5 Undervalued Stocks to Buy to Play a Little Defense

Susan Dziubinski: Hello, and welcome to The Morning Filter. I’m Susan Dziubinski with Morningstar. Every Monday morning, I sit down with Morningstar Research Services Chief US Market Strategist Dave Sekera to discuss what’s on his radar this week, some new Morningstar research, and a few stock picks or pans for the week ahead. So good morning, Dave. The first thing on radar this week is, of course, the Fed meeting.

Now, given the sticky inflation numbers we’re seeing, the market isn’t expecting the Fed to begin cutting interest rates anytime soon. What will you be listening for?

David Sekera: Hey good morning Susan. As far as Fed meetings go, I think this one’s going to just be largely a nothing burger. As you mentioned, inflation just isn’t moderating as we expected. And I just don’t think the Fed is going to be in any position to be able to start lowering monetary policy anytime soon. So I think during the press conference, I think Chair Powell will acknowledge that inflation has stayed higher for longer.

And I think he just is going to have to admit, the committee still just is not going to have enough confidence that inflation is on a downward path toward their 2% target. But I think he’s also going to have to acknowledge that the economy is slowing faster than most expected after we saw that first-quarter GDP print. And while our own economics team does still expect inflation to moderate, we also pushed back our expectation as to when we think the Fed’s going to start lowering the federal-funds rate.

So at this point based on our assumption that inflation will moderate but that we also expect economic growth to continue to slow in the second and third quarter under a 1% rate, we’re now looking for that first cut to begin in September. Now having said that, I’m going to play economist here. And I’m going to say on this hand, first, I do think that if Chair Powell makes any negative remarks regarding the outlook for the economy, I mean, very negative remarks that could indicate that maybe the Fed is very concerned about just how much and how fast the economy is slowing.

So that could indicate that maybe the Fed would want to start lowering rates faster to keep the economy from slipping into a recession. So in that case, it would be a case of bad news is good news. But secondly, on the other side of the coin, if Chair Powell even just utters the word “hike” during the Q&A session, I think the algo trading programs will all pick up on that, and I do think we could then see a market selloff.

Dziubinski: So let’s take a little bit of a diversion here, Dave, and talk about the market. It’s been quite a month. Economic numbers have surprised, and stocks have fallen. So recapping it all for viewers, and then tell us how the stock and bond markets look today.

Sekera: Yeah I really think the economic numbers that we saw last week really were just the worst of both worlds. It’s showing that the economy is slowing faster than expected, and inflation is still running higher than expected. So through last Friday, stocks have fallen 3% here in April. But I’d say, to us, this pullback was not necessarily unexpected. In our second-quarter outlook, we did note that stocks were trading at a 3% premium to fair value.

So at that point it wasn’t necessarily an overvalued territory just yet. But we did note that stocks were feeling pretty stretched at the end of March. In fact, when you look at it, the market has only ever traded at a 3% premium or more only 14% of the time since 2010. So at this point, following the stock selloff, the market is trading pretty close to our fair value right now.

We are starting to see some better valuations here and there. But this is certainly not a “backup the truck” kind of market just yet. And also the bond market got hit and yields have risen across the entire curve. Here in April, the two year’s up 40 basis points to almost 5%.

The 10-year Treasury up 46 basis points to about 4.67% as of last Friday. So year to date, the Morningstar Core Bond Index, which is our proxy for the broad fixed-income market, that’s also fallen here just over 3%. Now personally, I’m keeping a very close eye on that 10 year. If that 10-year starts getting closer to 5%, we could start seeing some institutional investors reallocate out of stocks and into fixed income.

And of course that change could push stocks down in the short term.

Dziubinski: Let’s get back to talking about the week ahead. And we have some notable companies reporting earnings that you’re going to be watching this week. On Tuesday, we have two companies reporting that have been outsize contributors to the market’s returns this year. And that’s Amazon and Eli Lilly. So what does Morningstar think of each stock heading into earnings?

Sekera: Yeah. So Amazon right now is a 3-star-rated stock. Trades just a couple percent below our fair value. And following the strong results that we saw out of both Alphabet and Microsoft last week, I think Amazon really has its work cut out for it this week. I think the market’s going to be expecting similarly strong numbers.

I think there’s two areas that I think the market’s going to be especially focused on. So first is going to be its cloud business. They just want to make sure that Amazon is keeping up. We saw very strong growth out of both Microsoft and Alphabet. So I think investors just want to make sure Amazon’s not losing any market share to those two.

