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5 Best Dow Dividend Stocks to Buy Now

If there’s one thing recent macroeconomic and stock market turbulence should reteach us, it’s that the best blue-chip dividend stocks never go out of style. And the Dow’s best dividend stocks are proving that handily so far in 2022.

True, inflation is advancing at the fastest pace in four decades, and the market is seething with anxiety over impending interest rate hikes. Yet the top-rated dividend payers among the 30 Dow Jones stocks are beating the market so far this year – and should continue to give income investors some much-needed peace of mind.

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Many of the Dow’s best dividend stocks also happen to be dividend growth stalwarts. Quite a few names in this elite bastion of 30 blue-chip equities are members of the S&P 500 Dividend Aristocrats – an index of 66 best dividend stocks that have increased their payouts for at least 25 consecutive years. 

It’s also noteworthy that the Dow Jones’ best dividend stocks hail from sectors that hold up well when inflation runs hot. As we’ll see below, four of the five best Dow dividend stocks are classified as healthcare, energy and consumer staples bets. 

The Dow’s Top Dividend Stocks Right Now

Here’s how we found the Dow’s best dividend stocks to buy now. Using data from S&P Global Market Intelligence, we screened the blue chip barometer for Wall Street analysts’ highest-rated Dow components with dividend yields of at least 2.0%. 

A quick note on S&P Global Market Intelligence’s ratings system: S&P surveys analysts’ stock calls and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. Any score equal to or below 2.5 means that analysts, on average, rate the stock at Buy. The closer a score gets to 1.0, the stronger the consensus Buy recommendation.

That led us to the following five Dow Jones dividend stocks, which we list below by strength of analysts’ consensus recommendations, from lowest to highest. (Market data and analysts’ ratings are as of Feb. 13.)

5. Johnson & Johnson

  • Market value: $441.5 billion
  • Dividend yield: 2.5%
  • Analysts’ consensus recommendation: 2.11 (Buy)

The best healthcare stocks have historically generated market-beating returns during inflationary periods, and Johnson & Johnson (JNJ, $167.71) is one of the top-rated names in the field. 

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Of the 18 analysts issuing opinions on JNJ tracked by S&P Global Market Intelligence, seven rate it at Strong Buy, two say Buy and nine call it a Hold. 

JNJ is set to spin off its consumer health business – the one that makes Tylenol, Listerine and Band Aid – from its pharmaceuticals and medical devices divisions. The breakup is meant to free the faster-growth, higher-margin parts of J&J from the drag of its more mature, less profitable operations. 

We’ll see how that goes, but the old arrangement helped JNJ become one of the 30 best stocks of the past 30 years. It’s also worth adding that Johnson & Johnson has increased its dividend for 59 consecutive years.

4. Merck

  • Market value: $193.6 billion
  • Dividend yield: 3.6%
  • Analysts’ consensus recommendation: 2.00 (Buy)

Merck (MRK, $76.64) is another Dow healthcare stock putting up market-beating returns in 2022, and analysts see additional outperformance ahead. With an average target price of $92.15, the Street gives MRK implied upside of about 20% over the next 12 months or so.

The Street has admittedly become incrementally less bullish on this Dow Jones stock over the past year, partly due to the pharma giant’s spinoff of Organon (OGN), its women’s health business. Warren Buffett’s Berkshire Hathaway (BRK.B) actually sold off its entire position in Merck in the third quarter – along with all of the OGN shares it received as part of MRK’s spinoff to shareholders.  

Nevertheless, the Street’s consensus recommendation stands at Buy. Of the 25 analysts issuing opinions on MRK, 10 rate it at Strong Buy, five say Buy and 10 call it a Hold, per S&P Global Market Intelligence.

3. Chevron

  • Market value: $267.6 billion
  • Dividend yield: 4.1%
  • Analysts’ consensus recommendation: 1.86 (Buy)

The best energy stocks tend to outperform when inflation is on the rise, and the Street singles out Chevron (CVX, $138.81) as one of the sector’s top bets.

