20 Stocks That Matter The Most To Financial Advisors

There are nearly 14 million high net worth individuals in the world today. These are investors with at least $1 million in investable assets and collectively have nearly $53 trillion in wealth. The US wealth market is nearly $11 trillion in size and served by multiple providers. Registered Investment Advisors (RIA) serve nearly 12% of this market. According to a report by Intuition, there are around 466 thousand financial advisers in the US and many of these are over the age of 55.

Insider Monkey has put together a list of 20 stocks that financial advisers most search for. The data is obtained from TrackStar which is the official newsletter of Intuition. Intuition, a division of InvestingChannel, is a global research, education, technology and creative solutions company that invests in intelligence to make the art of human-driven communication and decision-making more intuitive for both Financial Advisors and Financial Services Marketers. Many of the companies on the list are tech giants that have delivered strong returns this year. Other companies on the list are Goliaths in future growth areas such as biotech. Even more companies are tried-and-true dividend stocks. Given that financial advisers manage trillions of dollars on behalf of their clients and their preferences may affect stock prices, let’s take a closer look at their most searched picks.

#20 Procter & Gamble Co (NYSE:PG)

Financial Advisors are interested in this stock because of its dividend yield. With a forward P/E of 17.86 and dividend yield of 3.49%, Procter & Gamble Co (NYSE:PG) is a good core holding for any dividend investor. Procter & Gamble Co (NYSE:PG) has many world-leading billion dollar brands, a wide moat, and is a dividend aristocrat, having increased the dividend payout for at least 25 years. Although shares are down 13.88% year-to-date because of the strong dollar and higher costs, management is cutting costs and anticipates organic sales for the fiscal year of 2016 to be in-line to up to low single digit percentage points above that of fiscal year 2015.

#19 iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT)

Given bonds typically make up 60% of a balance portfolio, it’s not surprising that many financial advisers searched for the iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT). Given the U.S. government can print dollars to pay its debts, U.S. Treasury bonds are still the gold standard among bonds. Shares of iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT) have had a wild year as investors rushed into the security for safety during August’s bout of volatility but headed for the exits as the Federal Reserve begins to normalize interest rates.

#18 iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB)

Given the recent knowledge and cost breakthroughs in biotechnology, many savvy investors feel the human race is on the cusp of multiple earth-shattering discoveries that will prolong the life and improve the quality of living for hundreds of millions of people around the world. Those investors feel the subsequent improvements will mint several biotech equivalents of Amazon and Google, along with hundreds of companies that will deliver market-beating value for their shareholders. Given that many of the promising biotech stocks are included in the index, the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) is the 2010’s version of the late 90’s NASDAQ index.

#17 Bank of America Corp (NYSE:BAC)

Bank of America Corp (NYSE:BAC) has come a long way from the Great Recession. Because of CEO Brain Moynihan’s attention to cost cutting and previous legal settlements, Bank of America Corp (NYSE:BAC)’s  expenses and legal fees are markedly lower than before, providing shareholders with higher earnings per share. Bank of America shares are also cheap, with a price-to-book ratio of 0.79 and price-to-tangible book of 1.12. Shares should rally as interest rates normalize and the economy continues to improve.

#16 Starbucks Corporation (NASDAQ:SBUX)

We are really surprised to see Starbucks Corporation (NASDAQ:SBUX) in this list because it isn’t a giant technology, finance, or energy company, or a high dividend stock. Financial Advisors are probably interested in this stock because of its strong outperformance this year. SBUX shares are up 52% year-to-date as the coffee chain has either met or beaten analyst expectations for every quarter of 2015. Starbucks Corporation (NASDAQ:SBUX) global comparable store sales growth remain healthy despite the strong dollar, with an increase of 8% in Q4, following Q3’s rise of 7%. Analysts have a $67.78 price target.

#15 JPMorgan Chase & Co. (NYSE:JPM)

Although JPMorgan Chase & Co. (NYSE:JPM) had a tough trading quarter that led it to miss analyst EPS estimates, the bank’s shares are still up by 10.54% year-to-date. Under the leadership of the best CEO in the business, Jamie Dimon, JPMorgan Chase & Co. (NYSE:JPM) has a fortress balance sheet and earns a respectable return on capital. With a forward P/E of 10.83 and dividend yield of 2.61%, shares look cheap. Look for JPMorgan Chase’s stock to do well over the next five years as management buys back more stock and the bank’s tangible book increases. Shares should also rally as rising interest rates increase JPMorgan’s NIM.

