Stock Pick

  • Can Moderna Win the COVID-19 Vaccine Race?

    Can Moderna Win the COVID-19 Vaccine Race?And just like that, the global race to advance a COVID-19 vaccine got turned up a notch. On Monday, mRNA specialist Moderna (MRNA) announced positive data regarding its COVID-19 vaccine candidate, mRNA-1273.5-star Oppenheimer’s Hartaj Singh applauds Moderna’s “unprecedented pace of development” and highlights the vaccine’s potential to accelerate the mRNA platform’s progress.  In the first stage of the Phase 1 study across three different dose groups (25, 100, 250 µg), following the analysis of eight patients’ data, all developed neutralizing antibodies which stopped the virus from replicating. Additionally, the study showed the vaccine was safe, and that the higher the vaccine dose, the more antibodies were produced, matching or exceeding the level of antibodies in people who have recovered from COVID-19. These are the first results to come from human trials of a vaccine against COVID-19. The company plans to initiate mRNA-1273's Phase 2 shortly and Phase 3 in July. Singh commented, “Based on the strong immunogenicity data and tolerable safety profiles mRNA-1273 has demonstrated, we increase the probability of success of mRNA-1273 to 50%… We continue to see a fast-rising opportunity for MRNA as mRNA-1273 leaps closer toward potential commercialization. As the opportunities following mRNA-1273 assume a weightier share of our valuation going forward, we remind investors of the potential of the mRNA platform, and its potential to bring forward a new class of medicines.” Bearing this in mind, Singh reiterated an Outperform rating on Moderna shares, while boosting the price target from $62 to $108. Should the analyst’s thesis play out in the coming months, 47% upside could be in the cards. (To watch Singh’s track record, click here) Most of the Street agrees with the Oppenheimer analyst. The analyst consensus rates MRNA a Strong Buy based on 9 Buys and 2 Holds. The $91.78 average price target indicates possible upside of 25% over the coming months. (See Moderna stock analysis on TipRanks) To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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  • Fed Chair Powell faces questions on risk to housing market as people struggle to pay mortgage and rent

    Fed Chair Powell faces questions on risk to housing market as people struggle to pay mortgage and rent Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell answer Minnesota Senator Tina Smith’s questions on producing jobs.

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  • Why ASX 200 iron ore miners are your best bet for dividends right now

    business men digging up dollar sign

    Many S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) dividend-paying shares have significantly cut or deferred its dividend payments. This is not the case for the likes of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG). With the current iron ore spot price sitting at US$91.13 per tonne and the benefit of a weak Australian dollar, iron ore miners can be expected to continue generating strong cash flows to pay a leading dividend yield.  

    Iron ore tailwinds 

    The iron ore spot price has remained resilient throughout the coronavirus pandemic. China iron ore futures hit record peaks this week as industry data showed that port inventory levels had fallen to the lowest in more than 3 years. 

    Following China’s targeted tariffs on Australian sectors such as grain and beef, investors might be concerned that iron ore could be next. However, China and Australia are incredibly co-dependent on iron ore trade. There is no replacement for Australia’s iron ore. 

    This is strengthened by the fact that one of the world’s biggest iron ore producing countries, Brazil, is struggling to contain the coronavirus. Brazil’s confirmed cases have grown to more than 250,000, with almost 17,000 confirmed deaths. The world’s largest iron ore miner, Vale, is also recovering from the fatal dam disaster last year that significantly disrupted its production. This could drastically threaten Brazil’s iron ore production and seaborne exports.  

    China’s post-coronavirus stimulus 

    Infrastructure construction and industrial output has been pivotal to China’s economic growth. The market is expecting further infrastructure stimulus measures to be decided in May or June. 

    In response to the global financial crisis in 2008, the Chinese government unleashed a RMB$4 trillion stimulus package, equivalent to approximately 13% of the country’s GDP. This stimulus went towards various government-led projects, with a particular focus on infrastructure such as high speed rail lines, train stations, metro systems and airports. An infrastructure and commodity-reliant stimulus should further support the iron ore spot price and Aussie miners. 

    Market-leading dividends 

    Australian miners are positioned front and centre to generate strong cash flows and provide investors with a market-leading dividend.

    At the time of writing, Fortescue pays a 7.70% dividend yield, BHP pays a 5.10% dividend yield and Rio Tinto pays a 4.90% dividend yield. Given Fortescue’s pure iron ore operations, it has greater exposure to the stable/rising iron ore spot price. 

    I see a lot of potential in iron ore moving forward and these shares no doubt deserve a place on your watchlist. 

    If you’re after more ideas for leading dividend-paying shares, check out our free report below for a top dividend winner just like Fortescue, BHP and Rio Tinto.

    NEW: Expert names top dividend stock for 2020 (free report)

    When our resident dividend expert Edward Vesely has a stock tip, it can pay to listen. After all, he’s the investing genius that runs Motley Fool Dividend Investor, the newsletter service that has picked huge winners like Dicker Data (+92%), SDI Limited (+53%) and National Storage (+35%).*

    Edward has just named what he believes is the number one ASX dividend stock to buy for 2020.

    This fully franked “under the radar” company is currently trading more than 24% below its all-time high and paying a 6.7% grossed-up dividend.

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    More reading

    Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why ASX 200 iron ore miners are your best bet for dividends right now appeared first on Motley Fool Australia.

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