Key Points on 2021 Outlook

May 4, 2021 Issue No. 117

Greetings!

We have a lot to celebrate this spring.

Markets continue to move higher, (especially here at CAIM) and the U.S. is successfully getting people vaccinated. We are optimistic for the economy this year and the market has noticed.

Most ask, how much further can this go? We think both the economy and the markets have room to move higher, as long as we have reasonable policy coming out of Washington. With a narrow majority in the House and Senate by the Democrats, plus the upcoming mid-term elections, we believe there is a greater chance of policies that will be investor and worker friendly.

As always, our proprietary stock research guides us to companies with above average dividends and dividend growth that brings our clients benefits in both up and down markets. We have had several companies in the first quarter with notable dividend increases. Another added benefit is the lower valuation on our overall portfolio. We believe our lower valuation will be a cushion in the event of a market correction.

The newsletter below highlights some of our thoughts.

As always, please reach out to us with any questions.

Happy Mother’s Day!

Warm regards,

Catherine Maniscalco Avery

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.717.1850 p

203.717.1851 f

www.caimllc.com

Key Points on 2021 Outlook

• The shift from Growth to Value is underway, based on the economy and life getting back to normal.

• The shift is evident in SP 500 EPS estimates of +25% and +15% for 2021 and 2022, respectively.

• We saw strong EPS growth in the 4Q 2020 earnings reports, with 79% positive surprises and 18% negative surprises (Source: Yardeni Research). Expect more positive surprises in the 1Q 2021 reports.

• Overall, market P/E is 22.5x 2021e. CAIM average stock trading at a 20% discount to the market.

• CAIM Dividend Yield is 3.1%, which is 2x the SP 500 at 1.43% and the 10-year Treasury Note at 1.60%.

• Compelling Dividend increases just in the 1Q of 2021 include:

Home Depot (HD, current yield 1.99%) +10.2%

Abbvie (ABBV, current yield 4.55%) +10.3%

Nextra Energy (NEE, current yield, 1.99%) +11.5%

Air Products (APD, current yield, 2.07%) 15.5%

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