Fundamental Analysis - Stock Genius https://stockinvestorgenius.com Trading, Investing, Stock Options Fri, 05 May 2023 11:42:51 +0000 en-US hourly 1 https://stockinvestorgenius.com/wp-content/uploads/2021/12/cropped-logo-icon-550-x-550-px-32x32.png Fundamental Analysis - Stock Genius https://stockinvestorgenius.com 32 32 Five top perfoming sectors during the last recession https://stockinvestorgenius.com/five-top-perfoming-sectors-during-the-last-recession/?utm_source=rss&utm_medium=rss&utm_campaign=five-top-perfoming-sectors-during-the-last-recession Fri, 05 May 2023 11:42:51 +0000 https://stockinvestorgenius.com/?p=18810 As an investor, it’s essential to consider the impact of a possible recession on your portfolio. While it’s difficult to [...]

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As an investor, it’s essential to consider the impact of a possible recession on your portfolio. While it’s difficult to predict when a recession may occur, there are certain sectors that tend to perform better than others during economic downturns. In this article, we’ll discuss five sectors that are generally considered recession-resistant and provide two ticker examples from each sector along with their performance during the last US recession, which lasted from December 2007 to June 2009.

1. Healthcare

Healthcare is a defensive sector that tends to perform well during recessions as people continue to require medical care regardless of the economic situation. Here are two examples of tickers to consider:

– Johnson & Johnson (JNJ): JNJ is a diversified healthcare company that produces medical devices, pharmaceuticals, and consumer health products. During the last recession, JNJ’s stock price declined by about 15% from December 2007 to March 2009 but then recovered and ended up gaining 8% by the end of June 2009.
– UnitedHealth Group (UNH): UNH is the largest health insurer in the United States, providing coverage to more than 50 million people. During the last recession, UNH’s stock price declined by about 38% from December 2007 to March 2009 but then recovered and ended up gaining 24% by the end of June 2009.

2. Consumer Staples

Consumer staples are products that people need to buy regardless of their financial situation, such as food, beverages, and household products. Here are two examples of tickers to consider:

– Procter & Gamble (PG): PG is a consumer goods company that produces household and personal care products, such as Tide laundry detergent and Crest toothpaste. During the last recession, PG’s stock price declined by about 17% from December 2007 to March 2009 but then recovered and ended up gaining 6% by the end of June 2009.
– Walmart (WMT): WMT is a retail company that operates a chain of discount department stores and grocery stores. During the last recession, WMT’s stock price increased by about 17% from December 2007 to March 2009 and then gained an additional 16% by the end of June 2009.

3. Utilities

Utilities are considered a defensive sector as people still need electricity and gas regardless of the economic climate. Here are two examples of tickers to consider:

– Dominion Energy (D): D is a utility company that provides electricity and natural gas to customers in the eastern United States. During the last recession, D’s stock price declined by about 27% from December 2007 to March 2009 but then recovered and ended up gaining 9% by the end of June 2009.
– NextEra Energy (NEE): NEE is the largest producer of wind and solar energy in the United States and also provides traditional electricity services. During the last recession, NEE’s stock price declined by about 20% from December 2007 to March 2009 but then recovered and ended up gaining 29% by the end of June 2009.

4. Technology

While it may seem counterintuitive to consider investing in technology during a recession, there are still companies within the sector that can perform well. Here are two examples of tickers to consider:

– Microsoft (MSFT): MSFT is a technology company that produces software, hardware, and gaming products. During the last recession, MSFT’s stock price declined by about 32% from December 2007

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Top five dividend stocks of the past five years https://stockinvestorgenius.com/top-five-dividend-stocks-of-the-past-five-years/?utm_source=rss&utm_medium=rss&utm_campaign=top-five-dividend-stocks-of-the-past-five-years Mon, 10 Apr 2023 13:07:23 +0000 https://stockinvestorgenius.com/?p=18766 Investing in dividend stocks can be a great way to build wealth over the long term. Not only do they [...]

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Investing in dividend stocks can be a great way to build wealth over the long term. Not only do they provide a steady stream of income, but they can also appreciate in value over time. Here are some of the best performing dividend stocks of the last five years:

  1. Apple (AAPL)

Apple is a tech giant that needs no introduction. The company has been on a roll over the last five years, with its stock price increasing by over 200%. But what sets Apple apart from other dividend stocks is its impressive dividend growth. The company has grown its dividend at a compound annual growth rate (CAGR) of 9.6% over the last five years, making it one of the best dividend stocks in the market.

  1. Microsoft (MSFT)

Microsoft is another tech giant that has been a standout performer over the last five years. The company has successfully transitioned to a cloud-based business model and has grown its revenue and earnings at an impressive rate. But what’s even more impressive is its dividend growth. Microsoft has grown its dividend at a CAGR of 12.8% over the last five years, making it a top pick for dividend investors.

