Dividend Increases for the Week Ending June 7
June 7, 2013
Below we provide a list of firms that upped their dividends for the week ending June 7. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week Acme United Corporation (ACU): now $0.08 per share quarterly dividend, was $0.07. Altera Corporation (ALTR): now $0.15 per share quarterly dividend, was $0.10. Concurrent (CCUR): now $0.12 per share quarterly dividend, was $0.06. Cracker Barrel (CBRL): now $0.75 per share quarterly dividend, was $0.50. DuPont Fabros Technology (DFT): now $0.25 per share quarterly dividend, was $0.20. FEI Company (FEIC): now $0.12 per share quarterly dividend, was $0.08. Helmerich & Payne (HP): now $0.50 per
Realty Income’s Monthly Dividend Should Continue to Grow
June 7, 2013
With interest rates still near all-time lows (albeit rising), we think high-yielding equities are as vital as ever to providing income investors with an attractive total return investment. Realty Income (click ticker for report: ), one of the ideas on our dividend-growth watch list (not yet a portfolio constituent), has come under significant pricing pressure as of late. As such, we are strongly evaluating the firm’s shares for addition to the portfolio of our Dividend Growth Newsletter after this rather material slide. Let’s take a look. The ‘Monthly Dividend Company’ Initially, we were a little taken aback by a REIT actively touting itself as the “monthly dividend company.” However, after further investigation, we think the company is truly focused on returning capital to shareholders rather than taking advantage of
After Midnight Breakfast at McDonald’s: Is the Company out of Tricks?
June 6, 2013
Late yesterday night, fast food goliath McDonald’s (click ticker for report: ) confirmed that it is experimenting with an “after midnight” breakfast menu. Let’s emphasize the after midnight aspect, which specifically means that the firm won’t be serving all-day breakfast. Such a move to all-day breakfast would be expensive, and, in our view, a sure sign the firm was out of ideas. The moves to bolster its product offering in the late night segment has logic behind it—look no further than the popularity of breakfast diners at 2-5am on Saturday and Sunday mornings. For years, Taco Bell (click ticker for report: ) has been perceived as the go-to fast food destination after midnight, at least in part due to its
Salesforce.com: Completing the Package
June 6, 2013
Earlier this week, leading SaaS firm Salesforce.com (click ticker for report: ) made headlines acquiring cloud marketing platform ExactTarget (ET) for $2.5 billion in cash ($33.75/share). The move comes as Salesforce.com hopes to round out its product offering, and adding a company largely known for its email marketing platform helps the firm move toward this goal. Salesforce.com CEO Marc Benioff, excited about the transaction, explained that the landscape is changing, saying on the firm’s conference call about the deal: “There is no doubt our whole industry is changing, and the opportunity to create solutions in sales and service and marketing that are unified, that are mobile, that are social, that are in the cloud, that this combination of these two
Amazon’s Expansion Knows No Bounds
June 6, 2013
On Tuesday, we received a variety of information about Amazon’s (click ticker for report: ) expansion into different product lines. The company is looking to expand its AmazonFresh same-day grocery delivery service and could enter as many as 40 markets this year. Additionally, the firm entered into the highest streaming content contract ever, purchasing the rights to stream over 4,000 episodes of Viacom (click ticker for report: ) TV shows. Let’s dig into the details. AmazonFresh For years, people have speculated that the end-game for Amazon was to build so many warehouses that it could effectively offer same-day shipping on any product and compete with brick-and-mortar shops on the basis of time. Thus, the expansion of AmazonFresh comes as little
Checking In With Intel
June 6, 2013
While shares languished throughout 2012, Best Ideas Newsletter and Dividend Growth Newsletter portfolio holding Intel (click ticker for report: ) has experienced a solid rebound in 2013, with shares up 21% year-to-date. We have a nice gain on the position in our actively-managed portfolios, and the firm continues to pay out a nice and safe dividend yield (about 3.7%). Our conviction in the significant valuation upside of the firm remains unchanged (the high end of our fair value range is north of $30 per share), and we continue to think fears that Intel would never become a player in the mobile space are completely unfounded. Intel recently received the “Barron’s treatment,” as the financial publication called for shares to double. Though the publication
Three Very Good Questions From Members
June 5, 2013
Q: Why do you use a risk free rate assumption of 4.25% when the current spot rate of the 10-year Treasury is about 2%? In our discounted cash-flow models that we use to value every non-financial operating company in our coverage universe, we match the duration of future free cash flows (from year 1 to perpetuity) with expectations of the average discount rate over this forecast horizon (from year 1 to perpetuity). We think the best way to achieve expectations of the long-term future average rate of the 10-year Treasury (risk free rate) is to use the weighted average of the historical 10-year Treasury and the current spot rate. The goal of using a weighted average risk free rate in
Apple Can “Amazon” Pandora
June 5, 2013
Over the past year, the idea of Apple (click ticker for report: ) launching an internet streaming radio has been in the back of our minds. In fact, we think it’s the one of the few interesting features that could make the Apple ecosystem even stickier. According to reports, iRadio could be introduced next week. Pandora (click ticker for report: ) shareholders are clearly worried, sending shares tumbling over the past few days, and we believe they should be. While Apple has (wisely) been unwilling to sell its phones or hardware at lower prices in order to win market share, we do not think this logic necessarily applies to iAds/iRadio. For one, Apple’s hardware presents advertisers with an enormous installed
House Defense Appropriators Ignore Sequestration
June 5, 2013
To download the 155+ page fiscal 2014 Defense Appropriations bill, please click here. On Tuesday, the House Appropriations Committee released the subcommittee draft of the fiscal year 2014 Defense Appropriations bill. The bill provides for $512.5 billion in non-war funding, an amount that completely ignores the level that would be caused by automatic sequestration spending cuts (to the tune of over $28 billion). The House’s proposal is also $5.1 billion below fiscal 2013 levels and $3.4 billion below President Obama’s request. In any case (whether the bill in current form is implemented or if sequestration takes hold and further spending cuts are put in place), the trajectory of defense spending for fiscal 2014 relative to fiscal 2013 is down. The
The US Auto Recovery Is Unshakeable
June 4, 2013
As the housing market recovery in the US appears more sustainable, US auto sales continue to gain steam. Low-end luxury is performing exceptionally well, as is the pickup segment—a likely result of the housing recovery. Let’s take a look at results from the industry. Ford Best Ideas Newsletter holding Ford (click ticker for report: ) posted a spectacular May, exceeding consensus estimates with unit sales surging 14% year-over-year to 246,585. As we hit home in our recent piece about the US housing recovery, pickup sales are driving a large portion of Ford’s gains. In fact, F-Series unit sales grew 31% year-over-year to 71,604 units! Other cars posting large sales included the Escape, up 26% year-over-year, the Fusion, up 10% year-over-year, and
