Brian Nelson

Merck’s Dominance in Immuno-Oncology Expands Once Again

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Image Source: Merck Merck simply blew away the competition–the results are simply incredible. Keytruda is a gamechanger, and we think it will become the top-selling pharmaceutical once the patent lapses on Humira. By Alexander J. Poulos Key Takeaways Merck has solidified its lead in non-small cell lung cancer, which should power revenue growth well into the future. Merck will become increasingly more dependent on Keytruda for top-line growth, however, as we think its clinical pipeline remains uninspiring. The company’s dividend is a head-turner, but there are long-term risks to big pharma payouts. Shares look fairly valued to us. What is Immuno-Oncology? Immuno-oncology is the innovative field which seeks to augment the body’s own immune system to fight and hopefully eradicate cancer. … Read more

Dividend Increases/Decreases for the Week Ending June 8

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Below we provide a list of firms that raised their dividends during the week ending June 8. 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 Alexandria Real Estate Equities (ARE): now $0.93 per share quarterly dividend, was $0.90. AMEN Properties (AMEN): now $20.00 per share quarterly dividend, was $10.00. Boyd Gaming (BYD): now $0.06 per share quarterly dividend, was $0.05. Capital Southwest (CSWC): now $0.29 per share quarterly dividend, was $0.28. Clough Global Equity Fund (GLQ): now $0.1234 per share monthly dividend, was $0.1222. Clough Global Opportunities Fund (GLO): now $0.1000 … Read more

Microsoft Wins GitHub Over Alphabet

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Image Source: Microsoft deal presentation Microsoft has agreed to acquire GitHub for $7.5 billion. Competing bids may have driven the price tag higher, but Microsoft’s financial flexibility remains top-notch. By Kris Rosemann On June 4, simulated Dividend Growth Newsletter portfolio idea Microsoft (MSFT) agreed to acquire privately-held GitHub, one of the world’s leading software development platforms, for $7.5 billion in stock. We like that Microsoft isn’t taking on more debt related to this transaction, and in light of Microsoft’s buyback program, the deal is more cash-like than anything else. GitHub will continue to operate independently in providing an open platform for developers after the deal closes, which is expected by the end of 2018, similar to Microsoft’s course of action … Read more

Fishing Trends Benefiting Many Sporting Goods Retailers

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Johnson Outdoors is benefiting greatly from fishing-related sales, and such a tailwind may be helping other sporting goods retailers in the group. New store openings continue to drive Dick’s Sporting Goods’ top-line higher, but the company’s materially increased profit guidance for fiscal 2018 stole the show in its fiscal first quarter report. By Kris Rosemann The sporting goods industry seems to have found the path to resiliency, despite continued political debate around gun control in the wake of school and event shootings, and some vendors such as Dick’s Sporting Goods (DKS) even going as far as destroying the assault weapons once for sale on their shelves. We’ll talk more about Dick’s Sporting Goods’ strength in this note, which has positive … Read more

Evercore Partners (EVR) – Fair Value Estimate: ~$130 Per Share; Dividend Cushion Ratio: 4.9

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Image shown: The share-price performance of Evercore Partners since July 2017. Evercore’s financial performance in recent years has been impressive as its net revenues have grown at an 18% CAGR since 2011, adjusted earnings per share have advanced at a 22% CAGR, and operating margins have expanded by more than 6 percentage points. The company is working to sustain operating margins of 25%+ in solid M&A markets, which it anticipates will continue in the near term. We currently value shares at ~$130 each. Evercore currently registers an impressive Dividend Cushion ratio of 4.9. Shares yield ~1.8%.  By Kris Rosemann Evercore Partners (EVR) is a holding company with its only material assets represented by its ownership of partnership units in Evercore … Read more

Solar Not So Hot

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Image Source: zak zak Though First Solar stands alone as one of the stronger players in the solar space, we think the industry backdrop is among the weakest in our coverage universe. We’re huge fans of clean renewable energy but separating what we want to be a good industry like solar from an industry that actually has strong structural characteristics is a key component of being a good investor. Oftentimes, it is better to own an average company in a great industry than a good company in one of the worst industries out there. By Brian Nelson, CFA Sometimes it is too easy to invest with your heart and overlook opportunities across “sin” stocks. For example, you may dislike tobacco, … Read more

RE: Energy Transfer Partners: Why You Shouldn’t Worry, DEC 19, 2015

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Image shown: The performance of Energy Transfer Partners (ETP) since we warned about the MLP space in mid-2015. By Valuentum Analysts Now that simplification actions are on the rise in the MLP space, “Master Limited Partnership Simplications on the Rise,” all but proving our thesis on the group, we thought it important to follow up on a December 2015 article that another firm wrote, “Energy Transfer Partners: Why You Shouldn’t Worry.” For some reason, the article felt it appropriate to say that Valuentum is “unregistered.” We wanted to clear this up. Valuentum is a financial publisher, much like the Wall Street Journal or the Financial Times, and publishers are exempt from registering.  Second, the article felt the need to put … Read more

Microsoft Now $100+ Per Share

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Image shown: Microsoft’s performance relative to an ETF tracking the S&P 500 (SPY) since the beginning of 2012, the inception of the simulated Dividend Growth Newsletter portfolio. Almost every dividend-related presentation we made around the country, we talked about how much we liked Microsoft as a dividend growth idea. The stock was originally added to the simulated Dividend Growth Newsletter portfolio at inception at ~$26 per share, and we started the company out as an 8% position! It means the world to us to let you know that Microsoft’s stock has now surpassed $100 per share! Seriously – could we possibly have done any better with our top dividend growth idea out of the gates? By Brian Nelson, CFA I … Read more

The Free Cash Flow Shortfall in the Master Limited Partnership Space

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With the recent acceleration of master limited partnership simplification transactions, we find it appropriate to revisit the internally-generated cash flow shortfall present throughout much of the space. The table provides a breakdown of traditional free cash flow (cash from operating activities less all capital spending) relative to distributions paid, as well as a measure of the elevated financial leverage often found within the group. In case you missed it, “Nearly 60 Distribution Cuts Later, We Maintain Our View on the Hazards of the MLP Business Model.” By Kris Rosemann We think it is worth noting that the two entities at the top of this list in terms of traditional free cash flow coverage of distributions paid have significantly reduced their … Read more

Dividend Increases/Decreases for the Week Ending June 1

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Below we provide a list of firms that raised their dividends during the week ending June 1. 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 Ashland (ASH): now $0.25 per share quarterly dividend, was $0.225. Atlantica Yield (AY): now $0.32 per share quarterly dividend, was $0.31. Bank of Montreal (BMO): now CAD 0.96 per share quarterly dividend, was CAD 0.93. Cass Information Systems (CASS): now $0.26 per share quarterly dividend, was $0.24. Connecticut Water Service (CTWS): now $0.3125 per share quarterly dividend, was $0.2975. CVR Energy (CVI): now $0.75 per share … Read more