue increasing its dividend in the years ahead.

    Clearway Energy

    Clearway Energy (NYSE: CWEN)(NYSE: CWEN.A) offers a 7.7% dividend yield. The clean power producer backs that payout with very stable income generated by selling electricity to utilities and large corporate buyers under long-term contracts.

    The company expects to increase its already attractive payout by 5% to 8% annually over the long term, with growth likely toward the upper end through at least 2026. Clearway has already secured the funding and investments to deliver on that target. It sold its thermal assets in 2022, which gave it the cash to invest in several high-return renewable energy acquisitions. Those deals will close over the next few years as the projects enter commercial service. Meanwhile, Clearway should have ample power to continue growing its portfolio and payout in the future, given the country’s massive need for new renewable energy investment.

    Oneok

    Oneok’s (NYSE: OKE) dividend yields 5.9%. The pipeline giant supports that payout with steady cash flow backed by long-term, fee-based contracts. The company aims to increase that payout by 3% to 4% annually.

    Acquisitions and organic expansion projects will fuel that growth. Oneok closed its needle-moving acquisition of Magellan Midstream Partners last year, which will help fuel double-digit earnings growth this year. It has the financial flexibility to make more deals as compelling opportunities arise. On top of that, the company has several organic expansion projects under construction and in development to support the country’s growing oil and gas production. Those projects will grow its cash flow as they come online. While the country is slowly transitioning to lower carbon energy, it will need fossil fuels for decades, which should give Oneok plenty of fuel to continue paying dividends.

    Vici Properties

    Vici Properties (NYSE: VICI) pays a 5.7% yielding dividend. The REIT focuses on gaming and experiential properties net leased to high-quality operators. That allows it to collect very stable rental income to support that payout.

    The company has increased its dividend in all six years since its formation, including by 6.4% last September. Acquisitions are its main growth driver. It invested nearly $2 billion across various transactions last year, including its first international investments and several new experiential categories. It has continued to secure new investments this year, including funding the development of a Margaritaville Resort in Kansas City, which includes options to buy that resort and other experiential properties developed in the city by the operator. The company continues to extend its growth runway by expanding into new categories and developing new relationships with operators. Given its strong balance sheet and access to capital, Vici Properties should be able to continue expanding its portfolio and dividend for years to come.

    Verizon

    Verizon (NYSE: VZ) pays a 6.7% dividend yield. The telecom giant supports that payout with stable and recurring cash flows as customers pay their broadband and wireless bills.

    The company is a cash flow machine. It produces enough cash to invest in its network, pay a growing dividend, and strengthen its already solid balance sheet. The company’s investments in 5G should help increase its cash flow in the coming years. Meanwhile, cost-cutting efforts (Verizon aims to shave $2 billion to $3 billion in operating costs by 2025 while reducing capital expenses by over $5 billion from its peak) and debt reduction will enable it to produce even more free cash flow. That will allow Verizon to continue increasing its dividend, which the telecom company has done for 17 straight years. While Verizon won’t grow its payout at blazing speeds (it has averaged about 2% annually in recent years), its high-yielding dividend should continue to rise gradually.

    Growing income streams

    Agree Realty, Clearway Energy, Oneok, Vici Properties, and Verizon all pay dividends yielding more than 5%. Those companies should be able to sustain and grow their high-yielding dividends over the long haul. That makes them great stocks to buy for a potential lifetime of dividend income.

    Should you invest $1,000 in Agree Realty right now?

    Before you buy stock in Agree Realty, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Agree Realty wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

    See the 10 stocks

    *Stock Advisor returns as of March 21, 2024

    Matt DiLallo has positions in Clearway Energy, Verizon Communications, and Vici Properties. The Motley Fool has positions in and recommends Vici Properties. The Motley Fool recommends ONEOK and Verizon Communications. The Motley Fool has a disclosure policy.

    5 Dividend Stocks Yielding Over 5% to Buy Now for a Potential Lifetime of Income was originally published by The Motley Fool

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  • SEC holds urgent meetings with Nasdaq and NYSE to discuss Bitcoin ETFs

    SEC holds urgent meetings with Nasdaq and NYSE to discuss Bitcoin ETFs

    The SEC is holding meetings today with major exchanges, including the New York Stock Exchange, Nasdaq, and the Chicago Board Options Exchange (CBOE), regarding spot Bitcoin ETFs. 

