Morningstar Runs the Numbers

Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.

40%

Christine Benz published her annual roundup of capital gains distributions, and it is going to be another painful year for some fund shareholders. One standout is

After all, the same factors that led funds to make big distributions in 2017 are in place again this year. Because stocks have been running up for the better part of a decade, most U.S. equity funds hold appreciated holdings in their portfolios. At the same time, investors continue to yank their dollars from many actively managed funds, and that forced selling can force management to sell appreciated positions. Those distributions, in turn, are made to a reduced group of shareholders. That's where big capital gains distributions come in.

65%

Erin Lash thinks investors should look to the cereal aisle for dividends. She highlights opportunities in

We model a dividend payout ratio averaging 65% over our 10-year explicit forecast (which is in line with its five-year historical average), and implies mid-single-digit dividend growth. Given its discounted price, trading about 25% below our $58 fair value estimate, and with a 4%-plus dividend yield, we think the stock provides a sufficient margin of safety for long-term investors.

4.2% It's no secret that the cost of college keeps rising. Over the past 10 years, it's up 4.2% annual, roughly 2.5 percentage points above general inflation. Do 529 plans help investors keep pace? Research from Jason Kephart and Stefan Sayre shows they can help, but only if investors start early. They explored the chance of beating tuition inflation by investing for 18 years versus 15.

Over rolling 18-year periods from 1979 to September 2018, the median direct-sold and advisor-sold plan would have beat tuition inflation 85% and 78% of the time, respectively. Starting just three years later would have lowered the odds of beating tuition inflation to 80% and 73%, respectively. Those who wait until the child turns nine see their odds fall to 66% and 62%.

30%

Analyst Karen Andersen sees value in

Pipeline setbacks have brought investor focus back to core drug Revlimid, which generates more than 60% of Celgene's revenue today and is vulnerable to generics between 2022 and 2027. But we think the market is fixating on Revlimid declines, and our projections for the firm's pipeline are higher than consensus.

$12,000

The market may be expecting lithium prices to fall due to growing supply, but Seth Goldstein thinks prices will stay flat at $12,000 a ton as demand is set to rise with growing appetite for electric vehicle batteries. He thinks both

Most Popular Articles

• The 10 Biggest Funds to Get Upgrades in 2018
• More Tax Pain for Some Mutual Fund Shareholders in 2018
• Morningstar Names the Best 529 College Savings Plans for 2018
• New 5-Star Wide-Moat Stocks
• Are Millennials Smarter Than Us?

Most Popular Videos

• Our Asset Manager Stocks Picks in a Difficult Year
• What a Democratic House Means for Investors
• Dividends and Deals in the Cereal Aisle
• A Big Year for Upgrades of T. Rowe Price Funds
• Do's and Don'ts for Medicare Open Enrollment

Most Requested Stock Quote Apple GE Amazon Berkshire Hathaway AT&T

Most Requested Fund Quotes Templeton Global Bond Fidelity Contrafund Vanguard 500 Index T. Rowe Price Blue Chip Growth Vanguard Total Stock Market Index

Most Requested ETF Quotes SPDR S&P 500 ETF Vanguard Total Stock Market ETF Invesco QQQ Vanguard S&P 500 ETF Vanguard Dividend Appreciation