Investing

A Home Depot location in Encinitas, California.
Mike Blake | Reuters

With the late 2023 rally underway, investors can bolster their portfolios by adding a select group of dividend payers into the mix.
Dividend-paying stocks give investors a combination of potential price appreciation and income, which can enhance total returns.

Bearing that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Energy Transfer

First on this week’s list is Energy Transfer (ET), a limited partnership that operates a diversified portfolio of energy assets in the U.S., with nearly 125,000 miles of pipelines. ET recently completed its acquisition of Crestwood Equity Partners.
In October, ET declared a quarterly cash distribution of $0.3125 per common unit for the third quarter, which was paid on Nov. 20. The stock has a dividend yield of 9%.
Commenting on the third-quarter results, RBC Capital analyst Elvira Scotto said that Energy Transfer delivered a solid performance, with adjusted earnings before interest, taxes, depreciation and amortization exceeding the consensus estimate by 7%. The analyst also noted the increase in the 2023 midpoint adjusted EBITDA outlook by $300 million.
Scotto expects the Crestwood acquisition to offer commercial synergies. Further, she pointed out that ET intends to maintain a strong balance sheet, aiming for leverage of 4.0-4.5x debt/EBITDA. Also, ET aims to continue to return cash to unitholders via increased distribution and potential buybacks.  

“With high return growth projects, accretive acquisitions and its integrated asset footprint across hydrocarbons and basins, we believe ET can generate significant cash flow in the coming years,” said Scotto.
Scotto increased her price target on Energy Transfer to $19 from $18 and reiterated a buy rating, calling the stock a compelling investment opportunity. She ranks No. 54 among more than 8,700 analysts tracked by TipRanks. Her ratings have been profitable 65% of the time, with each delivering an average return of 18.1%. (See Energy Transfer Insider Trading Activity on TipRanks) 

Sunoco LP

Scotto is also upbeat about another limited partnership: Sunoco (SUN), one of the leading motor fuel distributors in the U.S.
For the third quarter, Sunoco announced a quarterly cash distribution of $0.8420 per unit, paid on Nov. 20. The company’s dividend yield stands at 6.3%.
After Sunoco posted its quarterly results, Scotto raised the price target for SUN stock to $57 from $51 to reflect a higher earnings outlook. The analyst reiterated a buy rating, saying that the company’s volumes and margins surpassed her estimates.  
The analyst thinks that the company’s scale, procurement ability and lower cost structure compared to the industry enable it to deliver beyond the industry’s breakeven margin.
“SUN continues to maintain a strong balance sheet exiting 3Q23 with leverage of 3.9x and total liquidity of $1.1BN, which provides SUN with significant financial flexibility to pursue growth opportunities including acquisitions.”
Overall, Scotto remains bullish on Sunoco due to its solid cash flows and focus on breakeven margins and expense management. (See Sunoco Hedge Funds Trading Activity on TipRanks) 

VICI Properties

Our next dividend stock is VICI Properties (VICI), a real estate investment trust. VICI owns a solid portfolio of gaming, hospitality, and entertainment properties, including the properties of the iconic Caesars Palace Las Vegas and MGM Grand.
For the third quarter, the company declared a cash dividend of $0.415 per share, reflecting a 6.4% increase. VICI offers a dividend yield of 5.4%.
In a recent research note, Stifel analyst Simon Yarmak, who ranks 573rd out of more than 8,700 analysts tracked by TipRanks, reiterated a buy rating on VICI stock and called it one of his top ideas in the North American triple-net REITs sector.
Yarmak noted that VICI has performed well in both gaming and non-gaming categories. He added that VICI’s tenants remain in a strong position.
“VICI has negotiated favorable escalators in its leases, which provide strong internal growth. Many of these escalators are linked to uncapped CPI growth (50.0% of rent) and, therefore, VICI should benefit from meaningful lease escalations in the above-average inflationary environment,” noted Yarmak.
The analyst estimates that lease escalations would generate about $71 million of incremental rent in 2024, which was not captured in the 2023 results. He expects VICI to post some of the best year-over-year growth in 2024 in the triple-net sector, with nearly 4.5% to 5.0% adjusted funds from operations growth.
Yarmak’s ratings have been successful 54% of the time, with each one delivering an average return of 8%. (See VICI’s Options Activity on TipRanks)

