Yield Credit Rating Notes December 5, 2018 The following table summarizes the Sector Strategy Spotlight stocks that are discussed in detail in separate sector-specific materials prepared by Janney's Investment Strategy Group. The listed securities are intended to reflect long-term investment themes of Janney's Investment Strategy Group utilizing industry leading companies that could potentially represent a well diversified portfolio. All sectors now have representative sub-industry and sector ETFs. We are Overweight Energy and Health Care. Communication Services sector replaced Telecom and we are Favorably Neutral on the new sector. We are Underweight Industrials and Materials. We are favorably Neutral on Technology, Consumer Discretionary, Consumer Staples, and Real Estate. Added AMZN for internet retailing exposure and replaced LVS with MGM for better U.S. exposure. Yield Credit Rating Notes Coverage Consumer Discretionary - 10% of S&P 500 Favorably Neutral - favorable towards Housing Related Industries and Consumer Experience - Restaurants, Hotels and Casinos. AMAZON.COM INC AMZN 61.27 49.50 - AA- Leading on-line retailer. COSTCO WHOLESALE CORP COST 29.27 10.78 0.98 A+ Solid top-line growth and successfully growing internationally. CFRA WALMART INC WMT 19.84 5.18 2.16 AA Dominant market share, price leadership, strong cash flow. HOME DEPOT INC HD 17.75 12.96 2.35 A World s largest home improvement retailer. MGM RESORTS INTERNATIONAL MGM 26.24 1.29 1.74 BB- Leading global hospitality company with portfolio of destination resorts. MARRIOTT INTERNATIONAL -CL A MAR 18.40 12.90 1.37 BBB Benefitting from strong fundamentals and significant US exposure. CFRA DARDEN RESTAURANTS INC DRI 19.07 10.62 2.56 BBB U.S. focused restaurant chains that should benefit from tax reform. CFRA CONSUMER DISCRETIONARY SELT XLY - - 1.21 - Broad exposure to 67 Consumer Discretionary stocks. ISHARES U.S. HOME CONSTRUCTI ITB - - 0.51 - Broad exposure to 49 home construction stocks. INVESCO DYNAMIC LEISURE AND PEJ - - 0.56 - Broad exposure to consumer leisure stocks (restaurants, hotels and casinos). Consumer Staples - 7% of S&P 500 Favorably Neutral - favorable towards Drug Retailers, Household Products, and Beverages. CVS HEALTH CORP CVS 11.24 10.56 2.53 BBB Largest pharmacy health care provider in U.S. WALGREENS BOOTS ALLIANCE INC WBA 12.66 8.58 2.03 BBB Largest U.S. retail drug chain based on revenues. COLGATE-PALMOLIVE CO CL 21.30 7.49 2.63 AA- Major marketer of personal care and pet nutrition in over 200 countries. CFRA PROCTER & GAMBLE CO/THE PG 21.23 6.54 3.04 AA- Expectations are low while stock has dividend support. CFRA ALTRIA GROUP INC MO 13.61 8.50 5.26 A- Largest U.S. tobacco company is leading industry price increases. CFRA PHILIP MORRIS INTERNATIONAL PM 16.99 8.78 5.17 A Largest publicly traded tobacco company with very solid capital returns. COCA-COLA CO/THE KO 23.79 7.37 3.15 A+ World s largest soft drink company. CFRA PEPSICO INC PEP 20.83 6.78 2.94 A+ Major global producer of branded beverage and snack food products. CFRA CONSUMER STAPLES SPDR XLP - - 2.71 - Significant exposure to all of the above themes and companies. Energy - 5% of S&P 500 Overweight - favor select Integrateds and Refiners, select Exploration & Production, and select MLPs. EXXON MOBIL CORP XOM 16.75 18.87 4.07 AA+ World s largest publicly-owned integrated oil company. VALERO ENERGY CORP VLO 12.78 16.36 4.03 BBB World s largest refiner well positioned for shale oil.
