{"id":3041,"date":"2020-01-08T12:01:35","date_gmt":"2020-01-08T12:01:35","guid":{"rendered":"https:\/\/jobbinghood.com\/finance\/2020\/01\/08\/this-basket-of-dividend-growth-stocks-can-help-your-portfolio-stand-out-in-2020\/"},"modified":"2020-01-08T12:01:35","modified_gmt":"2020-01-08T12:01:35","slug":"this-basket-of-dividend-growth-stocks-can-help-your-portfolio-stand-out-in-2020","status":"publish","type":"post","link":"https:\/\/jobbinghood.com\/magazine\/2020\/01\/08\/this-basket-of-dividend-growth-stocks-can-help-your-portfolio-stand-out-in-2020\/","title":{"rendered":"This basket of dividend growth stocks can help your portfolio stand out in 2020"},"content":{"rendered":"

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\n<\/p>\n

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Analysts at Goldman Sachs are highlighting a \u201cdividend growth basket\u201d of stocks at a time when valuations for the U.S. stock market have shot up to their second-highest level since June 2002.<\/p>\n

In the firm\u2019s recent \u201cU.S. Weekly Kickstart\u201d report on Jan. 3, the analysts, led by David Kostin, recommended investors be cautious and look for \u201cgrowth at a reasonable price,\u201d but also included \u201cbasket\u201d of dividend stocks with low price-to-earnings valuations relative to the S&P 500
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\n SPX, -0.28%<\/span><\/a><\/span>
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\n \u00a0that also appear likely to continue raising their dividend payouts more quickly than the broad market. <\/p>\n

Before taking a deeper dive into the 50 dividend stocks, let\u2019s have a quick refresher of just how pricey the stock market became toward the end of 2019, a year in which the S&P 500 climbed 29% and returned 31.8% with dividends reinvested. Goldman Sachs says 92% of the price appreciation reflects valuation expansion. That means that investors are willing to pay higher prices for stocks, even though earnings growth was very slow last year.<\/p>\n

Here are two charts that underline how much more expensive U.S. stocks became during 2019. The first ratio is based on consensus earnings estimates for a rolling 12 months, among analysts polled by FactSet. The second looks back at actual earnings. <\/p>\n

First, the forward price-to-earnings ratio for the S&P 500 during the year:<\/p>\n

<\/p>\n
\n \"\"\/
\n
\n FactSet<\/cite>
\n \n <\/div>\n


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\n <\/figure>\n

Take a longer view, however, and the index\u2019s forward P\/E briefly topped that mark at the end of 2017 and early 2019. Otherwise it hasn\u2019t been this high since June 2002.<\/p>\n

The second chart shows the trailing price-to-earnings ratio throughout 2019:<\/p>\n

<\/p>\n
\n \"\"\/
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\n FactSet<\/cite>
\n \n <\/div>\n


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\n <\/figure>\n

The dividend \u2018basket\u2019<\/h6>\n

The Goldman analysts offered a \u201csector-neutral\u201d list of 50 stocks that feature \u201cpremium yield while positioning for a Value rotation.\u201d That means a shifting of investors\u2019 preference to slower-growing companies whose price-to-earnings ratios are relatively low. According to the analysts, the basket features \u201ca higher dividend yield (3.6% vs. 2.1%), 2x the dividend growth through 2021 (10% vs. 5%), and a much lower P\/E multiple (12x vs. 19x),\u201d when compared with the S&P 500.<\/p>\n

The basket includes 50 stocks. Here are some smaller lists derived from the basket.<\/p>\n