Home Depot

We move to home improvement retailer Home Depot (HD). The company exceeded analysts’ fiscal third-quarter estimates despite a decline in sales due to pressure in certain big-ticket, discretionary categories. However, the company narrowed its full-year outlook due to macro pressures.
For the third quarter, the company declared a cash dividend of $2.09 per share, payable on Dec. 14. HD’s dividend yield stands at 2.6%.
Following the fiscal third-quarter results, JPMorgan analyst Christopher Horvers lowered the price target for HD stock to $318 from $332 but maintained a buy rating, saying that Home Depot is managing well against a tough backdrop.
The analyst thinks that management’s tone was less optimistic versus the second quarter but not worse than the first quarter. While the home improvement category is expected to remain under pressure in the first half of 2024, comparable sales are projected to recover in the second half.
“We believe HD remains one of the best long-term stories in retail given company-specific sales and margin initiatives, the duopoly/AMZN-resistant nature of the industry, and significant financial and operating leverage that amplifies EPS growth in better sales environments,” said Horvers.
Horvers ranks No. 520 among more than 8,700 analysts on TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 8%. (See Home Depot’s Technical Analysis on TipRanks)

Walmart

We finally look at big-box retailer Walmart (WMT). Earlier this year, the company announced a 2% increase in its annual dividend per share to $2.28. This marked the 50th consecutive year of dividend hikes for the company, giving Walmart the tag of a dividend king. The stock offers a dividend yield of 1.5%.
Recently, the retailer beat analysts’ fiscal third-quarter earnings and sales expectations. However, it cautioned investors about subdued consumer spending.  
Following the print, Guggenheim analyst Robert Drbul reaffirmed a buy rating on the stock with a price target of $180. The analyst noted that Walmart witnessed solid traffic growth across physical stores and digital channels. He increased his full-year sales estimates to reflect upbeat Q3 performance but maintained his fiscal 2024 and 2025 adjusted earnings per share estimates due to additional expense pressures. 
“We continue to believe Walmart is well positioned in an uncertain macro environment with its price and value proposition and with increased convenience and assortment,” said Drbul.   
The analyst added that given the stock’s 1.5% dividend yield and the fact that it’s trading at 22.3 times his fiscal 2025 EPS estimate of $7, WMT stock offers something for income, value and growth investors.
Drbul holds the 652nd position among more than 8,700 analysts on TipRanks. His ratings have been successful 59% of the time, with each delivering an average return of 5.9%. (See Walmart’s Financial Statements on TipRanks). More

Year-end Planning

With just a few weeks left in 2023, there’s still time to slash your tax bill or boost your refund, experts say.
You can reduce adjusted gross income by increasing pretax 401(k) plan contributions or bunching charitable distributions.
You may also weigh post-year-end strategies such as individual retirement account or health savings account contributions.

Vesna Andjic | E+ | Getty Images

With roughly one month left in 2023, there’s still time to reduce your tax bill or boost your refund, experts say.
Typically, you can expect a federal refund when you overpay annual taxes or withhold more than the total owed. The average refund for 2023 was $3,054, as of Oct. 27, according to the IRS.

“Start organizing your tax-related documents now,” said certified financial planner Akeiva Ellis, co-founder and financial coach at The Bemused in the Boston area. “Waiting until April can lead to unnecessary stress.”

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

Here are some tax strategies to consider before the calendar winds down, according to financial experts.

1. Boost pretax 401(k) contributions

This is especially important if you’re not maximizing employer matching funds or if you could benefit from a reduction in taxable income.

Akeiva Ellis
Co-founder and financial coach at The Bemused

“This is especially important if you’re not maximizing employer matching funds or if you could benefit from a reduction in taxable income,” said Ellis.

By adjusting 401(k) plan deferrals now, the change could go into effect before you receive a year-end bonus, which could reduce earnings and pad retirement savings.

2. Consider ‘bunching’ donations

Taxpayers claim either the standard deduction or total itemized deductions, whichever is bigger, and the latter category includes charitable and medical deductions, along with state and local taxes and more.
In 2018, the Tax Cuts and Jobs Act nearly doubled the standard deduction, slashing the number of filers who itemized. For 2023, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly.
“Even for our wealthier clients, many of them are no longer itemizing deductions,” said Robert Dietz, national director of tax research at Bernstein Private Wealth Management in Minneapolis.

One solution, “bunching deductions,” aims to accelerate expenses, such as charitable donations, into a single year, aiming to exceed the standard deduction thresholds, Dietz said.
While nonelective medical costs can be difficult to control, bunching charitable donations is common, especially for so-called donor-advised funds, which offer an upfront deduction and act like a charitable checkbook for future gifts.  