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“In the current volatile energy environment, a company’s balance sheet strength and place on the cost curve are critical, and favor those integrated oil companies that are well positioned to manage a potentially long period of volatile oil prices,” writes Argus Research analyst Bill Selesky (Buy). “CVX is one of these companies.”

The analyst adds that CVX benefits from “best-in-class production growth, industry-low operating costs and a strong balance sheet.” Selesky further praises Chevron’s “strong free cash flow” and “safe and sustainable” dividend.

Of the 29 analysts issuing opinions on this Dow dividend stock, 13 rate it at Strong Buy, seven say Buy and nine have it at Hold, according to S&P Global Market Intelligence.

2. Coca-Cola

  • Market value: $260.4 billion
  • Dividend yield: 2.8%
  • Analysts’ consensus recommendation: 1.85 (Buy)

Consumer staples stocks, such as Coca-Cola (KO, $60.29), tend to do well when prices are rising rapidly.

In addition to being one of Warren Buffett’s favorite stocks, KO has increased its dividend annually for nearly six decades. It’s also one of the 30 best global stocks of the past 30 years. 

Analysts are increasingly bullish on KO as a post-COVID-19 play. The beverage giant was hit hard by the pandemic, which shut down restaurants, bars, live events and myriad other venues serving its vast portfolio of fizzy drinks, juices, teas, sports and energy drinks, as well as other refreshments. Those sales are now coming back.

Additionally, Coca-Cola’s “unique pricing and franchise model” makes it “better positioned than peers to weather the challenges of the current inflationary environment,” notes UBS Global Research analyst Sean King (Buy). 

Twelve analysts rate KO at Strong Buy, six say Buy and eight have it at Hold, per S&P Global Market Intelligence. 

1. McDonald’s

  • Market value: $190.7 billion
  • Dividend yield: 2.2%
  • Analysts’ consensus recommendation: 1.73 (Buy)

McDonald’s (MCD, $255.16) gets the strongest consensus Buy recommendation of any Dow dividend stock yielding at least 2.0%.

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Nineteen analysts rate MCD at Strong Buy, nine call it a Buy and nine have it at Hold. They forecast the global fast food chain to generate average annual earnings per share (EPS) growth of more than 12% over the next three to five years. 

Even the best consumer discretionary stocks can struggle in inflationary environments, and shares in MCD are indeed down for the year-to-date. Regardless, the stock is beating the broader market by more than 2 percentage points, and analysts say it’s poised to post positive returns in 2022.

The Street’s average 12-month price target of $255.16 gives MCD stock implied upside of more than 11%. And that’s before factoring in the 2.2% yield on MCD’s dividend – a payout the hamburger chain has increased annually for 45 straight years and counting. 

So Far, So Good

Have a look at the chart below and you’ll see that every one of these five Dow dividend stocks is beating the S&P 500 on a total-return basis (price appreciation plus dividends) for the year-to-date through Feb. 13.

YCharts

More impressively, an investor who held a customized portfolio of these five dividend payers would be outperforming the broader market by more than 9 percentage points this year. 

Indeed, a market-cap weighted index of these five Dow dividend stocks generated a year-to-date total return of +2.1%, according to data from S&P Global Market Intelligence. That compares with the S&P 500’s year-to-date total return of -7.2%:

Chart data courtesy of S&P Global Market Intelligence

True, Chevron’s YTD total return of 18.3% is doing much of the heavy lifting. Be that as it may, the above chart makes a powerful visual statement: A highly concentrated portfolio of the best Dow dividend stocks is beating the broader market by a wide margin through the first seven weeks of a most troublesome 2022.

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Walmart (WMT): Expectations High Ahead of Q4 Earnings

Walmart (WMT, $137.09) will headline this week’s busy earnings calendar, with the discount mega-retailer set to unveil its fourth-quarter results ahead of Thursday’s open. 

