Cabot Stock of the Week Issue: June 16, 2025

The market remains in good shape, even after the surprise of a new conflict between Israel and Iran, worsening domestic turmoil, and tariff uncertainty as the July 9 deadline on the 90-day pauses approaches. Dark clouds are undoubtedly forming, but until it actually impacts the market, we must go with the evidence in front of us, and right now, it’s showing a resilient market that’s back near its February highs.

While stocks have been largely stagnant in the last week, oil prices haven’t, vaulting above $70 a barrel for the first time since early April thanks to the new Middle East conflict. It’s possible the spike in oil prices will be fleeting, but it makes sense to have some energy exposure in our portfolio – especially in the form of a dividend-paying stock with a long history of outperformance. For that, we turned to Cabot Dividend Investor Chief Analyst Tom Hutchinson, who recommends just such a stock.

Here it is, with Tom’s latest thoughts.

New Recommendation

The Williams Companies (WMB)

The most resilient and higher-growth midstream energy companies tend to deal in natural gas and natural gas liquids (NGLs). Natural gas is by far the cleanest-burning and fastest-growing fossil fuel source in the world, and the U.S. is the world’s largest energy producer.

The U.S. has more natural gas than it can use, and other parts of the world are desperate for the stuff. Massive natural gas export facilities have been built in recent years that liquify gas and ship it overseas, and many more are under construction. The overseas demand is strong and growing as Asia requires more energy to fuel its growth and Europe is replacing Russian gas.

The new administration is highly encouraging NGL exports. The government policy is to increase oil and gas production and reduce regulatory burdens. That’s not necessarily a good thing for the price of many energy stocks that rely on commodity prices. However, midstream energy companies are not reliant on prices but rather charge a fee for the storage, processing, and transport of oil and gas. These companies benefit from volumes and should benefit as more oil and gas sloshes around the country.

Williams is involved in the transmission, gathering, processing, and storage of natural gas. It operates the large Transco and Northwest pipeline systems that transport gas to densely populated areas from the Gulf to the East Coast. Roughly 30% of the natural gas in the U.S. moves through Williams’ systems.

Like most other midstream energy companies, the overwhelming bulk of earnings are guaranteed by long-term contracts. And those contracts have automatic inflation adjustments built in. It also operates a near monopoly in its areas and doesn’t have to compete on price with other similar companies. As a large and established player, it can easily grow with network expansion.

The company has a large and well-positioned pipeline system that allows it to invest in high-return growth projects with minimal regulatory hurdles. It has made several structural and financial moves in recent years that should allow the company to maintain and grow its dividend.

Williams deals almost exclusively with natural gas and has high and growing exposure to the highest growth market in the energy segment, NGL exports, via agreements with terminals as a main supplier of natural gas. Demand for gas is also being significantly bolstered by the skyrocketing demand for electricity for data centers, as artificial intelligence systems require massive amounts of electricity to function, and technology companies will invest trillions in new data centers in the years ahead.

The recent stock performance confirms the strong position of the company. In the last three calendar years, WMB has returned 128% compared to a return of just 28% for the S&P 500 over the same period. It’s also up 8.8% YTD compared to 2.4% for the S&P. These returns happened with far less volatility than the overall market. Even in the tumultuous market this April, WMB was down less than 2% for the month, and the stock is within $2 per share of the high.

Williams currently pays a dividend of $2.00 per share annually, which translates to a solid 3.35% yield at the current price. WMB has also increased the payout for the last nine consecutive years.

The future looks bright. Williams has a strong and growing presence in the fastest-growing fossil fuel source. Even in recent hard times for the industry, natural gas volumes continue to grow at the company. NGL exports are likely to dramatically increase in the years ahead, along with U.S. natural gas production.

In the most recent quarter, Williams delivered another solid earnings report with earnings per share up 8% and cash flow from operations rising 16% over last year’s quarter. The company also raised guidance for 2025 as project expansions come online. WMB is a reliable dividend-paying stock with strong industry fundamentals going forward. BUY

Current Recommendations

Changes Since Last Week: None

No changes to the portfolio this week, as basically all our holdings are acting well, with some (ASTS in particular, AEM, DASH, SAN, among others) on an absolute tear. But, with the addition of The Williams Companies (WMB), our portfolio is now increasingly overcrowded at 23 positions. Like or not, I’ll have to start clearing out some clutter soon, even if it means selling out of stocks that I normally would give a longer leash. It’s a good problem to have – too many strong-performing stocks. It’s possible the market will make the decision for us, but for now, it continues to hover near post-February highs despite many existential threats.