3. Make the most of your tax bracket

Before completing a year-end strategy that adds to your income, you should see if you can afford to “run up the income tax brackets,” Dietz said. Typically, this involves a tax projection to see how much more income you can receive in your current bracket.
For example, you can use this strategy if you’re weighing a year-end partial Roth individual retirement account conversion or required minimum distributions from an inherited IRA, he said. 
It’s also smart to know your tax bracket when deciding whether to defer income — such as a bonus or capital gains — into 2024.

4. Weigh strategies that stretch into the new year

Most tax planning must be complete by Dec. 31, but there are a few ways to trim your tax bill between Jan. 1 and the federal tax deadline. If you’re short on cash, these could wait until early 2024.

Pretax IRA contributions: You can still make up to $6,500 in pretax IRA contributions ($7,500 for age 50 and older) for 2023, which may offer a deduction. However, you need to check IRA tax break eligibility first.
Health savings account contributions: You can also save up to $3,850 (or $7,750 for family plans) in a health savings account, which offers a “triple threat” for tax breaks, noted Louise Cochrane, a certified public accountant and enrolled agent in Alameda, California. You can claim an upfront deduction, tax-free growth and tax-free withdrawals for qualified medical expenses.   More

A vehicle refuels at a Phillips 66 gas station in Rockford, Illinois, U.S., on Monday, July 29, 2019.
Daniel Acker | Bloomberg | Getty Images

Company: Phillips 66 (PSX)

Business: Phillips 66 is an energy manufacturing and logistics company. It operates through the following segments: midstream, chemicals, refining, and marketing and specialties. The midstream segment provides crude oil and refined petroleum product transportation and processing services, as well as natural gas and natural gas liquids transportation, storage, fractionation, gathering, processing and marketing services. The chemicals segment consists of Phillips 66’s 50% equity investment in Chevron Phillips Chemical (CPChem), which manufactures and markets petrochemicals and plastics on a worldwide basis. The refining business refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates and aviation fuels, as well as renewable fuels, at 12 refineries in the U.S. and Europe. The marketing and specialties segment purchases for resale and markets refined petroleum products and renewable fuels.
Stock Market Value: $57.06B ($129.70 per share)

Activist: Elliott Investment Management

Percentage Ownership:  n/aAverage Cost: n/aActivist Commentary: Elliott is a very successful and astute activist investor. The firm’s team includes analysts from leading tech private equity firms, engineers, operating partners – former technology CEOs and COOs. When evaluating an investment, the firm also hires specialty and general management consultants, expert cost analysts and industry specialists. The firm often watches companies for many years before investing and has an extensive stable of impressive board candidates. Elliott has historically focused on strategic activism in the technology sector and has been very successful with that strategy. However, over the past several years its activism group has grown and evolved, and the firm has been doing a lot more longer-term activism and creating value from a board level at a much larger breadth of companies. The firm’s activism has always been well thought out and the detailed analysis it presented here is evidence of that.

What’s happening

Behind the scenes

Activist investors like to claim that they are “amicable” or “constructive.” While we do not generalize like that, it is hard to imagine a more amicable and constructive activist campaign than what Elliott is proposing at Phillips 66.
Phillips 66 has underperformed peers Valero Energy and Marathon Petroleum by 45% and 191%, respectively, over the past three years and by 163% and 248%, respectively, over the past 10 years. Elliott thinks this can largely be attributed to the company’s shift in focus away from the refining segment and management’s poor execution in cost reductions, which has led to a loss of investor confidence.
Since his elevation to CEO in July 2022, Mark Lashier has committed to a strategic outlook that includes refocusing on the refining segment, cutting costs, targeting $14 billion of mid-cycle earnings before interest, taxes, depreciation, and amortization by 2025, selling $3 billion of non-core assets and increasing the company’s long-term capital return policy. Elliott wholeheartedly agrees with this plan and thinks it could lead to a $205 stock price. The first part of an activist campaign, convincing management that your plan is better than theirs, is already done here. The only thing activists like more than a management team agreeing with the activist’s plan is a management team that has its own plan that the activist agrees with.