“Fourth-quarter earnings season has continued to show that corporate sentiment is focused on labor shortages, supply chain related issues and ability to manage inflation,” says Gargi Chaudhuri, head of iShares Investment Strategy, Americas. And all three themes are likely to be front and center in WMT’s 4Q report.

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Yes, higher supply chain costs and inflation will likely be drags on Walmart’s quarterly results, says UBS analyst Michael Lasser (Buy). “That said, we believe that WMT benefited from fewer markdowns and increased contributions from ad revenues.”

Lasser also believes the Dow Jones stock picked up some additional market share in Q4. 

Why? 

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WMT was “well-positioned to capture holiday demand, and its everyday low prices strategy likely attracted incremental consumers as inflation remained elevated,” the analyst writes in a note. “Its gross margin was likely impacted by supply chain costs and not fully passing along inflation, though our expectation for a strong top line and a reduction in COVID costs should have provided meaningful SG&A [selling, general & administrative] leverage.”

Elsewhere, BofA analysts (Buy) project a solid fourth quarter for Walmart too, especially on the heels of an impressive third quarter which saw the retailer post U.S. same-store sales growth above 9%. 

Also helping WMT is its “strong inventory positioning (supported by more favorable port access, long-term container shipping agreements and chartered vessel capacity) that likely supported share gains vs. smaller competitors this holiday,” they write. 

Analysts, on average, are expecting Walmart to report fourth-quarter earnings of $1.49 per share, +7.2% year-over-year (YoY) and revenue of $151.5 billion, a marginal decrease from the year-ago period.

Shopify Stock Could Use a Post-Earnings Spark

Shopify (SHOP, $885.83) stock was not immune to the early 2022 selloff, with shares down nearly 36% for the year-to-date.

Can the e-commerce company’s fourth-quarter earnings report – due out before the Feb. 16 open – spark some much-needed upside in the shares?

Analyst earnings per share (EPS) estimates are broad, coming in at 74 cents per share on the low end and $2.64 per share on the high end. The consensus estimate is for SHOP to report fourth-quarter EPS of $1.58, unchanged from the year prior. Revenue is expected to arrive at $1.69 billion (+72.9% YoY).

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“We expect Shopify will report a solid end to calendar year 2021 as the company continues to benefit from new merchant growth and the shift to online commerce,” says Deutsche Bank analyst Bhavin Shah (Hold).

However, the analyst will be watching for any commentary related to a potential shift in the company’s Shopify Fulfillment (SFN) strategy, which has been key to SHOP’s investment thesis, according to Shah.

Wedbush analyst Ygal Arounian will also be watching for SFN updates, as it is expected to be a bigger contributor in 2022. As for SHOP’s Q4, he expects the company to post solid results, “with stronger growth earlier in the quarter offsetting slower overall Black Friday/Cyber Monday and December spend.”

What’s more, even with the stock’s early 2022 slump, “Shopify continues to take share of e-commerce and is the best operator in the space,” Arounian writes. He has an Outperform (Buy) rating on SHOP.

Analyst: DraftKings Selloff Creates Buying Opportunity

DraftKings (DKNG, $23.64) stock has been trending lower since its mid-March peak near $74. All told, shares are off about 68%, but Morgan Stanley analyst Thomas Allen sees this as a buying opportunity.

Certainly there are some near- and medium-term profit concerns, but investors “should not ignore that DKNG is a leading market share player in what will be a very large profitable market,” Allen says.

Needham analysts Bernie McTernan and Chris Pierce seem to agree. “We see DKNG as a leader in the emerging North America online gambling market, a $35B market opportunity,” they write in a note. “We are bullish on the potential for near-term market access gains, per capita spending continues to ramp in existing states and DKNG maintains its first or second place position in all states.”

