Member Articles

How Strong Is Caterpillar’s 2.5% Dividend Yield?

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Image Shown: A 10+ year share-price chart of Caterpillar. The stock has recently set new all-time highs. Caterpillar’s stock has reached new all-time highs! How excited should income investors be? By Brian Nelson, CFA Caterpillar (CAT) is one of our favorite companies from a fundamental perspective, if we look past the cyclicality of its operations and exposure to potential weak credits at its captive finance arm. No matter how you slice it or dice it though, the company’s dealer network is a significant competitive advantage, and the executive team’s ability to manage costs through the course of the economic cycle continues to be impressive. That its shares have now surged past $120+ to all-time highs, levels that it had only … Read more

AT&T’s 5% Dividend Yield: Is It Sustainable?

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Image Source: Mike Mozart The question on everyone’s minds: Is AT&T’s dividend sustainable? By Brian Nelson, CFA AT&T (T) has been on a spending spree. Its agreement to acquire Time Warner (TWX), the merger with DirecTV, and wireless acquisitions in Mexico are just a few tie-ups the company has pursued in recent years. Regardless of what you think about the incremental financial risk associated with a larger balance sheet, AT&T has increased its quarterly dividend for 30+ consecutive years and has frequently returned $20+ billion to shareholders annually through dividends and share buybacks. The company’s Dividend Cushion ratio is 0 (which isn’t great), but let’s put some color around that number. Per AT&T’s dividend report: Key Strengths AT&T has paid … Read more

Microsoft’s Dividend Growth Doesn’t Disappoint

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Image Source: Valuentum By Brian Nelson, CFA We’ve been talking Microsoft (MSFT) for years. Those that know anything about our Dividend Cushion ratio know that we’ve used the software giant as one of the key examples for what constitutes an entity with a strong dividend growth profile. From Microsoft’s tremendous free cash flow generation and fortress balance sheet (strong net cash position) to its moaty business model and beyond, it’s hard to paint anything about its dividend in a negative light. Here’s what we had to say about the company in July when it reported fiscal fourth-quarter results: Dividend Growth Newsletter portfolio holding Microsoft reported solid fiscal fourth quarter results July 20. The company that recently acquired LinkedIn remains a … Read more

Best in Biotech? Global Blood Therapeutics’ Promising Treatment for Sickle Cell Anemia

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We remain impressed with the depth of research conducted over a wide host of disease states. Though a molecule may appear to hold significant promise in the pre-clinical phase, we have often witnessed the unique ability of the human body to react to various treatments. Often an unwanted side effect can torpedo a treatment, thus relegating millions of dollars of research obsolete. However, if a promising molecule is brought to market, the payoff is often well worth the effort. Our goal is to sift through the various clinical data to unearth the most promising treatments with the understanding that nothing is assured until the FDA authorizes the product for marketing in the US. We believe we have identified a promising … Read more

The Asset Sales at Teva Have Begun

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Image Source: Teva We continue to watch the implosion of Teva with some interest; the company was once a Best Ideas Newsletter portfolio idea thanks to its strong ability to generate a copious amount of free cash flow. However, Teva made the classic mistake of purchasing a company that operates in a highly-commoditized industry at a market top while loading up the balance sheet with an enormous amount of debt at the precise time the favorable industry dynamics began transitioning to a headwind. Let’s review the company’s progress for signs of a turnaround. By Alexander J. Poulos Management Shakeup Corporate leadership remains a challenging field where a critical misstep can often end a once-promising career. The management team of Teva … Read more

Our Reports on Stocks in the Book Publishing Industry

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Structure of the Book Publishing Industry Firms in the book publishing industry compete primarily on the basis of quality and price. Rivals include numerous book, ebook, textbook, library, reference material, and Internet resellers. Industry constituents can carve out advantages by offering a comprehensive offering, as in the case of Scholastic’s suite of reading intervention products and services. Still, firms are subject to rapid changes in consumer preferences, especially within the ebook market, which is just beginning to take shape. We’re neutral on the group’s structure. Please click on a company name below to view the corresponding equity report. << Our Dividend Reports

Dividend Increases/Decreases for the Week Ending September 15

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Below we provide a list of firms that raised/lowered their dividends during the week ending September 15. 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 American Tower (AMT): now $0.66 per share quarterly dividend, was $0.64. Argan (AGX): now $1.00 per share annual dividend, was $0.70. Broadridge Financial Solutions (BR): now $0.365 per share quarterly dividend, was $0.33. Curtis-Wright (CW): now $0.15 per share quarterly dividend, was $0.13. Entravision (EVC): now $0.05 per share quarterly dividend, was $0.03125. Farmers & Merchants Bancorp (FMAO): now $0.26 per share quarterly dividend, was $0.25. … Read more

Apple: Innovation Versus Improvements

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Image Source: Valuentum Apple’s 2017 iPhone event took place September 12, and it was one of the most highly anticipated of such events. Let’s take a look at what improvements are being made and how they might impact our thesis on the tech giant. By Kris Rosemann Newsletter portfolio holding Apple (AAPL) has made a spectacle of its annual iPhone event in which it reveals the most recent improvements it makes to its flagship product, as well as other new products and features across its lineup. This year’s event, which took place September 12, was one of the most highly-anticipated events in the iPhone’s 10-year history, due in large part to the anticipation surrounding the iPhone X (iPhone 10 in … Read more