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This top-quality defensive stock just boosted its dividend to record highs

Oct 26, 2023

Good morning! 👋

US GDP came in at 4.9%, which is right on course with my expectations for another set of Fed follies before year-end—meaning Team Powell will hike rates again.

Sigh.

If you’re tired of the red ink, you wouldn’t be alone. I am, too.

But—and here comes a shameless plug for which I apologize in advance—if you’d like a path forward and some green on the screen, consider joining the One Bar Ahead® Family. Readers following along as directed experienced likely saw a good chunk of it yesterday and it’s reasonable to expect some more in the weeks ahead if the broader market selloff intensifies. 😊

Here’s my playbook.

The most anticipated combat action in history

Israel launched a raid into Gaza last night that is being described as a battlefield preparation mission. Targets included terror infrastructure, anti-tank missile launch posts, and Hamas members “who were planning to conduct attacks against us with anti-tank guided missiles,” according to IDF spokesman Peter Lerner.

Prime Minister Netanyahu says a ground incursion will come. (Read)

If you are not hedged, NOW is the time.

If you have not made a decision what to hold and how to play what’s coming, NOW is the time.

If you have not decided what to BUY and how, NOW is the time.

OBAers… refer to this past Monday’s update in the subscribers-only archives.

Ford and the UAW: Too late?

The UAW and Ford have apparently reached an agreement, but I wonder if the damage over the past six weeks is undoable. Terms apparently include 25% wage increases, cost of living adjustments, and other contractual improvements for the company’s unionized workers. (Read)

Higher wages and contractual improvements are great as far as I’m concerned, but they’re going to come at a cost.

One of two things’ll happen… a) Ford will jack prices to pass both on to consumers, or b) Ford will have a terrible few quarters while those get factored into the bottom line.

Not a stock that interests me at the moment either way.

What bothers me about META’s earnings

Props to El Zucko!

Meta reported a 23% jump in quarterly revenue, which means the company just logged a double beat AND its fastest growth since 2021.

Users held steady at 3.05B people, but what catches my attention is commentary that the company’s metaverse-focused business unit experienced a 26% drop in revenue and a $3.74B loss that it expected to “increase meaningfully” YoY.

Call me crazy, but I don’t think the markets are going to tolerate that.

Investors have woken up to the fact that promising growth in exchange for big operating losses isn’t all that. I also think the 42 AGs may have a thing or two to say.

$250 a share?

Every $1 spent on AI hardware = $20 generated in AI software

Love her or hate her, Cathie Wood is a super-sharp thinker. She said recently that “for every dollar spent on AI hardware, $20 is generated in AI software.” (Read)

That’s low.

The number is probably $100+.

AI is speeding up innovation everywhere and in everything. What’s more, it’s making new developments more accurate while generating insights that humans cannot possibly match.

Don’t take my word for it, though. Here’s a great primer (of many) if you’d like to know more. (Read)

Meanwhile….

You and your money will get left behind if you are not on board, even tangentially.

It’s just that simple.

Period.

MyPOV: At the risk of sounding like a broken record, AI may well be the greatest investing theme in the history of mankind. It’s on par with the invention of electricity, penicillin, and the internet itself in terms of impact… only far bigger in $.

Top-quality dividend just raised to record levels

Income investing is one of the most underrated stories in investing.

People would rather chase growth stocks on a whim because of what might happen than concentrate on making piles of cash with companies that are probably going to make it happen.

Take ExxonMobil, for example.

The company just raised its dividend to $0.91, a record in a long line of increases that date back 41 consecutive years. Perhaps best of all, the company presently trades at just 8.57x cash flow, according to Macrotrends.

Before you invest in XOM, though, what if I told you there was a better choice that could mean even more for your money? One that’s beaten XOM by 7.3% over the past decade and that has a higher CAGR (compound annual growth rate). Upgrade to Paid