The May Edition of Our Dividend Growth Newsletter!
May 1, 2013
All-Time Market Highs Complicate The Yield Hunt – By Brian Nelson, CFA Our Dividend Growth Portfolio (see page 5) continues to post strong results, with several names hitting fresh all-time highs over the past few weeks. With our cash balance relatively high, we anticipate to capitalize on any material pullback by adding to existing positions or opening new ones. We’ve had our sights on a few names on our watchlist (page 12) that we believe could add some outperformance and diversification to our portfolio. Although market fundamentals remain relatively strong, the increase in equity prices has had the unfortunate effect of making attractive yields scarcer. Strong earnings performance during the first quarter has pushed down the yields of some of
FAQ: Where Can I Find the Valuentum Dividend Cushion Score?
April 30, 2013
Valuentum Catches Pitney Bowes’ Dividend Cut
April 30, 2013
After we had warned about the firm’s dividend safety for several months, Valuentum subscribers were spared from Pitney Bowes’ (click ticker for report: ) dividend cut. In order to save cash, the firm slashed its quarterly dividend 50% to 18.75 cents per share from 37.5 cents per share. Shares no longer have a double-digit yield, and shares are falling drastically today.
Gross Margins Weigh on Buffalo Wild Wings
April 30, 2013
Best Ideas Newsletter holding Buffalo Wild Wings (click ticker for report: ) reported a mixed bag for its first quarter as high wing costs weighed on profitability. Revenue managed to grow 22% year-over-year to $304 million, exceeding consensus expectations. Earnings per share were disappointing, falling 11% year-over-year to $0.87. Free cash flow turned negative after it was in the positive $20 million range in the same period a year ago. In spite of industry-wide negative sales trends, Buffalo Wild Wings was able to muster positive same-store sales growth of 2.2% at franchised owned restaurants 1.4% at company owned locations. This occurred after the firm was impacted by one less week of NFL play and after the company kicked off the
Amazon’s Story Doesn’t Change
April 29, 2013
Online mega-retailer Amazon (click ticker for report: ) reported strong first quarter results. Revenue was slightly worse than consensus estimates anticipated, growing 22% year-over-year to $16 billion. Conversely, earnings per share exceeded consensus expectations, but still fell 35% year-over-year to $0.18. Amazon reports a metric of trailing twelve months (TTM) free cash flow, which declined 85% sequentially to $177 million as the firm invests heavily in fulfillment centers and distribution. Amazon’s earnings guidance was relatively weak, with the firm anticipating it will post operating income of negative $340 million to positive $10 million in the second quarter—meaning the company isn’t likely to come anywhere near the consensus expectation of $0.22 per share. Revenue is anticipated to fall between $14.9 billion
Don’t Get Too Floored By Lumber Liquidators’ Performance
April 29, 2013
Over the past year, one of the more amazing performers has been hardwood floor supplier Lumber Liquidators (click ticker for report: ). Shares have steadily climbed a whopping 185% over the past year and are up 55% year-to-date. However, we do not believe such robust performance is likely to continue. Fundamentally, little is wrong with the company’s recent performance. In fact, Lumber Liquidators is benefitting from a strong rebound in the US housing market. Flooring is one of the more obvious features of a house, making it an obvious area to improve from almost all aspects of ownership, whether it be selling, buying, or renting. With hardwood floors still in vogue, the firm is capitalizing on this demand, experiencing a
Exxon Mobil Struggles For Growth
April 26, 2013
Supermajor oil producer Exxon Mobil (click ticker for report: ) reported lackluster revenue of $108.8 billion, which fell a bit shy of consensus estimates. Earnings per share increased 6% year-over-year to $2.12, exceeding consensus expectations. However, earnings were only modestly higher, growing 1% year-over-year to $9.5 billion. Unfortunately for Exxon, operating cash flow declined 30% compared to the same period a year ago, to $13.6 billion. This came at the same time the firm invested $11.8 billion in capital expenditures and exploration, thus free cash flow declined precipitously. Though Exxon is among the largest companies in the world, its earnings stream contains several moving parts and remains reliant on global oil prices. Exxon’s upstream segment struggled with lower volumes and
Qualcomm’s Fall Is Baffling
April 25, 2013
Chipmaker Qualcomm (click ticker for report: ) announced wonderful second-quarter results Wednesday afternoon. Revenue jumped 24% year-over-year to $6.1 billion, exceeding consensus expectations. Non-GAAP earnings per share rose 16% year-over-year to $1.17 per share, which was also above consensus estimates. Free cash flow for the quarter jumped 10% year-over-year to $1.99 billion, equal to a whopping 33% of revenue! On the expense side, the firm did a fairly good job of keeping costs contained. Research and development costs increased 100 basis points (28% year-over-year on an absolute basis) to 20% of revenue. Management cited development of CDMA-based 3G tech and 4G LTE technology as the main drivers, though stock-based compensation was also 24% higher year-over-year at $156 million. Because the firm is
Valuentum’s Dividend Coverage Universe
April 25, 2013
Please use the ‘Symbol’ search box to download stock and dividend reports of companies you are interested in. The ‘Symbol’ search box can be found in our website header. Image shown from above. Use the active search box in the website header above. Learn more about your membership >> —– 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. Some of the companies written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
Procter & Gamble’s Third Quarter Stalls
April 25, 2013
After picking up momentum in the second quarter and raising its dividend in recent weeks, consumer products giant Procter & Gamble (click ticker for report: ) announced mediocre results. Revenue grew only 2% year-over-year to $20.6 billion, falling below consensus estimates. Earnings were slightly stronger than consensus expectations, with core earnings per share increasing 5% year-over-year to $0.99. The firm also announced it will increase its share buyback program to $6 billion—near the high end of the previously announced range. Core gross margins expanded 20 basis points year-over-year to 50% as initiatives in manufacturing and productivity yielded positive results. We’d like to see the firm push this number a bit higher, but it seems its price increases have been offset
