Oracle’s Shares Have Performed Fantastically
September 12, 2023
Image: Oracle’s shares may have sold off aggressively during the trading session September 11, but they have done quite well as a member of the Dividend Growth Newsletter portfolio. By Brian Nelson, CFA On September 11, Dividend Growth Newsletter portfolio holding Oracle Corp. (ORCL) reported first-quarter fiscal 2024 results that missed expectations modestly on the top line. Shares tumbled aggressively during the trading session September 12, but we think most of the sell-off is just profit taking. Prior to the report, Oracle’s shares were up more than 50%, while they are up over 64% during the past year. The high end of our fair value estimate stands at $136, while the firm yields ~1.3% on a forward estimated basis. During
Our Latest Report Updates
September 8, 2023
The data for these companies will be updated on their respective web pages this weekend. Download their updated 16-page reports (pdf) by selecting the link below. Chevron (CVX) ConocoPhillips (COP) Enbridge (ENB) General Mills (GIS) Keurig Dr Pepper (KDP) Kimberly-Clark (KMB) Kroger (KR) Mondelez Intl (MDLZ) Occidental Petroleum (OXY) Paramount Global (PARA) Pioneer Natural Resources (PXD) T-Mobile (TMUS) ———- In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements,
In the News: Lockheed Martin, Apple, Enbridge
September 7, 2023
Image Source: Björn Lammers By Brian Nelson, CFA On September 6, Dividend Growth Newsletter portfolio holding Lockheed Martin (LMT) announced in a regulatory filing that it expects to deliver 97 F-35 fighter jets during 2023, down from its previous expectation of 100-120 planes. Reports indicate that the production hiccup occurred at supplier L3Harris Technologies (LHX) with respect to the development of the aircraft’s integrated core processor, pushing back Lockheed’s delivery timeline for the combat jet. Though the news is not good, we’re not reading much into it. Lockheed noted that it continues to produce F-35s at a pace of 156 per year. We’re viewing this as a mere timing issue and not making any changes to our $440 per share fair
Latest Report Updates Reveal Tremendous Dividend Strength at Walmart
September 6, 2023
By Brian Nelson, CFA Our latest report updates showcased one very big observation, and that was the tremendous dividend strength of Walmart (WMT). The big box retailer’s Dividend Cushion ratio is rock-solid, and improved inventory management has worked wonders on operating cash flow this year, driving it to $18.2 billion during the six months ended July 31 from $9.24 billion in the same period a year ago, all the while organized retail theft remains a huge industry-wide problem. Though shares of Walmart are widely followed and are fairly valued on the basis of our discounted cash-flow process, we stand in awe of the company’s resurgence in free cash flow generation and believe that the firm offers a nice foundation to
Our Reports on Stocks in the Industrial Leaders Industry
August 28, 2023
Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity
Dick’s Sporting Goods Down ~7% Year-to-Date; Sticking with It Long Term
August 22, 2023
Image Source: Mike Mozart By Brian Nelson, CFA Dividend growth investing continues to face pressure during 2023 as investors have migrated to entities with strong net cash positions, solid free cash flow generation and secular growth prospects, many ideas of which can be found in the areas of big cap tech (XLK) and large cap growth (SCHG). The SPDR S&P Dividend ETF (SDY), which includes high-yielding Dividend Aristocrats, is down more than 4% so far in 2023 on a price-only basis and is off more than 6% over the past year, also on a price-only basis. With interest rates on the rise, the tradeoff between owning a certificate of deposit at the local bank yielding north of 5% and dividend
Theft Becoming a Huge Problem for Retailers
August 22, 2023
Image Source: Ben Schuman Theft has always been a problem for retailers, but it has never been as big of a problem as it has been in recent quarters. Emboldened by the lack of police response and employees sometimes getting fired for confronting shoplifters, retail organized crime is on the rise. We’re not talking theft in the millions, or billions, but likely in the tens of billions per year or more across the U.S. Some attribute the rise of organized retail crime to the pandemic, which paved the way for shoplifters to post their loot online in order to make a quick buck. Some retailers are especially feeling the pinch, and recent commentary reveals just how bad retail theft (shrink)
Home Depot’s Comparable Store Sales Continue Declines, Big Ticket Purchases Slow
August 15, 2023
By Brian Nelson, CFA Home Depot (HD) is one of the most resilient companies across the retail arena. The firm weathered the Great Financial Crisis [GFC] well and it handled the vicissitudes of the COVID-19 pandemic and aftermath flowingly as it juggled supply chain issues, changing consumer buying preferences, and increased demand as consumers remodeled and upgraded their working and living spaces while cocooning at home. The company’s second-quarter 2023 results, released August 15, came in better than expected, but comparable store sales fell 2% both in aggregate and in the U.S. Though comparable store sales declines improved from bigger declines in the first quarter, Home Depot’s guidance for comparable sales to fall 2%-5% for all of fiscal 2023 indicates