The sports betting company will report its fourth-quarter results ahead of the Feb. 18 open. Analysts, on average, expect DraftKings to report a per-share loss of 78 cents, a dime wider than the 68 cents per-share loss it recorded in the year-ago period. On the top line, Wall Street pros are targeting $445.1 million (+38.1% YoY).

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Health Care Cost Basics: What They Are and Ways to Save

Putting aside money for emergencies, like replacing a roof or a major car repair, is one of the age-old mantras of personal finance.

But today there’s one major potential expense that, until relatively recently, few working people rarely thought about: Paying for out-of-pocket medical costs.

Why? Because until the past decade or so, most employer health care plans covered the majority of employees’ medical costs.

Not anymore.

The spiraling cost of health care has resulted in many employers shifting more of these expenses to employees. Monthly premiums for traditional health care plans that used to be fairly reasonable now may cost $600 per month or more. And most of these plans have annual deductibles — money you must pay out of pocket for medical expenses before the plan takes over most of the costs.

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Since most employees can’t afford these plans, many companies now also offer high-deductible health plans (HDHPs). How pervasive are these plans? In 2019 51% of all U.S. employees were enrolled in HDHPs.

And for those who aren’t covered at work and have to purchase their own health insurance, HDHPs generally offer the lowest premiums of plans available in state and Affordable Care Act insurance marketplaces.

However, someday — maybe a few years from now, maybe next week — you will need medical treatment for an injury or a major illness. If you’re not financially prepared, you may discover the hard way what “high-deductible” really means.

Three kinds of expenses

Deductibles

Your HDHP may state that it has a $4,000 annual deductible. That means you’ll have to use $4,000 of your own money to pay for medical treatments before the plan starts covering some of the costs. If you don’t believe you’ll have to pay that much, think again. In 2018, the average cost for a knee replacement was $35,000. For spinal fusion, $110,000. Thinking of having a child? It could cost you $4,500 or more once all pre-natal care, delivery and post-partum expenses are tabulated.

As a participant in an HDHP, I’ve personally experienced the painful price of health care. Last year I was healthy for most of the year, but the costs for one visit to an out-of-state emergency room and follow-up appointments ate up my entire $2,800 deductible.

Thankfully, my deductible was relatively reasonable, considering that in 2020 the average deductible for individual subscribers was $4,364 and $8,439 for those with family coverage, according to research conducted by eHealth.

But your expenses may not end when you hit your deductible limit. Many HDHPs require to you to continue to pay partial costs through co-payments and co-insurance.

Co-payments

Co-payments are fixed amounts you pay out of pocket for health care expenses. How much you pay depends on whether you’ve hit the deductible or not. For example, if a procedure costs $500 and your co-payment for such a procedure is $20, you’ll pay $20 only if you’ve paid the maximum deductible. Otherwise, you’ll pay the full $500 out of pocket.

Co-insurance

If deductibles and co-pays weren’t enough, co-insurance can add even more to your medical tab. It’s a percentage of covered health care services you may still have to pay on your own even when you’ve maxed out your deductible.

Let’s say your plan has a 25% co-insurance requirement. If you’ve already hit your deductible and then have another procedure that costs $1,000, you’ll still have to pay $250 out of pocket.

When does it end?

Fortunately, the IRS sets maximum annual limits for total out-of-pocket medical expenses for HDHPs. In 2022, this limit is $7,050 for individuals and $14,100 for families. Any expenses above that level will be fully covered by your HDHP.

But remember — these limits reset every plan year.

Health Savings Accounts to the rescue

If there’s one silver lining in this scenario, it’s that many employers that offer HDHPs also offer Health Savings Accounts (HSAs).

With an HSA, you make pre-tax contributions from your paycheck to an investment account that allows you to withdraw contributions and earnings tax-free to pay for qualified health care expenses.

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In addition to medical treatments, you can use your HSA to pay for prescription and over-the-counter drugs, medical equipment, dental expenses, physical therapy and even acupuncture and aromatherapy. You can also use your HSA to help pay for long-term-care insurance premiums.