Highest yields<\/h6>\n

First, here are the 12 stocks in the basket with dividend yields of at least 4%:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/td>\nTicker<\/td>\nDividend yield<\/td>\nFree cash flow yield<\/td>\n\u2018Headroom\u2019<\/td>\nTotal Return – 2019<\/td>\nForward P\/E Ratio <\/td>\n<\/tr>\n
Macy’s Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
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\n M, +3.33%<\/span><\/a><\/span>
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\n \n <\/td>\n		9.13%<\/td>\n12.90%<\/td>\n3.76%<\/td>\n-38%<\/td>\n6.9<\/td>\n<\/tr>\n
Simon Property Group Inc.<\/td>\n
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\n SPG, -1.14%<\/span><\/a><\/span>
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\n \n <\/td>\n		5.71%<\/td>\n7.30%<\/td>\n1.59%<\/td>\n-7%<\/td>\n21.2<\/td>\n<\/tr>\n
Kohl’s Corp.<\/td>\n
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\n KSS, +0.22%<\/span><\/a><\/span>
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\n \n <\/td>\n		5.45%<\/td>\n13.67%<\/td>\n8.23%<\/td>\n-19%<\/td>\n10.3<\/td>\n<\/tr>\n
AT&T Inc.<\/td>\n
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\n T, +0.38%<\/span><\/a><\/span>
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\n \n <\/td>\n		5.33%<\/td>\n10.03%<\/td>\n4.70%<\/td>\n46%<\/td>\n10.8<\/td>\n<\/tr>\n
AbbVie Inc.<\/td>\n
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\n ABBV, -0.57%<\/span><\/a><\/span>
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\n \n <\/td>\n		5.32%<\/td>\n9.83%<\/td>\n4.51%<\/td>\n1%<\/td>\n9.3<\/td>\n<\/tr>\n
International Business Machines Corp.<\/td>\n
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\n IBM, +0.07%<\/span><\/a><\/span>
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\n \n <\/td>\n		4.82%<\/td>\n10.79%<\/td>\n5.97%<\/td>\n24%<\/td>\n10.2<\/td>\n<\/tr>\n
Seagate Technology PLC<\/td>\n
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\n STX, +1.20%<\/span><\/a><\/span>
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\n \n <\/td>\n		4.41%<\/td>\n6.65%<\/td>\n2.24%<\/td>\n62%<\/td>\n11.2<\/td>\n<\/tr>\n
Molson Coors Beverage Company Class B<\/td>\n
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\n TAP, -0.26%<\/span><\/a><\/span>
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\n \n <\/td>\n		4.27%<\/td>\n10.46%<\/td>\n6.19%<\/td>\n0%<\/td>\n13.4<\/td>\n<\/tr>\n
Broadcom Inc.<\/td>\n
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\n AVGO, -0.34%<\/span><\/a><\/span>
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\n \n <\/td>\n		4.14%<\/td>\n7.09%<\/td>\n2.95%<\/td>\n29%<\/td>\n13.4<\/td>\n<\/tr>\n
Interpublic Group of Cos.<\/td>\n
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\n IPG, +0.22%<\/span><\/a><\/span>
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\n \n <\/td>\n		4.14%<\/td>\n12.47%<\/td>\n8.33%<\/td>\n17%<\/td>\n11.6<\/td>\n<\/tr>\n
Verizon Communications Inc.<\/td>\n
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\n VZ, -1.11%<\/span><\/a><\/span>
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\n \n <\/td>\n		4.07%<\/td>\n7.15%<\/td>\n3.08%<\/td>\n14%<\/td>\n12.3<\/td>\n<\/tr>\n
Huntington Bancshares Inc.<\/td>\n
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\n \n <\/td>\n		4.05%<\/td>\n10.84%<\/td>\n6.79%<\/td>\n32%<\/td>\n11.3<\/td>\n<\/tr>\n
Sources: Goldman Sachs, FactSet<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

You can click the tickers for more information about each company.<\/p>\n

The table includes free cash flow yields, calculated by taking the past 12 reported months free cash flow per share and dividing it by the most recent closing share price. A company\u2019s free cash flow is its remaining cash flow after planned capital expenditures. It is money that management can use for any corporate purpose, including raising the dividend. <\/p>\n