And then second is going to be any additional information regarding their efforts in artificial intelligence and specifically their capex spending programs. And then also with Amazon, we’re now starting to get a lot of questions: Will Amazon start paying a dividend as well? We saw both Alphabet and Meta announce new dividends.

So I spoke with Dan Romanoff. He’s the equity analyst that covers Amazon for us. He just said in his view he doesn’t think Amazon’s in a position yet to start paying that dividend. Amazon just doesn’t produce the same kind of free cash flows like the others. If anything maybe we see like a stock buyback program announced here.

So let’s move on to Lily. Lily is really actually one of the most overvalued stocks under our coverage. We think market is just paying way too high of a valuation for their weight-loss drug. Now, this one, I’ve spoken to Damien Conover, he’s the director of our healthcare team, a couple of times on this stock.

What I think is really interesting here is he noted that we actually model in a higher number of prescriptions in our forecast than the market does for their weight-loss drugs. Yet the stock is still way overvalued in our view. It’s a 2-star-rated stock, trading at a 49% premium to our fair value.

So in my opinion, I think this is a situation where not only does Lilly have to post really strong earnings growth, but I think it also needs to provide very strong guidance. And I think if they were to disappoint on either front, this is a stock that has a big risk of gapping downwards.

Dziubinski: Now also on Tuesday we have two consumer brands that Morningstar likes that are reporting: Starbucks and Clorox. Both stocks look undervalued according to Morningstar’s metrics. Tell us about them.

Sekera: Yeah. So Starbucks is currently rated 4 stars, trades at a 16% discount to our fair value, and pays a 2.6% dividend yield. It’s a company we rate with a wide moat. We assigned a Medium uncertainty. Now, personally, I’m not a fan of Starbucks coffee myself. I’m really much more of a Dunkin’ Donuts kind of guy. But the key aspect for Starbucks is its just huge loyalty program.

And there’s a couple of different benefits of having that strong digital program. First of all, they’re able to tailor discounting to specific consumers and types of consumers as opposed to having it have really broad national ad campaigns. And it also just drives a lot of traffic. I mean, consumers really value that ability to order online or order on their cellphone, just walk in and pick up their coffee.

And lastly the good thing about it—call it an addictive product, if you will, it is to me—Starbucks has shown the ability to raise their prices even faster than inflation. And also, given how large Starbucks already is, it’s still able to grow very quickly. I mean, between new-store growth, pricing, mix, we forecast average annual growth of 8% on the top line and earnings growth of 16% through 2033.

Now Clorox is a different type of story. So it is a 4-star-rated stock, trades at a 14% discount, has a 3.3% dividend yield. It’s a wide moat with a Medium uncertainty. But here’s a name, and we saw a lot of these names, it just overshot to the upside during the early days of the pandemic.

I mean if you remember back then Clorox wipes, I mean, there were worth their weight in gold. I mean, they’re just impossible to get. But a lot of the investors that bought back then really got burned. Now in 2022 and 2023, as the underlying business started to normalize, like a lot of other consumer product companies, their margins really started getting squeezed.

Essentially they’ve just had a tough time raising their prices as fast as their own costs have been going up. But unfortunately with Clorox their problems were really exasperated by a cybersecurity breach last fall. And one of the aspects of our investment thesis here is that, looking forward, we do think that once inflation really does start to moderate and starts coming back down, companies like this will be able to catch up, increase their pricing and get back toward more normalized type of margins.

Dziubinski: Now Wednesday, we’ll be hearing from two companies that we’ve talked about before on The Morning Filter: Estée Lauder and Cognizant Technology Solutions. What’s Morningstar’s current take on both companies and their stocks?

Sekera: Yeah, Estee Lauder is actually one of our top picks. It’s a 5-star-rated stock, trades at a 29% discount to fair value, pays a 1.8% dividend yield. The company we rate with a wide moat and assign a Medium uncertainty. Again, a stock that overshot in 2021 and 2022. In fact, I think it even hit 1-star territory at one point.

But in our view, it’s now overcorrected to the downside. Over the past few years, the company’s really been under pressure from really two main aspects. So first, Estee does remain overexposed to the department store sector, which of course department stores are still kind of struggling, and second the sales in Asia especially China have been under a lot of pressure.

