Posted July 19, 2021
By Zach Scheidt
[VIDEO] My Top Three Earnings Plays for This Week
This week is starting off with a bit of turbulence in the market.
Investors are concerned about increasing case counts of the new "Delta" coronavirus variant. And after such a strong run for many stocks over the last few weeks, it makes sense for some investors to sell and take some profits off the table.
But that doesn't mean the bull market is over. And it certainly doesn't mean that you can't continue to grow your wealth by investing in the best companies listed in the stock market.
Today, as we head into a busy week for earnings reports, I wanted to share my three favorite earnings plays that you can buy this week.
Investing in these names before they report earnings can give you an opportunity to profit from Wall Street's reaction to these announcements.
I'm including my notes on each of these three companies below the video.
Once you're done taking a look at these three opportunities, I'd love to hear what you think! Please shoot me an email at RichRetirementFeedback@StPaulResearch.com and share your feedback.
American Express (AXP)
American Express is benefitting from both corporate and personal spending; consumer spending overall is a bright spot in the current economy.
Business travel is also picking back up, and despite some concerns over the coronavirus “Delta” variant, it’s looking like this trend will continue.
AXP reports earnings Friday morning, with Wall Street expecting $1.58 per share for the quarter and $7.54 in profit per share for the full year (this compares to just $3.77 in profit last year).
The company is currently trading at 21.8X this year's expected earnings.
One of the other things I’m watching with AXP is its dividend. It pays a quarterly dividend of $0.43, which gives you $1.72 per year. And with annual profits well above the company's dividend, AXP has room to increase those payments to investors.
NextEra Energy Inc. (NEE)
Electric utilities like NextEra can benefit from the broad economy reopening, and NextEra in particular can also profit from the trend towards renewable energy, as it owns numerous solar and wind projects.
Shares have been treading water for the last six months while earnings accumulate...
The company reports earnings on Thursday morning, with Wall Street expecting profits of $0.68 per share for the second quarter, and $2.53 per share for the full year, which is above its $2.31 from last year.
NextEra is trading at 30X this year's earnings. That’s a rich price, but investors are willing to pay more for safety right now; there’s a bit of uncertainty surrounding the reopening, and it’s the type of stock that should do quite well, even in a turbulent environment.
The company also pays a current quarterly dividend of $0.385, giving investors a 2% yield.
Procter & Gamble (PG)
Procter & Gamble doesn’t report earnings until next Friday, but shares already surged higher last week ahead of the company's earnings.
Wall Street is expecting quarterly profits of $1.09 per share, and $5.63 per share for the full year, which represents steady growth over last year's $5.12 profit.
Large-cap stocks like Procter & Gamble are coming back into favor, and PG also has an international business that could benefit from inflation or a weakening U.S. dollar.
The company currently pays a 2.5% yield, which is well above the market's 1.34% yield.
Here's to living a Rich Retirement!
Editor, Rich Retirement Letter