Brian Nelson

Dividend Increases/Decreases for the Week of April 21

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Below we provide a list of firms that raised their dividends during the week ending April 21. 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                          Bar Harbor Bankshares (BHB): now $0.28 per share quarterly dividend, was $0.26. Builders Capital Mortgage (BCF:CA): now $0.3945 per share quarterly dividend, was $0.1972. CapStar Financial (CSTR): now $0.11 per share quarterly dividend, was $0.10. Costco (COST): now $1.02 per share quarterly dividend, was $0.90. Cross Timbers Royalty Trust (CRT): now $0.2446 per share monthly dividend, was $0.1792. Discover Financial Services (DFS): now $0.70 … Read more

Philip Morris’ First-Quarter 2023 Results Just Okay

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By Brian Nelson, CFA On April 20, Philip Morris International Inc. (PM) reported first-quarter 2023 results that were about in-line with expectations. On a pro forma basis, including Swedish Match, the company’s adjusted net revenue growth came in at 3.8%, excluding currency movements, thanks largely to smoke-free product sales expansion and strong pricing growth across its legacy combustible tobacco business. We’re not making any changes to our $105 per-share fair value estimate as a result of the quarterly performance. The cigarette maker noted that it continues to integrate Swedish Match successfully and that it continues to make progress toward its smoke-free goals. Smoke-free revenue was up 3.4 percentage points of total revenue on a year-over-year basis in the first quarter … Read more

AT&T Disappoints Again

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Image: AT&T is back in the doghouse, as free cash flow generation came in worse than expected during its first-quarter 2023 results. Image Source: AT&T By Brian Nelson, CFA It’s unbelievable. As soon as we started to warm up to AT&T (T) in October of last year, noting that its free cash flow generation was looking a lot better, the company falls off the tracks again. During the first quarter of 2023, AT&T’s cash flow from operations dropped more than $950 million on a year-over-year basis, while capital spending and cash paid for vendor financing soared. Non-GAAP free cash flow came in at $1.0 billion (missing expectations), while the company shelled out $2 billion in dividends during the period. Excluding … Read more

1Q 2023 Earnings Coming in Better Than Feared Thus Far

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By Brian Nelson, CFA We’ve been receiving questions about the companies that we are looking to add to the Best Ideas Newsletter to replace the ones we recently removed, and I can say that we’re strongly considering adding Booking Holding (BKNG) and adding to the existing “position” in Chipotle (CMG) following their first-quarter 2023 results. We recently raised our fair value estimate for Booking Holding significantly (now $3,091; was $2,147 per share), and we expect a huge fair value increase at Chipotle in the coming weeks. Booking Holding will report its first-quarter 2023 earnings in early May, while Chipotle will report first-quarter 2023 results on April 25. We have several other ideas in mind to add to the Best Ideas … Read more

Brief Take: Chart of Best Ideas Newsletter Portfolio Idea Chipotle Looks Beautiful!

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Image: Chipotle’s shares have surged to a 52-week high. We continue to like the company’s long-term market opportunity. Brian Nelson, CFA Chipotle’s (CMG) shares have broken out to a 52-week high, and its chart looks beautiful. We attribute the recent strength in shares to greater conviction by the market in the company’s long-term restaurant growth potential. The company expects to open 255-288 new restaurants in 2023, a number that includes roughly a dozen or so restaurants that will be relocated to accommodate a Chipotlane drive-through. Adding more Chipotlanes, an initiative that grew out of meeting the needs of consumers during the worst of the COVID-19 pandemic, is key to our long-term thesis on the name. The pace of restaurant growth … Read more

UnitedHealth Group Raises Guidance for 2023

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By Brian Nelson, CFA On April 14, UnitedHealth Group (UNH) reported first-quarter 2023 that beat the consensus estimates on both the top and bottom lines. Revenue advanced 14.7% in the quarter, while non-GAAP earnings per share of $6.26 beat the consensus number by $0.18, increasing from $5.49 per share in the prior-year period. The high end of the fair value estimate range of UnitedHealthGroup stands north of $600 per share, implying considerable valuation upside potential compared to where shares are trading at the time of this writing. Image: We view valuation as a range of probable fair value outcomes. The high end of the fair value estimate range for UnitedHealth Group stands north of $600. Shares are currently trading at … Read more

Dividend Increases/Decreases for the Week of April 14

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Below we provide a list of firms that raised their dividends during the week ending April 14. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          Aon (AON): now $0.615 per share quarterly dividend, was $0.560. Agree Realty (ADC): now $0.243 per share monthly dividend, was $0.240. Choice Properties Real Estate Investment Trust (CHP.UN:CA): now CAD 0.0625 per share monthly dividend, was CAD 0.0617. CSW Industrials (CSWI): now $0.19 per share quarterly dividend, was $0.17. Mexico Energy (MXC): now $0.10 per share special dividend. Proctor & Gamble (PG): now … Read more

Fed Winning the Fight Against Inflation, Food-at-Home Prices Easing

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Image: CPI-U, not seasonally adjusted. The 12-month percent change in the pace of inflation for all items has fallen from north of 9% in June 2022 to 5% in March 2023. Image Source: BLS By Brian Nelson, CFA The Bureau of Labor Statistics (BLS) released the Consumer Price Index for All Urban Consumers (CPI-U) on April 12, and it showed that the Fed is winning its fight against inflation. The CPI-U rose just 0.1% in March on a seasonally adjusted basis, down 0.3 percentage points from the increase in February. During the past 12 months, the all-items index has advanced 5.0% before any seasonal adjustments, a level that is still higher than the Fed’s long-term target, but not one indicative of … Read more

Markets Don’t Look Bad

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Image: The market-capitalization weighted S&P 500 (SPY) continues to hold its January breakout, while support held in mid-March. By Brian Nelson, CFA Though the regional banking crisis in the U.S. remains on investors’ minds, the panicky environment that has defined much of the past couple months has settled down somewhat, even as First Republic Bank’s (FRC) back remains against the ropes. The regional bank has suspended the dividends on several series of its preferred stock, and we’re hearing of advisor flight from the bank as it now appears to be fighting a consumer perception battle as it struggles to stay afloat. First Republic is clearly on the front lines of the regional bank crisis, and if the bank holds the … Read more

Not Worried About Global PC Demand Weakness

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Image Source: IDC By Brian Nelson, CFA On April 9, International Data Corporation (IDC) issued preliminary findings for the first quarter of 2023 for global personal computer (PC) shipments in its Worldwide Quarterly Personal Computing Device Tracker. The results were a bit surprising, with the firm noting that “weak demand, excess inventory, and a worsening macroeconomic climate were all contributing factors for the precipitous drop in shipments of traditional PCs during the first quarter of 2023.” According to the IDC report, global PC shipments fell 29% to 56.9 million compared to the first quarter of 2022. Apple (AAPL) experienced the biggest year-over-year percentage decline, where shipments fell more than 40%. Dell Technologies (DELL), Lenovo (LNVGY) (LNVGF) and ASUS experienced declines … Read more