Three Strategies to Score Investment Discounts in the Current Year
In the ever-evolving world of investments, finding deals in 2025 amidst the ongoing trade war can be a challenging task. However, Kiplinger Personal Finance Magazine offers some expert approaches to navigate this landscape.
- Boosted Dividends as a Tactic: As tariffs push costs higher, some companies might attempt to attract investors by increasing dividends or payouts. This strategy could provide a better yield that could offset rising prices, making such companies worth considering.
- Focus on Tariff-Affected Sectors: Industries like automobiles, electronics, and imported goods will feel the impact of tariffs strongly. Investing in companies within these sectors, especially those adapting strategies due to the trade war, could yield opportunities. However, careful research is essential.
- Stay Informed: Subscribing to Kiplinger’s Personal Finance updates is recommended, as they provide timely insights on how trade policies affect market sectors and deal opportunities for investors.
While tariffs complicate finding deals, Kiplinger advises being attentive to companies showing resilience or strategic adaptation to tariffs and trade negotiations. This includes firms that can maintain or grow investor payouts despite pressure on profits.
In the current market, several companies are making headlines. TechnipFMC (FTI), a specialist in equipment for oil and gas drillers who operate below the sea's surface, restarted its quarterly dividend payments in 2023 at 5 cents per share. The dividend payout ratio of TechnipFMC (FTI) is now 10%, according to S&P.
Another company to watch is Global Payments (GPN), whose stock price has struggled this year due to investor concerns about an economic slowdown. The dividend paid by Global Payments (GPN) now represents 16% of its profits, and Morningstar analyst Brett Horn sees $131 per share as fair value for the stock. The company plans to use $7 billion through 2027 for share buybacks and dividends.
On the other hand, HCI Group (HCI), an insurer that also sells industry software, has had a good run, hitting a 52-week high in May. The small-company stock of HCI Group (HCI) trades at 11 times estimated 2025 earnings, well below the average multiple for property-casualty insurers. However, the dividend of HCI Group (HCI) represents about 15% of 2024 profits, and it hasn't increased in five years.
For those looking to invest in the U.K., Colin McQueen, of the T. Rowe Price International Value fund, recommends Barclays (BCS) and Informa (IFJPY) due to their low valuations and high dividend yields. David Polak of Capital Group believes some stocks, such as Siemens (SIEGY) and Hermès International (HESAY), have been punished beyond what they should be due to tariffs but have the ability to mitigate their impact.
Lastly, for those opening new accounts, E*Trade has a new-account bonus deal that ends July 31, with cash credits for taxable and retirement accounts. At Charles Schwab, the new-account bonus requires a referral from an existing client and ranges from $100 for a $25,000 transfer to $1,000 for a deposit of $500,000 or more. J.P. Morgan Self-Directed Investing offers a new-account bonus of up to $700 for deposits of $250,000 or more.
As always, it's crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.
- Navigating the challenging investment landscape in 2025, especially amidst the ongoing trade war, could involve focusing on companies with impressive resilience or strategic adaptations, such as those that are increasing investor payouts, like TechnipFMC (FTI) and Global Payments (GPN), despite pressure on profits due to tariffs and trade negotiations.
- In the realm of technology, while some companies struggle in the face of trade policies, there may be opportunities in undervalued firms that have the potential to mitigate their impact, as suggested by David Polak of Capital Group, for instance, Siemens (SIEGY) and Hermès International (HESAY).