Subtracting the dividend yield from the free cash flow yield gives an estimate of how much \u201cheadroom\u201d the company has to raise its dividend. If a company\u2019s free cash flow yield is lower than its dividend yield for an extended period, it could indicate trouble ahead \u2014 dividend reductions tend to lead to sharp and immediate share-price declines.<\/p>\n

Here\u2019s the same list, this time with a summary of ratings among sell-side analysts polled by FactSet:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/td>\nTicker<\/td>\nShare ‘buy’ ratings<\/td>\nShare neutral ratings<\/td>\nShare ‘sell’ ratings<\/td>\nClosing price – Jan. 3<\/td>\nCons. price target<\/td>\nImplied 12-month upside potential<\/td>\n<\/tr>\n
Macy’s Inc.<\/td>\n
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\n M, +3.33%<\/span><\/a><\/span>
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\n \n <\/td>\n		12%<\/td>\n47%<\/td>\n41%<\/td>\n$16.53<\/td>\n$15.21<\/td>\n-8%<\/td>\n<\/tr>\n
Simon Property Group Inc.<\/td>\n
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\n SPG, -1.14%<\/span><\/a><\/span>
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\n \n <\/td>\n		55%<\/td>\n45%<\/td>\n0%<\/td>\n$145.35<\/td>\n$173.78<\/td>\n20%<\/td>\n<\/tr>\n
Kohl’s Corp.<\/td>\n
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\n KSS, +0.22%<\/span><\/a><\/span>
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\n \n <\/td>\n		32%<\/td>\n58%<\/td>\n10%<\/td>\n$49.19<\/td>\n$50.53<\/td>\n3%<\/td>\n<\/tr>\n
AT&T Inc.<\/td>\n
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\n T, +0.38%<\/span><\/a><\/span>
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\n \n <\/td>\n		43%<\/td>\n53%<\/td>\n4%<\/td>\n$39.06<\/td>\n$39.91<\/td>\n2%<\/td>\n<\/tr>\n
AbbVie Inc.<\/td>\n
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\n ABBV, -0.57%<\/span><\/a><\/span>
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\n \n <\/td>\n		60%<\/td>\n40%<\/td>\n0%<\/td>\n$88.70<\/td>\n$92.13<\/td>\n4%<\/td>\n<\/tr>\n
International Business Machines Corp.<\/td>\n
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\n IBM, +0.07%<\/span><\/a><\/span>
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\n \n <\/td>\n		29%<\/td>\n62%<\/td>\n9%<\/td>\n$134.34<\/td>\n$149.17<\/td>\n11%<\/td>\n<\/tr>\n
Seagate Technology PLC<\/td>\n
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\n STX, +1.20%<\/span><\/a><\/span>
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\n \n <\/td>\n		25%<\/td>\n54%<\/td>\n21%<\/td>\n$58.91<\/td>\n$56.22<\/td>\n-5%<\/td>\n<\/tr>\n
Molson Coors Beverage Company Class B<\/td>\n
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\n TAP, -0.26%<\/span><\/a><\/span>
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\n \n <\/td>\n		35%<\/td>\n47%<\/td>\n18%<\/td>\n$53.38<\/td>\n$55.40<\/td>\n4%<\/td>\n<\/tr>\n
Broadcom Inc.<\/td>\n
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\n AVGO, -0.34%<\/span><\/a><\/span>
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\n \n <\/td>\n		65%<\/td>\n35%<\/td>\n0%<\/td>\n$314.19<\/td>\n$355.10<\/td>\n13%<\/td>\n<\/tr>\n
Interpublic Group of Cos.<\/td>\n
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\n IPG, +0.22%<\/span><\/a><\/span>
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\n \n <\/td>\n		38%<\/td>\n62%<\/td>\n0%<\/td>\n$22.73<\/td>\n$24.91<\/td>\n10%<\/td>\n<\/tr>\n
Verizon Communications Inc.<\/td>\n
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\n VZ, -1.11%<\/span><\/a><\/span>
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\n \n <\/td>\n		30%<\/td>\n70%<\/td>\n0%<\/td>\n$60.40<\/td>\n$62.32<\/td>\n3%<\/td>\n<\/tr>\n
Huntington Bancshares Inc.<\/td>\n
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\n HBAN, -1.10%<\/span><\/a><\/span>
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\n \n <\/td>\n		9%<\/td>\n86%<\/td>\n5%<\/td>\n$14.81<\/td>\n$15.49<\/td>\n5%<\/td>\n<\/tr>\n
Sources: Goldman Sachs, FactSet<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The analysts have majority \u201cbuy\u201d or equivalent ratings on only three of these stocks. Those ratings are based on their 12-month price targets. The price targets of course don\u2019t include dividends. But you can see that a high dividend yield might mean the market isn\u2019t confident in a company\u2019s prospects.<\/p>\n