But communicating a plan to the market is one thing, getting investors to believe that you can execute is entirely another. There has been a lack of shareholder trust here, much of which stems from the company’s AdvantEdge66 program in 2019, aimed at reducing costs. When implemented, Phillips 66 saw costs increase relative to peers, burning shareholders’ confidence in the management team’s ability to achieve its goals. The first step in rebuilding management credibility would be adding new directors to the board, particularly at the request of a shareholder. If those directors happened to have refining operations experience, that would give investors even more confidence that management is shifting their focus back to the refining business.
Elliott has significant experience in partnering with industry experts and has already identified candidates here with relevant expertise to fill two board seats. Elliott is not asking for a board seat for itself to debate with management. The firm is asking for two seats for two industry executives who would put management in the best position to execute on their plan. The best activists use board seats to support management in executing their plan, but they also will hold management accountable if they are unable to do so.
That is where Elliott’s plan B comes into play. If Phillips 66 adds two new directors approved by Elliott and still cannot deliver on performance targets over the next year, then it will need to take a path like the one Marathon Petroleum took in its transformation. This will include making appropriate management changes, closing the current $2 to $3 per barrel refining EBITDA gap between Phillips 66 and Valero and generating $15 billion to $20 billion from the sale of non-core assets, including their CPChem stake, European convenience stores and a portion of non-operated midstream stakes.
This should be an easy decision for the company, and we would expect it to quickly appoint two new directors identified by Elliott to the board. Given the tone and substance of Elliott’s outreach, it would be very surprising and disappointing to see this go to a proxy fight. However, if it did, we believe Elliott would be a lock to get at least two board seats on the 13-person board, particularly with the use of a universal proxy card.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.  More

Your Money

Workers who earn both pensions and Social Security may have their benefits reduced based on current rules.
That may come as a surprise to some workers and their families.
Here’s what beneficiaries need to know about the risk of overpayments and how they may gauge their income in retirement.

Richard Stephen | Istock | Getty Images

When Joyce Debnam’s husband passed away, she began receiving $1,400 a month in Social Security survivor benefits.
Eight months later, that income unexpectedly changed. The trigger: Debnam retired from her job at the United States Postal Service in 2013 after four decades of service.

That life change prompted Debnam’s Social Security benefits to be cut to just $174 a month. Moreover, the Social Security Administration notified her she had to return $5,000 in benefits she had been overpaid.
“When I got that letter, I almost hit the floor,” Debnam said.
She was particularly surprised because before her retirement, Debnam had contacted the Social Security Administration to let them know she was retiring and asked whether that would affect her monthly checks.
“They told me no, that I was eligible for retirement and I would get my money,” Debnam said.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

Today, Debnam, 80, of Suitland, Maryland, has paid back the $5,000 sum and relies almost exclusively on her postal pension to pay bills, which means her other retirement goals such as traveling or fixing up her home are not possible.

Debnam is one of millions of workers who is affected by Social Security rules related to public workers and reductions in the benefits they are eligible to receive.

How rules affecting public employees work

The Windfall Elimination Provision, or WEP, reduces benefits for people who receive a pension from work where they did not pay into Social Security and also had fewer than 30 years of substantial employment or covered employment.
About two million people, or 3% of Social Security beneficiaries, were affected by the WEP as of December 2022, according to the Congressional Research Service.

Far too often, people are unaware that they are subject to the WEP or GPO until their spouse retires.

Rep. Mike Carey

Another rule, the Government Pension Offset, or GPO, reduces the spousal, widow or widowers’ benefits for people who also receive pensions from government work not covered by Social Security.
About 734,601 Social Security beneficiaries were affected by the GPO as of December 2022.

Many pension-eligible workers are unaware of rules

Like Debnam, many workers are surprised to find their benefits are reduced when they are counting on that income.
“These policies make it difficult for affected workers and their families to plan for retirement,” Rep. Mike Carey, R-Ohio, said during a recent House Ways and Means subcommittee hearing on the rules in Baton Rouge, Louisiana.
“Far too often, people are unaware that they are subject to the WEP or GPO until their spouse retires,” Carey said.
This prompts some people to return to work, while others adjust their spending habits or change their standard of living, he noted.
“Even for public servants who are aware of these policies, the complexities of these formulas makes it difficult to determine the Social Security benefits that they will eventually receive,” Carey said.

Congress is considering ways to address these rules. One proposal, the Social Security Fairness Act, calls for eliminating both the WEP and GPO altogether. The bicameral, bipartisan bill has the support of a majority of House lawmakers, with 300 co-sponsors.
Professional organizations, such as the American Postal Workers Union, and others representing police, firefighters and teachers, support the change.
Experts say it will be difficult to come up with a solution that compensates workers who pay into Social Security for their entire careers, and those who also work for jobs where they pay into a pension, equally.
For now, workers who are affected must navigate the complicated rules to plan for their retirements.
Moreover, they may be affected by benefit overpayments, where beneficiaries receive more money than they are due because the Social Security Administration has wrong or incomplete information.

It would be nice if the state and local governments provided the agency with the data on the retirement benefit, the pension benefit, but they don’t.

