Brian Nelson

Boeing Shakes Up Executive Team

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  Image Source: Kanesue  By Brian Nelson, CFA On March 25, Boeing (BA) announced that CEO Dave Calhoun will step down as CEO at the end of 2024. The move comes weeks after an incident on an Alaska Airlines (ALK) flight where part of the fuselage blew out. The company’s Independent Board Chair Larry Kellner also announced that he would not stand for reelection at the next annual meeting. New Independent Board Chair Steve Mollenkopf will succeed Kellner and lead efforts to select Boeing’s next CEO. Mollenkopf has been on the board since 2020 and previously served as CEO of Qualcomm (QCOM). Further, Boeing Commercial Airplanes President and CEO Stan Deal will retire from Boeing effective immediately and be replaced … Read more

McCormick Targeting Strong Adjusted Earnings Growth in Fiscal 2024

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Image Source: McCormick By Brian Nelson, CFA On March 26, spice maker McCormick & Company (MKC) reported solid first quarter fiscal 2024 results for the period ended February 29. The company’s sales advanced 2% on a constant-currency basis, while adjusted operating income increased 4% on a constant-currency basis. Adjusted earnings per share came in at $0.63 compared to $0.59 in the same period last year, showcasing a 7% year-over-year increase. The results were good enough to send the stock meaningfully higher following the report. McCormick’s top line in the quarter was bolstered by a 3% increase in pricing, which was offset in part by a 1% decline in volume due primarily to mix and the company’s decision to exit lower … Read more

Ameresco’s Shares Under Pressure Despite Record Backlog and Asset Pipeline Metrics

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Image Source: Ameresco’s backlog of opportunities remains robust. By Valuentum Analysts The rise of ESG investing and the political shift towards encouraging developments within the realm of green energy–from renewable energy projects to efforts to reduce water consumption and much more–has created numerous opportunities for investors. Ameresco Inc (AMRC) offers energy efficiency solutions, infrastructure upgrades, and renewable energy solutions to its customers. The company also operates some of the renewable energy facilities it helps develop such as solar farms and biogas plants. Ameresco provides its services all over the globe though the U.S. remains its most important market (and the source of over 90% of its revenues). In the U.S., Ameresco will often help its clients secure the financing needed … Read more

Nike’s Revenue to Face Pressure During First Half of Fiscal 2025

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Image: Nike’s shares have faced considerable pressure from the beginning of 2022, and its outlook for the first half of fiscal 2025 wasn’t great. By Brian Nelson, CFA On March 21, Nike (NKE) reported better-than-expected third quarter fiscal 2024 results. Revenue during the quarter advanced modestly on a reported and currency-neutral basis as revenue from its Nike brand rose 2%, while sales for Converse fell 19% on a reported basis. Nike showcased its pricing strength in the period, with the company’s gross margin advancing 150 basis points, to 44.8%, despite higher input expenses and restructuring charges. Net income fell 5% in the fiscal third quarter, while diluted earnings per share dropped 3% in the period. Nike ended the quarter ending … Read more

Understanding Stock Splits

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By Brian Nelson, CFA There are few financial topics more misunderstood, in my opinion, than stock splits. Some investors believe that a stock split is a value-creating endeavor brought about by “market forces” that have blessed their company’s stock for one reason or another. They believe that they will get more shares of the company at the same price, thereby doubling their investment value as a result. Unfortunately, this is not correct. In reality, a stock split is a move made at the complete discretion of the company’s board to reduce the nominal price of the company’s shares such that more individual investors can “afford” to buy more of the stock (increasing its ownership base). The primary reason stems from the common belief … Read more

Pfizer 6% Dividend Yield Speaks of Considerable Risk, Free Cash Flow Coming Up Short

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Image: Pfizer’s shares have been under considerable pressure the past few years. By Brian Nelson, CFA  Pfizer’s (PFE) revenue has faced pressure of late from expected declines in COVID-related sales from Comirnaty and Paxlovid, as the pharma giant navigates a post-COVID-19 world. However, excluding weakness from COVID-19 related revenue, the company’s underlying revenue grew 7% during 2023. Pfizer is working to build a strong oncology portfolio as it strives to realize billions in annualized cost savings to get to the other side of its troubles.   Image: Pfizer’s 2024 financial guidance. For the full-year 2024, Pfizer is targeting revenue in the range of $58.5-$61.5 billion (was $58.5 billion in 2023) and adjusted diluted earnings per share in the range of … Read more

Phillips 66 Hovering Near All-Time Highs, Shares Yield ~2.7%

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Image: Phillips 66’s shares continue to hover near all-time highs thanks to a favorable energy resource environment. By Brian Nelson, CFA Shares of refining giant Phillips 66 (PSX) continue to hover near all-time highs as the company benefits from a favorable energy resource environment. The company’s fourth quarter non-GAAP earnings per share of $3.09 beat expectations handily, as it hauled in $2.2 billion in operating cash flow in the period. Phillips full-year 2023 performance was solid as it generated $7 billion in operating cash flow and returned $5.9 billion to shareholders in the form of dividends and share buybacks. Shares yield ~2.7% at the time of this writing. Management remains shareholder-friendly and said much in its fourth-quarter press release: As we … Read more

Hasbro Is Down But Not Out, Shares Yield ~5.3%

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Image: Hasbro’s shares have faced considerable pressure during the past few years. By Brian Nelson, CFA Hasbro’s (HAS) recently reported fourth-quarter results weren’t great and showed revenue declining 23% as it experienced material weakness in its Consumer Products segment (-25%) and Entertainment division (-49%) in the quarter. On an adjusted basis, backing out large impairment charges, the firm’s operating loss came in at $50 million in the quarter, while it recorded adjusted net earnings of $0.38 per share. Hasbro continues to navigate a difficult demand environment for physical toys, but the company’s free cash flow remains robust and was in excess of cash dividends paid during 2023. Shares yield ~5.3% at the time of this writing. Image: Hasbro had a … Read more

Altria Selling Portion of ABI Stake, Raises 2024 Guidance

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Image: Altria’s shares reacted positively to news that it would sell a portion of its stake in Anheuser-Busch Inbev. By Brian Nelson, CFA On March 14, Altria Group (MO) announced that it would be selling in a secondary offering 35 million of its ~197 million shares of Anheuser-Busch Inbev (BUD) it owns to unlock value for shareholders. The cigarette maker noted that it would use the proceeds of the sale for accelerated share buybacks to the tune of a $2.4 billion increase to its existing $1 billion repurchase program, a move that we like quite a bit as it helps to reduce total dividend obligations paid to shareholders given Altria’s outsized dividend yield. The cigarette maker also raised its earnings … Read more

Dick’s Sporting Goods Soars, Raises Dividend 10%

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Image: Dick’s Sporting Goods’ shares have soared since the doldrums of the COVID-19 meltdown. By Brian Nelson, CFA On March 14, Dividend Growth Newsletter portfolio holding Dick’s Sporting Goods (DKS) reported better-than-expected top and bottom-line performance for the fourth quarter and issued a solid outlook for fiscal 2024. Shares of Dick’s Sporting Goods have done fantastic since the worst of the COVID-19 meltdown years ago, and the momentum behind its business remains strong, as evidenced by a nice 10% increase in its quarterly dividend. We expect to raise our fair value estimate of Dick’s Sporting Goods upon our next valuation model update, and the company remains a key idea in the Dividend Growth Newsletter portfolio. Management’s commentary in the quarterly … Read more