Kinder Morgan Now Covers Cash Dividends with Traditional Free Cash Flow
October 23, 2023
By Brian Nelson, CFA On October 18, Kinder Morgan (KMI) reported third-quarter results that came in lower than expectations, but we’ve taken note of the company’s improved free cash flow generation that now runs in excess of its cash dividends paid, a huge change from a decade ago, where capital spending and cash dividends paid far outweighed its operating cash flow capacity. The company’s dividend stands at $1.13 per share on an annualized basis, and Kinder Morgan now has a forward estimated dividend yield of ~6.7%, which is quite attractive. Shares are trading meaningfully below our estimate of their intrinsic value, too, and we’re warming up to the company’s financials. Its net debt position likely precludes it from being added
Philip Morris Raises Adjusted Diluted EPS Outlook
October 23, 2023
By Brian Nelson, CFA On October 19, Philip Morris (PM) reported excellent third-quarter 2023 results that showed currency-neutral revenue advancing 16.4%, and non-GAAP adjusted diluted earnings per share beating the consensus forecast, increasing more than 20% to $1.67 per share. The company continues to benefit from strong pricing across its combustible tobacco portfolio, its integration of its purchase of Swedish Match, and the popularity of its nicotine pouch ZYN, where shipment volume in the U.S. increased ~66% from the year-ago period. In conjunction with its strong third-quarter report, Philip Morris raised its outlook for adjusted diluted EPS to the range of 10%-10.5% expansion, excluding currency. The firm’s latest dividend increase was ~2.4%, to $1.30 per share, and its payout now
Dividend Increases/Decreases for the Week of October 13
October 13, 2023
Below we provide a list of firms that raised their dividends during the week ending October 13. 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 A.O. Smith (AOS): now $0.32 per share quarterly dividend, was $0.30. Agree Reality (ADC): now $0.247 per share monthly dividend, was $0.243. Avient (AVNT): now $0.2575 per share quarterly dividend, was $0.2475. Emera Incorporated (EMA:CA): now CAD 0.7175 per share quarterly dividend, was CAD 0.6900. EQT (EQT): now $0.1575 per share quarterly dividend, was $0.1500. Gladstone Land (LAND): now $0.0464 per share quarterly dividend,
Investors Likely Overreacting to Long-Run Impact That Weight-Loss Drugs Will Have on Snack and Food Stocks
October 9, 2023
Image: Domino’s stock has slumped recently due to weakening same-store sales expansion and concerns that weight-loss drugs will have on snack and food demand. By Brian Nelson, CFA The American eater continues to fight the “battle of the bulge” as many seek improved lifestyles and the health benefits from losing weight and getting in shape. The healthcare industry is delivering on this front, too, with diabetes drugs from Novo Nordisk (NVO) and Eli Lilly (LLY) called GLP-1 agonists that also have weight-loss benefits. Though we applaud what looks to be a solution in part for the obesity epidemic that has overtaken the U.S., investors are growing concerned that snack and food stocks will see slackening demand. The retail sector, for
Dividend Increases/Decreases for the Week of October 6
October 6, 2023
Below we provide a list of firms that raised their dividends during the week ending October 6. 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 AGNC Investment Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (AGNCN): now $0.6825 per share quarterly dividend, was $0.6676. American Financial (AFG): now $0.71 per share quarterly dividend, was $0.63. Bank OZK (OZK): now $0.37 per share quarterly dividend, was $0.36. Bezeq The Israel Telecommunication Corp. Ltd (BZQIY): now $0.1226 per share semi-annual dividend, was $0.0802. EVI (EVI): now $0.28 per share special dividend,
We Like NextEra Energy’s ESG Focus But Capital Market Conditions Now Showing Cracks
October 3, 2023
Image Source: NextEra Energy By Brian Nelson, CFA We’ve written in the past about NextEra Energy (NEE), and our latest note can be found here. The company remains one of our favorite utilities, but mostly because of its renewables energy exposure as it relates to ESG considerations. When it comes to utilities, more generally, however, we tend to take a pass on almost all of them given the capital intensity involved in their operations and their interest-rate sensitivity, especially now in an environment where interest rates are returning to “normal” levels in the mid-single-digits. The forward estimated dividend yield on the Utilities Select Sector SPDR ETF (XLU) stands at ~3.8% at the time of this writing, and if investors are
Big Cap Tech and Large Cap Growth Remain Safe Havens
October 3, 2023
Image: The stylistic area of large cap growth, which is heavily represented in the Best Ideas Newsletter portfolio, is doing fantastic so far in 2023. Hi everyone: Brian here. I wanted to check in to see how everyone is doing. As expected, many of the interest-rate sensitive names are getting hammered. This should not be surprising by any stretch. The utilities sector (XLU) is down more than 20% this year. We’ve emphasized why we’re not fans of utilities in this article. The consumer staples (XLP) sector is down nearly 8% so far in 2023. We’ve emphasized why we’re not expecting much from consumer staples in this article. Equity REITs (VNQ) are down more than 8% year-to-date, and we’ve emphasized why
Latest Report Refreshes
October 2, 2023
Select the company’s link below to access their stock webpage where their 16-page stock report (pdf) can be downloaded. The stock webpage also houses the company’s dividend report (pdf), where applicable, as well as the latest company/industry commentary and news. Comcast (CMCSA) Coterra Energy (CTRA) Dish Network (DISH) Kinder Morgan (KMI) Medtronic (MDT) Merck (MRK) Zoetis (ZTS) Schlumberger (SLB) Baker Hughes (BKR) Alcoa (AA) BHP Billiton (BHP) EOG Resources (EOG) ———- It’s Here! The Second Edition of Value Trap! Order today! —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the
Dividend Increases/Decreases for the Week of September 29
September 29, 2023
Below we provide a list of firms that raised their dividends during the week ending September 29. 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 Accenture (ACN): now $1.29 per share quarterly dividend, was $1.12. Bancolombia S.A. (CIB): now $0.892 per share quarterly dividend, was $0.852. Bankinter, S.A. (BKNIY): now $0.1105 per share quarterly dividend, was $0.0818. Barratt Development plc (BTDPY): now $0.5893 per share semi-annual dividend, was $0.2535. Bid Corporation Limited (BDDDY): now $0.266 per share semi-annual dividend, was $0.240. CenterPoint (CNP): now $0.20 per share quarterly dividend,
