Member Articles

3M Dividend Still Strong for Now in the Face of Legal Troubles

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Image Source: 3M Company – IR Presentation By Callum Turcan Maker of bathroom scrubbers, specialty adhesive products, personal protection systems, inks, medical supplies, and a whole host of other products under the Scotch, Scotch-Brite, Command, Post-it, and other brands, 3M Company (MMM) is fundamentally a science-based company that holds over 100,000 patents. Innovation forged 3M into the giant conglomerate we know today, but that same innovation has created a major liability which could pressure its financials. Shares of 3M yield 3.5% as of this writing and are not part of any newsletter portfolio. The Situation It comes down to per- and polyfluoroalkyl substances (“PFAS”), which can be used as effective water and grease repellents in anything from Teflon pans to … Read more

Dividend Increases/Decreases for the Week Ending July 12

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Below we provide a list of firms that raised their dividends during the week ending July 12. 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 Antero Midstream (AM): now $0.3075 per share quarterly dividend, was $0.3025. Bank of America Corporation Deposit Shs Perp Pfd Shs Series E (BAC.PE): now $0.2556 per share quarterly dividend, was $0.2472. BP Prudhoe Bay Royalty Trust (BPT): now $0.5510 per share quarterly dividend, was $0.3449. Clough Global Allocation Fund (GLV): now $0.1032 per share monthly dividend, was $0.1023. Cummins (CMI): now $1.311 per share quarterly dividend, … Read more

DXC Technology Looks Super Cheap

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While DXC Technology is experiencing top-line pressure due to weakness at its legacy businesses, its digital growth trajectory continues to look promising. Very strong free cash flows and a modest dividend policy leave plenty of room for upside as it relates to future dividend increases, particularly if share buybacks are scaled back.  By Callum Turcan DXC Technology Company (DXC) can be quickly defined as an end-to-end IT services company that offers anything from cloud application and management services, analytics, and IT security services to traditional application management and maintenance offerings. The company seeks to enable enterprises to not only transition to the digital age but scale up their capabilities with the help of DXC Technology, a process aided by such … Read more

We Just Increased Our Fair Value Estimate for United Rentals

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Image Shown: We increased our fair value estimate for United Rentals in early July 2019.  By Callum Turcan We recently increased our fair value estimate for United Rentals Inc (URI), the largest equipment rental company in the world. The company has been a key beneficiary from the secular shift away from customer ownership to the rental of construction and industrial equipment. United Rentals has a heavy presence in America and Canada, along with a limited footprint in Europe. Management is guiding for United Rentals to generate $1.3–$1.5 billion in free cash flow in 2019 before taking special items into account (particularly expenses incurred integrating recent acquisitions into company-wide operations). That should enable United Rentals to pursue both its deleveraging goals … Read more

Our Reports on Rental and Leasing Stocks

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Structure of the Rental and Leasing Industry The highly fragmented and competitive US rental/leasing industry include entities that rent construction/industrial equipment, firms that lease household durable goods products, and companies that offer car/truck rental services. Equipment rental firms are tied to the cyclical construction/industrial markets, car rental revenue is levered to on-airport (air travel) demand, while lessors of household durables are tied to housing and consumer confidence trends. Some firms may gain advantages via large/diverse rental fleets and significant purchasing power, but we don’t like the structure of the group. We now cover stocks in the Rental and Leasing industry in the articles we write: CAR, PSA, R, UHAL, URI.

Checking Out ARAMCO, Saudi Arabia’s Sleeping Giant

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Image Source: Trending Topics 2019 By Callum Turcan Recent events have piqued our interest in the actions of Saudi Arabian Oil Company, better known as ARAMCO (ARMCO), the giant in charge of the Gulf nation’s hydrocarbon industry. Saudi Arabia is reportedly restarting ARAMCO’s IPO according to comments made by the Saudi Energy Minister, reviving a plan the country had previously put on ice primarily due to expectations that the company wouldn’t fetch a high enough valuation to suit the needs of the Kingdom. Many view ARAMCO as the most valuable company in the world, but whether this is a USD$2 trillion company or not is in the eye of the beholder (many see that target as overly ambitious, as do … Read more

New Highs! The December Call Has Been Well-Rewarded

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Image shown: Valuentum’s Dividend Growth Newsletter portfolio. Since inception, the newsletter portfolio has *never* had a constituent that experienced a dividend cut. We moved to weighting ranges beginning in 2018.   “The less the prudence with which others conduct their affairs, the greater the prudence with which we must conduct our own.” – Warren Buffett (2018) By Brian Nelson, CFA While others are celebrating, we know better. This market could come down upon itself like nothing else. But for now. We breathe a sigh of relief. A company, Valuentum, that emphasizes the importance of timing and then delivers on that cold December 26 day to move to all-in in the newsletter portfolios is something remarkable (see image below). We cannot go back to … Read more

What About BDCs?

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Business Development Companies, or BDCs, are often considered by dividend investors as a result of their quite sizable dividend yields, as compared to the overall market. In this piece, let’s take a look at how these companies operate and then also compare some important metrics between the various players. First, let’s looks at the below slide from Prospect Capital, which highlights some important differentiating features of BDCs. Image Source: Prospect Capital Investor Presentation Importantly, please know that you will need to consult a tax professional to determine how to treat the various dividend and return of capital from BDCs. Let’s also look at the below graphic from Prospect Capital (PSEC), which highlights the growth in BDCs over the past 10 … Read more

Chevron’s Permian Opportunity, Outsize Dividend Yield

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Image Source: Chevron Corporation – IR Presentation By Callum Turcan Last year, the storied energy giant Chevron Corporation (CVX) produced 2.9 million barrels of oil equivalent per day on average and the company ended 2018 with 12.1 billion BOE in proved reserves on a net basis. Chevron’s upstream production base climbed by 13% from 2016 to 2018 while its proved reserves increased 8% during this period, led by growth at its Permian Basin operations. Management intends on growing Chevron’s downstream presence to support rising Permian crude oil volumes. We would like to draw attention to Chevron’s Permian operations as we see that having an outsized influence on its growth trajectory. Shares of CVX yield 3.8% as of this writing and … Read more

Dividend Increases/Decreases for the Week Ending June 28

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Below we provide a list of firms that raised their dividends during the week ending June 28. 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 Empire (EMLAF): now CAD 0.12 per share quarterly dividend, was CAD 0.11. First Bancorp (FNLC): now $0.30 per share quarterly dividend, was $0.29. Glacier Bancorp (GBCI): now $0.27 per share quarterly dividend, was $0.26. Hingham Institution for Savings (HIFS): now $0.39 per share quarterly dividend, was $0.38. Investar (ISTR): now $0.0551 per share quarterly dividend, was $0.0525. John Wiley & Sons (JW.A): now $0.34 per share … Read more