Brian Nelson

Despite Lackluster Results, Johnson & Johnson Remains a Solid Dividend-Growth Holding

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Johnson & Johnson (JNJ) issued relatively uneventful first-quarter results Tuesday. We don’t expect to make a change to our fair value estimate, and we continue to like the company as a holding in the portfolio of our Dividend Growth Newsletter. << View Our Dividend Growth Newsletter Archives First-quarter revenue was roughly flat from the same period a year ago, as domestic sales declines and a negative currency impact more than offset international strength.  Net earnings in the quarter were also less-than-compelling with earnings per share advancing a meager 1.5%, to $1.37. However, J&J did update its earnings guidance for the full year to as much as $5.17 per share at the high end of the range, but most of the … Read more

Coca-Cola Reports Strong First-Quarter Results; Hits 14-Year Highs

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Coca-Cola (KO) reported strong first-quarter 2012 results Tuesday that revealed 5% global volume growth with expansion across every geographic operating group. Though we liked the performance during the period, we see no reason to change our fair value estimate on the firm at this time. The world’s biggest drink maker’s first-quarter net revenue advanced 6%, and the firm leveraged that sales expansion into operating-income growth of 10%. The revenue expansion was driven evenly by concentrate sales and positive pricing. However, currency-neutral operating income grew in line with the pace of sales as the company faced difficult comparisons with respect to commodity costs in the quarter.  Earnings per share came in at $0.89 in the quarter (consensus was at $0.88), with cash … Read more

We Still Like ConocoPhillips as a Solid Dividend-Growth Idea

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On Monday, ConocoPhillips (COP) said on its investor-update call that it expects to grow its cash flow to $22 billion by 2016 – that’s up from about $16 billion this year, an 8.2% compound annual growth rate. The firm also noted that it expects to allocate roughly 20% to 25% of its annual cash flow to dividend payments. We continue to like this high-yielder (3.6% annual payout) in the portfolio of our Dividend Growth newsletter and expect the company to experience high-single-digit dividend growth for some time to come. Conoco’s 3-Year Repositioning Plan “ConocoPhillips continues to execute its asset disposition program, targeting $10 billion in proceeds during 2012. During the quarter, the company closed on the sale of its Vietnam … Read more

Dividend Growth Gem P&G Increases Dividend for 56th Consecutive Year; Ups Payout 7%

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P&G’s dividend increase of 7% was roughly in line with our expectations of high-single-digit growth. — Business Wire (Friday, April 13) “The Procter & Gamble Company (NYSE: PG – News) announced that its Board of Directors declared an increase in the quarterly dividend from $0.525 to $0.562 per share on its Common Stock and on the Series A and Series B ESOP Convertible Class A Preferred Stock of the Company, payable on or after May 15, 2012 to Common Stock shareholders of record at the close of business on April 27, 2012 and to Series A and Series B Preferred Stock shareholders of record at the start of business on April 27, 2012. This represents a 7% increase compared to the … Read more

A Stock Split Steals the Headlines from Google’s Quarterly Results

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Google (GOOG) posted another solid first quarter after the close Thursday, with revenues growing 24% from the same period a year ago and adjusted earnings per share coming in at $10.08 — ahead of consensus estimates. Our thesis on Google (click here) remains unchanged, and we think shares continue to be fairly valued at current levels. We’d grow more interested in adding Google to our Best Ideas portfolio if it registered a higher score on our Valuentum Buying Index. At this time, we’re also quite comfortable with our current technology exposure in the portfolio: Apple (AAPL), Intel (INTC), and eBay (EBAY). Aggregate paid-clicks were up a whopping 39% compared to the first quarter of 2011 (and up 7% sequentially), suggesting Google … Read more

JP Morgan’s First-Quarter Results Support Our Small Financials Exposure; Credit Quality Continues to Improve

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JP Morgan (JPM) reported strong first-quarter results Friday that revealed a strengthening balance sheet and positive credit trends in its consumer real estate and credit card portfolios. The firm’s net income fell $172 million (3%) from the same period a year ago, though earnings per share advanced modestly, to $1.31 (consensus expectations were at $1.18 per share). Though we expect the earnings environment to continue to be challenging for banks, we do expect the group as a whole to fetch better valuations in the years ahead as the outsize risk premium associated with ongoing concerns about the domestic housing market and European sovereign debt ease. We continue to hold small, diversified financial positions in the portfolio of our Best Ideas Newsletter, … Read more

Coinstar Pre-announces a Huge Earnings Beat; Chanos Blushes

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Coinstar (CSTR) pre-announced solid first-quarter results after the close Thursday. The owner of Redbox self-service movie rental kiosks said that it now expects consolidated revenue for its first quarter to come in over $569 million at the high end and core diluted earnings per share to come in the range of $1.36 to $1.40 per share for the period (consensus was at only $0.89 per diluted share). Coinstar noted strong consumer demand at Redbox in the quarter, particularly during February and March. The firm also witnessed strength in turns of the following titles: Moneyball, Puss and Boots, 50/50, In Time, Abduction, and Mr. Popper’s Penguins. Specifically, Coinstar cited lower than expected card processing fees and direct operating costs at Redbox as the main reasons for the … Read more

Stay the Course: Alcoa’s 1Q Results Support the Overweight Aerospace Position in Our Best Ideas Portfolio

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Alcoa kicked off first-quarter earnings season with a solid report. Despite views that first-quarter earnings growth will be meager and almost negligible absent Apple (AAPL), we strongly disagree. We expect continued strong performance out of the cyclical aerospace sector coupled with improving earnings from the energy firms levered to oil. Alcoa, for example, posted $0.09 in earnings per share during the period versus consensus expectations of a $0.04 per share loss. But we had been expecting the earnings beat from the aluminum giant, and our fair value estimate for Alcoa remains unchanged following the report. We view Alcoa’s report more important for interpreting how certain end markets are performing than anything else. With that said, Alcoa reported year-over-year revenue growth … Read more