Energy (continued) CHEVRON CORP EQT CORP EOG RESOURCES INC HALLIBURTON CO SCHLUMBERGER LTD VANGUARD ENERGY ETF SPDR S&P OIL & GAS EXP & PR ISHARES U.S. OIL EQUIPMENT & ETRACS ALERIAN INFRASTRUCTUR Yield Credit Rating CVX 13.92 3.03 3.82 AA- Major global integrated oil company with E&P, refining, and petrochemicals. EQT 7.84 20.00 0.66 BBB- Marcellus shale play levered to natural gas prices. EOG 17.56 11.27 0.73 A- Large independent E&P company with Bakken Shale oil growth exposure. HAL 16.85 58.92 2.29 A- Leading global oil services company. SLB 26.37 20.88 4.53 AA- Bellwether of oil services group, and hence, premium valuation. VDE - - 2.82 - Cap-weighted basket of 131 companies across entire Energy sector XOP - - 0.80 - Equal-weighted basket of 63 E&P companies. IEZ - - 1.45 - Cap-weighted basket of 39 oil & gas equipment and services companies. MLPI - - 7.42 - ETN that tracks performance of Alerian MLP Infrastructure Index. Notes Coverage Financials - 14% of S&P 500 Neutral - favor Banks, Capital Markets, Insurance, and Consumer Finance. PNC FINANCIAL SERVICES GROUP PNC 12.08 8.94 2.62 A- Major regional bank with focus on Pennsylvania and Ohio. SUNTRUST BANKS INC STI 10.46 12.49 3.07 BBB+ Large regional bank with focus on Florida, Georgia, Virginia, and Tennessee. AMERICAN EXPRESS CO AXP 14.57 10.00 1.34 BBB+ Leading global payments and travel and expense services company. DISCOVER FINANCIAL SERVICES DFS 8.49 12.46 2.26 BBB- Solid balance sheet, gaining share, and promising growth initiatives. ALLSTATE CORP ALL 9.56 9.00 2.13 A- Second largest U.S. personal lines property-casualty insurer. /J METLIFE INC MET 7.92 13.21 3.91 A- Largest U.S. life insurer. Well positioned in growing retirement and savings market. /J JPMORGAN CHASE & CO JPM 11.66 9.33 2.31 A- Best-in-class financial services firm with operations in over 50 countries. GOLDMAN SACHS GROUP INC GS 7.27 12.07 1.71 BBB+ Leading position in investment banking, securities, and wealth management. FINANCIAL SELECT SECTOR SPDR XLF - - 1.85 - Includes 66 stocks for broad-based financial sector exposure. SPDR S&P REGIONAL BANKING KRE - - 1.86 - Includes 100 equally weighted regional bank stocks. ISHARES U.S. INSURANCE ETF IAK - - 2.19 - Includes 63 U.S. insurance provider stocks. ISHARES U.S. BROKER-DEALERS IAI - - 1.48 - Includes 29 U.S. investment services stocks with GS and MS largest holdings. Health Care - 16% of S&P 500 Overweight - favor Medical Devices, Managed Care, Biotech, and Pharmaceuticals. MEDTRONIC PLC MDT 18.74 8.02 1.99 A Very diverse product line, strong cash flow, valuation, and dividend support. CFRA UNITEDHEALTH GROUP INC UNH 21.75 13.82 1.24 A+ Leading market position with product diversity. HCA HEALTHCARE INC HCA 15.21 13.72 0.98 BB+ Leading U.S. health care services provider. JOHNSON & JOHNSON JNJ 17.89 7.80 2.42 AAA AAA rated blue chip with valuation and dividend support. MERCK & CO. INC. MRK 18.03 7.92 2.45 AA Full product pipeline with valuation and dividend support. GILEAD SCIENCES INC GILD 10.10 5.55 3.21 A Strong franchises, valuation support, and returning capital to shareholders. CFRA VANGUARD HEALTH CARE ETF VHT - - 1.24 - Broad exposure from cap-weighted basket of 355 companies. ISHARES U.S. MEDICAL DEVICES IHI - - 0.36 - Cap-weighted basket of 52 manufacturers and distributors. ISHARES U.S. HEALTHCARE PROV IHF - - 0.21 - Broad-based exposure to 47 U.S. health care providers. ISHARES NASDAQ BIOTECHNOLOGY IBB - - 0.29 - Broad exposure to Biotech firms and weighted toward large-cap. SPDR S&P BIOTECH ETF XBI - - 0.28 - Equal-weighted biotech ETF that s skewed toward mid and small-cap. ISHARES US PHARMACEUTICALS E IHE - - 1.14 - Cap-weighted basket of 42 pharmaceutical companies.
