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These 2 Dow Stocks Are Set to Soar in 2025 and Beyond
The Dow Jones Industrial Average tracks the performance of 30 industry-leading companies. The index recently surged to new highs, but some of its component companies haven’t yet recovered from the 2022 bear market and are trading at rock-bottom share prices that could potentially set up a sharp rebound over the next year. Here are two timely buys right now.
1. Verizon Communications
Shares of Verizon Communications (NYSE: VZ) are starting to rebound after tumbling during the 2022 market sell-off. The company has reported strong financial results this year, but the stock’s high dividend yield suggests it is undervalued ahead of opportunities to capitalize in 5G wireless and demand for artificial intelligence (AI)-enabled devices.
Verizon is a dividend investor’s dream. The company pays out 59% of its adjusted earnings, bringing the forward yield to 6.28%. High-yield stocks can be sensitive to rising interest rates, but with the Federal Reserve recently announcing a half-point rate cut, it removes some of the downward pressure on top dividend stocks.
Verizon has paid a growing dividend for many years, which stems from consistent revenue and profits the business earns from charging customers every month for wireless service plans. It ended 2023 with 94 million postpaid connections, which refers to billed monthly plans that customers sign up for. Verizon’s wireless service revenue accelerated in Q2, increasing by 3.5% year over year to $19.8 billion. The company says it also gained market share in broadband service, with 391,000 net adds last quarter, which exceeded the net customer additions in the first quarter.
Investors are increasingly bullish about Verizon’s ability to sustain growth as customers upgrade to 5G wireless plans. Customers could have a strong incentive to upgrade as Apple launches AI-optimized iPhones. Wall Street’s long-term earnings estimates are higher than a year ago. The company’s high yield and solid financial results could propel Verizon stock higher in 2025.
2. Walt Disney
Walt Disney (NYSE: DIS) is a timeless brand with some of the most valuable entertainment properties in the industry. Previous management missteps give long-term investors a once-in-a-decade buying opportunity. The stock has fallen deeply out of favor on Wall Street over the last few years, reflecting lower-than-expected subscriber gains in Disney+ and weak profitability.
With CEO Bob Iger back at the helm, Disney’s finances are in much better shape now. The company’s revenue is growing, and most importantly, Disney is driving profitable growth. In the most recent quarter ending in June, earnings per share improved to $1.43, reverting a year-ago loss of $0.25.
Disney’s investments to support content production for its direct-to-consumer (DTC) segment, including streaming services, nearly wiped out the company’s net income a few years ago. But the DTC segment is now profitable one quarter ahead of management’s original goal.
A key catalyst that could send the stock higher next year are strong subscriber gains in Disney+. Similar to Netflix, Disney is beginning to put an end to unauthorized password sharing and requiring all viewers to pay for a membership. The company expects its password sharing initiative to kick in this fall. Netflix’s revenue and subscriber numbers benefited enormously from this effort, and the same could happen for Disney.
Despite clear improvements in the business, the stock still trades at under $100 and a forward price-to-earnings ratio of 18 on fiscal 2025 earnings estimates. Analysts are forecasting long-term earnings growth of 14%. If it meets those expectations, Disney stock could double in value within the next five years.
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:
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Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,049!*
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Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,847!*
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Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $378,583!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of October 14, 2024
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Netflix, and Walt Disney. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
These 2 Dow Stocks Are Set to Soar in 2025 and Beyond was originally published by The Motley Fool
The habits of millionaires are a topic of interest when it comes to financial advice. After all, unless they received a large chunk of money as an inheritance or gift, most millionaires had to be smart with their money to get where they are.
Learning how millionaires accumulate wealth — and where they keep it — can provide valuable insights for anyone focused on growing their money. One common question is whether or not millionaires keep money in checking accounts.
Studies show that in recent years, millionaires are keeping a significant portion of their wealth in cash. According to CNBC’s , that portion was about 24% in 2023. While this doesn’t necessarily mean a quarter of a millionaire’s wealth is sitting in a checking account, it does indicate the importance of maintaining liquid assets. And a checking account can be a helpful tool for doing so — whether or not you’re a millionaire.
Anyone, regardless of net worth, can find value in a checking account. Checking accounts allow unlimited deposits and withdrawals, check writing, bill pay, and other features to help you manage your money day-to-day.
While millionaires may keep large portions of their wealth in other deposit accounts and investments, some may use a checking account to manage daily spending. Millionaires also recognize the importance of having liquid assets, like funds in checking and savings accounts. Accessible cash lets you cover unexpected expenses without needing to sell off investments, borrow money, or pay a penalty for tapping your retirement savings early.
The amount of money a millionaire keeps in their checking account is highly personal and depends on preference. However, because checking accounts rarely earn competitive — if any — interest, some millionaires intentionally limit their checking account balance. Some may choose to keep the bare minimum, such as a couple of months’ worth of essential expenses, in their checking accounts, keeping the rest of their wealth in more lucrative assets.
