Brian Nelson

Valuentum Dividend Cushion Catches Another: Cliffs Natural Resources!

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After we predicted a dividend cut in November 2012, Cliffs Natural Resources (click ticker for report: ) finally cut its dividend after posting poor results for 2012. The firm slashed its quarterly payout 76% to $0.15 per share. Results for Cliffs were actually a bit better than consensus estimates on both the revenue and earnings side. Total revenue declined 4% year-over-year to $1.5 billion, while earnings dipped 59% year-over-year to $0.62 per share (after adjusting for a $1 billion goodwill impairment). Free cash flow for the year was incredibly weak, falling to a negative $613 million, explaining why the dividend needed to be cut. If we only took into account the payout ratio, Cliffs’ adjusted earnings per share of $3.45 … Read more

Comcast Bets Big on NBCUniversal

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Tuesday afternoon, cable provider Comcast (click ticker for report: ) announced that it will acquire the 49% stake of NBCUniversal that it doesn’t already own for $16.7 billion from General Electric (click ticker for report: ). The company will also acquire the famous 30 Rockefeller headquarters in Manhattan and CNBC’s Englewood Cliffs headquarters for $1.4 billion. The deal had long been anticipated to occur in the future, but it appears to have closed earlier because Comcast feared the price might rise. Rarely do deals seem like a “win-win” for both parties, but we like this deal for both Comcast and GE. GE now has largely purged itself of its diverse conglomerate past, leaving it more of an industrials and financials pure-play. … Read more

Omega Healthcare Posts a Solid Fourth Quarter

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A few months prior, we profiled Omega Healthcare (click ticker for report: ) and found it to be one of the most attractive healthcare REITs in our coverage universe. Recent results do nothing to disconfirm our thesis, and in fact, the performance strengthens our conviction in the company. During its fourth quarter, Omega saw its adjusted funds from operations jump 16% year-over-year to $0.58 per share, easily exceeding estimates. Revenue was also slightly better than the consensus anticipated, jumping 25% year-over-year to $95 million thanks to the acquisition of several new properties throughout the year. For the full year, Omega earned $2.06 per share in funds from operations, up 22% compared to 2011. The firm made several investments in new … Read more

Coca-Cola’s Steady Growth Continues

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Warren Buffett holding and dividend growth stalwart Coca-Cola (click ticker for report: ) reported solid fourth-quarter results Tuesday morning. Revenue increased 4% year-over-year to $11.4 billion, a touch below expectations (but this was the result of unfavorable swings in currency). Adjusted earnings rose 15% year-over-year to $0.45 per share, a penny north of consensus estimates. Coca-Cola did a fantastic job controlling expenses, with SG&A declining 120 basis points as a percentage of sales to 37.7%. The company has been laser-focused on delivering cost savings since 2008, and the firm anticipates generating annualized savings of $550-$600 million during the next four years. Such improved operational leverage could lead to the robust earnings expansion that shareholders have become accustomed to during the past … Read more

Regal Posts a Strong Quarter; Shares Look Undervalued

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Movie theater owner/operator Regal (click ticker for report: ) announced strong fourth quarter results last week. Revenue jumped 18% year-over-year to $723 million, easily exceeding consensus estimates. Earnings were also stronger than consensus expectations, more than doubling compared to the year ago period to $0.28 per share (adjusted for certain items). The firm’s fourth quarter greatly benefitted from a favorable release slate, which tends to be one of the primary drivers of performance. In addition to more high-grossing films, management noted that the breadth of films also helped drive ticket sales during the quarter. Attendance grew 15% year-over-year, but average ticket prices were 2% higher and average concessions per patron jumped 3%. Regal’s price increases and large jumps in attendance … Read more

Dividend Growth Portfolio Holding Hasbro Boosts Dividend; Cash Flow Remains Fantastic

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After pre-announcing weaker than anticipated fourth quarter results at the end of January, Dividend Growth Newsletter portfolio holding Hasbro (click ticker for report: ) updated investors with its final results. Revenues were down about 4% year-over-year to $1.28 billion, while earnings for the quarter were 13% higher year-over-year at $1.20 per share (net of restructuring charge). As a result, full-year earnings were $2.55 per share, down 10% compared to 2011. However, excluding restructuring charges and foreign exchange variations, earnings for the year were $2.91 per share—a slight increase on a year-over-year basis. As Valuentum members are well aware, Hasbro’s stock performance has been very strong as of late (and such equity performance doesn’t consider its hefty dividend payout). Although earnings were not amazing by … Read more

Philip Morris Capitalizes on Growth Markets

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International cigarette maker Philip Morris (click ticker for report: ) announced strong fourth quarter results. Revenue, net of excise taxes, grew 2.8% year-over-year to $7.9 billion, falling slightly short of expectations, though that was mainly attributable to currency fluctuations. Adjusted earnings per share increased 13% year-over-year to $1.24, exceeding the consensus estimate by a few cents. On a company-wide level, shipments of cigarettes grew 2.9% year-over-year (excluding acquisitions) during the fourth quarter. Revenue and earnings, when accounting for currency fluctuations, also looked much more favorable, growing 6% and 16%, respectively. Philip Morris also used its strong cash flow generation to repurchase $2 billion of stock, while returning $0.85 per share (per quarter) to investors in the form of dividends. Shipment … Read more

Auto Parts Retailers Post Surprising Results

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Last week, Advance Auto Parts (click ticker for report: ) and O’Reilly Automotive (click ticker for report: ) posted better than anticipated fourth quarter results. Revenue at Advance Auto Parts was roughly flat year-over-year at $1.3 billion, in line with consensus estimates. However, the firm’s bottom line surprised materially to the upside, with earnings in the quarter decreasing just 2.2% on a year-over-year basis to $0.88 per share. O’Reilly’s fourth quarter was even more impressive, with revenue jumping 7% year-over-year to $1.5 billion, a touch better than the consensus forecasted. Earnings for the quarter also exceeded consensus estimates, surging 21% year-over-year to $1.14 per share. Though both companies posted better-than-expected results, the means were completely different. Advance Auto Parts, which … Read more

Best Ideas Portfolio Holding eBay Flashed a VBI of 10 and Has Never Looked Back

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Valuentum members have been blessed by the good fortunes of eBay (click ticker for report: ). The firm has been one of the best performers in the entire market after it registered the very top rating of 10 on the Valuentum Buying Index (VBI) in September 2011. Very few firms ever score a 10 on the VBI, so when a company does, members take close note. Google (click ticker for report: ) was the most recent firm to do so, and it has since rocketed to new all-time highs. In most cases, we tend to add firms to our Best Ideas portfolio when they register a 9 or 10 and remove them when they register a 1 or 2 on … Read more