So if you see any names of interest on any of these tables, you need to do your own research and form your own opinion not only about the safety of the dividend but about the company\u2019s ability to remain competitive over the coming years.<\/p>\n

Most \u2018headroom<\/h6>\n

Here\u2019 are the 15 companies in Goldman\u2019s basket with the most free cash flow \u201cheadroom,\u201d as described under the fist table:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/td>\nTicker<\/td>\nDividend yield<\/td>\nFree cash flow yield<\/td>\n\u2018Headroom\u2019<\/td>\nTotal return – 2019<\/td>\nForward P\/E ratio<\/td>\n<\/tr>\n
Unum Group<\/td>\n
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\n UNM, -0.10%<\/span><\/a><\/span>
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\n \n <\/td>\n		3.92%<\/td>\n39.86%<\/td>\n35.94%<\/td>\n3%<\/td>\n5.1<\/td>\n<\/tr>\n
DXC Technology Co.<\/td>\n
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\n DXC, +1.47%<\/span><\/a><\/span>
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\n \n <\/td>\n		2.38%<\/td>\n27.07%<\/td>\n24.68%<\/td>\n-28%<\/td>\n7.1<\/td>\n<\/tr>\n
Morgan Stanley<\/td>\n
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\n MS, -0.20%<\/span><\/a><\/span>
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\n \n <\/td>\n		2.73%<\/td>\n21.89%<\/td>\n19.16%<\/td>\n33%<\/td>\n10.0<\/td>\n<\/tr>\n
KeyCorp<\/td>\n
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\n KEY, -0.76%<\/span><\/a><\/span>
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\n \n <\/td>\n		3.72%<\/td>\n15.21%<\/td>\n11.50%<\/td>\n43%<\/td>\n10.6<\/td>\n<\/tr>\n
Comerica Inc.<\/td>\n
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\n CMA, -0.66%<\/span><\/a><\/span>
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\n \n <\/td>\n		3.79%<\/td>\n13.68%<\/td>\n9.89%<\/td>\n8%<\/td>\n10.1<\/td>\n<\/tr>\n
HP Inc.<\/td>\n
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\n HPQ, +0.24%<\/span><\/a><\/span>
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\n \n <\/td>\n		3.43%<\/td>\n13.06%<\/td>\n9.62%<\/td>\n4%<\/td>\n9.3<\/td>\n<\/tr>\n
Interpublic Group of Companies Inc.<\/td>\n
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\n IPG, +0.22%<\/span><\/a><\/span>
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\n
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\n \n <\/td>\n		4.14%<\/td>\n12.47%<\/td>\n8.33%<\/td>\n17%<\/td>\n11.6<\/td>\n<\/tr>\n
Kohl’s Corporation<\/td>\n
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\n KSS, +0.22%<\/span><\/a><\/span>
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\n \n <\/td>\n		5.45%<\/td>\n13.67%<\/td>\n8.23%<\/td>\n-19%<\/td>\n10.3<\/td>\n<\/tr>\n
Eastman Chemical Co.<\/td>\n
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\n EMN, -0.70%<\/span><\/a><\/span>
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\n \n <\/td>\n		3.48%<\/td>\n10.68%<\/td>\n7.21%<\/td>\n12%<\/td>\n9.9<\/td>\n<\/tr>\n
Delta Air Lines Inc.<\/td>\n
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\n DAL, -0.09%<\/span><\/a><\/span>
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\n \n <\/td>\n		2.77%<\/td>\n9.60%<\/td>\n6.83%<\/td>\n20%<\/td>\n8.2<\/td>\n<\/tr>\n
Huntington Bancshares Inc.<\/td>\n
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\n
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\n HBAN, -1.10%<\/span><\/a><\/span>
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\n
\n
\n \n <\/td>\n		4.05%<\/td>\n10.84%<\/td>\n6.79%<\/td>\n32%<\/td>\n11.3<\/td>\n<\/tr>\n
Cummins Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CMI, +0.07%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.97%<\/td>\n9.35%<\/td>\n6.39%<\/td>\n38%<\/td>\n13.9<\/td>\n<\/tr>\n
Citizens Financial Group Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CFG, -0.63%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.41%<\/td>\n9.63%<\/td>\n6.22%<\/td>\n42%<\/td>\n10.5<\/td>\n<\/tr>\n
Molson Coors Beverage Co. Class B<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n TAP, -0.26%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		4.27%<\/td>\n10.46%<\/td>\n6.19%<\/td>\n0%<\/td>\n13.4<\/td>\n<\/tr>\n