Here’s what’s happening with all our stocks as our portfolio hums along.

Updates

AbbVie (ABBV), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was up 1.5% this week after the FDA approved the label expansion of its Mavyret hepatitis C drug. The drug is the only direct-acting antiviral (DAA) treatment for people with hepatitis C but not cirrhosis. It has so far treated more than a million patients, but this new FDA approval will allow the company to expand to a much wider customer base. The stock has recovered nicely from its April dip to 170 but is still well shy of its 2025 highs above 216. Keeping ABBV at Hold until it can demonstrate a bit more momentum. HOLD

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, got back the 5% it lost from the previous week as Middle East tensions caused investors to flood back into gold, pushing gold prices to new all-time highs above $3,400 an ounce. The combination of global unrest and economic uncertainty has pushed gold prices up more than 31% year to date, and AEM is essentially acting like a 2X leveraged fund on the price of gold, up 58% year to date. With no letup in the factors driving up gold’s appeal as a safe-haven asset, AEM is a buy even at these levels. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up about 1.5% this week after the CEO said he’s “cautiously hopeful” that the aircraft maker will meet its goal of 820 deliveries this year. Lingering supply-chain slowdowns have resulted in 40 completed airframes being left without an engine and parked at Airbus’ factories until one arrives. This seems like a temporary concern, and while “cautiously hopeful” doesn’t exactly project supreme confidence, Wall Street seems to be taking the CEO at his word. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, is up another 21% this week after soaring nearly 50% the previous week and has pushed well into record-high territory above 42 a share! Why the sudden surge? For starters, the stock is set to join the Russell 1,000 large-cap index on June 27, it was announced. That’s the only tangible catalyst. The other, perhaps more forceful catalyst has come from speculation that the war of words between President Trump and SpaceX CEO Elon Musk could divert government support and funding away from SpaceX and to other space-based competitors – including AST SpaceMobile. The Musk-Trump feud has seemingly cooled, for now, but that hasn’t stopped investors from piling into ASTS, which aspires to be the first company to provide straight-to-smartphone internet service around the globe from space.

Last week, I recommended selling half your ASTS shares to book profits, as the stock had tripled in the 11 months since we added it to the Stock of the Week portfolio. Let your remaining half position ride and see how high this stock can go. Right now, it looks like the answer is, “to the moon.” HOLD HALF

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up another 3% this week and has now risen more than 80% this year! There was no company-specific news. This Spain-based bank is capitalizing on the improving interest-rate and investment climate in Europe, but its global footprint and expanding mobile option with Openbank set it apart from other European banks. BUY

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, held steady at 101 this week. The stock has been in a bit of a rut the past month but is still up more than 46% year to date. The company’s decision to slash prices on 22 of its models in China by more than 30%, at least through this month, seems like an unpopular one on Wall Street. But I doubt it will have more impact on the company, which continues to grow like a weed. I’d use this mini-slump in BYD as a buying opportunity if you don’t already own shares or want to add to an existing position. BUY

Carnival Corp. (CCL), originally recommended by yours truly in my Cabot Value Investor advisory, finally pulled back a bit after a big run, dipping about 3% this week. There was no news. The company reports earnings on June 24. Shares of the cruise-liner are off to a great start for us, as the stock price is still well off its highs despite revenues being at record levels as Americans play catch-up on their cruise vacations now that Covid is long in the rear-view mirror. BUY

Coeur Mining (CDE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, finally cooled after a 16% run-up the previous two weeks, pulling back about 2% as silver prices stalled, with metals money flowing back into gold as Middle East tensions rise. Still, the gold-silver ratio isn’t far off from 100-to-1 – a historically rare reading that has portended much higher prices for silver 100% of the time, so this pause is likely a temporary one on the way to higher prices for both silver and this mid-cap silver miner. BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, has been on a slow-and-steady rise, up another 2% this week to get to new 52-week highs above 221! The stock even shrugged off a lawsuit from the Competition Bureau this week, which accuses the company of giving misleading prices to its customers. But the company is coming off another strong quarter and recently announced two big acquisitions worth roughly $5 billion. DoorDash is buying London-based Deliveroo for $3.9 billion, plus hospitality tech company SevenRooms, for $1.2 billion. So, the good far outweighs the bad of a lawsuit and a bad look if it is, in fact, trying to deceive its customers. The stock is now up 32% year to date, and our gains are now north of 65%. BUY

