Johnson & Johnson: Why it’s loved by many
Avalon increased its stake in JNJ by 48% bringing the holding to one that eats up 1.47% of its total portfolio. With the company’s ever rosy performance and growth prospects, it is undeniably a stock that is highly favored by many. The metrics speak by themselves. The revenue is growing at a stable quarterly growth of over 8% year-on-year, at least in the last couple of data points. It has a double digit profit margin with the most recent bordering 20%. It never missed an earnings estimate in the 4 most recent quarters and is gaining more upward than downward revisions for its earnings forecast this year. Also, the company remains a haven for dividend income seekers with annualized pay-outs growing by an average rate of 11% in the last 9 years. The company’s P/E ratio last year was 17.05 while its forward P/E is 15.16.
Fifth Third Bancorp: The valuation is low
The asset manager has also purchased a new position at Fifth Third Bancorp (NASDAQ:FITB) worth over $6 million. The stake was equivalent to 0.38% of the firm’s portfolio. The diversified financial services company has just reached a new 52-week high last May 14. It has beaten consensus estimates in the last 2 previous quarters. Also, earnings for the fiscal quarter ending in June had gained 9 upward revisions with only 1 downward revision so far. It is a highly profitable company with a consistent profit margin of over 20%, the latest of which is 25.87% for the end of March in the current year. In 2012, the P/E ratio is 10.72. With a forward P/E of only 10.39 and PEG ratio of 1.12, investors can expect to gain from its likely appreciation in the immediate future. Moreover, FITB is also luring dividend lovers with its improving record in dividend payment. Recently, it increased the quarterly pay-out from 10 to 11 cents per share.
I must say that on the overall, Avalon’s big buys are an impressive mix of dividend stocks. Many investors are bullish towards AbbVie Inc (NYSE:ABBV). I think this comes with a strong basis. But investors must move with the right timing. The window of opportunity for the heavily Humira-dependent company may be narrowing unless more concrete developments in its pipeline surface soon. Meanwhile, I would gamble with JNJ anytime these days. TXN remains a strong company and it has huge growth prospects. And do check out FITB; you may gain from a likely appreciation anytime soon if you act fast enough. (Data sources: finviz.com, whalewisdom.com, nasdaq.com, marketwatch.com, and ycharts.com; data retrieved May 16, 2013).
The article A Quick Look at Avalon Advisor’s Big Buys Last Quarter originally appeared on Fool.com.
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