Monthly Security List December 5, 2018 Yield Credit Rating Notes Coverage Industrials - 9% of S&P 500 Underweight - favor Defense, Transports, and high quality companies with dividend support. HONEYWELL INTERNATIONAL INC HON 17.79 14.68 2.14 A Diversified portfolio of profitable businesses with growth opportunities. 3M CO MMM 20.31 8.65 2.69 AA- Strong balance sheet (AA-) and history of earnings and dividend growth. EMERSON ELECTRIC CO EMR 17.84 9.17 2.96 A aristocrat with diversified global businesses. INGERSOLL-RAND PLC IR 18.29 12.37 1.84 BBB 66% of revenue from North America. Participating in housing recovery. BOEING CO/THE BA 22.68 15.85 2.00 A World s largest commercial jets and second largest military weapons maker. GENERAL DYNAMICS CORP GD 15.54 10.51 2.10 A+ Fourth largest military contractor and major manufacturer of corporate jets. FEDEX CORP FDX 12.35 14.80 1.07 BBB Strong balance sheet, healthy cash flow and earnings growth. UNION PACIFIC CORP UNP 19.48 9.37 2.00 A- Largest U.S. railroad with oligopoly-like industry to support profit growth. INDUSTRIAL SELECT SECT SPDR XLI - - 1.98 - Broad exposure to 68 U.S. based industrials. GE is largest holding. ISHARES TRANSPORTATION AVERA IYT - - 1.12 - FDX and UNP are largest holdings of this Dow Jones Transport ETF. Technology - 20% of S&P 500 Favorably Neutral - favor Software and Semiconductors. MICROSOFT CORP MSFT 24.31 13.32 1.58 AAA Fortress balance sheet with valuation support and new products. ORACLE CORP ORCL 14.40 7.43 1.56 AA- Strong balance sheet, free cash flow, and valuation support. INTEL CORP INTC 10.60 10.60 2.51 A+ Strong balance sheet. Valuation and dividend support. TEXAS INSTRUMENTS INC TXN 17.01 10.58 2.74 A+ Diverse product line with exposure to many end markets and customers. CISCO SYSTEMS INC CSCO 15.52 5.74 2.70 AA- Fortress balance sheet and valuation support. Dominant market position. QUALCOMM INC QCOM 13.93 10.94 4.12 A- Solid position in high growth industry with strong cash flow. CFRA APPLE INC AAPL 13.13 10.75 1.60 AA+ Leading technology innovator with favorable growth and value. CFRA VISA INC-CLASS A SHARES V 25.99 18.70 0.63 AA- World s largest retail electronics payment network. VANGUARD INFO TECH ETF VGT - - 1.09 - Cap-weighted basket of 356 info tech stocks. ISHARES NORTH AMERICAN TECH- IGV - - 0.03 - Cap-weighted basket of 66 U.S.-traded software companies. VANECK VECTORS SEMICONDUCTOR SMH - - 1.49 - Cap-weighted basket of 26 U.S.-traded semiconductor companies. ISHARES NORTH AMERICAN TECH- IGN - - 0.68 - Cap-weighted basket of 25 U.S.-traded multimedia networking companies. Materials - 3% of S&P 500 Underweight - favor Diversified Chemicals and Packaging. VANECK VECTORS GOLD MINERS E GDX - - 0.90 - Liquid and diversified proxy for global gold stocks. DOWDUPONT INC DWDP 13.67 7.50 2.69 A- Diversified and generating lots of free cash flow to support dividend. PPG INDUSTRIES INC PPG 18.26 7.41 1.74 A- Solid exposure to fast growing markets and shareholder friendly. SEALED AIR CORP SEE 14.34 3.38 1.84 BB+ Leading global manufacturer of a wide range of packaging materials. BALL CORP BLL 22.21 5.63 0.82 BB+ Leading packager for beverage, food, personal, and household products. CFRA ISHARES MSCI GLOBAL AGRICULT VEGI - - 1.74-148 holdings provide broad-based agricultural exposure. SPDR S&P METALS & MINING ETF XME - - 2.63-26 U.S. based holdings that provide broad-based metals & mining exposure. MATERIALS SELECT SECTOR SPDR XLB - - 2.01-28 holdings provide exposure to S&P Materials Select Sector Index.
