Earnings Roundup: Bellwethers and Big Name Dividend Payers
October 24, 2018
Image Source: Mike Cohen Let’s take a look at some high-profile earnings reports of this week, including those from Boeing, Caterpillar, 3M, AT&T, and Verizon. By Kris Rosemann Boeing Raises Full-Year Guidance Former simulated Dividend Growth Newsletter portfolio idea Boeing (BA) reported third-quarter results October 24, and a strong showing enabled management to increase its guidance for the full year. Revenue in the third quarter advanced 4% on a year-over-year basis thanks to higher defense volume and services growth as the company works to build the latter into a $50 billion business in the next five to ten years from its current $12+ billion run rate. The company’s operating margin faced pressure (GAAP operating margin contracted by two percentage points) as
Wild Ride in the Markets — Nelson
October 24, 2018
Image Source: Spencerville Rodeo By Brian Nelson, CFA Market volatility has picked up quite a bit of late, and frankly you shouldn’t be the bit surprised. I’ve been quite active explaining the impact that the proliferation of index investing and quantitative investing has had and will have on the marketplace. The more people index or invest on backward-looking empirical criteria, as in most quant models, regardless of future expectations, the more people that buy everything at any price and hold no matter what, the more people that aren’t making decisions on the basis of underlying valuations, then the more people that can contribute to severe price-to-fair value dislocations. In many ways, when nobody is paying attention to what is going
Hasbro’s Top Line Drops Amid Ongoing Challenges
October 22, 2018
Hasbro continues to face the fallout of the Toys ‘R’ Us bankruptcy earlier this year, as well as challenges from the rapidly changing retail environment and retail inventory clearing. Management remains optimistic regarding a return to profitable growth in 2019, however. By Kris Rosemann Simulated Dividend Growth Newsletter portfolio idea Hasbro (HAS) saw its shares face selling pressure following a disappointing third quarter report October 22 as its top line declined 12% as reported on a year-over-year basis due to the temporary loss of Toys ‘R’ Us revenue, a rapidly-changing retail environment, clearing through retail inventory, and currency headwinds. Management noted retail inventory was down significantly in the US and Europe, and it is working to clear excess inventory by
Hi-Crush and EnLink Join Growing List of MLP Simplifications
October 22, 2018
Image Source: EnLink transaction presentation A number of master limited partnerships continue to transition to more simplified structures as they attempt to become increasingly nimble organizations. By Kris Rosemann The ongoing trend of master limited partnership simplification transactions continued October 22 as proppant and logistics solutions provider Hi-Crush Partners (HCLP) acquired its general partner and slash its quarterly distribution to $0.225 per unit from $0.75 per unit. The now C-Corp used 11 million newly issued units to acquire Hi-Crush Proppants LLC for a total consideration of $96.25 million and eliminated its incentive distribution rights in doing so. Rationale cited for making the change is very similar to other similar transactions, including a lower cost of capital, wider appeal to a range
Netflix’s Strong Subscriber Growth and Sizable Cash Burn Continue
October 20, 2018
Image Source: NodStrum Tech Streaming giant Netflix continues to grow its subscriber base at an impressive rate as it works to achieve sufficient levels of operating leverage, but its free cash flow burn is as significant as ever as financial obligations mount. By Kris Rosemann Shares of market darling Netflix (NFLX) were boosted in the October 17 trading session by strong subscriber growth guidance and better-than-expected profit generation in its third quarter report, released October 16, though management noted a portion of that profit generation was due to marketing costs being pushed in the fourth quarter. Paid net additions came in at 6.07 million in the third quarter, and total paid memberships sat at 130.42 million at the end of the
Earnings Roundup: Past, Present, and Potential Dividend Growth Ideas
October 19, 2018
Image Source: Mike Cohen Let’s take a look at the earnings reports of some past, present, and potential simulated Dividend Growth Newsletter portfolio ideas, including that of Novartis, Procter & Gamble, Honeywell, and Kinder Morgan. By Kris Rosemann Novartis Reports Solid Volume Growth But Pricing Pressure Simulated Dividend Growth Newsletter portfolio idea Novartis (NVS) reported third quarter 2018 earnings October 18, and its top line was driven 3% higher as reported thanks to nine percentage points of volume growth, which was partially offset by negative pricing action, generic competition, and currency headwinds. Drivers of the volume growth include Cosentyx, Entresto, its oncology portfolio, and Alcon, but reported operating income faced material pressure as a result of the voluntary withdrawal of
Dividend Increases/Decreases for the Week Ending October 19
October 19, 2018
Below we provide a list of firms that raised their dividends during the week ending October 19. 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 1st Constitution Bancorp (FCCY): now $0.075 per share quarterly dividend, was $0.06. Antero Midstream GP (AMGP): now $0.144 per share quarterly dividend, was $0.125. Antero Midstream Partners (AM): now $0.44 per share quarterly dividend, was $0.415. Blackstone (BX): now $0.64 per share quarterly dividend, was $0.58. BP Midstream Partners (BPMP): now $0.2915 per share quarterly dividend, was $0.2725. Central Valley Community Bancorp (CVCY): now $0.09 per
In The News: Chemical Margins Tighten, Philip Morris Total Volume Rises, Consolidation in ETFs
October 18, 2018
PPG Industries is experiencing notable margin headwinds, international tobacco giant Philip Morris has experienced solid total volume performance in 2018, and Invesco continues its pursuit of a significantly larger ETF business. By Kris Rosemann PPG Industries (PPG), one of our favorite chemicals companies on a fundamental basis, has experienced notable selling pressure in recent weeks as a result of its preliminary third quarter results released October 8. It noted a number of headwinds to its bottom-line, despite selling prices increasing for the sixth consecutive quarter in the third quarter of 2018. Cost inflation was the highest since the “cycle began two years ago,” a reference to the beginning of the rebound in energy resource pricing, a key consideration for chemical
In the News: Housing Starts and Railroad Pricing
October 17, 2018
Two highly-followed portions of the US economy are experiencing demand and pricing movements, and investors are taking note. Let’s take a quick look. By Kris Rosemann Homebuilders (XHB, ITB) faced selling pressure early in the October 17 trading session after concerns over slowing demand and affordability continue to be present. Housing starts for the month of September revealed a more significant than expected decline from the previous month as the measure fell 5.3% to 1.201 million compared to the 1.216 million expected. Building permits came in at 1.241 million in the month compared to 1.272 million expected. Meanwhile, mortgage applications dropped as interest rates continue to rise, and total mortgage applications fell 7.1% in the week ended October 12. The
Johnson & Johnson Driven By Pharma Growth
October 16, 2018
Image Source: JNJ third quarter earnings presentation Simulated newsletter portfolio idea Johnson & Johnson turned in a strong third quarter report that was driven once again by growth in its ‘Pharmaceutical’ segement, namely its ‘Oncology’ division. By Kris Rosemann Johnson & Johnson (JNJ) reported 3.6% year-over-year revenue growth in the third quarter of 2018 thanks to ongoing strength in its ‘Pharmaceutical’ segment, which turned in reported revenue growth of 6.7% as reported revenue in its ‘Oncology’ division within the segment leapt 36%+ from the year-ago period. Key sales growth leaders in ‘Oncology’ were DARZALEX, IMBRUVICA, and ZYTIGA, while REMICADE revenue erosion from biosimilar competition was more than offset by strength in other key ‘Immunology’ drugs including STELARA and SIMPONI/SIMPONI ARIA.