Dutch Bros (BROS), originally recommended by Carl Delfeld in his Cabot Explorer advisory, gave back its 3% gain from last week and has been running in place for about a month since making a big leap on earnings in the first half of May. The fast-expanding drive-through coffee store chain’s loyalty rewards program has been accounting for about 70% of traffic as the company opened 30 new locations in the first quarter. The company plans to open at least 160 shops in 2025. BUY

Eli Lilly and Company (LLY), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, had a good week, up nearly 6%, as the stock has finally started to gather momentum after a down start to the year after getting caught in the crosshairs of the new administration’s targeting of big pharma for jacking up drug prices. Those headlines have faded, and LLY has rallied as its weight-loss drugs continue to dominate. The stock is almost back above its 200-day moving average for the first time since late April. If and when it does get there, we’ll restore our Buy rating. HOLD

Freshworks (FRSH), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, gave back the 4% it had gained the previous week but remains stuck in the same 14-16 range it’s been in for the past six weeks. There’s been no major news. Keeping at Buy for now, but I’d like to see a breakout soon, or I might start to lose patience here. BUY

Kenvue (KVUE), originally recommended by Clif Droke in his Cabot Turnaround Letter, was up slightly this week after a 9% pullback the week before, after CEO Thibaut Mongon gave a downbeat assessment of the company’s full-year outlook. But Jefferies pounced on the stock after the quick pullback, reiterating a Buy rating and upping their price target as they expressed confidence in the improved U.S. retail climate and in Kenvue’s own reinvestment push, with marketing and R&D spend up 11% in 2024. That was enough to convince Clif to keep the stock at Buy. So, we’ll do the same for now. BUY

Main Street Capital Corp. (MAIN), originally recommended by Tom Hutchinson in the High Yield Tier of his Cabot Dividend Investor advisory, was off about 1% this week but hasn’t budged much in the last couple weeks. But the overall trend is up, as Tom notes: “MAIN has been trending higher since early April and got a boost over the past week as the economic prognosis improved. The investment outlook has been cautious because of rising expenses and tariff concerns, as with most other companies. But if the economic optimism is confirmed going forward, the stock could have a nice move higher. MAIN has delivered a solid return since being added to the portfolio last year. The fortunes of this portfolio position will depend on the economic news going forward. And it pays a high yield with monthly dividends while you wait around.” As a business development company that pays a monthly dividend with a high yield, MAIN is an attractive income generator for us. Movements in the share price are mostly gravy. Thankfully, the stock is up more than 25% since we recommended it. BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, was unchanged this week despite Oppenheimer raising its price target on the stock from 1,200 to 1,425. There’s been no major news. Shares of the streaming giant are up 37% year to date but are on a bit of a pause right now after a huge jump in April and May on the heels of another very impressive earnings report. This stock belongs in any long-term portfolio, even near all-time highs. BUY

Palomar Holdings, Inc. (PLMR), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, bounced back slightly after a rough start in our portfolio the previous week. It was down 9% last week but up 1.5% this week. There’s been no real news, and this is an insurance stock with a very low beta (0.50), so the abrupt decline was a bit of a head-scratcher, especially since Piper Sandler just raised its price target on it from 171 to 177. It was likely just normal consolidation after a very fast start to the year (+56%) for the stock. PLMR peaked at 175 a couple weeks ago. I’m going to bet it claws its way back there in the coming weeks, as long as the market behaves. BUY

Planet Fitness (PLNT), originally recommended by Mike Cintolo in Cabot Top Ten Trader, inched up from 104 to 105 and is knocking on the door of resistance above 106. A push above that level could be bullish. Canaccord Genuity raised its price target on the stock from 120 to 126. That’s been the only real news of late. In the absence of an immediate catalyst, PLNT might need a boost from the market to get above technical resistance. BUY

