Our first recommendation has a current annual dividend yield of 2,81%, paid quarterly. Its top five holdings include: The Home Depot Inc (HD, 4.58% of assets), International Business Machines Corp (IBM, 4.18%), Pfizer Inc (PFE, 4.17%), PepsiCo Inc (PEP, 4.07%), and Texas Instruments Inc (TXN , 4.01%). Our second recommendation is a sale of a previous idea after disappointing results.
Buy: Schwab U.S. Dividend Equity ETF (SCHD)
Schwab U.S. Dividend Equity is being added to our recommended Growth and Conservative portfolios with a 6% target weight. It mirrors an index designed by Horizon Investment Services, a sister company of Horizon Publishing, which earns a fee based on its asset size.
Holding nearly 100 stocks, the ETF favors high-quality companies with sustainable dividends. Financials represent 22% of the portfolio, followed by industrials at 18%.
The ETF ranks among the top 3% of its peer group on five-year performance.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, May 17, 2021
Sell: Hologic, Inc. (HOLX)
Updated from WSBD 834, October 15, 2020
We are dropping Hologic from the Focus, Buy, and Long-Term Buy lists after the company posted disappointing results for the March quarter and guidance for the current quarter. Hologic reported adjusted earnings per share of $2.59, versus $0.57 earned in the year-ago quarter, missing the consensus by $0.03. Revenue increased 103% to $1.54 billion, meeting the consensus.
Management targets June-quarter earnings per share of $1.00 to $1.15, implying 33% to 53% growth, on revenue of $1.00 billion to $1.07 billion, good for 22% to 30% growth. That forecast fell well short of analysts’ targets of $1.81 for per-share profits and $1.29 billion for sales. Although Hologic called its guidance conservative, its outlook could signal that analysts have become too bullish on coronavirus testing at this stage in the pandemic.
Hologic is being dropped from the Monitored List and should be sold.
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, May 3, 2021