Good News from High Yielding AT&T
April 22, 2021
Image Source: AT&T By Brian Nelson, CFA On Thursday, April 22, AT&T (T) reported solid first-quarter results that gave the market confidence that it can make good on its payout to shareholders. The company offers high yield dividend investors an attractive risk-reward profile given its healthy earnings (and free cash flow) coverage of the dividend, in our opinion. During the period, AT&T’s consolidated revenue advanced 2.7% while adjusted diluted earnings per share came in at $0.86 versus $0.84 in last year’s quarter. Operating cash flow leapt 12% while free cash flow soared to $5.9 billion, up by more than half over the same tally in the year-ago period. Here’s what CEO John Stankey had to say about the quarter in
One of Our Favorite Dividend Growth Ideas J&J Smashes Consensus Estimates
April 21, 2021
Image Shown: Summary of Johnson & Johnson’s first-quarter 2021 earnings results. Image Source: J&J. Valuentum’s Dividend Growth Newsletter portfolio >> By Callum Turcan On April 20, Johnson & Johnson (JNJ) reported first quarter 2021 earnings that smashed past consensus estimates. In conjunction with the solid earnings report, Johnson & Johnson raised its quarterly dividend 5% sequentially to $1.06 per share or $4.24 per share on an annualized basis, good for a forward-looking yield of ~2.5% as of this writing. The health care giant’s outperformance largely came from its ‘Medical Devices’ segment, which took a beating last year as the COVID-19 pandemic prompted widespread deferrals of elective surgeries. Last quarter, this part of the firm’s business grew its reported sales by
Abbott Expects Strong Earnings Expansion in 2021
April 21, 2021
Image Shown: We use a discounted cash flow model to derive a fair value estimate range for companies in our coverage. The high end of our fair value estimate range for Abbott is $125 per share. We’re maintaining this range after its first-quarter 2021 report. Image Source: Valuentum’s 16-page stock report of Abbott. Presentation: How to Use our 16-page Stock Reports (pdf) >> By Callum Turcan On April 20, Abbott Laboratories (ABT) reported first quarter 2021 earnings that missed consensus top-line estimates but beat consensus bottom-line estimates. Last quarter, Abbott Laboratories’ ‘Diagnostics’ revenues more than doubled year-over-year due primarily to its COVID-19 pandemic-related offerings, while its ‘Medical Device’ and ‘Nutrition’ revenues were up 9% and 6% year-over-year on an organic
Vertex and CRISPR Therapeutics Partnership Update
April 21, 2021
Image: Vertex Pharma is co-developing gene-based therapy for sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). CTX001 may offer a potential cure for people that have SCD and TDT. By Callum Turcan We include shares of Vertex Pharmaceuticals (VRTX) in the Best Ideas Newsletter portfolio and continue to view the biotech company quite favorably. Our capital appreciation thesis on Vertex Pharma is partially built upon the “call option” related to potential upside that various partnerships, including that with CRISPR Therapeutics (CRSP), could uncover. Even if such promising partnerships don’t pan out, however, Vertex Pharma’s free cash flow growth outlook underpins the higher end of its fair value estimate range, which currently sits at $321 per share (well above where
Banks Holding Up Well, Some Feel Pain from Archegos Capital Collapse
April 20, 2021
Image Shown: Bank of America Corporation has an optimistic view towards the ongoing US economic recovery. Image Source: Bank of America Corporation – First Quarter of 2021 IR Earnings Presentation By Callum Turcan Earnings season is now underway! In this article, we cover the performance of two large US banks and the problems facing one major European bank in light of losses stemming from Archegos Capital Management blowing up. Large reserve releases last quarter–due to the US economy holding up better than expected–during the coronavirus (‘COVID-19’) pandemic played an outsized role in bolstering the financial performance of key US banks after these institutions recorded large reserve builds in 2020. Net interest margins (‘NIM’) continue to face headwinds from the low
UnitedHealth Group Raises Guidance After Stellar Earnings Report
April 19, 2021
Image Shown: We added UnitedHealth Group Inc to the Dividend Growth Newsletter portfolio back on November 27, 2020. Since then, shares of UNH have surged higher, though we are primarily interested in the company’s immense dividend growth potential. By Callum Turcan On April 15, health insurance and health care solutions provider UnitedHealth Group Inc (UNH) reported first quarter 2021 earnings that beat both consensus top- and bottom-line estimates. In conjunction with the earnings update, management raised the company’s full-year adjusted (non-GAAP) EPS forecast for 2021 up to $18.10 – $18.60 versus $17.75 – $18.25 previously. At the midpoint of guidance, the company’s new forecast represents ~9% growth over its 2020 adjusted EPS of $16.88. UnitedHealth Group maintained its expectations for
Dividend Increases/Decreases for the Week April 16
April 16, 2021
Below we provide a list of firms that raised their dividends during the week ending April 16. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Agree Realty (ADC): now $0.217 per share monthly dividend, was $0.207. Aon (AON): now $0.51 per share quarterly dividend, was $0.46. AptarGroup (ATR): now $0.38 per share quarterly dividend, was $0.36. Artesian Resources (ARTNA): now $0.261 per share quarterly dividend, was $0.257. Banco Santander-Chile (BSAC): now $0.9285 per share annual dividend, was $0.4651. Cadence Bancorporation (CADE): now $1.25 per share special dividend, was $0.15. Costco (COST):
MPT Is Dead, Long Live Active Stock Management!
April 15, 2021
By Valuentum Analysts Valuentum’s President of Investment Research Brian Nelson, CFA, explains the importance of active stock management for long-term investors. Active stock selection is achievable for individual investors, necessary for advisors to differentiate their practice and achieve client goals in a low-yield environment, and indispensable for pensions and large institutions that have indefinite lives. MPT is dead, long live active stock management! Stocks for the long run. —– Valuentum members have access to our 16-page stock reports, Valuentum Buying Index ratings, Dividend Cushion ratios, fair value estimates and ranges, dividend reports and more. Not a member? Subscribe today. The first 14 days are free. Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, and IWM. Brian Nelson’s household owns
SPACs Are Good for Markets, Not SPAC-tacular for Investors
April 13, 2021
Image: Performance of the Defiance NextGen SPAC IPO ETF (SPAK), where “a 60% weighting is applied to IPO companies derived from SPACs and 40% is allocated to common stock of newly listed Special Purpose Acquisition Companies (“SPACs”), ex-warrants” has been roughly flat since inception in October 2020. By Brian Nelson, CFA What a time to be an investor…ehem, speculator! Cryptocurrencies, non-fungible tokens (NFTs), and now the boom in Special Purchase Acquisition Companies, more commonly known as SPACs. First, the good: We like that SPACs will create more publicly listed companies to improve investor choice because the number of publicly traded companies has been dangerously shrinking in recent years…but that’s really all we like about them. A SPAC is just
How Many Stocks to Achieve Diversification?
April 12, 2021
Image: GameStop’s shares are falling like a rock after hitting euphoric levels in the mid-$400s earlier this year. Our fair value estimate stands below $10 per share. By Brian Nelson, CFA GameStop (GME) will be trading in the double digits soon enough, in our opinion. The stock’s rise caught Wall Street by surprise, putting hedge fund Melvin Capital’s back against the wall. Earlier this year, the Reddit/Robinhood (r/WallStreetBets) community aggressively bought the quant factor “short interest as a percentage of float” to drive shares of GameStop, AMC Entertainment (AMC) and others like it into a relentless short squeeze. According to reports, Melvin Capital generated a 49% first-quarter loss, which for any institution should be an unfathomable possibility in a market
