🗞 6 Growing Businesses with a High Dividend

Happy Sunday!

Here’s what’s on the docket for this week’s newsletter:

• 🏪 Dollar Stores in Turmoil

• 💼 Nvidia vs. DOJ

• 6️⃣ 6 Growing Businesses with a Dividend Yield above 4%

And much more, let’s dive in!

News of the week

• 🏪 Dollar Stores are Struggling: Dollar General and DollarTree are the two of the largest discount retailers in the US by far and up until last year both had been considered strong, durable companies. However, with both stocks now down more than 60% from recent highs, many investors are becoming weary.

  At the heart of the issue for both companies is a struggling consumer. DollarGeneral and Family Dollar (owned by DollarTree) both attract lower income consumers and have reported that their customers seem to be tightening their spending. While discussing the customers during their latest conference call, Dollar General mentioned “the majority of them state that they feel worse off financially than they were six months ago.”

  This has led to continued inventory markdowns at both companies, and ultimately, lower margins.

• 💼 Nvidia vs. DOJ: Nvidia’s stock dropped 15% this week shaving off more than $400 billion in market value, after the US Department of Justice (DOJ) sent a subpoena to the company as a part of its ongoing investigation into potentially anticompetitive practices.

  The DOJ is looking into Nvidia’s recently announced acquisition of Run:ai, but more importantly asking for information to see if Nvidia has been giving preferential treatment to its bigger clients. Nothing material has come of the investigation yet.

• 📉 SMCI Responds to Hindenburg: Last week, activist short selling firm Hindenburg Research released a scathing report on AI darling SuperMicro Computer. In an attempt to quell investor concerns, SMCI released a response this week stating that the short report “contains false or inaccurate statements about our company”.

  Unfortunately, SMCI’s response failed to directly refute any of the specific allegations, which may have left investors with even more worry. SMCI’s stock closed down another 15% this week.

Platform Update

In case you missed it, this week marked the official launch of FinChat V4. 

The FinChat team has pushed over 5,000 improvements in the code base to make this happen.

Here are a couple of the highlights:

• A Completely Redesigned Mobile Layout 📱 

• Custom Dates for Charting 📅 

• A clean interface that scales without sacrificing power 📈 

6 Growing Businesses with a High Dividend

If a stock has a dividend yield near or above the US 3-Month Treasury yield, it typically indicates that investors are skeptical about the company’s ability to grow.

However, every once in a while, you’ll find a company that for one reason or another has been improperly discarded by investors. And on those rare occasions, investors are rewarded with both a high-dividend and future growth.

Here are 6 growing companies that might fit that mold:

1.) Phillip Morris International

In addition to its legacy combustibles portfolio, Phillip Morris is the category leader for reduced-risk nicotine products globally. Analysts estimate that Phillip Morris will grow its revenue by more than 6% annually over the next 3 years.

• Dividend Yield: 4.22%

• Revenue CAGR (5yr): 4%

• EPS CAGR (5yr): 2%

2.) CME Group

CME is the world's leading digital derivatives marketplace and clearing house. CME facilitates trading of futures and options for a plethora of different markets.

• Dividend Yield: 4.5%

• Revenue CAGR (5yr): 5%

• EPS CAGR (5yr): 12%

3.) OTC Markets Group

OTC Markets provides critical market infrastructure that broker-dealers rely on to facilitate trading on over 12,000 US and International securities.

• Dividend Yield: 4.58%

• Revenue CAGR (5yr): 12%

• EPS CAGR (5yr): 11%

4.) CVS Health Corp

CVS is a health solutions company that operates ~10,000 pharmacies throughout the US while also providing consumer-directed health insurance products.

• Dividend Yield: 4.59%

• Revenue CAGR (5yr): 10%

• EPS CAGR (5yr): 9%

5.) PACCAR Inc

PACCAR designs and distributes commercial trucks and parts all over the globe. The company sells through a network of independent dealers under the Kenworth, Peterbilt, and DAF brands.

• Dividend Yield: 4.75%

• Revenue CAGR (5yr): 7%

• EPS CAGR (5yr): 16%

6.) United Parcel Service

UPS provides letter and package delivery, transportation, and logistics services in the US and internationally.

• Dividend Yield: 5.12%

• Revenue CAGR (5yr): 4%

• EPS CAGR (5yr): 2%

Meme of the week

It’s always tempting to buy the high-flying stock of the day, even if you haven’t done the research to justify the purchase. Besides, who wants to spend hours digging through financial reports anyways.

Fortunately, you no longer have to with FinChat. FinChat gives users all the information they need in seconds, so they no longer need to say “YOLO” before hitting the buy button.