Regardless of preference, it would be surprising for a millionaire to keep more than $250,000 in a single checking account. That’s because the Federal Deposit Insurance Corp. (FDIC) only insures up to $250,000 in deposits per institution, per account holder.
While millionaires may use checking accounts for day-to-day financial transactions, they may also use some of the following accounts in addition to, or in place of, a checking account:
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Savings accounts: Like checking accounts, savings accounts provide a high degree of liquidity, allowing you to access your money as needed for regular or unexpected expenses. High-yield savings accounts, in particular, give millionaires an extra bang for their buck. Some of the best accounts currently offer rates upwards of 4% versus the national average savings account rate of 0.46%.
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Cash management accounts: Cash management accounts (CMAs) pay competitive interest rates while maintaining more accessibility than a savings account. Some CMAs come with a debit card and ATM access, and many provide extended FDIC coverage limits by “sweeping” additional deposits into partner banks. CMAs are available at brokerages, not banks, facilitating easy transfers between investment and cash accounts.
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Money market accounts: Similar to CMAs, money market accounts combine features of checking and savings accounts, often paying competitive interest rates and providing check writing and ATM access. Banks and credit unions offer these accounts, which are federally insured. Minimum opening deposit and minimum balance requirements are often higher than those for standard savings accounts.
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Retirement and tax-advantaged accounts: Millionaires understand the importance of investing for their later years, and retirement accounts such as 401(k)s and IRAs allow them to do so in a tax-advantaged way. Some retirement accounts, like 401(k)s, are offered by certain employers. Others, such as traditional and Roth IRAs, are available to anyone.
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Brokerage accounts: The IRS limits contributions to tax-advantaged accounts, and millionaires typically invest beyond these limits. They do so with taxable brokerage accounts, which can hold investments such as stocks, bonds, and mutual funds without contribution limits.
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Other investments, like real estate, commodities, and art: Some millionaires may decide to diversify their portfolio with other investment types. These could include real estate investments, such as investment properties or real estate investment trusts (REITs); commodities, such as metals or energy products; art; and more.
The amount of money millionaires keep in their checking accounts depends on personal preference. While some millionaires may keep six figures in their checking account to maintain a comfortable cash cushion, others may choose to keep the bare minimum in checking. You wouldn’t expect millionaires to keep more than $250,000 in a checking account, however, because balances over this threshold aren’t typically insured.
There’s no single bank that’s a favorite among millionaires; it’s another matter of preference. However, millionaires are likely to bank with institutions that offer private banking to those who meet specific financial requirements. Private banking may include wealth planning services, waived fees, dedicated bankers, and additional perks. J.P. Morgan Private Bank, Citi Private Bank, and Bank of America Private Bank are among some of the most popular banks for millionaires.
Billionaires may have checking accounts, but they likely use accounts that cater to ultra-high-net-worth individuals. These accounts may come with perks such as a dedicated banker, waived fees, and competitive interest rates. Alternatively, billionaires may opt for a cash management account with higher FDIC insurance coverage limits and checking account features.
No rule says you can’t have a million dollars in a checking account, but FDIC insurance typically only covers up to $250,000. Plus, you can get a bigger return on your investment by keeping $1 million elsewhere. One alternative is a cash management account, which acts like a checking account but generally earns higher interest. Plus, many cash management accounts insure more than the standard $250,000 by sweeping funds into multiple partner banks.
Lumen Technologies, Inc. (NYSE:LUMN) shares are trading higher on Monday after the company announced it is partnering with Meta Platforms, Inc. (NASDAQ:META) to significantly increase Meta’s network capacity and help drive its AI ambitions.
Lumen’s partnership offers Meta enhanced flexibility with secure, on-demand bandwidth, supporting its complex computing requirements and enabling it to serve billions daily.
Ashley Haynes-Gaspar, Lumen’s EVP and chief revenue officer, said, “We’ve transformed our company to meet this demand. As Meta’s customers use more AI services across its platforms, we’re helping provide Meta with a seamless, effortless, and flexible network that will meet its growing needs.”
Lumen Technologies said its Private Connectivity Fabric enables long-term network capacity for Meta’s AI.
Alex-Handrah Aimé, director of Meta’s Network Investments stated, “Our AI tools are performing increasingly more complex tasks including enabling conversations in a variety of languages and translating text to images in real time, while helping people interact with the world around them in new, immersive ways.”
Lumen will report third quarter 2024 results on November 5, 2024.
Investors can gain exposure to the stock via Invesco S&P SmallCap Utilities & Communication Services ETF (NASDAQ:PSCU) and First Trust Cloud Computing ETF (NASDAQ:SKYY).
Price Action: LUMN shares are up 9.50% at $7.38 at the last check Monday.
Image via Shutterstock
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This article Lumen And Meta Join Forces To Boost AI With Flexible, On-Demand Network Solutions originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
CoinShares said the United States and Bitcoin led crypto investment product dynamics last week amid growing optimism over a potential Republican election win in the US.
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