Yield Credit Rating Notes Coverage Real Estate - 3% of S&P 500 Favorably Neutral - favor Diversified, Wireless Communications, and Technology. EQUITY RESIDENTIAL EQR 42.73 5.82 3.00 A- Well-positioned with high quality portfolio in attractive markets. J/CFRA MID-AMERICA APARTMENT COMM MAA 53.16-3.65 BBB+ Largest multi-family portfolio in large and secondary Sunbelt region cities. J/CFRA DIGITAL REALTY TRUST INC DLR 44.17 18.83 3.49 BBB Focused on providing data center and colocation solutions. CROWN CASTLE INTL CORP CCI 81.16 22.35 3.65 BBB- Operates wireless communications and broadcast networks. CFRA AMERICAN TOWER CORP AMT 53.53 16.37 1.84 BBB- Largest independent portfolio of wireless towers in North America. CFRA VENTAS INC VTR 49.23 2.66 5.00 BBB+ Health Care exposure with large, diversified portfolio that provides steady income. CFRA HCP INC HCP 13.34 3.36 5.09 BBB+ Major and diversified owner of health-care related facilities across the U.S. CFRA VANGUARD REAL ESTATE ETF VNQ - - 4.74 - Includes 153 U.S. REITs for broad-based REIT exposure. Communication Services - 10% of S&P 500 Favorably Neutral - favor Internet Services and Media. ALPHABET INC-CL A GOOGL 19.42 17.82 - AA+ World's largest Internet firm with further secular growth opportunities. FACEBOOK INC-CLASS A FB 16.45 24.31 - - One of world s largest internet firms with further growth opportunities. WALT DISNEY CO/THE DIS 15.74 12.98 1.49 A+ *- Leading media firm with theme parks, TV and filmed entertainment. COMCAST CORP-CLASS A CMCSA 14.77 5.46 1.93 A- Diversified with cable, television, filmed entertainment, and theme parks. AT&T INC T 8.75 4.85 6.51 BBB Major provider of telecommunications and digital entertainment services. VERIZON COMMUNICATIONS INC VZ 12.43 4.28 4.08 BBB+ Well-positioned for wireless growth with high-quality network. ISHARES US TELECOMMUNICATION IYZ - - 2.96 - Broad exposure to 23 Telecom Industry firms. Utilities - 3% of S&P 500 Neutral - favor Regulated Electric Utilities and Multi-Utilities. NEXTERA ENERGY INC NEE 23.51 8.25 2.44 A- and dividend expected to grow faster than peer group. PPL CORP PPL 13.01 8.10 5.29 A- & valuation should support stock until power markets recover. CFRA DOMINION ENERGY INC D 18.57 5.51 4.35 BBB+ Balanced earnings regulated gas & electric distribution and pipelines. NISOURCE INC NI 21.15 5.38 2.88 BBB+ Diversified exposure to regulated gas and electric distribution. UTILITIES SELECT SECTOR SPDR XLU - - 3.23 - Broad exposure to 29 S&P Utilities Sector Index companies. Definitions: - Current stock price divided by EPS consensus estimate for the next four quarters. Estimate - Mean broker estimate of the compounded annual growth rate of the operating eps over the company's next full business cycle (typically 3-5 years). Yield - Trailing 12 month dividend per share divided by share price Credit Rating - Rating assigned by Standard & Poor's to the long term obligations of the issuer if repaid in the local currency of the issuer.