    The information was revealed by a Fox Business journalist earlier today, bringing some sense of relief for the wider crypto community after crypto services firm Matrixport reported that the SEC would likely reject all ETF applications in January. This report triggered a major liquidation in today’s market, as the crypto market lost more than $540 million in just four hours. 

    Despite Matrixport’s report of a possible denial, Bloomberg’s analysts have claimed that no substantial evidence pointing towards a rejection of the ETFs has been reported. 

    There was a brief debate on X between Bloomberg analyst Eric Balchunas and Matrixport’s Markus Thielen, who published the potential ‘rejection’ report. Thielen clarified that the report wasn’t based on any comments from SEC insiders or the ETF applications. However, he cited consensus among researchers to reach this prediction and has turned bearish on Bitcoin.

    However, today’s meeting suggests a more optimistic outlook, aligning with broader market expectations of a possible approval by the SEC, potentially as soon as the following week. Jan. 10th has been identified as a critical date, marking a deadline for the numerous spot Bitcoin ETF applicants.


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    Mohammad Shahidullah

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  • Good News Drives Fisker Stock Into 2024

    Good News Drives Fisker Stock Into 2024

    Finally, some good news for Fisker (NYSE: FSR) investors! After a difficult third quarter that had production estimates slashed, a downbeat earnings report, a resigning chief accounting officer, and notice from the New York Stock Exchange for the late filing of its report, investors finally have some positive news heading into 2024. Let’s dig in and see if Friday’s stock price pop of roughly 15% is warranted.

    Surprise

    With so much pessimism surrounding the company, and a stock price testing new record lows, it didn’t take much to boost the price this past Friday when Fisker announced better-than-expected delivery numbers.

    More specifically, Fisker grew deliveries by over 300% from the third quarter to the fourth quarter, reaching roughly 4,700 total deliveries. Fisker produced 10,142 units in 2023 with deliveries beginning in June and taking a big uptick in September and October.

    Further, Fisker began deliveries in Canada during December and is now operating in 12 markets across the globe. The first Fisker Ocean Sport — the company’s entry-level trim — recorded its first delivery in the U.K. in December.

    Before we surround those figures with a bit more context, it’s worth noting that Henrik Fisker, chairman and CEO, remained optimistic when speaking about the 4,700 deliveries: “This accomplishment represents substantial revenue, and as we accelerate our delivery pace in 2024, I am excited to see faster growth. We have a solid business with relatively low overhead and an award-winning vehicle that customers enjoy.”

    Adding context

    While the surge in deliveries was very much welcomed by investors, it’s fair to say there is some context worth adding. Investors have to remember that the California-based automaker originally estimated production between 20,000 and 23,000 units before slashing that estimate to between 13,000 and 17,000 units.

    Finally, management lowered those estimates yet again to roughly 10,000 units as the company had been struggling with a cash crunch and decided to unlock over $300 million in working capital by reducing production.

    Gaining momentum

    Friday’s announcement likely confirmed to investors that some speed bumps were in the rearview mirror. Investors had hints that deliveries were accelerating when the company noted that over 1,200 vehicles were delivered in October alone, which exceeded the company’s entire third-quarter deliveries.

    Fisker’s Ocean has won six different European awards in Germany, France, Denmark, and the U.K., delivered two important over-the-air (OTA) software updates in the fourth quarter, and expanded its physical footprint and customer engagement.

    There’s no question the company is gaining some momentum heading into 2024, and the stock could certainly pop higher if the company proves it can expand its delivery infrastructure and close the gap between deliveries and production.

    Should you invest $1,000 in Fisker right now?