For 2022, the maximum amount you can contribute is $3,650 per individual ($7,300 per family) with an additional $1,000 in “catch-up” contributions per person for those 55 and older. Some employers also make periodic contributions to their employees’ HSAs to help offset some of these out-of-pocket expenses.

Completely portable

The great thing about HSAs is that you never have to make withdrawals. For example, you may choose to pay your current medical bills from your savings and reserve your HSA money for health care costs during retirement. (Note that once you enroll in Medicare you can no longer contribute to an HSA.)

If you start a new job with an employer that has an HDHP and HSA, you can transfer the assets from your old HSA into the new HSA. If they don’t offer an HSA, you can move assets from your old HSA into one offered by a financial services company. Keep in mind that if you don’t enroll in your new employer’s HDHP (or they don’t have one) you can’t make additional contributions to your HSA.

Having an HSA can help take the sting out of out-of-pocket medical expenses when they occur — but only if you contribute to it.

This may be challenging if you’re also trying to save for retirement, your children’s higher education or a new home. But considering that the pre-tax contributions you make to your HSA have the same taxable-income-lowering benefits as contributing on a 401(k) account, there are advantages to contributing as much as you can to both accounts.

If you’re fortunate enough to receive a tax refund, consider contributing some of it to your HSA. Even though these contributions are after-tax, they may be deductible. If you’re planning on doing this, make sure that your combined pre-tax and after-tax contributions don’t exceed the annual limit.

Other ways to lower health care expenses

This may sound like a tough-love situation, but the fewer family members covered by your plan the lower your premiums and out-of-pocket expenses may be. If your adult children are covered by your HDHP but work for a company that offers its own health care plan, it might be time to encourage them to experience the “joys” of managing their own health care expenses. They’ll have to do it anyway, since at some point they’ll be too old to be covered by your plan (generally age 26, but higher in a few states).

If you and your spouse both have HDHPs at work, compare the monthly premiums, deductibles, co-pays, co-insurance and maximum out-of-pocket expenses for each option. If both options let your use your current primary care physicians and specialists, you may both want to switch to the more potentially affordable option.

And if you’re thinking of having a procedure done, you may also want to estimate total costs in your area. 

It’s unfortunate that people may need to add “future health care costs” to their list of savings goals, but this is a reality that many will have to plan for. If you need help figuring out how to balance these competing priorities, a qualified financial planner can provide guidance to help you make sure that staying healthy doesn’t significantly harm your financial well-being.

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Should You Worry about Tax Increases? Maybe Not!

There’s been no shortage of handwringing about the prospect of tax increases over the course of the past year. Worried about potential tax changes, some business owners pushed ahead with sales or other liquidity events, while investors raced to book gains in 2021.

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However, as 2022 progresses, the tax legislation spurring those actions faces a highly uncertain future. And for business owners and investors who were facing increases, the most recent drafts of the Build Back Better Act suggest several future planning options to mitigate the pain.

First, Put Matters into Perspective

Let’s start big picture. Tax considerations are important, but they are often secondary to business and investment planning. Focusing on business operations and growth can drive valuation increases that more than pay for future tax hikes given the right investment timeline. This same logic applies to investment assets, as investors weigh expected value appreciation against the potential for tax increases. Attempting to complete sales before tax changes take effect could result in lower tax rates, but might also come at an economic cost.

Fortunately, financial projections and tax modeling can bring clarity to an uncertain future.

The Build Back Better Plan Has Evolved

It’s worth noting that the most recent legislative proposals are a significant retreat from the earlier push to raise capital gains taxes for the highest earners to a combined 43.4%. Instead, the version of the Build Back Better Act most recently under consideration in Congress would add a surtax to push up rates on all income — not just capital gains — for taxpayers only over specified income thresholds.

That surtax would be:

  • 5% on income over $10 million.
  • An additional 3% on income north of $25 million.
  • For trusts and estates, significantly lower thresholds of $200,000 (for a 5% surtax) and $500,000 (for an additional 3% surtax) would apply.