International Business Machines Corp.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n IBM, +0.07%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		4.82%<\/td>\n10.79%<\/td>\n5.97%<\/td>\n24%<\/td>\n10.2<\/td>\n<\/tr>\n
Sources: Goldman Sachs, FactSet<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Here\u2019s how analysts feel about this second group of companies:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/td>\nTicker<\/td>\nShare ‘buy’ ratings<\/td>\nShare neutral ratings<\/td>\nShare ‘sell’ ratings<\/td>\nClosing price – Jan. 3<\/td>\nCons. price target<\/td>\nImplied 12-month upside potential<\/td>\n<\/tr>\n
Unum Group<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n UNM, -0.10%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		21%<\/td>\n50%<\/td>\n29%<\/td>\n$29.06<\/td>\n$33.54<\/td>\n15%<\/td>\n<\/tr>\n
DXC Technology Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n DXC, +1.47%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		40%<\/td>\n60%<\/td>\n0%<\/td>\n$35.23<\/td>\n$38.50<\/td>\n9%<\/td>\n<\/tr>\n
Morgan Stanley<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n MS, -0.20%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		73%<\/td>\n23%<\/td>\n4%<\/td>\n$51.20<\/td>\n$56.17<\/td>\n10%<\/td>\n<\/tr>\n
KeyCorp<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n KEY, -0.76%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		48%<\/td>\n44%<\/td>\n8%<\/td>\n$19.91<\/td>\n$21.23<\/td>\n7%<\/td>\n<\/tr>\n
Comerica Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CMA, -0.66%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		8%<\/td>\n69%<\/td>\n23%<\/td>\n$70.66<\/td>\n$71.78<\/td>\n2%<\/td>\n<\/tr>\n
HP Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n HPQ, +0.24%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		13%<\/td>\n87%<\/td>\n0%<\/td>\n$20.53<\/td>\n$20.75<\/td>\n1%<\/td>\n<\/tr>\n
Interpublic Group of Companies Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n IPG, +0.22%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		38%<\/td>\n62%<\/td>\n0%<\/td>\n$22.73<\/td>\n$24.91<\/td>\n10%<\/td>\n<\/tr>\n
Kohl’s Corporation<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n KSS, +0.22%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		32%<\/td>\n58%<\/td>\n10%<\/td>\n$49.19<\/td>\n$50.53<\/td>\n3%<\/td>\n<\/tr>\n
Eastman Chemical Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n EMN, -0.70%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		58%<\/td>\n42%<\/td>\n0%<\/td>\n$75.95<\/td>\n$86.39<\/td>\n14%<\/td>\n<\/tr>\n
Delta Air Lines Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n DAL, -0.09%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		62%<\/td>\n38%<\/td>\n0%<\/td>\n$58.06<\/td>\n$66.63<\/td>\n15%<\/td>\n<\/tr>\n
Huntington Bancshares Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n HBAN, -1.10%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		9%<\/td>\n86%<\/td>\n5%<\/td>\n$14.81<\/td>\n$15.49<\/td>\n5%<\/td>\n<\/tr>\n
Cummins Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CMI, +0.07%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		28%<\/td>\n60%<\/td>\n12%<\/td>\n$176.81<\/td>\n$181.37<\/td>\n3%<\/td>\n<\/tr>\n
Citizens Financial Group Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CFG, -0.63%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		81%<\/td>\n19%<\/td>\n0%<\/td>\n$39.91<\/td>\n$43.00<\/td>\n8%<\/td>\n<\/tr>\n
Molson Coors Beverage Co. Class B<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n TAP, -0.26%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		35%<\/td>\n47%<\/td>\n18%<\/td>\n$53.38<\/td>\n$55.40<\/td>\n4%<\/td>\n<\/tr>\n
International Business Machines Corp.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n IBM, +0.07%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		29%<\/td>\n62%<\/td>\n9%<\/td>\n$134.34<\/td>\n$149.17<\/td>\n11%<\/td>\n<\/tr>\n
Sources: Goldman Sachs, FactSet<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
Analysts\u2019 favorites<\/h6>\n

