In the News: MSFT, AAPL, SAVE, ALB
January 17, 2024
Image: Microsoft and Apple have been strong performers the past several years, with Microsoft recently surpassing Apple’s market capitalization to become the largest entity in the S&P 500. By Brian Nelson, CFA The start of trading in 2024 hasn’t been tracking the way that we like, but it’s way too early to sound the alarm on any sort of correction. The employment markets remain very healthy, both as it relates to unemployment and wage gains, while inflation looks to be largely under control, with the market expecting a number of rate cuts during 2024. We continue to like the areas of big cap tech and large cap growth in the current market environment. Microsoft (MSFT) is now the largest company
FedEx’s ESG Initiatives Are Refreshing Reminder of Great Companies Doing Things Right
January 13, 2024
By Brian Nelson, CFA Back on December 19, FedEx (FDX) reported second quarter results for its fiscal 2024. Revenue fell 2.6% on a year-over-year basis, but the company was still able to drive operating income and adjusted operating income higher to the tune of 9% and 17%, respectively. FedEx’s revenue outlook for the remainder of fiscal 2024 wasn’t great, and the company now expects a low-single-digit decline in revenue from 2023 (was “approximately flat” previously). The package shipping giant, however, raised its earnings per share forecast for 2024 to $15.35-$16.85 per share before the MTM (mark-to-market) retirement plans accounting adjustments (from $15.10-$16.60 previously). Though FedEx is an important data point for the health of the consumer, we’re not reading too
UnitedHealth Group Still a Free-Cash-Flow Generating Machine
January 12, 2024
Image: UnitedHealth Group continues to drive strong revenue and operating earnings performance. Image Source: UnitedHealth Group. By Brian Nelson, CFA On January 12, healthcare benefits provider UnitedHealth Group (UNH) reported strong fourth-quarter 2023 results that showed revenue advancing 14% on a year-over-year basis thanks to strength at its UnitedHealthcare and Optum divisions, while earnings from operations advanced 11.6%. UnitedHealth is facing some temporary cost pressures in its business due to pent-up demand for discretionary procedures following the worst of the COVID-19 pandemic, but its net margin held up fine in the period, coming in at 5.8%, the same level a year ago. Management reaffirmed its previously-issued 2024 guidance, and we continue to like UnitedHealth Group as a key weighting in
Dividend Increases/Decreases for the Week of January 12
January 12, 2024
Below we provide a list of firms that raised their dividends during the week ending January 12. 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 A2B Australia Limited (CGAAY): now $0.7671 per share dividend, was $0.0567. AbbVie (ABBV): now $1.55 per share quarterly dividend, was $1.48. Apogee (APOG): now $0.25 per share quarterly dividend, was $0.24. Apollo Global Management, Inc. SER A MAND CNVp (APO.PR.A): now $0.844 per share quarterly dividend, was $0.75. ATCO (ACO.X:CA): now CAD 0.4898 per share quarterly dividend, was CAD 0.4756. ATCO Ltd. (ACO.Y:CA):
Dividend King Leggett & Platt’s Payout May Be Worth the Risk
January 11, 2024
Image: Leggett & Platt has put together a long track record of consecutive annual dividend increases, but recent performance suggests that the dividend may be at risk in the longer run. Its 7.1% dividend yield may be worth the risk, however. By Brian Nelson, CFA Leggett & Platt (LEG) has raised its dividend for more than 50 consecutive years, putting it in the coveted category of being a Dividend King. However, the bedding, flooring and textile product maker has fallen on some difficult times. The company sports a Dividend Cushion ratio of -1.2 (negative 1.2), indicating that our future expectations of its dividend payments over the next five years coupled with its net debt position fall far below the cumulative
Best Ideas Visa, Alphabet Hit 52-Week Highs
January 10, 2024
Image: The top weightings in Valuentum’s Best Ideas Newsletter portfolio just hit 52-week highs. By Brian Nelson, CFA We’re reiterating our view that investors should stay aggressive with their allocations to equities, “12 Reasons to Stay Aggressive in 2024,” and our top two weightings in the Best Ideas Newsletter portfolio, Visa (V) and Alphabet (GOOG) just hit 52-week highs. These are two of our favorite names on the marketplace, with targeted weightings of 10%-12% of portfolio construction seeking long-term capital appreciation. During the past year, Visa’s shares are up nearly 20%, while Alphabet’s shares are up more than 60%. Position sizing, or the weighting ranges we assign to each company within a newsletter portfolio, is important as it is another way to
Boeing In Negative Headlines Again; Part of 737 Max Fuselage Blows Out During Commercial Flight
January 8, 2024
Image: Boeing’s shares have been quite volatile the past couple years. By Brian Nelson, CFA On January 6, Boeing (BA) received some more bad news. Part of a fuselage installed on one of its new eight-week old 737 Max 9 aircraft blew out on an Alaska Airlines (ALK) flight. There were no reported injuries because of the mishap, but understandably passengers were undoubtedly shaken up. Some posted videos of the experience. Boeing had been working hard to get back on track with customer perception of the safety of its 737 MAX line-up, and we view the incident as yet another hiccup in the firm’s relations with the public. Key Boeing supplier Spirit AeroSystems (SPR) installed the part on the
In the News: Apple, Nvidia, ANSYS
January 6, 2024
By Brian Nelson, CFA The first week of trading in the new year wasn’t very welcome, but we think it is far too early to draw any conclusions about how the rest of the year will be. The Dow Jones Industrial Average (DIA), S&P 500 (SPY), and NASDAQ (QQQ) faced selling pressure in the first week due in part to investors waiting until the new year to book the huge gains garnered during 2023. The market continues to digest critical employment data, as it watches movements in the 10-year Treasury closely, a key benchmark rate for asset pricing that now stands just north of 4%. Many bulls are saying 2024 may be a difficult year after the worst start in
Dividend Increases/Decreases for the Week of January 5
January 5, 2024
Below we provide a list of firms that raised their dividends during the week ending January 5. 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 ABM Industries (ABM): now $0.225 per share quarterly dividend, was $0.22. Alamo (ALG): now $0.26 per share quarterly dividend, was $0.22. Bank OZK (OZK): now $0.38 per share quarterly dividend, was $0.37. Barloworld Limited (BRRAY): now $0.0982 per share semi-annual dividend, was $0.0624. Barry Callebaut AG (BRRLY): now $0.158 per share annual dividend, was $0.145. Biloxi Marsh Land (BLMC): now $0.125 per share annual
It’s All About Free Cash Flow – Walgreens Cuts Its Payout
January 4, 2024
Image: Walgreens’ shares have been under consistent pressure for years, and a turnaround is not guaranteed. By Brian Nelson, CFA Back in early December, we said the following about Walgreens (WBA): Walgreens is a household name, but its wheeling and dealing over the past few years has created a convoluted situation that can best be observed by the company’s deteriorating operating cash flow. As shown in the company’s cash flow statement…capital expenditures are eating up a high percentage of operating cash, and its fiscal 2023 free cash flow — as measured by cash flow from operations less all capital spending — is now materially below that of cash dividends paid. The firm also issued guidance recently that came in below