The Chinese economy never really reaccelerated after the pandemic. Now, having said that, looking forward, when I look at our model, we do model out a 7% compound annual growth rate on revenue. And we do expect that earnings will be bolstered by operating margins following some cost-cutting programs that they’ve put in place.

And I think really the long-term play here is really expecting the growth in the emerging market, middle class over the long term for the emerging markets. And then moving on to Cognizant. That’s a 4-star-rated stock at a 28% discount, 1.8% yield. Company with a narrow economic moat and Medium uncertainty. And we’ve talked about this one a number of different times on the show.

So just a quick synopsis. The investment thesis here is that we do look at this company as being a second derivative play on artificial intelligence. When we think about it a lot of small- and mid-cap companies they just are not going to have the expertise or the financial wherewithal to build, train, and roll out their own artificial intelligence models.

So I do think they’re going to need to hire outside expertise to do that for them.

Dziubinski: And then on Thursday, of course, Apple reports. Apple was hit with an antitrust lawsuit from the US Department of Justice several weeks ago. And the stock isn’t having a great year. What’s Morningstar think of Apple heading into earnings?

Sekera: Year-to-date, Apple is actually down 12%. So it’s actually now fallen enough it’s dropped back down into 3-star territory from being 4 stars at the beginning—I’m sorry, it’s now dropped back into 3-star territory after being in 2 stars earlier this year. So our fair value is $160 per share.

We do rate the company with a wide moat and a Medium uncertainty. And looking at this quarter, we expect to see relatively weak iPhone demand. And a couple of just reasons why—the replacement cycle for cellphones generally has been slowing, especially in China where we do see the government pressuring consumers away from the Apple products.

And in fact their competitor there—Huawei—actually just recently launched a very competitive phone to the iPhone and then also with the stock, I think investors are just concerned about the lack of announcement regarding their AI strategy. So I think we want to hear more about what Apple is thinking as far as artificial intelligence.

Now, having said that, some of this will be offset by some rising margins. We do expect to see a higher percentage of iPhone sales in more of the premium models, and we also expect to see a higher percent of the revenue coming from services. So both of them being higher margin for them.

So really the only other thing, as you mentioned, we do have the DOJ lawsuit. We’ll be listening for any commentary there. I don’t think we’re going to hear any new updates at this point, but our base case there is that we do think the lawsuit at the end of the day will result in Apple having to open up different portions of its ecosystem.

Dziubinski: On to some new research from Morningstar about companies that reported earnings last week. Let’s first talk about Meta Platforms. The stock is up quite a bit in 2024 and looked overpriced heading into earnings. Then earnings came out OK, but the stock tanked. So recap what happened, whether Morningstar has made any changes to its fair value estimate on the stock, and tell us how the stock looks today.

Is it attractive after that pullback?

Sekera: Actually I think Meta really just killed it on both revenue and earnings, substantially beating estimates on both of those. But Meta stock I mean it really just dropped like a rock. And I think the big reason is because they are raising their capex spending program in order to spend more money on artificial intelligence.

So if you remember with Meta, I mean, they spent a huge amount of money building out the “metaverse.” And of course, that never produced any tangible benefits, never really produced any money or any margin for them. And that’s really a big reason why the stock dropped as much as it did in 2022. In fact, I don’t think that stock really bottomed out until they started a pullback on spending on AI.

So I think that’s the big concern here. Now of course the stock did skyrocket higher in 2023 and early 2024. And that was because the margins were expanding so much as they were pulling back on that capex spending on the metaverse. Now, as much as we thought that stock was undervalued coming into 2023, so it was a 5-star-rated stock coming into the year last year, that pendulum swung just way too much to the upside in our view. It was rated 2 stars in early 2024. And even after the selloff it’s still trading at a 20% premium, which puts it in that 2-star territory.

Dziubinski: So let’s move on to Tesla now. Unlike Meta, Tesla stock is having an awful year. The stock jumped after earnings, though, and Morningstar nudged up its fair value estimate by a few dollars. What’s the takeaway? And is the stock a buy?

Sekera: Tesla’s almost the mirror image of Meta. Tesla missed on both the top line and the bottom line. Yet, as you noted, the stock surged, I think 11% after the earnings announcement. In my opinion, I think it’s really just largely due to the announcement that they’re pulling forward as far as when they’re going to be able to start selling their low-cost cars.

