Live Nation (NYSE: LYV)
According to Goldman, the pandemic effectively shut down all of Live Nation’s business lines, but the company was able to shore up its balance sheet during the downturn, putting it in a strong position as live events resume.
“We believe [Live Nation’s] actions during the early stages of the pandemic were successful. While live events were not able to take place at scale for the remainder of the year, the company (and the market) has shifted focus to the strong supply and demand trends building beneath the surface,” according to the note.
Goldman’s take on Live Nation is one of the more bullish calls on the volatile stock. Even in a year when reopening stocks have done well, Live Nation’s stock has gained less than 9% year to date, trailing the broader market. Furthermore, according to FactSet, only 50% of analysts rate the stock as a buy.
Maxar Technologies (NYSE: MAXR)
In trading, shares of the satellite imagery and space infrastructure company rose more than 6% from their previous close of $33.12.
“As the company launches its Legion constellation of satellites, we expect revenue growth to accelerate. “Margin expansion opportunity is evident as its Space Infrastructure business stabilizes and diversifies into the [US government] market,” Morgan Stanley analyst Matthew Sharpe wrote in an investor note on Thursday.
Morgan Stanley has set a $50 price target on Maxar shares, which is slightly lower than the $52 price target set by Goldman Sachs last month.
Maxar’s earth imagery business relies heavily on the Pentagon and U.S. intelligence agencies for revenue.
“Revenue growth should accelerate as the company’s planned WorldView Legion constellation goes live later this year,” Sharpe predicted. “These satellites will fill unmet demand, and we anticipate that they will contribute 10% revenue growth by 2023.”
Sharpe also stated that Maxar’s space infrastructure division “has been under-earning, with losses in both of the last two years.” Morgan Stanley anticipates that the business will return to profitability in the near future, following changes to the unit’s structure and a “more disciplined approach to bidding” for contracts to build spacecraft and satellites made by Maxar.
“The path to margin expansion is straightforward,” Sharpe added.
High-yielding China stocks
According to the analysts’ July 12 report, this high-yield trade has historically outperformed both growth and value stocks.
Here are five of their top picks for Chinese stocks that have “sustained dividend growth or free cash flow growth for 5 of the last 7 years”:
Kunlun Energy is a Chinese energy company.
Kunlun Energy is the only one of the ten Chinese stocks that made Bernstein’s high-yield screen that the firm has rated outperform.
The Hong Kong-listed utilities firm is a subsidiary of the Chinese energy conglomerate PetroChina. Kunlun Energy explores for and produces crude oil and natural gas in China, Kazakhstan, Oman, Peru, Thailand, and Azerbaijan.
According to Bernstein, the dividend yield is 4%.
Guangzhou Automobile Group
Guangzhou Auto Group, or GAC, is a Chinese state-owned automaker and a partner of Honda, Toyota, and Fiat Chrysler. GAC also has its own passenger car line and a new energy vehicle brand called Aion.
According to the China Passenger Car Association, the Aion S was the fifth best-selling new energy vehicle in China during the first half of this year, just two spots below Tesla’s Model 3 and Model Y.
Dividend yield: 4%, according to Bernstein, which rates GAC’s Hong Kong-traded shares as market perform.
According to a portfolio manager, Chinese technology stocks face additional risks in addition to tighter regulation.
Cathie Wood explains her Chinese stock strategy in light of the crackdown.
Dan Niles says he is now tempted to invest in Chinese technology stocks; here are two of his favorites.
China Resources Gas Group is a Chinese energy company.
According to the gas distribution company’s most recent annual report, China Resources Gas Group operates in 14 provincial capitals across the country. The company is a subsidiary of China Resources, a Chinese state-owned conglomerate.
CR Gas’s revenue in 2020 was 55.86 billion Hong Kong dollars ($7.19 billion), with a profit of 6.71 billion Hong Kong dollars. The majority of the company’s revenue was generated by the sale and distribution of gas fuel and related products.
Dividend yield: 2%, according to Bernstein, which rates the stock as market perform.
Cement Resources of China
This cement company, a subsidiary of the Chinese state-owned conglomerate China Resources, primarily operates in the country’s south, including the semi-autonomous regions of Hong Kong and Macao.
In 2020, CR Cement reported a profit of $9.03 billion Hong Kong dollars.
According to Bernstein, the dividend yield is 7%.
Hengan International Group is a multinational conglomerate.
Hengan International, based in Fujian province, was founded in 1985 and primarily manufactures women’s sanitary napkins, baby diapers, and household tissues.
For 2020, the company reported a profit of 4.61 billion yuan ($720 million).
According to Bernstein, the dividend yield is 6%.
It should be noted that companies have the option to suspend or reduce dividends. According to Bernstein analysts, long-term investors should continue to hold high-growth stocks in China because the category has historically dominated.