#14 Exxon Mobil Corporation (NYSE:XOM)

Exxon Mobil Corporation (NYSE:XOM) reported third quarter earnings of $1.01 per share on revenues of $67.34 billion (down by 37.1% year-over-year), beating estimates by $0.12 per share and $3.59 billion, respectively. Upstream earnings were $1.4 billion while its downstream earnings came in at $2 billion. Oil equivalent production for the quarter was 3.9 BOE/day, up by 2.3% year-over-year. Exxon’s strong results are a testament to the company’s low cost of production and its integrated operations. Given the company’s fortress balance sheet and triple A credit rating, Exxon can use the period of weak crude prices to buy up production or reserves on the cheap. As it has been for the past decade and half, Exxon Mobil Corporation (NYSE:XOM) is still a core dividend holding for any dividend investor, with a dividend yield of 3.58%. Look for shares to rebound strongly as crude prices normalizes.

#13 Netflix, Inc. (NASDAQ:NFLX)

Netflix, Inc. (NASDAQ:NFLX) shares are up 131% year-to-date as investors continue to believe the internet streaming giant is the next generation HBO and the future of television. With hit shows such as ‘House of Cards’ and ‘Marco Polo’, the company is widening its moat and quickly transitioning to a must-have channel for any cord cutter. The company is aggressively expanding overseas, with rumored plans to offer its products in China too. More importantly, Netflix’s price raises across different territories have been well-tolerated. Being able to charge more for its wares will help Netflix, Inc. (NASDAQ:NFLX) deliver the profits that investors are pricing in today.

#12 Wal-Mart Stores, Inc. (NYSE:WMT)

Wal-Mart Stores, Inc. (NYSE:WMT) shares have fallen by 31.6% year-to-date due to competition from Amazon and rising labor cost concerns. Investors fear Wal-Mart Stores, Inc. (NYSE:WMT) will no longer be as relevant as it was before. They also fear the hot labor market and higher minimum wage laws will cut Wal-Mart’s operating margins. The worries may be a little too negative, however, as many smart money investors are still optimistic. Warren Buffett’s Berkshire Hathaway owned 60.39 million shares at the end of June, while Bill & Melinda Gates Foundation Trust, managed by Michael Larson, sported a position of 11.6 million shares at the end of the second quarter. Shares trade at a cheap valuation of 13.76 times forward earnings and pay a 3.4% dividend yield.

#11 Pfizer Inc. (NYSE:PFE)

Despite various blockbuster drugs coming off patent in recent years, Pfizer Inc. (NYSE:PFE) has continued to deliver healthy profits and solid dividends. Shares are up 11.93% year-to-date, as the company has beaten analyst earnings expectations for nine quarters in a row. Pfizer Inc. (NYSE:PFE) has historically done well through M&A (having acquired the full rights to Lipitor by acquiring Warner-Lambert in 2000), and could be on to something equally as big, having acquired Hospira, one of the world’s leading makers of biosimilars and injectable drugs and infusion technologies. The global biosimilar market is estimated to be worth $20 billion by 2020 and the global market for generic sterile injectibles is estimated to be as big as $70 billion by the end of the decade. The company is also considering acquiring Allergan to lower its taxes. With a forward P/E of 14.19 and dividend yield of 3.32%, Pfizer is one of the cheaper stocks on the market today.

#10 Amazon.com, Inc. (NASDAQ:AMZN)

‘Your margin is my opportunity’. Amazon.com, Inc. (NASDAQ:AMZN) became a $315 billion company it is today by putting consumers first and forsaking margins for market share. Working in low margin sectors has made Amazon.com, Inc. (NASDAQ:AMZN) super efficient, and has made it almost unstoppable in its quest to become the everything store. With membership programs such as Amazon Prime, the company has the loyalty of a large percentage of American consumers who go to Amazon first to check on e-commerce goods. Amazon’s efficiency and its customers’ loyalty will allow the company to expand into many different adjacent sectors successfully. Meanwhile Amazon Web Services (AWS) continues to dominate the fast growing cloud sector.

Billionaire Stanley Druckenmiller had this to say about AWS in a recent investor conference:

If you’re starting a business today, you don’t need a tech department, you don’t need a back office, you can use AWS. By the way, it’s just ripping to shreds the 10 or 15 consultants from IBM … that you used to need, but you don’t need because now you go into cloud

Druckenmiller believes AWS profit margins will increase substantially over the next few years as the division realizes more economies of scale. Shares of Amazon are up 116% year-to-date.

#9 Verizon Communications Inc. (NYSE:VZ)

Verizon Communications Inc. (NYSE:VZ) shares are an essential part of any dividend investor’s portfolio, as the telecom company has durable and predictable cash flows and yield a dividend of 4.85%. Although Verizon Communications Inc. (NYSE:VZ) shares have only appreciated 1.6% year-to-date, the stock trades for a reasonable 11.36 times forward earnings. Analysts have a $50.41 price target.