So they’re now saying that they should be able to start selling them at the beginning of 2025, maybe even as early as the end of this year, at the end of 2024. Before, they were projecting not being able to start selling those cars until the end of 2025. Now, prior to this earnings announcement, the stock had fallen 40% this year.

That was enough to put it in that 4-star territory after being a 2 star as recently as last July. I also talked to Seth Goldstein following earnings. And there’s a couple of other key takeaways that he noted here. So first we are seeing stronger adoption of the full self-driving subscriptions.

He slightly raised his 2024 delivery forecast due to Tesla’s recent price cuts. And he also raised his energy storage volume forecast as well. Now however, that will be offset by some slightly reduced near-term margins, especially in the automotive gross margins, but at the end of the day, we did bump up our fair value by $5 to $200 a share.

So it does put it currently at a 16% discount, which puts it in that 3- star territory.

Dziubinski: Now Alphabet’s stunned the market both with its results and with the news that it’s going to begin paying dividends. Now, the stock surged on the news, and Morningstar raised its fair value estimate by $8 to $179. What’s Morningstar’s take on the results, the dividend, and the stock’s valuation today?

Sekera: Yeah. Alphabet also they beat and they beat big both on top line and the bottom line. Company’s still just hitting on all cylinders as far as we’re concerned. Across all of its three major business segments: search advertising, YouTube, and its cloud business. Now they also announced that they were increasing their capex budget for artificial intelligence.

But they did note that they’re offsetting some of that spend by cutting some of their expenses elsewhere. So I think the market was comforted by that. They did announce a 70 billion stock buyback program and that they are now paying a dividend. So the real benefit of that dividend is that now that those dividend funds that before couldn’t own that stock can actually now start to buy it.

So that is going to widen out their investor base. We bumped up our fair value by 5% to $179 a share. It wasn’t the dividend that did that, the dividend in itself doesn’t change our valuation, but is really just due to an increase in some slight changes to our underlying business assumptions. So the thing with Alphabet, it was actually kind of the last of the Big Tech names that we thought was still selling at much of a discount to fair value.

So following the stock rising, it’s a 3-star-rated stock. Trades at only 4% discount to fair value. And if you take that 20% dividend payment and annualize that, that gives you about a half of a percent dividend yield.

Dziubinski: Now, Microsoft also reported strong results last week, and Morningstar bumped up its fair value estimate by $15 on the stock to $435. So what impressed Morningstar, the AI-related news maybe or …?

Sekera: Microsoft, they did beat both on the top line and the bottom line. I spoke to Dan Romanoff following earnings. He’s the equity analyst that covers Microsoft for us. And he said that he just thought that they were just doing a very impressive business really from kind of all the different business angles that he looks at. Now specifically he called out Azure, that’s its cloud business, as doing exceptionally well. That’s an area we just think that, in the cloud business overall, there’s still just a long path way of growth for all of these companies. But AI did contribute a large amount of that growth for them this past quarter. He also noted that they started given a preview of their fiscal-year 2025 guidance: Looking for double-digit revenue growth, but being somewhat offset by a margin contraction of 1%. Both of those are consistent with our financial model. So Microsoft, wide economic moat, Medium uncertainty. In my opinion it is a core holding type of stock. Trading at about a 3% discount. 3 stars, three quarter percent yield.

Dziubinski: And last one on the tech theme. IBM stock fell after earnings. The company also announced it’s acquiring HashiCorp. Any changes to our fair value estimate on this one? And does the stock still looked overpriced?

Sekera: Yeah. So IBM actually missed on the top line although they were able to squeak out a bottom-line beat. That stock did drop 8%. So our fair value of $139 is unchanged. Still puts it at a 20% premium to fair value. So it’s a 2-star-rated stock. No change to the valuation. But our long-term thesis here still is the same.

We do think that IBM will probably have some individual strong products within its broader portfolio. But overall when we look at the secular trends within the IT business itself, we’re just expecting lower consumer spending with IBM over time. Now I do think this stock end of last year, beginning of this year probably got caught up with the wave where everyone is looking for anything AI-related.

But at the end of the day, IBM just really is not an AI play in our view. And I think the market is now starting to also come to that same realization.

Dziubinski: Now both Verizon and AT&T looked attractive heading into earnings, and Morningstar didn’t make any changes to its fair value estimates on these stocks after earnings. So what do you think here today? Do you still like these two names?

