JPMorgan Continues to Generate Value for Shareholders
October 15, 2024
Image Source: Hakan Dahlstrom By Brian Nelson, CFA JPMorgan (JPM) reported excellent third quarter results on October 11. Reported revenue of $42.7 billion and GAAP earnings per share of $4.37 both beat the consensus forecast. Credit costs were $3.1 billion, which included $2.1 billion of net charge-offs and $1 billion in net reserve build. Average loans were up 1% year-over-year, while average deposits advanced at a similar rate. For the third quarter, JPMorgan reported an ROE of 16% and ROTCE of 19%, both measures indicating nice value generation for investors. CEO Jamie Dimon had the following to say about the quarter and current economic conditions: The Firm reported strong underlying business and financial results in the third quarter, generating net income
Dividend Increases/Decreases for the Week of October 11
October 11, 2024
Below we provide a list of firms that raised their dividends during the week ending October 11. 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 $0.253 per share monthly dividend, was $0.250. American Mobile Dental Corp. (AMBD): now $0.7085 per share quarterly dividend. AMFI Corp. (AFIPA): now $275.00 per share dividend, was $270.00. Avient (AVNT): now $0.27 per share quarterly dividend, was $0.26. Bank of Hawaii Corporation DEP SHS SER B (BOH.PR.B): now $0.5000 per share quarterly dividend, was $0.2223. Calvin B. Taylor Bankshares (TYCB):
Domino’s Pizza Remains an Attractive Long-Term Story
October 10, 2024
By Brian Nelson, CFA On October 10, Domino’s Pizza (DPZ) reported mixed third quarter fiscal 2024 results with GAAP earnings per share coming in above expectations, while revenue came up short relative to the Street’s forecast. Excluding foreign currency impacts, global retail sales expanded 5.1% thanks to higher supply chain, U.S. franchise advertising and U.S. franchise royalties and fees revenues, while U.S. same store sales growth came in at 3%. International same store sales growth, excluding foreign currency impacts, was 0.8%, while it grew global net stores by 72 in the quarter. Excluding foreign currency impacts, income from operations advanced 5.7% in the period thanks to gross margin dollar growth within supply chain and higher U.S. franchise royalties and fees.
PepsiCo Experiencing Subdued Growth, Business Disruptions Due to Geopolitical Tensions
October 8, 2024
Image: PepsiCo has traded sideways for most of the past couple years. By Brian Nelson, CFA On October 8, PepsiCo (PEP) reported mixed third-quarter results with revenue coming up a bit short of consensus and non-GAAP earnings per share beating the Street’s forecast. The headline numbers weren’t great with net revenue falling 0.6% and earnings per share falling 5%. Organic revenue growth was 1.3% in the third quarter (consensus was for 3% growth), with core earnings per share coming in at $2.31, with core constant currency operating profit up 6% and core constant currency earnings per share up 5%. On an organic revenue basis, Frito-Lay North America experienced a 1% decline, while Quaker Foods North America fell 13%. PepsiCo Beverages
Dividend Increases/Decreases for the Week of October 4
October 4, 2024
Below we provide a list of firms that raised their dividends during the week ending October 4. 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 Almacenes Exito S.A. American Depositary Share, each representing eight (8) Common Shares (EXTO): now $0.0369 per share quarterly dividend, was $0.0116. Alphamin Resources Corp. (AFM:CA): now CAD 0.06 per share interim dividend, was CAD 0.03. American Financial (AFG): now $0.80 per share quarterly dividend, was $0.71. Arrow Financial (AROW): now $0.28 per share quarterly dividend, was $0.27. Bank OZK (OZK): now $0.41 per share
Nike In the Midst of a CEO Transition, Withdraws Full Year Guidance
October 2, 2024
Image: Nike’s shares have been under pressure as the firm continues to underperform. By Brian Nelson, CFA On October 1, Nike (NKE) reported mixed first-quarter fiscal 2025 results, with revenue coming up short relative to the consensus estimate, while GAAP earnings per share came in ahead of what the Street was looking for. The headline numbers for Nike weren’t great. First quarter revenue fell 10% on a reported basis, while Nike Brand and Nike Direct revenues dropped 10% and 13% on a reported basis, respectively. Wholesale revenues fell 8% on a reported basis, Converse sales fell 15% on a reported basis, while diluted earnings per share of $0.70 was down 26% year-over-year. Nike is in the midst of a management
Carnival Corp. Experiencing Strong Demand
September 30, 2024
Image: Carnival’s shares have traded sideways since the beginning of 2024. By Brian Nelson, CFA On September 30, Carnival (CCL) reported better than expected third quarter results for its fiscal 2024. Third quarter revenue reached an all-time high of $7.9 billion, which was $1 billion better than the year-ago period. The company posted record operating income and adjusted EBITDA in the quarter. Third-quarter net income came in at $1.7 billion, which was 60% better than what it recorded in the same period last year. Management commentary was positive in the press release, particularly as it relates to visibility into future revenue: We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led
DOJ Antitrust Lawsuits Targeting Our Top Two Ideas: V and GOOG
September 30, 2024
Image: Alphabet’s and Visa’s shares have performed remarkably well since the beginning of 2023. By Brian Nelson, CFA We received a number of questions regarding the DOJ’s investigation into anticompetitive practices for two of the top ideas in the Best Ideas Newsletter portfolio. Antitrust news with respect to Alphabet’s (GOOG) ad search business and Visa’s (V) debit card business is nothing surprising, but it speaks to the positives and dominance behind their business models, something we like quite a bit. Any outcome of an antitrust lawsuit is uncertain and could result in a settlement and potential other action, including divestitures. That said, as it relates to Alphabet, the potential for divestitures in its business reinforces a sum-of-the-parts value analysis
Costco’s Shares Remain Pricey
September 27, 2024
Image Source: Costco By Brian Nelson, CFA Costco Wholesale (COST) reported fiscal fourth-quarter results on September 26 where revenue came up a bit short relative to forecasts, while the company beat on the bottom line. For the 16-week fourth quarter, Costco reported a net sales increase of 1% compared to the 17-week fourth quarter of last fiscal year. Total company adjusted comparable store sales were 6.9% in the 16-week period, better than the consensus estimate of 6.4%. E-commerce adjusted comparable store sales were 19.5% in the quarter. Net income for the 16-week period was $5.29 per diluted share, compared with $4.86 per diluted share in the 17-week fourth-quarter period of a year ago. Management spoke of its international opportunity on
An Important Measure of Leverage for Dividend-Growth and Income-Oriented Shareholders, One That Is Dividend-Adjusted
September 26, 2024
As more and more investors rely on company dividends for income, dividends, in our view, have become more debt-like commitments in nature, especially from the perspective of dividend-growth or income-oriented shareholders. Years ago, we rolled out a measure of financial leverage that considers both the company’s debt and the present value of its future expected cash dividend obligations, which, in the eyes of die-hard dividend-growth or income-oriented shareholders, may be implicitly assumed to be debt-like commitments in substance. We think this leverage ratio can be used in conjunction with the Dividend Cushion ratio to gain additional insight into the dividend-paying financial health of an entity. Note: There is often great confusion with respect to published measures of financial leverage, and
