Brian Nelson

PepsiCo Adjusts Organic Revenue Growth Guidance

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Image: PepsiCo’s shares have been choppy since the beginning of 2022. By Brian Nelson, CFA On July 11, PepsiCo (PEP) reported mixed second quarter results with the firm missing estimates slightly on the top line, but exceeding the consensus forecast on the bottom line. Net revenue growth in the second quarter came in at 0.8%, while organic revenue expansion was 1.9%, below the 3% the Street had been expecting. Core earnings per share was $2.28 versus the consensus estimate of $2.16, while core constant currency earnings per share leapt 10% on a year-over-year basis. PepsiCo’s volume was down 2% in the Convenient Foods segment, while it was flat in its Beverages division. Volume fell 4% in Frito-Lay North America, while … Read more

3 High Dividend Yielders for Consideration

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Image: Energy Transfer, Philip Morris, and Altria have outperformed the SPDR S&P 500 Dividend ETF (SDY) since the beginning of 2024. By Brian Nelson, CFA The market remains laser-focused on inflation readings and employment trends – two of the main dynamics that influence policy at the Federal Reserve. Since the beginning of 2024, the market has ratcheted down expectations of rate cuts from as many as 5 or 6 to just 1 or 2 in 2024. With yields on risk-free instruments poised to go lower soon, a focus on high yielding equities may be appropriate for the income investor. Here are three high dividend yielders that we like for consideration. Energy Transfer (ET) Midstream pipeline operator Energy Transfer has come … Read more

Constellation Brands’ Beer Business Continues to Propel Results

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Image Source: Constellation Brands By Brian Nelson, CFA On July 3, alcoholic beverages giant Constellation Brands (STZ) reported mixed first quarter fiscal 2025 results, where revenue came in a bit light relative to expectations, but non-GAAP earnings per share was better than the consensus forecast. Comparable net sales increased 6%, while comparable operating income jumped 12%. Comparable earnings per share advanced 17%, to $3.57. Shares yield ~1.6% at the time of this writing. Constellation’s Beer Business experienced an 8% increase in net sales thanks to a 7.6% advance in shipment volumes. Strength was prevalent across its Modelo Especial, Pacifico, and Modelo Chelada brands. Constellation’s Beer Business continues to gain share, with its “dollar sales and volume growth outpace(ing) the total … Read more

Tesla’s Deliveries Bounce Back in Second Quarter

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Source: Tesla By Brian Nelson, CFA On July 2, Tesla (TSLA) released its production and delivery numbers for the second quarter of 2024. Production of Model 3/Y and other models totaled 410,831, while total deliveries came in at 443,956 units, consisting of 422,405 Model 3/Y and the balance coming from other models. The results were better than expected and helped to propel shares of the electric-vehicle maker higher. Tesla’s equity has shot up past the high end of our fair value estimate range, and while we liked the better-than-feared news regarding its deliveries, we continue to be on the sidelines with respect to Tesla’s shares. The next big catalysts for Tesla’s shares are its earnings release on July 23 and … Read more

Dividend Increases/Decreases for the Week of July 5

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Below we provide a list of firms that raised their dividends during the week ending July 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                          Bank OZK (OZK): now $0.40 per share quarterly dividend, was $0.39. DouYu International (DOYU): now $9.76 per share special dividend. Lorne Park Capital Partners (LPC:CA): now $0.008 per share quarterly dividend, was $0.007. Medalist Diversified REIT (MDRR): now $0.05 per share quarterly dividend, was $0.02. MV Oil Trust (MVO): now $0.41 per share quarterly dividend, was $0.33. PNC Financial (PNC): now $1.60 per share … Read more

High Yield Dividend Income Investing Is Not as Easy as Chasing the Highest Yield

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Dear members: — The skills to successfully invest for long-term capital gains or long-term dividend growth are much different than those required for generating high yield dividend income. Income investing is a much different proposition. However, the skills do center on a similar equity evaluation process, but one that requires an acknowledgement and heightened awareness of considerably greater downside risks. Income investing, or high yield dividend income investing, should at times be considered among the riskiest forms of investing, as many high dividend-yielding securities tend to trade closer to the characteristics of junk-rated bonds than they do most net cash rich and free cash flow generating powerhouses that we like so much in the Best Ideas Newsletter portfolio (1) and Dividend Growth … Read more

Boeing to Acquire Spirit AeroSystems

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Image: Boeing’s shares have traded sideways the past few years as it works to fix safety issues. By Brian Nelson, CFA Boeing (BA) has been plagued with safety issues the past couple of years as the company’s decision to cut costs by outsourcing much of its manufacturing operations has created a whole host of problems. Two deadly plane crashes of its 737 MAX coupled with a blown-out area of the fuselage in a recent Alaska Airlines (ALK) flight are but a few missteps that have plagued the aircraft maker. On July 1, Boeing announced that it would roll back some of its outsourcing, announcing that it would bring fuselage maker Spirit AeroSystems (SPR) back into the fold. Boeing’s purchase of … Read more

Nike’s Revenue Under Pressure

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Image: Nike’s shares have languished of late, and a comeback will take some time. By Brian Nelson, CFA On June 27, Nike (NKE) reported disappointing fourth quarter fiscal 2024 results and issued an outlook for fiscal 2025 that came up short relative to expectations. Revenue in the quarter fell 2%, missing the consensus estimate, but was flat on a currency-neutral basis. Revenue for its Nike brand advanced 1% on a currency-neutral basis, while Nike direct revenue fell 7% on a currency-neutral basis. Wholesale revenue was up 8% on a currency-neutral basis, while revenues for Converse dropped 17% on a currency-neutral basis. Nike’s guidance for 2025 wasn’t very encouraging. Here’s what the executive team said on the conference call: Now let … Read more

Shares of Walgreens Boots Alliance Collapse

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Image: Walgreens’ shares have been under constant pressure for some time now. By Brian Nelson, CFA On June 27, Walgreens Boots Alliance (WBA) reported mixed third quarter results for fiscal 2024. Though sales increased 2.6% from the year-ago period, adjusted operating income fell 36.3% on a constant-currency basis, reflecting in part “softer U.S. retail and pharmacy performance.” Adjusted net earnings told a similar story, falling 36.6%, to $0.63 per share in the quarter, missing the consensus estimate. Management spoke of continued problems in its quarterly press release commentary: We continue to face a difficult operating environment, including persistent pressures on the U.S. consumer and the impact of recent marketplace dynamics which have eroded pharmacy margins. Our results and outlook reflect … Read more

General Mills’ Organic Performance Reveals Underlying Weakness

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Image Source: General Mills By Brian Nelson, CFA On June 26, General Mills (GIS) reported mixed fourth-quarter fiscal 2024 results that showed weakness on the top line, but a modest beat relative to the consensus forecast on the bottom line. Fourth-quarter net sales dropped 6% from the same period a year ago as organic growth was also down 6% “driven by the trade expense timing comparison, a reduction in retailer inventory, and a headwind in its International segment results.” Organic volume declined 6 percentage points in its North America Retail segment and 7 percentage points in its Pet segment, with both segments experiencing organic price/mix headwinds of one percentage point, too. Its North America Foodservice business did comparatively better, recording … Read more