Those income thresholds would narrow the scope of tax increases as compared to an actual increase in capital gain rates. They also serve as the key to tax-planning opportunities.

Let’s also remember that the proposed tax increase on capital gains through the surtax is just that — a proposal, subject to congressional negotiations. Last fall it appeared that there was momentum for tax legislation on Capitol Hill, as the House passed a version of the BBBA and the Senate began its deliberations. However, that progress stalled, and the likelihood of significant tax increases is diminishing.

Opportunities for Business Owners

That said, tax increases do matter, and if you’re already planning to transition out of your business or investments, tax planning could minimize your liability.

One tactic business owners might consider is an installment sale. Stretching out the payment of purchase price over an agreed-upon number of years could help sellers keep their annual income recognition from the sale below the threshold that would trigger the surtax.

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Installment sales aren’t for everyone. They have the notable drawback of sellers assuming economic risk for the unpaid portion of promissory notes until the final payments are received. An interest charge may also apply to the deferred tax liability, depending on the amount of deferred gain.

A similar but potentially less risky option would be to sell businesses in phases, with each sale of a stake treated as a stand-alone liquidity event.

Sellers might also explore selling stock under the qualified small business stock gain exclusion. Those rules uniquely allow for the permanent exclusion of taxable gain, though the eligibility requirements are strict. The Build Back Better Act included proposals to reduce the maximum benefit of the gain exclusion. However, a gain exclusion of any type is always beneficial and would provide amplified benefits to taxpayers above the surcharge thresholds.

The potential for tax changes could also prompt business owners to revisit their plans around gifting or succession, both potential avenues to divest from the business in a tax-efficient manner. Tax changes involving gifting and estate planning were removed from the Build Back Better Act during the legislative process, but business owners should continue to watch that area closely.

The Bottom Line

There’s little we can be certain about with upcoming tax changes. But it’s a safe bet that taxes won’t go down anytime soon, and business owners are right to pay attention. Yet, setting out to eschew growth to escape a future of higher taxes may be counterproductive. It’s often better to focus on making your business as successful as possible, and then when it comes time to sell, figure out the most tax-advantageous way to do it.

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What Executives Can Learn from Odell Beckham Jr.’s Bitcoin Decision

I grew up in upstate New York, and I’ve always been a New York Giants fan. Odell Beckham Jr. is a player I’ve followed even after he left the Giants, so I’m excited he will have the opportunity to play in the upcoming Super Bowl for the Los Angeles Rams.

Recently, I was surprised to read about a financial decision he made. When he became a free agent in November, Odell decided to be paid his $750,000 salary in bitcoin. After bitcoin’s recent plummet in January, and after taxes, the news report estimated he will net approximately $35,000 from his contract with the Rams for the entire year.

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Fortunately, Odell’s previous contracts with the Giants and Cleveland Browns paid him tens of millions of dollars – so he may have seen the risk as minimal.

But Odell’s situation has some interesting implications for executive compensation.

Many Executives Face Similar Decisions

Executives, especially when they change jobs, often get a chance to negotiate their compensation.  In some cases, they can take a signing bonus in company stock instead of cash.  Or, they can take a bonus that is split over a couple of years, assuming they stay with the company long enough to collect.

At some companies, executives are also given a choice about how to receive their long-term incentive award. For example:

  • They can take stock options. If the company’s price rises, there can be major upside here, though the stock could also drop, causing the options to be worthless.
  • Restricted stock. As long as the stock has any market value whatsoever, an executive will receive some value if they stay at the company long enough for the stock to vest.
  • Performance-based restricted stock. If the company meets the goals required, the executive could receive a payout of 100% to 150% or more of their original grant based on the company’s stock price when the award cycle ends. But it can also be worth $0 if the company does not hit its performance targets.

Some Rules of Thumb to Consider

So, what is the right choice?