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, is in a bit of a weak spot after a huge run-up the first five months of the year, falling 3% this week. The Singapore-based conglomerate is coming off a quarter in which sales improved 30% to $4.84 billion, and shares took off accordingly. The stock is still up 48% year to date but is down from its 170 peak from early June. This looks like a good entry point for a stock that’s trading at less than half its 2021 peak – and doing business like never before. BUY

Stoxx Europe Total Market Aerospace & Defense (EUAD), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was unchanged this week but is off to a fast start for us. This ETF, the only one in our mostly stock-centric portfolio (hence the name), is a play on the strength of European stocks and Europe’s increased focus on defense spending as its economy improves. European stocks are up more than 7% year to date, while U.S. stocks are up only 2.5% YTD. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was back with a vengeance this week, up more than 7% as the aforementioned Elon Musk-Donald Trump war of words has cooled. Now investors are focusing on a potential bit of positive news for Tesla, which has been hard to come by of late: the launch of its robotaxi service in Austin, Texas, which, according to Musk’s X account, will happen this Sunday, June 22. A successful rollout of robotaxis could create a new revenue stream for a company that desperately needs it given the worldwide boycott of Tesla cars due to its CEO’s unpopular position within President Trump’s cabinet. Now, Musk is stepping back from his governmental duties and focusing on his companies. That, plus this week’s robotaxi rollout, has resulted in a swift bounce-back in TSLA shares after they dipped below 300 earlier this month. HOLD

Toast Inc. (TOST), originally recommended by Mike Cintolo in his Cabot Growth Investor advisory, was off 1.5% this week to erase the previous week’s minor gains. In his latest update, Mike wrote, “One look at the weekly chart below shows that this stock remains very much under control, hovering in a 10% range for the four weeks since its powerful earnings move (two big-volume buying weeks) in May. At a conference in mid-May (soon after the Q1 report), the firm said its U.S. market share among restaurants had gone from 10% to 15% in the past two years; those share gains should continue with the small/mid-sized operators, while the enterprise opportunity is big—beyond Applebee’s and TopGolf being announced as Q1 wins, the firm has signed up Marriott, Hilton and Choice hotels in recent quarters for use in their food and beverage operations, and there’s no reason more big chains won’t come onboard in the quarters to come. Back to the stock, we remain optimistic, but now that the rest is a month old, we want buyers to show up somewhat soon—a drop into the high 30s could tell us TOST won’t be a leader, but any powerful breakout above the May highs would be enticing. For now, we advise holding on if you own a small position, and we’re OK nibbling here if you’re not yet in.” Good advice. BUY

Veeva Systems Inc. (VEEV), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, was essentially flat in its first week in our portfolio. Here’s part of what Mike wrote about it in this space last week: “Veeva Systems is the hands-down leading cloud software provider to the life sciences industry, with a solution built from the ground-up many years ago to handle the intricacies of that business, starting with sales and marketing functions and expanding to everything from clinical trial management, tracking and reporting, regulatory submissions, safety and quality control aids, medical content creation, data analytics and much more. Of course, the latest growth angle could come from AI, which Veeva announced in April and with offerings that will hit the market later this year: The firm sees two bots (one for CRM functions, one for commercial) launching around year-end, and aims to integrate AI into many parts of its platform, allowing many routine tasks to be automated and even allowing users to create customized automation tools, too. To be fair, Veeva is a larger firm these days—it just crossed $3 billion of annualized run-rate revenue—so growth isn’t going to be off the charts, but the firm continues to execute and the top brass recently set a $6 billion run-rate goal by 2030, expecting continued mid-teens growth for many years to come. Q1 results were terrific, with total revenue rising 17% (subscription revenue, which makes up more than 80% of the total, was up 19%), accelerating a bit from recent quarters, while operating income lifted 34% (margin of 46%!) and earnings of $1.97 per share rose 31% and crushed estimates. It’s not changing the world, but Veeva is an emerging blue chip with a steady growth outlook, and if its AI products gain big adoption in 2026, results should continue to top estimates, and growth could accelerate from the years-long, mid-teens baseline.” BUY

The next Cabot Stock of the Week issue will be published on June 23, 2025.

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