Member Articles

Dividend Increases/Decreases for the Week Ending March 4

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Image: Gulfstream, a General Dynamics company, makes some of the most technologically-advanced business jet aircraft, Charley W. Karl Below we provide a list of firms that raised/lowered their dividends during the week ending March 4. 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 Bank of Nova Scotia (BNS): now C$0.72 per share quarterly dividend, was C$0.70. Big Lots (BIG): now $0.21 per share quarterly dividend, was $0.19. Broadcom (AVGO): now $0.49 per share quarterly dividend, was $0.44. Chatham Lodging Trust (CLDT): now $0.11 per share monthly dividend, was $0.10. Citizen Community Bancorp … Read more

Thinking About Increasing Equity Exposure Modestly in Best Ideas Newsletter Portfolio

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  Image Source: Berkshire Hathaway By Brian Nelson, CFA I’m putting together something for you… …an annotated commentary of Berkshire Hathaway’s (BRK.A, BRK.B) recently-released 2015 annual report, and specifically Warren Buffett’s letter to shareholders. Why does my opinion on this topic matter? Well, having trained hundreds of equity and credit analysts on the concept of “economic moats” (or competitive advantages) across continents for one of the largest independent investment research firms and its clients and beyond, I believe that my opinion is at least worth hearing on the topic, if only for thought-generation, conceptual understanding, and debate. Given some of the recent technical strength at Berkshire, we are also considering taking a bite out of shares should markets remain strong, … Read more

Valuentum: Still Bullish on Kinder Morgan Since Mid-Teens

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“Valuentum called the collapse in Kinder Morgan’s shares from $40 per share to the low-teens, and now we have called the rebound to $20 from the low-teens. Though this action may not fit into the playbook of the “buy and hold” investor, the idea of “selling” overpriced stocks that are going down and “buying” overpriced stocks that are going up is a core part of our methodology.” By Brian Nelson, CFA I’m still getting emails about how wrong we were about our calls on Kinder Morgan (KMI). Will they ever stop? We’re doing our best to relieve investors of the shackles of “buy and hold” thinking, which is separate, distinct and runs counter to investing with a focus on long-term … Read more

We Said 2016 Was Going to Be a Big One for Intel; FVE: $38

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Image Source: Thomas Cloer Last October, we wrote that “Intel May Have a Breakout Year in 2016,” and despite the rough start to the year, our thesis continues to progress nicely. Here’s what we wrote several months ago: Part of the reason why we like Intel (INTC) is that many continue to dismiss the firm’s entrance into the mobile market, an area traditionally dominated by Qualcomm (QCOM). It is widely-accepted that Intel’s research and development prowess has nearly put AMD (AMD) out of business, and we’re confident the chip giant’s resources and innovation track record will open the door to the mobile market in a big way. In March (2015), it was reported that Intel’s technology will find its way … Read more

The Long-term Remains Ominous for Potash Producers

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By Brian Nelson, CFA We think investors are finally getting a feel for the vulnerability of commodity-oriented equities, almost across the board. Potash (POT), the largest member of Canpotex, rang the alarm bell a number of weeks ago, slashing its dividend, “The Bounce in Energy and Potash’s ‘Surprising’ Dividend Cut (Jan 2016).” Times have been tough across the industry, but the big shocker was its “little brother,” pure-play Intrepid Potash (IPI), which put up terrible fourth-quarter results February 29 and warned that “pricing pressure…has the potential to cause a breach in (its) loan covenants.” Incredible. Intrepid Potash has now fallen to under $1 per share from ~$40 in early 2011. As we wrote in July 2013, “Uralkali Backs Out of … Read more

Medtronic Expects to Generate $40 Billion in Free Cash Flow in Next 5 Years

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Image Source: Medtronic, JP Morgan Healthcare Conference Presentation, January 11 On March 1, top holding in the Dividend Growth Newsletter portfolio Medtronic (MDT) reported solid fiscal third-quarter results, now a full year after it completed the deal with Covidien. In the period, Medtronic’s comparable, constant-currency revenue advanced 6% while it recorded non-GAAP diluted earnings per share of $1.06. Management complained of currency headwinds, not unlike that of other multinationals, but reiterated its 2016 diluted non-GAAP earnings per share in the range of $4.36-$4.40, which includes a forex headwind of $0.45-$0.50 in the year. Non-GAAP earnings in Medtronic’s case “relate to charges or gains that management believes may or may not recur with similar materiality or impact on results in future … Read more

Politics and the Markets

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Image Source: DonkeyHotey By Brian Nelson, CFA I personally cannot believe how long this election cycle has been. Have we really had 10 Republican debates? It seems like the town halls are adding up, too? If it wasn’t for Apple’s (AAPL) run-in with the FBI, “Most of us woke up to the news… (Feb 18),” one might have not known that former producer of McAfee anti-virus software John McAfee may run as the Libertarian Party candidate, and what about Michael Bloomberg? Could the latter play spoiler to Donald Trump’s hopes for the oval office if he divides the Republican vote? Or will traditional Republicans that prefer anyone else but “the Donald” donate to Hillary Clinton’s candidacy in the general election, … Read more

Avoid Dividend Double Whammies By Using the Dividend Cushion!

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By Brian Nelson, CFA I think a lot of investors sell themselves short. Of course you want a strong and growing dividend, but analysis shouldn’t stop there. One of the most important things you could ever do is evaluate just how strong that dividend truly is via the Dividend Cushion ratio, a metric that measures a company’s dividend coverage via future free cash flow generation with consideration of its balance sheet health. For example, how valuable would it have been to know that Kinder Morgan (KMI), ConocoPhillips (COP), and BHP Billiton (BHP) were going to cut their dividends…in advance of them doing so? Our membership knew these cuts were probable long before anyone else because they paid attention to each … Read more

When Do the Dark Days Return in Home Improvement?

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By Kris Rosemann Though there are many way to slice and dice the numbers, total employment continues to grow, helping consumers’ personal income levels, and gas prices have significantly reduced everyday expenses for the average American. Home improvement retail is benefiting materially, from our perspective, and we point to a number of trends that are driving Americans to spend more on their homes, “Is the Time Right to Invest in Home Improvement (Aug 2015).” Though many subdivisions across the country remain unfinished, “What’s the Deal with US Housing? (May 2015),” we’re even started to see life out of the builders in some previously abandoned areas. Things are looking up… Home Depot (HD) and Lowe’s (LOW) embraced the late-arriving winter last … Read more

Defense Dividends Remain Solid; Little Valuation Opportunity Present

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Image Source: Sikorsky S-70 (H-60) Black Hawk, Martijn By Kris Rosemann The defense industry continues to face pressure in the face of weak funding and competing budget priorities, and malaise in the global economy could add pressure to those seeking growth from foreign sovereigns. Having an already strong backlog will certainly help to a degree, and ongoing cyber threats, “The Global Pandemic of Cybercrime, Cyber Espionage and Cyber Warfare,” and preparation for modern-day warfare and all its complexities will post both challenges and opportunities for many, “Annual US Defense Spending Still 85% Higher Than Year of September 11 Attacks.” Defense contractors generally are strong free cash flow generators, and as a result often have reliable and competitive dividends, not to mention … Read more