#8 Chevron Corporation (NYSE:CVX)

Chevron Corporation (NYSE:CVX) has a dividend yield of 4.64%, almost double the 10-year Treasury bond yield. Management believes the company will have enough cash flow to cover the dividend by 2018. The analysts at Deustche Bank also believe Chevron’s yield is safe:

“While some dividends may be (or should be) at risk (e.g. Marathon Oil’s), we believe the remaining dividends are safe, suggesting the Integrateds’ current yields (vs SPX and Euro Majors and respective historical averages) are overly discounted.”

Shares of Chevron Corporation (NYSE:CVX) are down 15% year-to-date, but look for shares to rebound once crude prices normalizes.
#7 Walt Disney Co (NYSE:DIS)

Walt Disney Co (NYSE:DIS) shares are up 24% year-to-date as investors anticipate strong sales for the company’s up coming Star Wars movie. Although shares fell substantially in August as investors worried Walt Disney Co (NYSE:DIS)’s crown jewel ESPN faces a long secular decline, Disney’s stock has since recovered as the company has a strong internet presence with ESPN.com and its Sling TV partnership. Analysts have a 118.59 price target.

#6 Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) is no longer the dominant tech company that it once was. The Department of Justice lawsuit a decade and half ago and Steve Jobs made sure of that. The good news is that Microsoft is still fantastically profitable, having made $22 billion in net income in 2014. Given that over a billion people around the world regularly use Microsoft Office and Windows, Microsoft products are still in demand, and the company is making solid inroads in future growth categories such as the cloud and virtual reality. With a dividend yield of 2.3% and forward P/E of 17.26, Microsoft Corporation (NASDAQ:MSFT) shares are cheap.

#5 Facebook Inc (NASDAQ:FB)

Facebook Inc (NASDAQ:FB)’s services are just as addicting now as they were 10 years ago. The difference is that a billion more people are using it.  Under CEO Mark Zuckerberg’s leadership, Facebook Inc (NASDAQ:FB) has grown from a dorm room project to a website used by one-sixth of humanity each month. The company has successfully adapted to the mobile age, and has acquired two of the fastest growing mobile applications in the world for low prices relative to their net worth, WhatsApp and Instagram. The social media giant is also making productive progress in videos, e-commerce, and could potentially challenge Google in search one day too. Shares are up 39.7% year-to-date.

#4 General Electric Company (NYSE:GE)

General Electric Company (NYSE:GE) shares have been hot, having rallied 24% year-to-date. The company has been shrinking its financial operations to get back to its industrial and technological roots. Management has been selling off parts of GE Capital piecemeal and plans to trim around $200 billion of financial assets from its balance sheet in two years. Nelson Peltz‘s Trian Partners, which took a $2.5 billion stake in General Electric Company (NYSE:GE), believes management’s strategy is the correct one, and estimates the strategy will boost GE earnings per share to $2.20 by 2018. Peltz believes General Electric stock could be $40-45 per share including dividends by the end of 2017 if management controls costs. Shares trade for a reasonable 20.18 times forward earnings.

#3 Colgate-Palmolive Company (NYSE:CL)

Colgate-Palmolive Company (NYSE:CL) reported third quarter earnings of $0.72 per share on revenues of $4 billion, meeting EPS expectations but missing revenue estimates by $70 million. Despite the mixed earnings, investors breathed a sign of relief as the company’s organic sales remained healthy, rising 5% year-over-year in Q3. Although shares are down 1.8% year-to-date and trade at 22 times forward earnings, Colgate-Palmolive Company (NYSE:CL) shares are attractive for the long term investor given the company’s substantial emerging markets exposure.

#2 Gilead Sciences, Inc. (NASDAQ:GILD)

Gilead Sciences, Inc. (NASDAQ:GILD)’s Sovaldi and Harvoni are some of the best selling drugs on the market, and will provide the company with substantial cash flow to buy back shares or pay higher dividends. Gilead Sciences, Inc. (NASDAQ:GILD)’ shares trade at a discount valuation of just 8.86 times forward earnings and are up 14.58% year-to-date. Analysts have a consensus price target of $124.67 per share, giving the stock 18% upside.

#1 Apple Inc. (NASDAQ:AAPL)

The market doesn’t like one-product companies because the profit from a single product is not as sustainable as the profit from a broad portfolio of products. While there is no question that the majority of Apple Inc. (NASDAQ:AAPL)’s profits come from the iPhone, the data shows that iPhone profits are sustainable. Apple’s EPS has been steadily growing since Steve Jobs launched the iPhone in 2007. Chinese iPhones sales are rising despite the slowing economy. Apple Inc. (NASDAQ:AAPL)’s strong ecosystem and luxury brand keep customers coming back each time. The smartphone may be more or less commoditized, but Apple’s profits haven’t. Meanwhile, virtual reality, smart cars, and artificial intelligence will offer more growth and diversification opportunities in the future. Carl Icahn‘s Icahn Capital LP, who thinks Apple should trade for $240 per share, owned 52.76 million shares at the end of June.

Disclosure:None