Five interesting things that Hodges Capital research analysts discovered this week...

#1 GOING UP: U.S. home insurance rates are expected to reach a record high this year, with the biggest increase occurring in states prone to severe weather events. The average premium for homeowners’ insurance is expected to hit $2,522 by the end of the year, driven largely by intensifying natural disasters, rising reinsurance costs, and higher fees for home repair, according to Insurify, a Massachusetts-based insurance comparison platform. That figure represents a 6% increase over the average U.S. premium at the end of 2023 and follows a roughly 20% increase over the past two years.

#2 GENETICS: Genetically engineered (GE) seeds were commercially introduced in the United States for major field crops in 1996. The two main GE trait types are herbicide-tolerant and insect-resistant. Today, more than 90 percent of corn, cotton, and soybean acres are planted using at least one GE trait. According to the USDA, this is up from 50% in 2008.

#3 PAID TO WIN: The University of Georgia recently approved a new 10-year, $130 million contract with football coach Kirby Smart. According to ESPN, the deal will make Smart the highest-paid coach in college football and the first to make $13MM in a year. The money is guaranteed for at least the first half of his contract, and Smart could earn up to $1.55 million in bonuses. Smart is entering his ninth season as Geogia’s coach, winning back-to-back national championships in 2021 and 2022. Georgia won an SEC-record 29 straight games before losing to Alabama in the SEC championship game last season.

#4 MOST VALUABLE: According to Bloomberg, Novo Nordisk is now Europe’s most valuable company, where its market capitalization is now larger than its home country of Demark’s GDP. The company’s first triumph came with Ozempic, a drug intended for diabetes treatment. Ozempic sales are up 6x in just five years. Wegovy, the company’s FDA-approved weight-loss drug, now represents 17% of the company’s total sales. Combined, Ozempic and Wegovy represent 70% of total company sales.

#5 HOW ATTRACTIVE ARE DIVIDEND YIELDS? According to Piper Sandler, the surge in rates in recent years means that less than 10% of the S&P 500 pays a dividend yield above the 10-year Treasury rate. Fed rate cuts should be a tailwind for high dividend-yielding stocks, which tend to outperform in periods where the dividend is increasingly attractive versus Treasury yields. Investors need to do their due diligence as dividend cuts often happen in periods of slower growth and soft earnings.

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