Here are the 18 companies in the basket with majority \u201cbuy\u201d or equivalent ratings among analysts polled by FactSet. The list is sorted by implied 12-month upside potential, based on consensus price targets:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/td>\nTicker<\/td>\nShare ‘buy’ ratings<\/td>\nShare neutral ratings<\/td>\nShare ‘sell’ ratings<\/td>\nClosing price – Jan. 3<\/td>\nCons. price target<\/td>\nImplied 12-month upside potential<\/td>\n<\/tr>\n
Simon Property Group Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n SPG, -1.14%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		55%<\/td>\n45%<\/td>\n0%<\/td>\n$145.35<\/td>\n$173.78<\/td>\n20%<\/td>\n<\/tr>\n
Phillips 66<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n PSX, +0.31%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		60%<\/td>\n40%<\/td>\n0%<\/td>\n$108.49<\/td>\n$129.00<\/td>\n19%<\/td>\n<\/tr>\n
Valero Energy Corp.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n VLO, +1.31%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		85%<\/td>\n15%<\/td>\n0%<\/td>\n$91.52<\/td>\n$108.44<\/td>\n18%<\/td>\n<\/tr>\n
Gilead Sciences Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n GILD, -0.81%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		57%<\/td>\n36%<\/td>\n7%<\/td>\n$65.07<\/td>\n$76.29<\/td>\n17%<\/td>\n<\/tr>\n
Delta Air Lines Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n DAL, -0.09%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		62%<\/td>\n38%<\/td>\n0%<\/td>\n$58.06<\/td>\n$66.63<\/td>\n15%<\/td>\n<\/tr>\n
ViacomCBS Inc. Class B<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n VIAC, +0.17%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		61%<\/td>\n31%<\/td>\n8%<\/td>\n$41.45<\/td>\n$47.40<\/td>\n14%<\/td>\n<\/tr>\n
Eastman Chemical Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n EMN, -0.70%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		58%<\/td>\n42%<\/td>\n0%<\/td>\n$75.95<\/td>\n$86.39<\/td>\n14%<\/td>\n<\/tr>\n
Broadcom Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n AVGO, -0.34%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		65%<\/td>\n35%<\/td>\n0%<\/td>\n$314.19<\/td>\n$355.10<\/td>\n13%<\/td>\n<\/tr>\n
Regency Centers Corp.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n REG, -1.42%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		55%<\/td>\n45%<\/td>\n0%<\/td>\n$62.41<\/td>\n$70.35<\/td>\n13%<\/td>\n<\/tr>\n
Cisco Systems Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CSCO, -0.65%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		61%<\/td>\n39%<\/td>\n0%<\/td>\n$47.63<\/td>\n$52.70<\/td>\n11%<\/td>\n<\/tr>\n
Morgan Stanley<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n MS, -0.20%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		73%<\/td>\n23%<\/td>\n4%<\/td>\n$51.20<\/td>\n$56.17<\/td>\n10%<\/td>\n<\/tr>\n
Citizens Financial Group Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CFG, -0.63%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		81%<\/td>\n19%<\/td>\n0%<\/td>\n$39.91<\/td>\n$43.00<\/td>\n8%<\/td>\n<\/tr>\n
Eaton Corp. PLC<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n ETN, -0.52%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		52%<\/td>\n40%<\/td>\n8%<\/td>\n$95.16<\/td>\n$100.59<\/td>\n6%<\/td>\n<\/tr>\n
