Starbucks’ China Business Leads Same-Sale Growth
September 14, 2016
By The Valuentum Team Starbucks (SBUX) has unparalleled brand power, capturing customers’ hearts across the world! As owners of its equity know, the coffee giant has recently shifted its unit growth focus away from domestic expansion, to international growth (mostly in China and Japan). As we outlined in our late June piece, “Quick Update: Starbucks — What a Company,” 70% of the ~1,800 new stores expected to be opened in fiscal 2016 will be outside of the US. Starbucks’ China division’s comparable-store sales rose 7% in the third quarter of fiscal 2016 on a year-over-year basis, which was unable to keep global comparable-store sales above 5% as the company had done for the previous 25 consecutive quarters; global comparable-store sales
Potash-Agrium Deal Will be Subject to Growing Regulatory Scrutiny
September 12, 2016
Image Source: Bruce Guenter By Kris Rosemann Suppressed crop prices and a supply glut have negatively impacted the financial performance of crop nutrient companies around the world and have helped spur a string of attempted mergers in the agriculture space. Seed giant Bayer’s (BAYRY) pursuit of rival Monsanto (MON) and ChemChina’s purchase of Syngenta (SYT) for $43 billion are two recent examples of consolidation attempts among major agricultural firms, the latter of which is expected to create the world’s largest supplier of pesticides and agrochemicals. Canadian firms Potash Corp (POT) and Agrium (AGU) had previously announced they were in preliminary merger talks and have now announced an agreement to combine forces in a merger of equals that will create a
The Quiet Analyst Speaks
September 12, 2016
Image Description and Source: Mailslot for Cantor Fitzgerald, on the top floors of the WTC. The mailslot was located in a post office near the WTC site. The mailslots are with the Smithsonian Institution. Travis Wise. It’s 9pm Sunday, September 11, 2016. The day is a somber one. The 15th year passing of the tragic events of 9/11 were on everyone’s minds, and I can’t help but think specifically of Cantor Fitzgerald. The financial services company’s headquarters were on the 101st-105th floors of One World Trade Center, just a few floors above the impact zone of one of the hijacked airplanes. The firm lost 658 employees, over two thirds of its workforce, more than “any of the other World Trade
Dividend Increases/Decreases for the Week Ending September 9
September 12, 2016
Below we provide a list of firms that raised/lowered their dividends during the week ending September 9. 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 Ameris Bancorp (ABCB): now $0.10 per share quarterly dividend, was $0.05. Brady (BRC): now $0.205 per share quarterly dividend, was $0.2025. Citizens Financial Services (CZFS): now $0.42 per share quarterly dividend, was $0.415. Gaming and Leisure Properties (GLPI): now $0.60 per share quarterly dividend, was $0.56. Israel Chemicals (ICL): now $0.04702 per share quarterly dividend, was $0.02745. Logitech (LOGI): now CHF 0.56 per share annual dividend,
Dividend Increases/Decreases for the Week Ending September 2
September 5, 2016
Below we provide a list of firms that raised/lowered their dividends during the week ending September 2. 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 Bank of America (BAC): now $0.075 per share quarterly dividend, was $0.05. Bank of Nova Scotia (BNS): now C$0.74 per share quarterly dividend, was C$0.72. Broadcom (AVGO): now $0.51 per share quarterly dividend, was $0.50. Brookfield Infrastructure Partners (BIP): now $0.59 per share quarterly dividend, was $0.57. Campbell Soup (CPB): now $0.35 per share quarterly dividend, was $0.31. Capital Southwest (CSWC): now $0.11 per share quarterly
Apple Handed Huge Tax Bill; We’re Not Worried
September 1, 2016
By Kris Rosemann The Competition Commission of the European Union has ordered Apple (AAPL) to pay up to ~$14.5 billion in back taxes plus interest to the government of Ireland after concluding that the country unjustly allowed the firm to pay an effective corporate tax rate between 0.005% in 2014 and 1% in 2003 on its European profits. The total amount deemed owed by the EU is 40 times the largest amount previously demanded in such a case. While $14.5 billion is certainly a meaningful sum of cash, if there is a company equipped to handle such a situation, it is Apple. As of the end of the third quarter of its fiscal 2016, it had ~$231.5 billion in cash,
Dividend Growth Giant Medtronic Reiterates Expectations
September 1, 2016
Image source: Medtronic investor presentation By Kris Rosemann As it is a core holding in the Dividend Growth Newsletter portfolio, it is no surprise we are high on Medtronic’s (MDT) free cash flow generating ability. The company remains committed to churning out dozens of billions of dollars in free cash flow generation in coming years, and we like management’s strategy on the allocation of the capital it expects to generate. Medtronic reported a solid first quarter of fiscal 2017 (ended July 29) on August 25. Though revenue fell 1% as-reported, revenue increased more than 5% on a constant-currency, year-over-year basis when ignoring the extra selling week in the comparable period of fiscal 2016. The firm’s ‘Cardiac and Vascular Group,’ ‘Minimally
The Banking Industry Is All About Confidence
August 29, 2016
Image Source: 401(K) 2012 The “5 Cs of credit” — character, capacity, capital, collateral, and conditions — is a widely-followed framework and generally-accepted guideline for lending to consumers, but for corporate entities, we think another C is much more important: confidence. By Brian Nelson, CFA The financial sector, and the underlying banking industry in particular, is distinctly different than most other sectors like industrials, retail, or healthcare, for example. Unlike the latter industries, banks use money to make money (net interest income), instead of using operating assets like property, plant and equipment (PPE) and raw materials to drive revenue and resulting free cash flow. This means that continued access to money and credit is the primary source of banks’ economic returns
Dividend Increases/Decreases for the Week Ending August 26
August 29, 2016
Below we provide a list of firms that raised/lowered their dividends during the week ending August 26. 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 Aceto Corporation (ACET): now $0.065 per share quarterly dividend, was $0.06. Altria Group, Inc. (MO): now $0.61 per share quarterly dividend, was $0.565. Cementos Pacasmayo (CPAC): now S/0.285 per share annual dividend, was S/0.28. Expedia (EXPE): now $0.26 per share quarterly dividend, was $0.24. FFW Corporation (FFWC): now $0.17 per share quarterly dividend, was $0.15. First Connecticut (FBNK): now $0.08 per share quarterly dividend, was $0.07.
Garmin Navigating Competitive Pressures
August 26, 2016
By Kris Rosemann Little has changed at Garmin (GRMN) as of late from an operational standpoint. The lion’s share of the pressures weighing on the company’s shares are external forces, in our opinion. The firm is executing soundly, and recent product launches were key drivers of improved results through the first half of 2016 and gave management the confidence to raise its top- and bottom-line guidance for full-year 2016. Free cash flow generation has rebounded nicely thus far in 2016 as well. Through the first six months of the year, the company reported free cash flow of more than $250 million, compared to free cash flow generation of -$55 million (negative $55 million) in the comparable period of 2015. Garmin