Many executives take long view, which means using these long-term equity awards to meet their retirement or college savings goals, as well as help cover expenses in retirement.

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If there is a choice of all three – stock options, restricted stock and performance-based restricted stock – I like a combination of all three, split into one-third each. This, in essence, is a diversified portfolio of company stock plans that doesn’t place all the pressure on the stock market or the individual company’s performance. 

For the executive who consistently saves money from their salary and cash bonuses over the years, they often can afford to take more risk and elect just the stock option component.  Others who rely on their long-term incentives to meet living expenses or other short-term goals may want to go with the more conservative route and choose only restricted stock awards.

One of my clients who works for a Fortune 500 company has seen his stock options increase in value by 500% while the company stock price has risen 200% in the past two years. He immediately takes the cash proceeds from the stock options and reinvests them in retirement accounts, children’s college accounts, and reduces debt.

What If I Work Overseas?

Executives who work abroad face different compensation options. If given the choice to be paid in the local currency or U.S. dollars, the executive needs to think about the currency that will pay for most of their living expenses, as well as the currency’s stability against the dollar.

A client recently shared a story about her colleague, a U.S. executive working in Turkey, who is paid in lira.  The executive pays her nanny in U.S. dollars.  Due to recent currency conversion differences, the nanny is making almost as much as the executive!

The Final Word on Odell and Executive Compensation

Getting back to Odell. It’s quite possible he believed he could turn his $750,000 salary into multiplies of that amount by investing in cryptocurrency. And if bitcoin rebounds dramatically, he may not regret his decision.

Similarly, most executives shouldn’t take heavy risk with compensation decisions unless they are already financially independent, or are saving enough outside of their stock awards, for example, to meet their short- and long-term financial goals.

Remember that all risk assets can have periods where the asset price moves lower. With the stock market off to a rocky start in 2022, there is always the temptation to seek assets that could deliver a higher yield now. But most executives should look at their compensation decisions as part of a comprehensive financial and investment plan, so money will be there when they need it.

  • SEE MORE Why Are Bitcoin Prices So Volatile?

Super Bowl Betting: Tax Tips for Gambling Winnings and Losses

An estimated 31.4 million people will plunk down a bet on the Super Bowl this year. And, of course, wagers aren’t just made on the outcome of the game between the Los Angeles Rams and the Cincinnati Bengals — you can bet on the length of the national anthem, whether the coin toss will come up heads or tails, which songs will be played at halftime, the color of the Gatorade dump on the winning coach and so much more. It’s a great day for serious and casual gamblers alike!

However, if you are lucky enough to win some cash from a smart bet, don’t forget that Uncle Sam wants his cut, too. So, before you run out and spend your new-found fortune, here are 8 things to remember about taxes on gambling winnings.

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Stock Market Today: Nasdaq Recovery Continues as Comms, Tech Rebound

Stocks delivered another solid day of gains ahead of Thursday’s pivotal January consumer price index (CPI) report.

Gov. Kathy Hochul on Wednesday announced that New York would join a growing group of large states that are lifting some or all mask mandates. That – and a plunge in new COVID cases, to 250,000 new cases daily from an all-time peak of about 800,000 in January – have stoked optimism about the country’s omicron situation, driving up cyclical sectors including materials (+2.2%) and industrials (+1.4%).

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Meanwhile, several beaten-up sectors received something of a reprieve, thanks to a small pullback in 10-year Treasury rates and potential dip-buying.

Troubled-of-late Facebook parent Meta Platforms (FB, +5.4%) and Twitter (TWTR, +5.1%) helped the communication services sector (+2.8%) finish on top; chipmakers including Nvidia (NVDA, +6.4%) and Micron (MU, +4.8%) lifted technology (+2.2%); and real estate, 2022’s worst sector so far, posted a solid 2.4% gain.

