Brian Nelson

In the News: Apple, Nvidia, ANSYS

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By Brian Nelson, CFA The first week of trading in the new year wasn’t very welcome, but we think it is far too early to draw any conclusions about how the rest of the year will be. The Dow Jones Industrial Average (DIA), S&P 500 (SPY), and NASDAQ (QQQ) faced selling pressure in the first week due in part to investors waiting until the new year to book the huge gains garnered during 2023. The market continues to digest critical employment data, as it watches movements in the 10-year Treasury closely, a key benchmark rate for asset pricing that now stands just north of 4%. Many bulls are saying 2024 may be a difficult year after the worst start in … Read more

Dividend Increases/Decreases for the Week of January 5

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Below we provide a list of firms that raised their dividends during the week ending January 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                          ABM Industries (ABM): now $0.225 per share quarterly dividend, was $0.22. Alamo (ALG): now $0.26 per share quarterly dividend, was $0.22. Bank OZK (OZK): now $0.38 per share quarterly dividend, was $0.37. Barloworld Limited (BRRAY): now $0.0982 per share semi-annual dividend, was $0.0624. Barry Callebaut AG (BRRLY): now $0.158 per share annual dividend, was $0.145. Biloxi Marsh Land (BLMC): now $0.125 per share annual … Read more

It’s All About Free Cash Flow – Walgreens Cuts Its Payout

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Image: Walgreens’ shares have been under consistent pressure for years, and a turnaround is not guaranteed. By Brian Nelson, CFA Back in early December, we said the following about Walgreens (WBA): Walgreens is a household name, but its wheeling and dealing over the past few years has created a convoluted situation that can best be observed by the company’s deteriorating operating cash flow. As shown in the company’s cash flow statement…capital expenditures are eating up a high percentage of operating cash, and its fiscal 2023 free cash flow — as measured by cash flow from operations less all capital spending — is now materially below that of cash dividends paid. The firm also issued guidance recently that came in below … Read more

2023 Was a Fantastic Year! Are You Ready for 2024?

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By Brian Nelson, CFA 2023 was a fantastic year by almost any measure, with the S&P 500 (SPY) advancing almost 25%. The markets bounced back from a very difficult 2022 and overcame a crisis in the regional bank sector and rising mortgage rates through the course of the year. The great promise of artificial intelligence [AI], easing inflation, and a dovish Fed pivot late in the year helped to propel the broader indices higher. As we look out into 2024, we think there are 12 reasons why investors should stay aggressive in this new bull market, “12 Reasons to Stay Aggressive in 2024.” Valuentum’s newsletter suite has delivered throughout the good times and bad times. 2023 numbers were great, but … Read more

Kinder Morgan’s ~6.4% Dividend Yield Is Much Stronger These Days

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Image: Kinder Morgan is back on track. Image Source: Kinder Morgan. By Brian Nelson, CFA Early in December, Kinder Morgan (KMI) released financial expectations for 2024 that showed the midstream energy giant is back on track. Excluding its recent purchase of NextEra Energy Partners’ (NEP) STX Midstream assets, Kinder Morgan expects 5% expansion in adjusted EBITDA and distributable cash flow [DCF] in 2024 thanks to growth in its Natural Gas Pipelines and Energy Transition Ventures segments coupled with rate escalations across its operations. For 2024, management is targeting its 7th consecutive year of dividend increases with a projected annualized dividend of $1.15 in 2024. Net debt-to-Adjusted EBITDA is targeted at 3.8x at the end of 2024, a level that is materially … Read more

Dividend Increases/Decreases for the Week of December 29

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Below we provide a list of firms that raised their dividends during the week ending December 29. 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                          AMCON Distributing (DIT): now $0.28 per share special dividend, was $0.18. Banco de Sabadell (BNDSY): now EUR 0.03 per share interim dividend. Bankinter, S.A. (BKNIY): now $0.1266 per share quarterly dividend, was $0.1105. Borr Drilling (BORR): now $0.05 per share quarterly dividend. Cadiz Inc. 8.875% DEP PFD A (CDZIP): now $0.56 per share quarterly dividend, was $0.55. Crescent Capital BDC (CCAP): now $0.41 per … Read more

6%+ Dividend Yielder Cracker Barrel Needs to Raise Menu Prices More Aggressively

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By Brian Nelson, CFA Cracker Barrel Old Country Store (CBRL) is a high-yielding restaurant idea with a unique concept that has fallen on more difficult times of late. Our recent channel checks indicate that Cracker Barrel has a lot of room to raise prices versus peers, but the firm is having a hard time executing on this front as overall traffic trends remain challenged. Right now, Cracker Barrel yields ~6.3%, and if the company can turn things around, it might make for one of the most interesting income ideas on the market. The high end of our fair value estimate range of Cracker Barrel stands north of $100 (its shares are trading at ~$80 each), but investors should remain cautious … Read more

Dividend Aristocrat Enterprise Products Partners Boasts 7%+ Yield, Investment-Grade Marks

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Image: Enterprise Products Partners continues to raise its distribution year after year. Source: Enterprise Products Partners. By Brian Nelson, CFA Enterprise Products Partners (EPD) represents rare exposure to the midstream energy pipeline space in the simulated High Yield Dividend Newsletter portfolio, a key feature of the monthly High Yield Dividend Newsletter, released by email to its subscribers on the first of each month. The master limited partnership is one of the largest providers of midstream energy services of natural gas, natural gas liquids (NGLs), crude oil and other refined products in North America. Units offer investors a distribution yield of ~7.6% at the time of this writing, one that is covered nicely by the firm’s distributable cash flow [DCF], not to … Read more

5 Questions Advisors Should Ask When Interviewing Fund Managers

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Image Source: Investment Zen These are not your typical questions. These are the questions advisors should ask to help find the most analytical fund managers. The questions don’t cover strategy or market outlook, but instead hit upon the analytical foundation of the fund manager, which could be more important than anything else. Can you explain the difference between ROA, ROE, and ROIC? What you are looking for in the answer is a response that goes into the pitfalls of using return on assets (ROA) and return on equity (ROE) as a measure of a company’s ability to generate value for shareholders. Ideally, you’d want to hear a response that says ROA is muddied by the inclusion of non-operating cash in … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more