Important Disclosures The Sector Strategy Security List is being provided solely for informational and illustrative purposes, is not an offer to sell or a solicitation of an offer to buy the securities highlighted in the list, and does not constitute investment advice by Janney Montgomery Scott LLC or its affiliates. The Sector Strategy Security List does not refer, and should not be taken as referring, to an actual fund, portfolio or account, and should not be deemed as a model investment portfolio. Decisions to buy or sell a stock should be based on an investor s investment objectives and risk tolerance and this material should not be relied upon in substitution of independent judgment. This material does not take into account individual client circumstances, objectives or needs and is not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The information provided in the list has been obtained or derived from sources believed by Janney Montgomery Scott LLC to be reliable. Janney Montgomery Scott LLC, however, does not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of the Investment Strategy Group of Janney Montgomery Scott LLC at this time and are subject to change without notice. The opinions and estimates do not necessarily represent the viewpoint of Janney Montgomery Scott LLC, its Research Department or any other group or employee associated with Janney Montgomery Scott LLC or its affiliates, and may differ from opinions or estimates of Janney Montgomery Scott LLC, including its Research Department, and its affiliates. Janney Montgomery Scott LLC or its affiliates may have issued, and may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented in this material. Janney Montgomery Scott LLC, its officers, directors, employees, or members of their families may have positions in the securities mentioned and may make purchases or sales of such securities from time to time in the open market or otherwise and may sell to or buy from customers such securities on a principal basis. This list includes only companies that receive research analyst coverage from either Janney Montgomery Scott LLC s Research Department or a research provider whose research is available to Janney Montgomery Scott LLC Financial Advisors and that also currently pay a dividend to shareholders. Thus, the universe of potential companies that could be included in this representative list is narrower than the total universe of public companies. information is as of 11/30/2018. The opinions and estimates with respect to the overweight, neutral or underweight exposure of particular economic or market sectors represent the viewpoint of the Investment Strategy Group of Janney Montgomery Scott LLC and does not necessarily represent the viewpoint of Janney Montgomery Scott LLC or any other group or employee associated with Janney Montgomery Scott LLC or its affiliates, and may differ from opinions or estimates of Janney Montgomery Scott LLC and its affiliates. The Overweight/Neutral/Underweight referenced in this report is intended to be used as a guide for sector rankings relative to the sector make-up of the S&P 500 Index. Currently, the S&P 500 Index includes securities grouped into 10 economic sectors. Overweight generally refers to the Investment Strategy Group s expectation that the sector s fundamentals and/or valuation is likely to be favorable over the next 12 months. Neutral generally refers to the Investment Strategy Group s expectation that the sector s fundamentals and/or valuation is likely to be neutral over the next 12 months. Underweight generally refers to the Investment Strategy Group s expectation that the sector s fundamental and/or valuation is likely to be cautious over the next 12 months. Past performance is no guarantee of future performance and future returns are not guaranteed. There are risks associated with investing in stocks such as a loss of original capital or a decrease in the value of your investment. A company may also decide to decrease or cancel a dividend payment at any time without notice. For additional information or questions, please consult with your Financial Advisor.