Bristol-Myers Squibb Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n BMY, +1.51%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		57%<\/td>\n43%<\/td>\n0%<\/td>\n$62.78<\/td>\n$65.78<\/td>\n5%<\/td>\n<\/tr>\n
Archer-Daniels-Midland Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n ADM, -1.20%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		62%<\/td>\n38%<\/td>\n0%<\/td>\n$46.02<\/td>\n$48.10<\/td>\n5%<\/td>\n<\/tr>\n
AbbVie Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n ABBV, -0.57%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		60%<\/td>\n40%<\/td>\n0%<\/td>\n$88.70<\/td>\n$92.13<\/td>\n4%<\/td>\n<\/tr>\n
Eli Lilly and Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n LLY, +0.19%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		53%<\/td>\n47%<\/td>\n0%<\/td>\n$131.77<\/td>\n$131.58<\/td>\n0%<\/td>\n<\/tr>\n
Wynn Resorts Ltd.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n WYNN, +0.47%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		61%<\/td>\n39%<\/td>\n0%<\/td>\n$141.47<\/td>\n$139.07<\/td>\n-2%<\/td>\n<\/tr>\n
Sources: Goldman Sachs, FactSet<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Leaving the third group in the same order, here are its dividend yields, free cash flow headroom, 2019 returns and forward P\/E ratios:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company<\/td>\nTicker<\/td>\nDividend yield<\/td>\nFree cash flow yield<\/td>\n\u2018Headroom\u2019<\/td>\nTotal return – 2019<\/td>\nForward P\/E ratio<\/td>\n<\/tr>\n
Simon Property Group Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n SPG, -1.14%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		5.71%<\/td>\n7.30%<\/td>\n1.59%<\/td>\n-7%<\/td>\n21.2<\/td>\n<\/tr>\n
Phillips 66<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n PSX, +0.31%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.32%<\/td>\n7.49%<\/td>\n4.17%<\/td>\n34%<\/td>\n10.1<\/td>\n<\/tr>\n
Valero Energy Corp.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n VLO, +1.31%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.93%<\/td>\n8.42%<\/td>\n4.48%<\/td>\n30%<\/td>\n9.8<\/td>\n<\/tr>\n
Gilead Sciences Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n GILD, -0.81%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.87%<\/td>\n9.75%<\/td>\n5.88%<\/td>\n8%<\/td>\n9.3<\/td>\n<\/tr>\n
Delta Air Lines Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n DAL, -0.09%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.77%<\/td>\n9.60%<\/td>\n6.83%<\/td>\n20%<\/td>\n8.2<\/td>\n<\/tr>\n
ViacomCBS Inc. Class B<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n VIAC, +0.17%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.32%<\/td>\n2.74%<\/td>\n0.42%<\/td>\n-2%<\/td>\n8.0<\/td>\n<\/tr>\n
Eastman Chemical Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n EMN, -0.70%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.48%<\/td>\n10.68%<\/td>\n7.21%<\/td>\n12%<\/td>\n9.9<\/td>\n<\/tr>\n
Broadcom Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n AVGO, -0.34%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		4.14%<\/td>\n7.09%<\/td>\n2.95%<\/td>\n29%<\/td>\n13.4<\/td>\n<\/tr>\n