Mark Warshawsky
senior fellow at the American Enterprise Institute

In those situations, the agency requires beneficiaries to pay the money back.
Overpayments of retirement benefits mostly affect beneficiaries of state and local governments who receive noncovered pensions, Mark Warshawsky, senior fellow at the American Enterprise Institute and former deputy commissioner for retirement and disability policy at the Social Security Administration, wrote in a recent op-ed.
The agency may discover a pension it didn’t know existed or an amount of pension income that was not previously reported.
“At large, the way to prevent it from happening is to get the data much more quickly,” Warshawsky said.
“It would be nice if the state and local governments provided the agency with the data on the retirement benefit, the pension benefit, but they don’t,” Warshawsky said.

How beneficiaries can estimate retirement income

There are steps beneficiaries who are affected by these rules may take to gauge how much income they may expect in retirement.
For workers with five or more years of noncovered earnings, the Social Security Administration provides a supplemental fact sheet about the WEP and GPO rules.
While the agency does not calculate the altered retirement benefit to adjust for that income, individuals can do it themselves through tools online, including WEP and GPO calculators.
“We recommend that people review their Social Security Statement at least once every year, which includes important information about WEP and GPO,” a Social Security spokeswoman said in a statement.

There is still the risk that information may be overlooked, or the wrong data may be transferred. That has prompted Laurence Kotlikoff, a Social Security expert and Boston University economics professor, to urge beneficiaries to carefully track their own earnings and pension benefit information and cross check it with Social Security’s records.
In the event Social Security beneficiaries receive an overpayment notice, they may be able to work out a deal for a partial payment, extended period of payment or forgiveness of part of the overpayment, Warshawsky noted.
“That has to be negotiated on a one-off basis, for each person individually,” Warshawsky said. More

If you piled cash into money market mutual funds in 2023 amid rising interest rates, you may have a surprise tax bill in April, experts say.
Investors and institutions have funneled $5.84 trillion into money market mutual funds, as of Nov. 29, and many funds are paying well over 5%.

JGI/Jamie Grill

If you funneled cash into money market mutual funds in 2023 amid rising interest rates, you may have a surprise tax bill in April, experts say.
Investors and institutions have piled $5.84 trillion into money market mutual funds, as of Nov. 29, according to the Investment Company Institute, and many funds are paying well over 5%.

“With pennies earned in 2022 on cash assets, the tax bill was negligible,” said certified financial planner Robert Schultz, senior partner at NWF Advisory Group in Encino, California. “At 5% rates, there will be much higher bills, which will catch many off guard.”
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With yields closely tied to the federal funds rate, money market funds — different than money market deposit accounts — are mutual funds that typically invest in shorter-term, lower-credit-risk debt, such as Treasury bills.
Many investors are stockpiling money into these funds due to “fear in the stock market” and many are nervous to spend cash, according to CFP Colin Day, an enrolled agent at Correct Capital in St Louis.

Fund earnings ‘could be significant’

Typically, money market funds pay dividends monthly, and the earnings made in 2023 “could be significant,” said Day. “But unfortunately, this is before taxes.”

Rather than more favorable capital gains rates, you’ll owe regular income taxes on money market fund earnings, with a top bracket of 37%. By comparison, the top long-term capital gains rate is 20%.

For example, let’s say you’re an investor in California with a 45% tax rate when combining state and local taxes. With $100,000 in a money market fund, earning 5% could trigger a $2,250 tax bill, according to Schultz.
However, some states offer a tax break, depending on the underlying assets. For example, money market funds with U.S. Treasury bonds may exclude a portion of earnings from state and local taxes.

Still, investors may only find out about their taxable money market earnings when they receive tax forms in early 2024. “There will be a late Christmas gift for many investors in February,” Schultz said.
Typically, investors receive tax forms for money market mutual funds in January or February, which reports the previous year’s earnings to the IRS.Don’t miss these stories from CNBC PRO: More

Year-end Planning

You may have just a few weeks left to use any leftover money in your health-care flexible savings account.
Next year, individuals will be able to save as much as $3,200 in their FSA.

Tom Werner | Digitalvision | Getty Images

As 2023 comes to an end, you may have just a few weeks left to use any leftover money in your health-care flexible savings account. 
Employer-sponsored FSAs allow you to save pretax dollars and use the funds for qualified medical expenses. An individual can save up to $3,050 in these accounts in 2023.

