Cathie Wood is one of the most popular investors globally. Her flagship fund, ARK Innovation ETF (ARKK), has gained 81.5% over the past year, surpassing the SPDR S&P 500 Trust Fund ETF’s (SPY) 38.6% returns.
Wood has been betting on dividend-paying stocks lately, given the current macroeconomic backdrop. Rising inflationary pressure and fluctuating benchmark Treasury yields, along with the stock market volatility, are the primary reasons she is now focusing on such stocks.
Thus, Wood’s popular holdings Thermo Fisher Scientific Inc. (TMO), Deere & Company (DE), NXP Semiconductors N.V. (NXPI), and Paccar Inc. (PCAR), which have stable dividend payout histories, could be ideal investment bets now.
Thermo Fisher Scientific Inc. (TMO)
TMO offers life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and services worldwide. The company serves pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions, and government agencies.
TMO is scheduled to pay a $0.26 quarterly dividend on July 15, 2021. The stock distributes a $1.04 annual dividend, which translates to a 0.2% yield.
On May 19, TMO and the University of California, San Francisco (UCSF) formed a strategic alliance to accelerate the development and manufacture of cell-based therapies. TMO will build and operate a state-of-the-art cell therapy development, manufacturing and collaboration center on UCSF's Mission Bay campus, to offer clinical and commercial cGMP cell therapy manufacturing services and associated technology development support. TMO aims to provide its clients with integrated, end-to-end solutions to reduce costs and accelerate adoption of cell therapies.
During its fiscal year 2021 first quarter, ended April 3, 2021, TMO’s revenues increased 59% year-over-year to $9.91 billion. The company’s adjusted operating income came in at $3.51 billion, which represents 154.9% gain from the prior-year period. Its adjusted net income was $2.87 billion for the quarter, up 143.8% from the prior-year period. Its adjusted EPS increased 145.2% year-over-year to $7.21.
A $5.50 consensus EPS estimate for the current quarter, ending June 30, 2021, represents a 41.4% year-over-year improvement. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $8.79 billion consensus revenue estimate for the current quarter, represents a 27% rise from the prior-year period. The stock’s EPS is expected to grow at a 5.1% rate over the next five years. TMO has climbed 28.3% over the past year to close yesterday’s trading session at $449.21.
It’s no surprise that TMO has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Growth, and a B grade for Value and Sentiment. To see additional POWR Ratings for TMO’s Quality, Stability and Momentum, click here. TMO is ranked #7 of 57 stocks in the Medical - Diagnostics/Research industry.
Click here to checkout our Healthcare Sector Report for 2021
Deere & Company (DE)
DE manufactures and distributes equipment used in agriculture, construction, forestry, and turf care. It also offers wholesale financing to dealers of the equipment, extended equipment warranties, and retail revolving charge accounts. Wood has been investing in DE through ETFs ARKQ and ARKX. She has a combined holding of 248,797 shares of DE, which translates to a 0.21% weighting. DE has a #92 weighted rank across all Ark ETFs.
DE is scheduled to pay a $0.90 quarterly dividend on August 9, 2021. The stock distributes $3.60 annually, which translates to a 1% yield.
On May 10, DE added new technology and transmission options and more top-end horsepower to its 5M Series Tractor lineup and introduced a new 125-horsepower tractor to the lineup . Its integrated AutoTrac guidance helps operators reduce inputs, such as fuel, seed, and fertilizer, by minimizing overlap in straight line applications in fields, thus reducing costs significantly. The company expects the revamped lineup to generate robust sales.
For its fiscal year 2021 second quarter, ended May 2, 2021, DE’s total net sales and revenues were $12.06 billion, which represents a 30.3% year-over-year improvement. The company’s total operating profit is reported at $2.44 billion for the quarter, up 152.7% from the prior-year period. While its net income increased 168.8% year-over-year to $1.79 billion, its EPS increased 169.2% year-over-year to $5.68.
Analysts expect DE’s EPS to improve 75.5% year-over-year for the current quarter, ending July 30, 2021 to $4.51. The stock surpassed consensus EPS estimates in each of the trailing four quarters. And its $10.30 consensus revenue estimate for the current quarter represents a 31.1% rise on a year-over-year basis. Analysts expect the stock’s EPS to grow at 37.6% per annum over the next five years. DE has gained 133.2% over the past year and closed yesterday’s trading session at $356.71.
DE’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our POWR Ratings system.
The stock has a B grade for Sentiment. In addition to the POWR Ratings grades we’ve just highlighted, one can see DE’s ratings for Growth, Value, Momentum, Stability and Quality here. DE is ranked #33 of 86 stocks in the A-rated Industrial - Machinery industry.
