A Conservative Trio

02/10/2016 7:00 am EST

Focus: STOCKS

Richard Stavros

Analyst, Global Income Edge, Utility Forecaster and Personal Finance

According to S&P, only three of ten S&P sectors are expected to post positive earnings growth for the fourth quarter—telecom, consumer discretionary, and healthcare (5.6%)—notes Richard Stavros, editor of Global Income Edge.

Here, we take a look at some of our favorite conservative holdings within these sectors.

In telecom, AT&T (T) completed its acquisition of satellite TV provider DirecTV and has begun reporting impressive earnings.

Last quarter revenues grew to $39.1 billion, nearly 19% year-over-year, as a result of the DIRECTV acquisition that has made the pay-tv business increasingly profitable.

The firm rolled out its unlimited wireless data plans in early January; the new plans are only available to customers who subscribe to DirecTV, or its older U-verse TV Service.

S&P Capital IQ full year consensus estimates are for $2.77 per share for 2016 from $2.64 for 2015.

In consumer discretionary, Luxottica (LUX) is breaking all kinds of earnings records in 2015.

The firm has had hyper growth in North America (up 22.8%) and in Europe (up 9%); it also managed to eke out sales growth in the volatile Asia-Pacific (up 3.2%) as well as Latin America (up 13.6%).

Apparently, the world puts a premium on looking cool and the maker of Ray-Ban and Oakley sunglasses is on a roll as a result.

And its Lenscrafters and Sunglass Hut stores have also been contributing to an improved bottom line. S&P Capital IQ full year consensus estimates are for $2.11 in FY2016 from $1.88 in FY2015.

In healthcare, Merck (MRK) raised its earnings guidance for full year 2015 to between $3.55 and $3.60 per share on revenues of $39.2 to $39.8 billion.

The company continues to make strides in building out its new drug pipeline, as well as initiatives to find treatments for diseases and solutions to unmet medical needs.

The firm will acquire IOmet, a UK-based drug discovery company focused on the treatment of cancer.  This followed on the heels of the addition of the Cubist portfolio acquisition in hospital acute care.

S&P Capital IQ full year consensus estimates are for $3.78 in fiscal year 2016 from $3.50 in fiscal year 2015.

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