However, unlike a health savings account, which roll over year to year, the funds in an FSA are considered “use it or lose it,” said certified financial planner and physician Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida. She is also a member of CNBC’s Financial Advisor Council.
Depending on your employer, you may have some leeway.
A bit less than half, 42%, of employers offer a rollover, according to Employee Benefit Research Institute data from 2021. This year, that means you can take up to $610 into 2024. Another 26% of employers offer a grace period, which gives you an extra two and a half months to spend down 2023 funds.
The remaining 33% of employers don’t offer either accommodation. Almost half, or 48%, of workers in that situation end up forfeiting some of their pretax dollars, according to the EBRI.

More from Year-End Planning

Here’s a look at more coverage on what to do finance-wise as the end of the year approaches:

It’s common for workers to not know what their employer’s FSA rules are. If you’re uncertain, reach out to your company’s human resources department, Jake Spiegel, research associate at the institute, previously told CNBC.

Here are seven ways you may want to take advantage of those leftover savings while you can.
1. Invest in a biometric or fitness tracker
Consumers have a new opportunity: You can now purchase certain biometric or fitness trackers, such as an Oura Ring or a Withings ScanWatch, as an eligible FSA or HSA expense. Otherwise, taxpayers can only use FSA funds to purchase an activity tracker such as a Fitbit or a Garmin if they provide a letter of medical necessity from their doctor.
2. Squeeze in year-end doctor’s visits
If you’ve been meaning to visit any of your doctors, try to schedule it in the next few weeks. Typically, visits and consults are covered, and you’re getting those expenses in before your deductible resets at the start of next year.
If you can’t make it in person, telehealth visits are also covered. You can use your funds for dental care as well, for procedures such as routine dental cleaning, root canals, braces and other out-of-pocket expenses. 
3. Stock up on over-the-counter medications
The CARES Act of March 2020 removed prescription requirements to use FSA funds for many over-the-counter medicines. You can buy a supply of nonprescription medications such as pain relievers, cough medications, sleep aids and other treatments.
This can be a smart move as we move into cold and flu season, or if Covid cases pick up in your area.

4. Purchase women’s health products
Back in 2020, the IRS approved women’s menstrual products such as pads and tampons as eligible items under an FSA. Birth control and other contraceptives also count, as long as you show a medical prescription.
5. Buy certain skin care products
You can use your FSA savings for eczema-approved creams and lotions. It may be good to stock up on these items as cold weather brings on dry skin. Sunscreens with SPF 15+ are covered as well as any acne treatments with certain ingredients such as salicylic acid.
You don’t need to buy these products exclusively at health retail stores. Certain skin care purchases at beauty retailers such as Sephora and Ulta may qualify, too.
6. Plan ahead for a new baby
New and expectant parents can use their FSA funds for baby products such as diaper rash cream, baby breathing monitors and baby sunscreen.
7. Prepare for New Year’s resolutions
If your New Year’s resolution is to quit smoking, you can purchase OTC gum and patches, prescribed medications and pay for smoking cessation programs with your FSA funds.

How to use FSA funds wisely

In 2024, employees can contribute as much as $3,200 to a health FSA, the IRS said in November.
To avoid having too much left to spend down at the last minute in future years, pay attention to your balance and make efforts to use your funds throughout the year, said McClanahan. When it’s open enrollment time, look at your expenses in recent years to ensure you’re not putting aside too much money.
Those steps can help make sure “you’re actually using it wisely and not wasting it,” she said. More

Life Changes

College enrollment is struggling, and six-year completion rates are stagnant, according to recent reports.
Rising tuition costs and ballooning student debt balances have caused more students to question the return on investment. 
Broad-based loan forgiveness is off the table, but “the debate about the value of college continues,” says Rick Castellano, a spokesperson for Sallie Mae.

Hero Images | Hero Images | Getty Images

Even before the Supreme Court blocked President Joe Biden’s plan to forgive student debt, fewer students were enrolling in college.
Nationwide, enrollment has lagged since the start of the Covid-19 pandemic, when a significant number of students decided against a four-year degree in favor of joining the workforce or completing a certificate program instead.

But this fall, freshman enrollment continued its slide, sinking 3.6%, according to the National Student Clearinghouse Research Center. The declines were most pronounced in bachelor’s programs at public and private four-year institutions.
“The debate about the value of college continues,” said Rick Castellano, a spokesperson for education lender Sallie Mae.

Completion rates are at a standstill

Six-year college completion rates have also stalled after years of steady growth, a separate National Student Clearinghouse Research Center report found. Only about 62% of students who started college in 2017 have graduated, essentially unchanged since 2015. Nearly one-third, or 29%, of all students who started that year have stopped out, or put their education on hold.