NXP Semiconductors N.V. (NXPI)
NXPI is a Netherlands-based company that designs semiconductors and software for mobile communications, consumer electronics, security applications, in-car entertainment, and networking. The company sells its products to automotive, identification, wireless infrastructure, lighting, mobile, and computing applications. Wood holds approximately 526,985 shares of NXPI, which translates to a 0.26% weighting in ARKQ. The stock has a #83 weighted rank across all funds.
NXPI is scheduled to pay a $0.56 quarterly dividend on July 6, 2021. The stock pays a $2.25 annual dividend, which translates to a 1.1% yield.
On May 11, 2021, NXPI closed an offering of $1 billion of senior unsecured notes. The company intends to use the net proceeds of the offering for investments in its research and development projects and in energy efficiency measures at NXPI’s manufacturing and non-manufacturing facilities.
For its fiscal 2021 first quarter, ended April 4, 2021, NXPI’s revenue came in at $2.57 billion, which represents a 27% improvement year-over-year. The company’s non-GAAP gross profit increased 33% year-over-year to $1.39 billion. Its non-GAAP operating income is reported at $792 million for the quarter, up 57.8% from the prior-year period. NXIP’s adjusted net income came in at $832 million, up 37.1% from the prior-year period. Its EPS came in at $1.25 for the quarter, versus an $0.08 loss per share in the prior-year period.
Analysts expect NXPI’s EPS for the current quarter ending June 30, 2021, to be $2.31, up 145.5% year-over-year. It surpassed the Street’s EPS estimates in each of the trailing four quarters. For the current quarter, analysts expect NXPI’s revenue to be $2.57 billion, representing a 41.6% rise from the prior-year period. NXPI has gained 104.9% over the past year and 57.3% over the past nine months. It closed yesterday’s trading session at $207.85.
NXPI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
The stock has an A grade for Growth, and a B grade for Sentiment. We have also graded NXPI for Value, Stability, Quality and Momentum. Click here to access all NXPI’s ratings. NXPI is ranked #24 of 98 stocks in the B-rated Semiconductor & Wireless Chip industry.
Click here to checkout our Semiconductor Industry Report for 2021
Paccar Inc. (PCAR)
PCAR is a global technology leader that designs and manufactures high-quality light-, medium- and heavy-duty trucks under the Kenworth, Peterbilt and DAF brand names. The company also designs and manufactures advanced diesel engines, provides financial services and information technology, and distributes truck parts related to its principal business. Wood owns 302,973 shares of PCAR (as of May 28), representing a 0.06% weighting in the ARKQ ETF. The stock has a #144 weighted rank across all funds.
PCAR has increased its quarterly dividend 6% sequentially to $0.34, payable June 2, 2021. The stock’s $1.36 annual dividend translates to a 1.5% yield.
On April 6, PCAR announced a five-year supply agreement with Romeo Power, Inc. (RMO), a California-based leading battery technology company, to purchase RMO’s battery packs and battery management software for PCAR’s heavy-duty Peterbilt 579EV vehicles and Peterbilt 520EV refuse trucks. The partnership should enhance PCAR’s zero-emissions product offerings and improve its customers’ operational efficiency.
PCAR’s total sales and revenues for its fiscal year 2021 first quarter, ended March 31, increased 13.2% year-over-year to $5.85 billion. The company’s gross profit was $607.30 million, which represented a 31.4% year-over-year improvement. Its net income increased 30.8% year-over-year to $470.10 million. And its EPS increased 31.1% from the prior-year period to $1.35.
A $1.39 consensus EPS for the current quarter, ending June 30, 2021, represents a 223.9% improvement year-over-year. It surpassed the Street’s EPS estimates in each of the trailing four quarters. The $5.48 consensus revenue estimate for the current quarter represents a 102.8% rise from the prior-year period. Analysts expect the stock’s EPS to grow at a rate of 16.8% per annum over the next five years. PCAR has gained 25.7% over the past year and closed yesterday’s trading session at $92.29.
PCAR’s POWR Ratings reflect its solid prospects. The company has an overall B rating, which translates to Buy in our proprietary ratings system.
PCAR’s has a B grade for Growth, Sentiment and Momentum. In addition to the POWR Ratings grades we’ve just highlighted, one can see PCAR’s ratings for Stability, Quality and Value here. Out of 57 stocks in the Auto & Vehicle Manufacturers industry, PCAR is ranked #17.
Click here to check out our Automotive Industry Report for 2021
TMO shares were unchanged in premarket trading Thursday. Year-to-date, TMO has declined -3.50%, versus a 12.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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