  1. Johnson & Johnson (JNJ)

Johnson & Johnson is a healthcare company that has been a reliable performer over the last five years. The company has a diverse range of products and a strong pipeline, which has helped it to consistently grow its dividend. Johnson & Johnson has grown its dividend at a CAGR of 6.1% over the last five years, making it a solid pick for dividend investors.

  1. Visa (V)

Visa is a global payments technology company that has been a consistent performer over the last five years. The company has a strong competitive position in the payments industry and has grown its dividend at a CAGR of 18.4% over the last five years. This has made Visa one of the best performing dividend stocks in the financial sector.

  1. Mastercard (MA)

Mastercard is another global payments technology company that has been a standout performer over the last five years. The company has benefited from the shift towards cashless payments and has grown its revenue and earnings at an impressive rate. Mastercard has also been a top pick for dividend investors, with its dividend growing at a CAGR of 18.5% over the last five years.

In conclusion, these five stocks have been some of the best performing dividend stocks of the last five years. While past performance is not a guarantee of future results, these companies have a strong track record of dividend growth and are likely to continue to provide strong returns to dividend investors in the years to come. As always, it’s important to do your own research and consider your investment goals and risk tolerance before making any investment decisions.

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How to Perform Fundamental Analysis on Stocks https://stockinvestorgenius.com/how-to-perform-fundamental-analysis-on-stocks/?utm_source=rss&utm_medium=rss&utm_campaign=how-to-perform-fundamental-analysis-on-stocks Sun, 25 Oct 2020 23:03:06 +0000 https://stockinvestorgenius.com/?p=15134 How to Perform Fundamental Analysis on Stocks In determining whether a stock is overvalued, leading to a sell recommendation, or [...]

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How to Perform Fundamental Analysis on Stocks

In determining whether a stock is overvalued, leading to a sell recommendation, or undervalued, leading to a buy, the two most common types of analyses are Fundamental or Technical.

The basic difference between the two is that technical analysis relies almost exclusively on historical trading prices and volume, while fundamental analysis may include that data but only as part of a wider review of the company and economic structure surrounding it. Both approaches are commonly used, and it depends on the type of stock as to which one may give a more realistic valuation.

Fundamental analysis is generally not used by active or short-term traders as it is based on a more long-term strategy where the expected payoff will occur in the future when the undervalued stock begins to rise in price. Performing a fundamental analysis is centered around understanding the company as a whole and comparing its stock price to related companies within the same industry.

Both quantitative and qualitative measures are used in fundamental analysis, the first providing data based on the available numbers from financial statements. The second comes from reviewing the company’s overall character and quality.

4 Key Qualitative Measures

  • A company’s competitive advantage within its industry. Is it keeping pace with its competitors, ahead of them in areas like brand recognition, or are they falling behind with a lack of social media presence?
  • The business model and how well it is performing in its main function. A look at a company’s financials can provide a great deal of insight into their sustainability. Other aspects to look at will be if there are plans to expand or diversify into other areas.
  • The management structure and its key figures. In the age of social media, how the public figures in charge of large corporations comport themselves can cause drastic rises and falls in stock price. Within the company, new management or corporate “shake-ups” can be either a pro or a con depending on what caused the change.
  • The policies in place that declare how it enacts corporate governance. These policies should be clearly outlined in the company charter and bylaws. How a company communicates with its shareholders or whether they have committed to operating fairly and ethically are all ways to judge how they will treat an investor.

3 Key Quantitative Measures

  • The balance sheets provide a snapshot of the assets a company has at a specific point in time. It shows the resources a company has in its possession (assets) and how the company paid for those resources in the form of debts (liabilities) plus shareholder’s equity.
  • Income statements are usually provided quarterly and annually and provide a more comprehensive overview of a company’s financials than the balance sheet. However, both generally offer the same type of information.
  • The cash flow statement is an integral part of an analysis. It provides a clear idea of cash on hand, which is usually more difficult to manipulate than earnings statements.

Case Study: AT&T, Inc.

  • Pro: 25 years of dividend growth and payout
  • Pro: Well-established in its industry
  • Pro: Multiple revenue streams
  • Con: The 2018 purchase of DirecTv satellite was poor timing due to the surge in streaming technology
  • Pro: New management is taking steps to curb underperforming areas
  • Pro: AT&T is a strong contender for the 5G market, which caused a spike in stock pricing at the initial announcement
  • Con: The spike didn’t last as 5G stalled out with supply/demand for the new tech not yet reaching its peak
  • Pro: Demand for 5G is growing, and AT&T is well-placed to be able to meet it
  • Result: Stock price is expected to rise along with the increase in 5G technology demand*

*Not intended to be financial advice

Fundamental analysis can provide insight into long-term investment opportunities, and the research performed on the industry surrounding the target company frequently results in finding additional stocks worth looking researching. This type of analysis can give a more in-depth view of a company’s long-term health and performance ratios to predict growth than technical analysis, but it has its limitations in short-term trading.

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