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Here’s a look at other stories offering a financial angle on important lifetime milestones.

“This is more bad news for four-year colleges,” said Doug Shapiro, the National Student Clearinghouse Research Center’s executive director.
“Not only have fewer of the 2017 starters completed as of 2023, but the data also show fewer still enrolled, suggesting that this is more than just a matter of slower progress during the pandemic years,” Shapiro said.

How student debt has influenced enrollment

Higher education, as a whole, is under pressure, Shapiro said. Rising college costs and ballooning student debt balances have caused more students to question the return on investment. 
Among recent “stopouts,” most said they put their education on hold due to financial obstacles, including the costs of programs, inflation and the need to work, a separate report by Lumina and Gallup found.
To that end, low-income students are the most likely to opt out.
Research suggested that Biden’s promise to forgive up to $20,000 in debt might have made it more likely that previously unenrolled students would reenroll.
However, that relief never came and now there is a new plan in the works.

It may be too early to tell the effect that could have on enrollment going forward, Shapiro said.
But increasingly, borrowers are struggling under the weight of education debt, which today totals more than $1.7 trillion.
For those who don’t get a degree, managing such a hefty amount of debt is especially difficult.

Among borrowers who start college but never finish, the default rate is three times higher than the rate for borrowers who have a diploma.  
“Broad-sweeping debt forgiveness may not be on the table but there are other programs the Biden administration has implemented,” Castellano said.
Already, Biden has managed to erase $127 billion in education debt for more than 3.5 million borrowers, largely through Public Service Loan Forgiveness and income-driven repayment plans.
“There are still options for students and families to reduce their payments and eventually get their loans forgiven,” Castellano said.
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Though aerospace and defense funds understandably haven’t done well in this year’s faltering market, some individual stocks have posted substantial gains.
This could be an advantageous time for investors to consider the category.
Lucrative products include fighter jets, helicopters, parts for those aircraft, avionics products, missile guidance system, drones and anti-drone technology and support services.

A US Air Force (USAF) Lockheed Martin F-35A Lightning II all-weather stealth multirole combat aircraft flies over during the 2023 Dubai Airshow at Dubai World Central – Al-Maktoum International Airport in Dubai on November 13, 2023. 
Giuseppe Cacace | Afp | Getty Images

In times of war, investors’ thoughts naturally may turn to defense stocks.
Continuing wars in Ukraine and Israel and Gaza, along with various simmering geopolitical hotspots around the world, could mean increased revenues for U.S. defense contractors, enhancing the allure of stocks in the aerospace and defense category.

Though aerospace and defense funds understandably haven’t done well in this year’s faltering market, some individual stocks have posted substantial gains. And now that the overall market has started moving upward in recent weeks, this could be an advantageous time for investors to consider the category.
Government sales account for varying amounts of revenues received by aerospace/defense companies — from 100% down to 30% or less in some cases.

Diversified revenue creates a ‘sweet spot’

As the label aerospace and defense implies, many such companies have civilian business from jetliner manufacturers and airlines, so the current boom in commercial aviation is a positive for them. This diversification currently puts them in a sweet spot.  
Though U.S. defense spending on contractors has been pared back a bit over last couple years, some aerospace and defense firms continue to benefit from total contract spending that increased markedly in 2017-2020, from $373.5 billion to $448.9 billion, rising with the total defense budget.

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U.S. support in what’s turning out to be a long war in Ukraine will likely push overall contractor spending higher, benefitting aerospace and defense companies.

In this era of high-tech warfare, when strategic military engagement is more about digital systems and aerial weapons than boots on the ground, aerospace and defense companies are advantageously positioned. Lucrative products include fighter jets, helicopters, parts for them, avionics products, missile guidance system, drones and anti-drone technology and support services.

Lesser-known companies have key market positions

Publicly traded companies in this category with relatively low downside risk (based on various fundamental metrics) and good growth projections include some familiar names of large companies, including General Dynamics, Lockheed Martin and Northrup Grumman.
Yet, standing out from such behemoths are some lesser known and/or smaller companies whose key market positions and robust growth projections may signal greater potential for investors.
Among them are these six:
TransDigm Group Inc. (TDG)

Projected average annual earnings growth over five years, according to FactSet: 26%
Market cap: $48 billion (as of mid-November)

TransDigm designs and manufactures original aircraft parts for manufacturers and aftermarket replacement parts for operators of commercial and military aircraft. Most of its revenue is from civilian aviation sources. The company is benefiting from the integration of global economies, which is spurring jetliner fleet additions, and from pricing power as the sole supplier of some items. Though its trailing 12-month price/earnings ratio is high, at 47, this multiple has been pushed up by stock price growth of about 15% over the past six months, as of mid-November.
Parsons Corp. (PSN)

Projected five-year annual earnings growth: 13%.
Market cap: $6.5 billion.