Sekera: Yeah, I think longtime viewers might be getting tired of us talking about both Verizon and AT&T, but these two stocks are up 25% from those August lows. They’re both rated 4 stars, trading at about a 26% and 27% discount, respectively, both paying out well in the 6% dividend yield. We rate both companies with a narrow economic moat and a Medium uncertainty.

For both quarters, I think it is a similar story. The wireless revenue growth was pretty good. Churn is still relatively low. Margins are improving. The only hit here would be free cash flow was relatively weak. But as Mike Hodel noted first quarter is typically a seasonally soft period for free cash flow anyway.

So no change to our long-term investment thesis here. We still think the wireless industry over time is going to become more like an oligopoly. They’ll compete less on price, and that’s going to allow margins to expand over time.

Dziubinski: And then lastly, Biogen reported last week. The stock popped after earnings, and we held our fair value estimate of $303. How did earnings look, and what do you think of the stock?

Sekera: Yeah, I think we talked about Biogen last week. And we noted that Biogen stock has been under pressure for a while. One of their main drugs is losing its patent protection and is facing competition. But we think Biogen in and of itself is in the midst of expanding its portfolio in neurology beyond multiple sclerosis into neuromuscular diseases and Alzheimer’s.

So we think the story here is that the market just generally has underappreciated Biogen’s pipeline. So this past quarter, I think we’re starting to see some benefits from some new product launches and some cost-cutting programs. Both of which should offset those headwinds from a declining portfolio of older drugs in multiple sclerosis.

Now, Karen Andersen, who’s our healthcare analyst that covers this stock, encouragingly she noted that three different new product launches do appear to be gaining some acceleration. And she thinks that points to a pretty solid growth profile beyond 2024. So the stock popped. It’s up, I think, about 7.5% on the week. 4-star-rated stock at a 31% discount.

I will note it does not pay a dividend. So if you’re a dividend investor, this might be one you want to shy away from. But it’s a company with a wide economic moat, although it does have a High uncertainty, which for a biotech, I think you should expect a High uncertainty stock.

Dziubinski: All righty. We’ve arrived at the picks portion of our program. And given sticky inflation and slowing economic growth, you say that now may be the time to play a little defense. So today you’ve brought viewers five defensive stocks to consider. Most of the companies you’re going to talk about have economic moats, reliable cash flows, and pay dividends. And the stocks are undervalued.

Your first pick is a consumer defensive stock. It’s Brown-Forman. Tell us about it.

Sekera: Yeah. So Brown-Forman, I think, you kind of have to look at the long-term trading pattern here. The stock rose way too high in 2020. It got well into that 2-star category. And the stock’s been on just a long-term downward trend ever since. And in fact at this point I think it’s now trading below prepandemic levels.

So I think this is an opportunity to be able to buy a high-quality name that rarely has traded much below our fair value estimate. Now, personally, I’m not a Jack Daniel’s guy myself, but Jack Daniels is the bestselling American whiskey brand in the world. As you mentioned this is a company we rate with an economic moat.

We believe it’s a wide economic moat in this case. We assign a Medium uncertainty to this company. And when I think about their underlying fundamental business here, we’ve noted they’ve successfully expanded into both the premium and the super premium segments within their brands. Plus they’ve been able to take their brands and extend those into the ready-to-drink category, which is one of the more faster-growing areas within this business.

And I pulled up our model over the weekend and I looked at our assumptions. And actually, I think they look relatively conservative to me. We’re looking at compound annual growth for revenue over the next five years of only 4%. We’re looking for earnings growth of 8%. So at the end of the day, it’s a 4-star-rated stock at an 18% discount and pays a 1.8% dividend yield.

Dziubinski: Now your second pick this week is from another sector associated with defensive investing. And that’s healthcare. And the stock is one we recently talked about, too. It’s Johnson & Johnson. Why is this stock a defensive pick for you today?

Sekera: Well in fact I mean Johnson & Johnson in my opinion I think is just a core holding type of stock. It’s currently rated 4 stars, trades at a 10% discount, 3.4% dividend yield. A company that we assign you a Low uncertainty rating. And it is one with a wide economic moat. In fact, according to Damien Conover, who’s the head of our healthcare equity analyst team, he thinks it’s actually one of the widest moats in the healthcare sector.

So I think the reason why the stock is trading where it is right now is that they will start to face some competition from a biosimilar product beginning this summer. That will be a drag on growth over the short term. But I would note our equity analyst team is already got that factored into their model. And we do forecast that some other new product growth should offset that over the next couple of years.

