Higher Oil Prices and Geopolitical Conflict Hit United’s Profits

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Higher Oil Prices and Geopolitical Conflict Hit United’s Profits In the first sign of the effect of geopolitical conflict and higher oil prices, United Airlines projected a lower fourth-quarter profit that fell below analysts’ estimates due to a suspension of flights to Tel Aviv, Israel and higher jet fuel costs. Cancellations for flights to Tel Aviv will add up in the damage to United’s profit. Adjusted profit will be $1.80 a share if Tel Aviv flights are canceled through October 31. But the number is even lower to $1.50 if it is grounded through the end of 2023. That was versus the analyst estimates of $2.10 EPS. Also, the cost of jet fuel jumped more than 25% since June. United thinks the cost will keep increasing to an average of $3.28 a gallon in the fourth quarter – versus $2.95 in the third. As a result, the airline stock fell 4.5% after the announcement. (Photo: Getty Images) Yesterday, the 10-year Treasury yield topped 4.8% which was the highest level since October 6th. Traders are betting on “higher for longer” rates after retail sales data came in hotter than expected. Wall Street has raised its odds of a rate hike in January after leaving rates unchanged in November and December. - “It’s more the bond market driving the stock market at this point,” said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance. “You’re seeing the trend that we’ve seen for the last two months reassert itself.” Regardless, big banks continue to report solid earnings. Bank of America and Bank of New York Mellon jumped after better-than-expected reports. We will get the first batch of tech earnings today with Netflix and Tesla due to report results. Philadelphia Fed President Patrick Harker and New York Fed President John Williams will also speak today. Fed Chairman Jerome Powell (along with four other Fed officials) will speak tomorrow – along with the release of the latest readings of initial jobless claims and existing home sales.  Top Dividend Stock To Own Right Now Today’s Stock Pick: FTAI Aviation ([FTAI]() This stock is a wonderful one for a dividend investor to own. First, let’s talk about the company itself. FTAI Aviation is a global aviation and power equipment leasing company. The company would acquire aircraft and lease them to airline companies. And it also develops aircraft engines and aftermarket components primarily for the CFM56-7B/5B commercial aircraft engines. All in all, it owns a portfolio of 97 aircraft and 247 standalone engines as of June 30, 2023. The huge opportunity lies in the aftermarket for CFM56-5B engines. It is the largest engine market ever produced with over 22,000 engines manufactured and 21,000+ still in service today. However, GE Care is exiting this market to focus on new technology engines. This leaves companies like FTAI to fill in the niche. Aftermarket care for CFM56 is expected to grow at a whopping pace of 16% between 2022 and 2030, while GM Care’s market share of 26% is expected to shrink to 10% in the same period. (Source: FTAI Aviation) This is an important segment because the margins are insane. The adjusted EBITDA margin was above 44% for the segment. In the most recent quarter, the company earned an adjusted EBITDA of $30.1 million on revenue of $68.1 million. That’s a lot of money going straight to the company’s pocket! (Source: FTAI Aviation) This segment makes up a small percentage of FTAI Aviation’s adjusted EBITDA, but that is going to change soon. FTAI made zero dollar on Aerospace products in 2020. Now, it accounts for 23% of the revenue for Q2’23 run-rate. (Source: FTAI Aviation) As a result, FTAI generated $344 million in positive free cash flow position in the recent quarter. This will lead to more asset acquisitions. For example, it acquired 23 stand-alone engines & 15 narrowbody Aircraft during Q2 2023. This can only lead to bigger adjusted EBITDA down the road. Meaning? Lots of dividends for the shareholders! The stock currently yields an attractive 3.43%, and the company has paid out dividends for 48th straight quarters since its inception. With its blueprint of acquiring aircrafts and engines to generate income, an investor can feel assured that the dividend growth will continue for many quarters to come. Bottom line: FTAI Aviation has mastered the nice business model in the airline industry. Its products are essential. People will always need to fly. With its strong free cash flow position, the company has plenty of funds to grow its income through asset acquisition. This is a perfect stock for dividend lovers.   [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](     © All Rights Reserved, Trade Alliance  If you no longer want to receive these messages, you may [click here]( to unsubscribe.