This global technology company gets most of its revenue from federal agencies, both defense and civilian. Parsons Corp. clients include the U.S. Department of Defense, the Missile Defense Agency, the State Department, Department of Homeland Security, the Department of Energy and the Federal Aviation Administration. Products and services include items to counter unmanned air systems, and gear for national security, bio-surveillance, space launches, border security, rail design/control and infrastructure engineering. The stock prices has increased about 36% over the past six months, bringing the trailing P/E up to 48.

Howmet Aerospace (HWM)

Projected five-year annual earnings growth: about 22%.
Market cap: nearly $19.9 billion.

About 30% of Howmet’s revenue is from defense. This is a manufacturer of lightweight jet-engine components, aerospace fastening systems, titanium aircraft parts and forged wheels. Its largest customers are commercial aircraft and jet engine manufacturers. Thus, this stock has more cyclical risk than more military-intensive companies. However, Howmet’s EBITDA (earnings before interest, taxes, depreciation and amortization) is up 16% this year, and order-flow momentum is highly positive. Trailing P/E: 31.
Curtiss-Wright Corp (CW)

Projected five-year annual earnings growth: Data was not available.
Market cap: about $7.8 billion.

CW has the best downside-risk/forward-performance metrics of all aerospace/defense stocks. Curtiss-Wright provides engineered products and services for the defense, industrial and global power-generation markets. Most defense companies are located in Virgina (near government clients in Washington), but Curtiss-Wright is headquartered in Davidson, N.C. Products include throttle-control devices, joysticks, transmission shifters, sensors and electro-mechanical actuation components used in commercial and military aircraft. Pure defense lines include turret-aiming and stabilization items, weapons-handling systems, communications gear and naval ship items, including airlock hatches and products for spent-nuclear-fuel management and propulsion parts. CW also provides services for ship repair and maintenance. Despite a stock price increase of more than 20% over the last six months, solid earnings have kept this company’s trailing P/E under 23.
Woodward Inc. (WWD)

Projected five-year annual earnings growth: 13.2%.
Market cap: $7.94 billion.

Woodward designs and manufactures mechanical control items for aviation and industry, both original equipment sold to manufacturers and replacement parts for operators. Products include fuel pumps, metering units, valves, nozzles, motors and sensors. Woodward also makes thrust-reversal systems for military aircraft and helicopters and commercial and private civilian aircraft and flight-deck systems for aircraft carriers. Industrial items include products for gas and steam turbines and compressors. This is another non-D.C. area company, located in Fort Collins, Colorado. Trailing P/E: about 39, with share price growth of more than 18% over the last six months.
Huntington Ingalls Industries (HII)

Projected annual five-year earnings growth: 24%.
Market cap: $9.3 billion.

A pure defense play, Huntington Ingalls Industries is primarily a warship company with a focus on aviation, as it builds aircraft carriers. More than 82% of its revenue is from the Navy, though it also manufactures and services Coast Guard vessels. Long time frames for producing Naval ships may make HII’s revenues more predictable. The company’s ultimate product is the 1,106-foot nuclear-powered aircraft carrier, U.S.S. Gerald R. Ford. The latest in carrier technology, this ship can support up to 90 aircraft, including F-35s and other fighter jets, as well as helicopters and unmanned aerial vehichles (aka drones). In the water since 2013, the Ford was the subject of news coverage in October when the Pentagon deployed it to Mediterranean coast off Israel as a deterrent to Iranian involvement in the Israeli-Hamas conflict. The company is currently touting its status as the manufacturer of “the Gerald R. Ford class” of carriers. Trailing P/E: 17.7, even with a stock price increase of about 18% over the past six months.

Commercial air travel demand ‘still playing out’

Long-term forecasts for these companies are quite positive. And with post-pandemic demand for air travel still playing out, those with civilian aircraft business currently have diversified revenue. Yet wars can mean lower demand for commercial air travel in affected regions.
Nevertheless, the market positions of those with substantial defense revenue — derived from their status as sole or primary suppliers, developers of unique technology and established records as DOD partners — make them perennially investable propositions for long-term investors.
—Dave Sheaff Gilreath, a certified financial planner and the founding partner and chief investment officer of Sheaff Brock Investment Advisors and Innovative Portfolio, an institutional money management firm. More