Again, another one where I think our assumptions look pretty conservative here. So looking at the top line, we’re only looking at a 2.3% compound annual growth rate over the next five years. Looking for only 4% average annual earnings growth. But yet the stock is trading at under 14 times our 2024 estimated EPS and only about 13 times 2025 earnings.

Dziubinski: Now your next pick is also from the healthcare sector. It’s Medtronic.

Sekera: Yeah we’ve talked about this one a number of times I think over the past year. So Medtronic is the largest pure-play medical-device maker. It is one of the ones that we think is best positioned in medtech for being able to benefit from the continued aging of the baby boomer generation. For those of you that don’t know the company, they make medical devices for chronic diseases.

When I look at their portfolio, it includes things like pacemakers, defibrillators, heart valves, stents, and insulin pumps. We rate the company with a narrow economic moat and a Medium uncertainty. So when I looked this one up, I think we last talked about it on our Oct. 30 show. It’s up 14%. And plus whatever dividends you got since then.

But it is still undervalued. It’s a 4-star stock at a 28% discount and a 3.5% dividend yield. And when I look at our underlying fundamentals we’re looking for revenue growth for the next five years on an annual basis of about 4.5%, earnings growth of 11.3%. It trades at about 15 times our 2024 estimated earnings.

Dziubinski: Now, your last two picks this week aren’t from sectors that investors would associate with being defensive in nature. But you argue that both are defensive plays in today’s market. The first is Newmont. Explain yourself, Dave.

Sekera: Well their defensive in my opinion are just from two different aspects. So first of all, mining companies are typically associated with being a very secular business. However, in an environment of still higher for a longer inflation gold actually feels a bit defensive to me. But the real reason that I’m looking at your Newmont Mining is when I look at our model, we do assume that gold prices are going to end up declining over time.

So we’re forecasting gold at $2,320 per ounce from 2024 through 2026. But then we actually model the price of gold will decline toward our midcycle forecast of $1,780 by 2028. So the story here to me is that if gold were actually it’s to stay here or even move higher, I think there’s a huge amount of upside leverage in the stock.

However, if gold price does fall toward our long-term target of $1,780 over the next four years, you’re still buying the stock at a very large margin of safety. Newmont did report earnings last Thursday. They significantly beat on both the top line and earnings. The stock is up 12%. But it’s still a 4-star-rated stock at a 16% discount and a 2.3% dividend yield.

Dziubinski: And then your last pick this week is a name we’ve already talked about on the show today. It’s AT&T. How does this fit into your definition of being a defensive pick today?

Sekera: Yeah. So AT&T does fall into that communications sector, and the communications sectors considered to be economically sensitive, meaning that it has some attributes of defensive names but also some cyclicality to it as well. And I would just say that, while there is churn in the wireless industry overall and that’s essentially when people move from one carrier to another, when I think about the wireless business and cellphones, not too many people are going to give up their cellphones, even in a recession. So AT&T is rated 4 stars. That’s a 27% discount at a 6.6% dividend yield. A company that we rate with a narrow economic moat and assign a Medium uncertainty. When I look specifically at the first-quarter earnings, we thought the wireless revenue growth was pretty good. Churn was low. We’re seeing improvement in margins here. The free cash flow was relatively weak, but typically the first quarter is seasonally soft, so that’s not a concern. And at the end of the day, no change to our long-term investment thesis. The wireless industry is generally becoming more like an oligopoly over time.

We expect that the main competitors there will compete less on price. That’s going to allow margins to expand. So I think the only real question here is: Why I pick AT&T over Verizon? So I did reach out to Mike Hodel. He’s the equity analyst that covers these names for us. And his answer here for AT&T is that he does like their fiber strategy.

He thinks that AT&T, over time, will succeed in bringing together both the wireless business and the fixed line business and the unique way that he thinks that over the next decade will provide additional benefits to the company and be able to generate some additional earnings. And, of course, as always, if you’re interested in any of these stocks or any of the others we discussed in the show, you can find a lot more analysis on Morningstar.com or whichever Morningstar platform you use.

Dziubinski: Thanks for your time this morning, Dave. Viewers, we hope you’ll join us for The Morning Filter again next Monday at 9 a.m. Eastern, 8 a.m. Central. In the meantime, please like this video and subscribe to Morningstar’s channel and have a great week!