Regardless of who wins the presidential election, most of us are just ready for the political circus to be over. However, there are potential storm clouds forming, and a dispute or delay in the election results could raise tensions and volatility. With the volatility index (VIX) trading over the 40 level briefly last week, it is a sure sign that some investors are getting worried. The VIX closed Monday at 37.13, despite a big rally.
Given the sharp increase in volatility, and the lackluster response to what was some spectacular earnings, especially from some of the technology giants, we decided to screen the Goldman Sachs research universe looking for some safer companies that make sense for investors now. It’s important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
This top cable giant has been expanding its services and product offerings. Charter Communications Inc. (NASDAQ: CHTR) is a leading broadband communications company and the second-largest cable operator in the United States. It provides a full range of advanced broadband services, including Spectrum TV video entertainment programming, Spectrum Internet access and Spectrum Voice.
Spectrum Business similarly provides scalable, tailored and cost-effective broadband communications solutions to business organizations, such as business-to-business internet access, data networking, business telephone, video and music entertainment services and wireless backhaul.
The company made a huge investment in Time Warner Cable and has completed the giant integration, which will enable all its product offerings, pricing, packaging and service operations to be universal across its footprint.
After the solid results were posted, the analysts had this to say:
We believe that Charter’s 3Q20 results reflect strong performance around the 3 key drivers of our Buy thesis, which are: 1) strong growth in broadband, 2) high operating leverage resulting in EBITDA growth and margin expansion, and 3) material buybacks that amplify free-cash-flow/share growth. With the shares having pulled back 12% from an all-time high on October 12th (vs. -6% for the S&P 500), we expect a positive reaction in the stock to the company’s third quarter results.
Goldman Sachs has a $710 price objective on the shares, and the Wall Street consensus target price is $670.43. Charter Communications stock traded at $594.45 Tuesday morning.
This top dividend payer is a very safe play for investors. Colgate-Palmolive Co. (NYSE: CL) continues to deliver solid execution and is one of the best-positioned companies in its sector, given its strong brands in attractive categories, particularly oral care. Colgate is one of the most valuable brands in the world.
Over half of Colgate’s total revenues (52%) are derived in faster-growth emerging economies, and the company maintains leading or near-leading market shares across Brazil, Russia, India and China. While those have slowed over the last year, a pickup in growth could be coming, especially with a very weak dollar making products attractive overseas.
The analysts said this about the results:
Colgate-Palmolive Reported strong third quarter results with balanced organic sales growth across all segments. Its Hills’ segment once again led the way (despite an onerous comparison) while Emerging Markets inflected to high-single digits to lift overall corporate growth to 7.5%. We believe growth was somewhat flattered by a bounce from the second quarter weakness, but the company’s growing traction with premium innovation, improved market share trajectory and better competitive positioning in emerging markets in the current environment should all have lasting benefits, in our opinion.
Colgate-Palmolive stock investors receive a 2.20% dividend. Goldman Sachs raised its price target from $86 to $90, and the consensus target is $81.45. The shares were trading at $81.90.
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