Looks like someone has been reading the AMM Dividend Letter.
Q: What is your best stock pick?
A: After not holding General Electric for many years, we’ve come back to the stock in the past six months. It makes sense right now to own some large-cap, high-yielding names with durable businesses. Though Wall Street doesn’t like GE, the company is changing its business mix. Historically, the financial business generated more than half of GE’s profit. By 2016, that should fall to 25%, with industrial segments accounting for the rest. The higher-quality earnings stream deserves a higher multiple. At this point, dividend growth is subpar, but GE can earn its way out of that problem. Now at $25, the stock is worth closer to $30 in the next 12 to 18 months with protection from the 3.7% dividend yield.
For investors with a higher risk tolerance, there’s Wynn Resorts. Roughly 80% of the business is based in Macau. China’s anticorruption campaign and the disfavor for conspicuous consumption have hurt the gaming sector. But after falling from $250 to roughly $150 in the past year, Wynn could reach $200 in the next 12 to 18 months. The company will eventually cycle through tough comparisons. Meanwhile, Wynn is opening a new property in Macau next year, which should dramatically increase free cash flow. Investors get rewarded with a 4% dividend yield.