Regency Centers Corp.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
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\n REG, -1.42%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.75%<\/td>\n4.69%<\/td>\n0.94%<\/td>\n11%<\/td>\n41.1<\/td>\n<\/tr>\n
Cisco Systems Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
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\n
\n
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\n CSCO, -0.65%<\/span><\/a><\/span>
\n
\n
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\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.94%<\/td>\n7.25%<\/td>\n4.31%<\/td>\n14%<\/td>\n14.6<\/td>\n<\/tr>\n
Morgan Stanley<\/td>\n
\n
\n
\n
\n
\n
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\n
\n
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\n
\n
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\n MS, -0.20%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.73%<\/td>\n21.89%<\/td>\n19.16%<\/td>\n33%<\/td>\n10.0<\/td>\n<\/tr>\n
Citizens Financial Group Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n CFG, -0.63%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.41%<\/td>\n9.63%<\/td>\n6.22%<\/td>\n42%<\/td>\n10.5<\/td>\n<\/tr>\n
Eaton Corp. PLC<\/td>\n
\n
\n
\n
\n
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\n
\n
\n
\n
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\n ETN, -0.52%<\/span><\/a><\/span>
\n
\n
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\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.98%<\/td>\n6.88%<\/td>\n3.89%<\/td>\n43%<\/td>\n16.5<\/td>\n<\/tr>\n
Bristol-Myers Squibb Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n BMY, +1.51%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.87%<\/td>\n7.39%<\/td>\n4.52%<\/td>\n28%<\/td>\n11.5<\/td>\n<\/tr>\n
Archer-Daniels-Midland Co.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n ADM, -1.20%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		3.04%<\/td>\n-21.60%<\/td>\n-24.64%<\/td>\n17%<\/td>\n14.9<\/td>\n<\/tr>\n
AbbVie Inc.<\/td>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n ABBV, -0.57%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		5.32%<\/td>\n9.83%<\/td>\n4.51%<\/td>\n1%<\/td>\n9.3<\/td>\n<\/tr>\n
Eli Lilly and Co.<\/td>\n
\n
\n
\n
\n
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\n
\n
\n
\n
\n
\n
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\n LLY, +0.19%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.25%<\/td>\n2.66%<\/td>\n0.41%<\/td>\n16%<\/td>\n20.6<\/td>\n<\/tr>\n
Wynn Resorts Ltd.<\/td>\n
\n
\n
\n
\n
\n
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\n
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\n WYNN, +0.47%<\/span><\/a><\/span>
\n
\n
\n
\n
\n
\n
\n
\n
\n
\n \n <\/td>\n		2.83%<\/td>\n0.29%<\/td>\n-2.54%<\/td>\n45%<\/td>\n27.3<\/td>\n<\/tr>\n
Source:s Goldman Sachs, FactSet<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Don\u2019t miss:<\/strong> This contrarian stock play is leading to big gains, and the party isn\u2019t close to being over<\/a> <\/p>\n

Create an email alert for Philip van Doorn\u2019s Deep Dive columns here<\/a>.<\/strong> <\/em> <\/p>\n<\/p><\/div>\n

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