Brian Nelson

Ford Ups Dividend; Mulally to Stay

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It hasn’t been that long ago since Ford reinstated its dividend, and Thursday brought the most recent increase, the second in two years. The automaker announced today that it will pay a first-quarter 2014 dividend of 12.5 cents per share, up 25% from the 2013 quarterly dividend of 10 cents per share. Though Ford’s Valuentum Dividend Cushion score indicates the pace of the advance is steep (and much higher than we would have expected), we like that management continues to put shareholders’ interests first. We think investors should expect a long-term dividend growth rate in the low-single-digits given the inherent cyclicality of the auto business. Ford will now yield in excess of 3.1% based on Thursday’s closing price. We plan … Read more

The Best Ideas for 2014 and Beyond: Part II

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A portion of this article is excerpted from the January 2014 edition of the Dividend Growth Newsletter. Valuentum has two actively-managed portfolios: a Best Ideas portfolio and a Dividend Growth portfolio. Each portfolio has different goals and strategies. The Best Ideas portfolio seeks to find firms that have good value and good momentum characteristics and typically holds them from a Valuentum Buying Index rating of a 9 or 10 to a rating of a 1 or 2. The goal of the portfolio is to generate a positive return each year and to exceed the performance of a broad market benchmark. The Dividend Growth portfolio seeks to find underpriced dividend growth gems that generate phenomenal levels of cash flow and have … Read more

Apollo’s 1Q 2014 Results Show Continued Enrollment Declines, Weakening Cash Flow

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Industry proxy for the ‘Education (For-Profit)’ group, Apollo (APOL) reported weak fiscal first-quarter 2014 results Wednesday. Net revenue declined to $856 million to $1.1 billion in the first fiscal quarter of last year. University of Phoenix Degreed Enrollment fell nearly 18% from the same period a year ago, while New Degreed Enrollment tumbled nearly 23%.   Image Source: Apollo Operating income dropped significantly ($169 million, was $231 million), and income from continuing operations, excluding special items, came in at $1.04 per share compared to $1.22 per share in last year’s quarter. The for-profit education provider’s cash balance shrunk to $917 million from $1.52 billion as it paid down debt. Net cash from operations fell to $129 million in the three … Read more

JC Penney’s Holiday Sales Update Leaves Much to Be Desired

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We’ve been warning investors about the seriousness of JC Penney’s (JCP) cash flow situation for some time (click here for an in-depth cash-burn breakdown). It looks now that even in-line commentary about the company’s holiday performance is being deciphered as underperformance, as shares are under significant pressure Wednesday. JC Penney reported today that the company is pleased with its performance for the holiday period, showing continued progress in its turnaround efforts. Customers responded well to the company’s offerings this holiday shopping season, both in store and online. JC Penney also reaffirmed its outlook for the fourth quarter of 2013, as previously set out in the Company’s third quarter earnings release dated Nov. 20, 2013. Though comparable sales are very important … Read more

Sony Sets Sights on Future; GameStop Shareholders Startled

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Sony (SNE) announced Tuesday that it sold 4.2 million copies of the PS4 during 2013, exceeding estimates for ~3 million sales of Microsoft’s (MSFT) Xbox One units during the year. The PS4’s lower price tag of $399 versus the Xbox One’s $499 sale price coupled with wider distribution (53 countries versus 13) helped drive the better numbers at Sony. Sales levels of each competing console, however, were fantastic, which bodes well for game developers such as Electronic Arts (EA) and Take Two (TTWO). Sony remains firmly on track to surpass its PS4 sales target of 5 million units by March 2014 and will likely turn a nice profit of about $25-$50 per unit (despite the lower price). Microsoft’s XBox sales may be … Read more

In-Line Is Good Enough…for Today

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Tuesday brought a couple of interesting developments that showed sometimes in-line performance is good enough. Valeant Pharma (VRX)—fact sheet download here—surged more than 10% in trading Tuesday as it spoke favorably about its long-term ambitions. Though fourth-quarter financial guidance in the presentation was in-line with expectations, the company’s outlook for 2014 and its intermediate-term goal to become one of the world’s top five pharma companies (by market capitalization) by the end of 2016 caught investor’s attention. We don’t think saying such a noble goal is a reason for its stock price to appreciate, but the company’s other strategic priorities are worth noting. We think the “one significant deal” highlighted below may potentially refer to a future purchase of or a … Read more

Boeing Sets Records for 2013; Aerospace Thesis Remains Intact

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Boeing (BA) revealed the tremendous strength of global commercial aerospace demand in a news release Monday. During 2013, the aerospace giant noted that it delivered a record 648 commercial deliveries, received a record 1,531 gross commercial orders for the year, and posted a record 5,080 units in its backlog of unfulfilled orders at the end of 2013. The 1,355 net commercial order mark for the year was the second-largest in company history. Boeing continues to execute well on its production rate increases, and three of its programs set records for deliveries during the year: the 737 program, the 777 program, and the 787 Dreamliner program. 2013 was a fantastic year across the board for Boeing and for much of the … Read more

Household Durables Firms, Electronics Retailers Face Pressure

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On Monday, the maker of the Sleep Number bed, Select Comfort (SCSS) sent shudders through the furniture and bedding manufacturing industry when it warned that not only would fourth-quarter sales miss the mark but that the challenging times would continue into 2014: Select Comfort Corp…reported that preliminary fourth-quarter 2013 total net sales grew 5% year-over-year to $231 million, with flat company-controlled comparable sales growth. The mid-point of the company’s fourth-quarter EPS guidance range of $0.18 to $0.26 assumed low-double-digit growth in total net sales and mid-single-digit growth in company-controlled comparable sales. Through November, company performance was trending consistent with the EPS guidance range, with solid sales results and expense controls. From Cyber Monday through the end of December, however, sales … Read more

Throw December Auto Sales Numbers Away; December Ice Storms and a Late Thanksgiving Holiday to Blame

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The excuses for the subpar selling performance at automakers in December (up just 0.3%) were many: the frigid ice and snow storms that scared customers away; a late Thanksgiving holiday that stole sales from the month; and a shortened holiday shopping season that left consumers scrambling to buy holiday gifts for family and friends, as opposed to spending time car shopping. Though the impact of each contributing factor is difficult to measure, we think the combination of these items was the main culprit for disappointing December auto sales, not that the consumer has decided to forgo car purchases and that the upswing in auto sales has come to an abrupt halt. Some caution is starting to creep into the market—see … Read more

Dividend Increases/Decreases for the Two Weeks Ending January 3

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Below we provide a list of firms that raised/lowered their dividends during the two weeks ending January 3. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here (or use our ‘Symbol’ search box in our website header). Firms Raising Their Dividends Bank of the Ozarks (OZRK): now $0.22 per share quarterly dividend, was $0.21. Firms Lowering Their Dividends Gold Resource Corp (GORO): now $0.01 per share monthly dividend, was $0.03.