    Before you buy stock in Fisker, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fisker wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

    See the 10 stocks

     

    *Stock Advisor returns as of December 18, 2023

     

    Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

    Good News Drives Fisker Stock Into 2024 was originally published by The Motley Fool

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  • Prediction: These 3 Warren Buffett Stocks Will Be the Biggest Winners in 2024

    Prediction: These 3 Warren Buffett Stocks Will Be the Biggest Winners in 2024

    Buffett17 TMF

    I’ve never heard Warren Buffett predict which stocks in Berkshire Hathaway‘s (NYSE: BRK.A) (NYSE: BRK.B) portfolio will deliver the greatest gains over the next year. He’s called the Oracle of Omaha, but even Buffett knows that such near-term predictions usually fall short.

    But I’m about to give it a shot anyway. I fully realize the folly of attempting something that Buffett wouldn’t do. However, I nonetheless predict that three of the stocks he owns will be his biggest winners in 2024. Here are those stocks (listed in alphabetical order), along with why I have great expectations for each one.

    1. American Express

    American Express (NYSE: AXP) emerged as one of Buffett’s best-performing stocks this year. Shares of the financial services giant were in negative territory as recently as October. However, a fourth-quarter surge now has the stock on track to finish 2023 up more than 25%.

    I think that AmEx’s momentum will continue into the new year. Why? For one thing, business is booming. The company reported its sixth consecutive quarter of record revenue in the third quarter. Its earnings per share soared 34% year over year to an all-time high.

    Macroeconomic factors also appear to bode well for American Express in 2024. Inflation, although still higher than the Federal Reserve would like it to be, has moderated considerably. Unemployment levels are low historically. And the prospects for the Fed to cut interest rates next year appear to be pretty good.

    These should be tailwinds for other Berkshire holdings as well, notably including payment processing leaders Mastercard and Visa. However, I picked American Express as a likely bigger winner in large part because of its low valuation. Its shares currently trade at less than 14.8 times expected earnings.

    2. D.R. Horton

    D.R. Horton (NYSE: DHI) has been an even more impressive winner for Buffett this year than American Express. Shares of the homebuilder have skyrocketed by nearly 70%. As was the case with AmEx, most of those gains came in the final two and a half months of the year.

    I predict D.R. Horton will be one of the best Buffett stocks of the new year for a couple of reasons. The first ties in with the macroeconomic factors that should help American Express. In particular, I think that the potential for interest rate cuts could boost home sales, especially in the second half of 2024.

    The second is that there’s still an acute housing shortage in this country. Bank of America published a paper a few months ago that stated the U.S. needs another 4 million houses.

    D.R. Horton is uniquely positioned to benefit from lower interest rates and the need for more housing. It’s the largest homebuilder by volume in the country, a distinction it has held since 2002. The company operates in 33 states.

    What’s more, the stock is cheap — especially considering the company’s growth prospects. D.R. Horton’s price/earnings-to-growth (PEG) ratio is a low 0.64.

    3. Occidental Petroleum

    Unlike American Express and D.R. Horton, Occidental Petroleum (NYSE: OXY) hasn’t been a great stock for Buffett in 2023. However, I think that sets the stage for a much better performance in 2024.

    First of all, Occidental’s valuation is attractive. Its shares trade at only 11.3 times expected earnings. I suspect this will entice Buffett to buy even more of the stock in 2024. Berkshire secured regulatory approval to acquire up to 50% of the company’s shares. So far, it has bought 27.2%.

    I think there’s a real possibility that Berkshire will aggressively add to its stake in Occidental in the coming months. If this happens, it could ignite a broader buying frenzy that pushes the stock price much higher.

    Of course, Occidental’s fortunes hinge on oil prices. However, Goldman Sachs projects that Brent crude will hit $85 per barrel by mid-2024. That’s higher than the current price of a little under $77 per barrel. If Goldman Sachs is right, Occidental should be in good shape in 2024 — and so should Buffett.

    Should you invest $1,000 in Occidental Petroleum right now?

    Before you buy stock in Occidental Petroleum, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Occidental Petroleum wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

    See the 10 stocks

     

    *Stock Advisor returns as of December 18, 2023

     

    American Express is an advertising partner of The Ascent, a Motley Fool company. Keith Speights has positions in Berkshire Hathaway and Mastercard. The Motley Fool has positions in and recommends Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends Occidental Petroleum and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

    Prediction: These 3 Warren Buffett Stocks Will Be the Biggest Winners in 2024 was originally published by The Motley Fool

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