5 Highly Ranked Dividend Growth Stocks
October 31, 2012
Let’s take a look at 5 highly ranked dividend growth stocks.
Ford Smashes Expectations, Operating Margin Expansion Drives Earnings
October 30, 2012
American automaker Ford (click ticker for report: ) reported fantastic third quarter earnings Tuesday morning in spite of persistent weakness in Europe. Revenue fell 3% year-over-year to $32.1 billion, which was still much higher than consensus estimates. Operating profit, which excludes special items, surged 18% year-over-year to $0.40 per share, 25% higher than consensus estimates. The real story at work during the third quarter was the undeniable success of One Ford in driving operating margin expansion. While revenue in North America increased 8% year-over-year to $19.5 billion, operating margins expanded a whopping 340 basis points to 12%. As a result, pre-tax operating profit surged 50% year-over-year to $2.3 billion. Our main thesis behind the company is that operating leverage is
Panera Shrugs Off Uncertainty
October 30, 2012
Healthy quick-serve chain Panera Bread (click ticker for report: ) reported fantastic third quarter results Wednesday afternoon. Revenue surged 17% year-over-year to $529 million, roughly in-line with consensus estimates. Earnings growth outpaced revenue, up 28% year-over-year to $1.24 per share, which was stronger than consensus expectations. The firm also raised its fourth quarter earnings outlook to $1.72 to $1.74 per share, which exceeds prior guidance as well as the consensus estimate of $1.70 per share. System-wide same-store sales increased 5.8% during the quarter, driven by 6.2% growth from company owned stores and 5.5% growth from franchise owned stores. Panera’s mix of healthy foods and a diverse menu continue to drive expansion, even while other high-fliers such as Chipotle (click ticker
Amazon Continues to Lose Money; Market Continues to Not Care
October 30, 2012
Online giant Amazon (click ticker for report: ) reported another quarter of solid revenue growth masked by subpar profitability Thursday afternoon. Revenue surged 27% year-over-year to $13.8 billion, just below consensus estimates. Earnings swung to a loss of $0.23 per share compared to a profit of $0.14 last year, on an adjusted basis, which was much worse than expected. On a GAAP-basis, the company lost $0.60 per share thanks to recognizing a large loss on deal site LivingSocial. The tech giant continues to focus on taking market share and damaging its competitors rather than generating large profits. CEO Jeff Bezos announced the Kindle Fire HD, a tablet that sells for approximately breakeven, is the number one selling product on Amazon.com,
Linn Energy Continues to Capture Cash Flow
October 29, 2012
Linn Energy (click ticker for report: ) and newly-formed entity LinnCo (LNCO) reported solid third quarter results Thursday morning. Net of non-cash derivative losses, the firm earned $0.45 per unit during the quarter, up a penny from last year, and significantly higher than consensus estimates. More importantly, the firm achieved $1.01 in distributable cash flow per share, achieving a coverage ratio of 1.40x. Perhaps the most meaningful event during the quarter was the IPO of LinnCo, an entity formed to exclusively own shares of Linn Energy. The one caveat is that LinnCo is a traditional corporation, while Linn Energy receives K-1 tax treatment, which can be a long and convoluted process. As a result, Linn hopes to spur institutional and
Solid Long-term Fundamentals Remain Intact at Potash
October 29, 2012
Near-term headwinds persist at fertilizer giant Potash (click ticker for report: ), which reported a mixed bag in its third quarter results Thursday morning. The Canadian firm saw revenue fall 8% year-over-year to $2.1 billion, slightly better than consensus expectations. Earnings per share slid 22% year-over-year to $0.74, which was worse than consensus estimates. Potash (the product) sales tumbled 10% year-over-year to $887 million, the result of declining prices and slumping orders from India and China. Total tonnage sales in North America increased 25% year-over-year to 1.0 million tonnes, as farmers have continued to invest in fertilizer to compensate for lower yields resulting from poor growing conditions in the US. Sales in Latin America also remained brisk, growing year-over-year driven
Decker’s Third Quarter Results and Guidance Were Absolutely Terrible
October 29, 2012
Decker’s third quarter performance showed waning demand and poor execution. We’re not interested in shares at this time.
ConocoPhillips’ Free Cash Flow Is Disappointing to Us in Third Quarter
October 27, 2012
ConocoPhillips (click ticker for report: ) reported its first full quarter as an independent E&P (exploration and production) company Thursday. It spun off its refining arm Phillips 66 (click ticker for report: ) earlier this year. Though we hold ConocoPhillips in the portfolio of our Dividend Growth Newsletter, we’re taking a hard look at whether we want to keep it, as we’ve been disappointed with some of the cash-flow trends recently (particularly after considering that future performance is largely determined by volatile oil and gas prices). We’re considering swapping it for other dividend-growth opportunities available on the market today, which we provide in the following table: “Stocks With High VBI Ratings and Strong Dividend Growth Prospects.” ConocoPhillips reported adjusted earnings
AstraZeneca Is Not Immune to Patent Cliff
October 27, 2012
On Thursday, AstraZeneca (click ticker for report: ) posted difficult third-quarter results as the loss of exclusivity on several brands (namely Seroquel IR) and a couple divestitures drove revenue 15% lower. Core earnings per share declined 8%, while reported earnings per share dropped 50%. Still, management reiterated its full-year 2012 financial targets for earnings per share between $6.00 and $6.30 per share, and we don’t expect to make a material change to our fair value estimate at this time. The headline numbers were poor. US revenues dropped 19% in the third quarter, as a result of the loss of exclusivity of Seroquel IR, while revenue in the rest of the world (ROW) fell 12% during the period. The company noted
New York Times Experiences Advertising Weakness in Third Quarter
October 27, 2012
On Thursday, the New York Times (click ticker for report: ) reported terrible third-quarter results that showed weakness in both print and digital advertising revenue. New York Times’ total revenue fell 0.6% as advertising revenue dropped nearly 9% during the period. The lower revenue was compounded by a 2.3% increase in operating costs during the period, as operating profit tumbled nearly 60% to $8.5 million from $21 million in the year-ago quarter. Print and digital advertising sales fell 10.9% and 2.2%, respectively, during the quarter and overwhelmed the 7.4% increase in circulation revenue. We’ve seen advertising weakness from other online-based consumer subscription firms such as Morningstar (click ticker for report: ), and we credit this trend to the growing digital