And for a second straight day, an afternoon hiccup failed to materialize into anything worse, leaving investors with pleasant results from the major indexes. The Nasdaq Composite led, up 2.1% to 14,490, followed by the S&P 500 (+1.5% to 4,587) and Dow Jones Industrial Average (+0.9% to 35,768).

Looking ahead to the next two days, Tom Essaye, founder of the Sevens Report, outlines the importance of Thursday’s CPI report and Friday’s producer price index (PPI) announcement:

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“Bottom line, inflation remains the single biggest potential influence over Fed policy, and Fed policy will determine whether stocks continue to rally, or decline,” he says. “Tomorrow and Friday we get the next two inflation readings that could either make the Fed more hawkish (and hit stocks again) or make the Fed less hawkish (and spark a rally).

“But it’s not just CPI that needs to peak. Inflation expectations, which in many ways are more important from a Fed standpoint than the monthly inflation data, also need to peak. And they have not yet.”

Other news in the stock market today:

  • The small-cap Russell 2000 also enjoyed robust gains, closing 1.9% higher to 2,083.
  • U.S. crude futures gained 0.3% to end at $89.66 per barrel.
  • Gold futures rose 0.5% to settle at $1,836.60 an ounce.
  • Bitcoin improved by 1.2% to $44,744.13. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.) 
  • Enphase Energy (ENPH) jumped 12.0% after the solar power company reported earnings. In its fourth quarter, ENPH reported adjusted earnings of 73 cents per share on $412.7 million in revenue, easily beating analysts’ consensus estimates for earnings of 59 cents per share and revenue of $410.2 million. Oppenheimer analyst Colin Rusch reiterated his Outperform (Buy) rating on the stock. “We are encouraged ENPH is pushing through a 7% price increase in March on its energy storage product to offset its battery expense,” Rusch says. “We believe this points to the depth of demand and relative price inelasticity for the product, which we believe bodes well for top-line growth and margins.” ENPH’s positive earnings reaction helped lift other solar stocks, including First Solar (FSLR, +5.4%), Sunrun (RUN, +6.5%) and SunPower (SPWR, +6.6%).
  • A solid earnings report boosted Lyft (LYFT, +6.8%) shares today too. The ride-hailing firm reported fourth-quarter adjusted earnings of 9 cents per share on $970 million in revenue – more than the 8 cents per share and $940.1 million analysts were expecting. And while LYFT had fewer active riders than the Street was anticipating in the three-month period (18.73 million actual vs. 20.2 million expected), revenue per active rider ($51.79) was higher than the $46.54 analysts projected. “We still expect a gradual recovery in commuting, higher airport volume and greater momentum in bikes/scooters supporting accelerating growth in 2022 vs. 2021,” says CFRA Research analyst Angelo Zino (Buy). “Rides remain about 30% below pre-pandemic levels in the U.S., but LYFT’s profitability has drastically improved.”

The Biggest Wealth Destroyers of All Time

When you think about historic corporate failures, a few names probably come first to mind. Enron. Lehman. Perhaps Arthur Andersen.

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But it might surprise you to find that none of these three holds a candle to the 20 worst destroyers of shareholder wealth from the past three decades.

Hendrik Bessembinder, a finance professor at the W.P. Carey School of Business at Arizona State University, put together a study of stocks between 1990 and 2020 – from the worst stock collapses to the absolute best generators of wealth – meant to underscore the importance of diversification.

As Kiplinger’s Dan Burrows sums it up:

“Investors were highly unlikely to buy and hold a concentrated portfolio of the market’s vanishingly small handful of outsized wealth creators. At the same time, the market’s biggest wealth destroyers were out there helping to crush investors’ long-term plans and goals.”

So, which companies managed to out-implode the likes of Enron and Lehman Brothers? Here’s our quick look at these 20 wealth destroyers from around the globe – spanning disasters including the Great Financial Crisis, the tech-bubble burst, the Japanese banking crisis and more.

Kyle Woodley was long FB and NVDA as of this writing.

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