Motley Fool Money Summary

Episode: Three Non-AI Stocks to Buy: MRK, UPS, CVX
Date: November 17, 2025
Host: Tim Byers
Guests: Carl Thiel, Anthony Chavon

Main Theme

The episode centers on stock investing opportunities outside the hot AI sector. With AI dominating headlines, the hosts dive into three significant non-AI stocks—Merck (MRK), UPS, and Chevron (CVX)—analyzing recent events, evaluating business trends, and delivering actionable buy/sell/hold recommendations. Later in the episode, the team plays “Back it or Bin it,” focusing on the outlook for dividend growth at three additional companies.

Key Discussion Points and Insights

1. Merck’s Strategic Move: The Sadara Deal

Segment: [00:39–05:26]

• Deal Overview:
  Merck (MRK) is acquiring Sadara (CDTX) in a ~$10B deal, primarily to obtain an innovative influenza treatment.
• Deal Premium:
  Merck is paying a premium of 109% over Sadara’s prior close ($221.50/share), indicating conviction in the drug’s value.

  “This was initially looked at as something just for very high risk influenza patients. FDA has actually kind of come back…to make it...potentially a slightly broader drug.” — Carl Thiel [03:51]

• Sector Context:
  Recent pharma M&A usually targets oncology, but Merck’s move into infectious diseases (flu, fungal) signals sector diversification.
• Patent Cliff Motivation:
  Merck faces a looming patent expiration on Keytruda, its blockbuster oncology drug. The Sadara acquisition is seen as a way to offset this risk.
• Pricing Justification:
  “I don’t think that Merck is paying an outrageous amount…this could be…a broader drug.” — Carl Thiel [03:53]

Recommendation:

• Buy on Merck.

  “I’m a buy on Merck just because I think Merck is attractively priced relative to the rest of the market…The data has looked good for this approach…modestly bullish.” — Carl Thiel [04:55]

2. UPS: Turnaround and Strategic Refocus

Segment: [05:26–08:19]

• Performance:
  Revenue fell nearly 4% YoY, “primarily driven by the planned decrease in Amazon package volumes…and some business divestitures.” — Anthony Chavon [05:53]
• Positive Signs:
  • Despite 12% volume decline in domestic shipments, revenue per piece grew 10%—fastest in three years.
  • Operating margin expanded; management’s “better, not bigger strategy is progressing.” [06:38]
  • Significant cost cutting: “expects to reduce expenses by 3.5 billion this year.”
  • Shift toward higher-margin healthcare, B2B, and international packages.
• Profitability Focus:

  “All these decisions are aimed towards becoming a smaller, more efficient UPS. And I really think this quarter was a big step in the right direction for the company.” — Anthony Chavon [07:15]

Recommendation:

• Buy on UPS.

  “…7% dividend yield…not currently covered by free cash flow, but I do think it’s sustainable…might be enough to beat the market over a five to ten year period.” — Anthony Chavon [10:36]

3. Chevron: Strong Returns Despite Volatility

Segment: [08:19–11:22]

• Earnings Recap:
  • “Production…was a record quarter…21% higher than last year.”
  • “Adjusted free cash flow at $7 billion,” and $6B returned to shareholders via dividends and buybacks.
• Shareholder Focus:
  • “…returned $78 billion through dividends and buybacks over just the last three years…that’s really kind of the thesis for traditional energy companies now.” — Anthony Chavon [09:25]
  • Management plans to return $10–$20 billion per year through 2030.
  • Strong 4.3% dividend yield; targeting 10% annual free cash flow growth.
• Industry Trend:
  Oil & gas shifting from aggressive growth to focus on capital discipline and consistent shareholder returns.

  “Now they're much more focused on returns on capital and returns of capital through dividends and buybacks.” — Anthony Chavon [09:32]

Recommendation:

• Buy on Chevron.

  “Roughly 4.3% dividend yield today…free cash flow at a 10% annual rate through 2030…double-digit expected return over the next five years.” — Anthony Chavon [11:07]

4. “Back it or Bin it?”: Dividend Growth Prospects

Segment: [12:49–18:19]

A quick-fire round assessing whether three companies are likely to bump their dividends in 2026.

A. Wabtec (WAB)

• Financials: 6.6% projected revenue growth; 12% payout ratio—"at the low end of management's target."
• Outlook: Stated goal to increase dividends; recent acceleration in dividend growth rate.
• Verdict: Back it

  “That dividend growth rate is accelerating over the last two years, so yeah, I think a dividend increase…is probable.” — Anthony Chavon [14:47]

B. Hasbro (HAS)

• Financials: 75% of FCF dedicated to dividend.
• Challenges: In multi-year turnaround; substantial debt.
• Verdict: Bin it

  “I kind of hope they don’t honestly increase the dividend…they already pay something like a 3.6% yield…they’ve got a number of challenges…” — Carl Thiel [15:51]

C. CF Industries (CF)

• Financials: Huge cash generator; payout ratio averaged 24–35%.
• Trend: Prefers buybacks; last big dividend bump was 2022/2023.
• Volatility: Dependent on commodity prices.
• Verdict: Bin it

  “Management seems to prefer share buybacks right now…I think a dividend increase is largely going to depend on commodity prices…” — Anthony Chavon [17:43]

Notable Quotes & Memorable Moments

• On pharma M&A premiums:

  “You expect an M&A deal to come at some premium. But that's a pretty big one…” — Carl Thiel [02:54]

• Turnaround optimism:

  “All these decisions are aimed towards becoming a smaller, more efficient UPS. And I really think this quarter was a big step in the right direction…” — Anthony Chavon [07:15]

• Chevron’s capital returns:

  “Chevron mentioned that they have returned 78 billion through dividends and buybacks over just the last three years. That’s a massive amount of capital…” — Anthony Chavon [09:29]

• Dividend sweepstakes:

  “If you want dividend growth, the old Westinghouse Airbrake Technologies Corporation, that's your one to go with.” — Tim Byers [18:38]

Timestamps for Key Segments

• [00:39] — Intro to Non-AI stock picks
• [01:25] — Merck’s Sadara acquisition explained
• [04:55] — Buy/Sell/Hold on Merck
• [05:41] — UPS earnings and business model shift
• [07:52] — Evaluating UPS’s profitability prospects
• [08:38] — Chevron’s results and shareholder returns
• [10:36] — Buy/Sell/Hold on UPS
• [11:07] — Buy/Sell/Hold on Chevron
• [12:49] — “Back it or Bin it” dividend game
  • Wabtec (WAB) [14:24]
  • Hasbro (HAS) [15:51]
  • CF Industries (CF) [17:43]

Summary Table: Buy/Sell/Hold Ratings

| Stock | Ticker | Analyst | Recommendation | Key Reasoning | |------------|--------|-------------------|----------------|------------------------------------------------------| | Merck | MRK | Carl Thiel | Buy | Attractive value, pipeline diversification | | UPS | UPS | Anthony Chavon | Buy | Turnaround, efficiency, high dividend yield | | Chevron | CVX | Anthony Chavon | Buy | Strong shareholder returns, capital discipline |

Tone

The hosts maintain the friendly, engaging, and slightly irreverent “Foolish” tone fans expect, mixing clear-eyed business analysis (“I think Merck was attractively priced...”) with informal banter (“Did you know that Hasbro is the home of Play Doh?”). They are candid about risks and benefits, focusing on long-term fundamentals rather than short-term hype.

For listeners seeking non-AI stock ideas and thoughtful dividend analysis, this episode delivers timely, actionable perspectives with Foolish flair.