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Fundamental data is updated weekly, as of the prior weekend. Please download the Full Report and Dividend Report for any changes.
Oct 29, 2024
Enterprise Product Partners’ DCF Covered Its Distributions 1.7x in Third Quarter
Image: Enterprise Products Partners’ units have done well the past couple years. Enterprise’s distributable cash flow [DCF] was $1.96 billion for the third quarter, up 5% from the $1.87 billion it registered in the same period a year ago. Distributions during the third quarter increased 5% to $0.525 per common unit, with DCF providing 1.7x coverage of the distribution declared for the third quarter. The midstream energy company expects organic growth capital investment for 2025 in the range of $3.5-$4 billion to reflect opportunities in the Permian Basin and with its acquisition of Piñon Midstream. Our fair value estimate of Enterprise Products Partners stands at $30 per share. Units yield 7.2% at the time of this writing.
Oct 29, 2024
Phillips 66’s Dividend Well Covered with Free Cash Flow
Image Source: Phillips 66. In the quarter, Phillips 66 achieved its target of $1.4 billion in business transformation savings, including a $1 per barrel refining cost reduction. The firm is also optimizing its portfolio, with asset dispositions totaling $2.7 billion, approaching its $3 billion target. We like Phillips 66 free cash flow generation of $774 million in the third quarter, which easily outpaced its dividends paid in the quarter. The company has distributed $12.5 billion through share buybacks and dividends since July 2022, and it remains on pace to achieve its target of $13-$15 billion by year end. Our fair value estimate of Phillips 66 stands at $155 per share. Shares yield 3.6% at the time of this writing.
Oct 28, 2024
In the News: Newmont, McDonald’s, the Election
Newmont is facing cost pressures, while its gold production is expected to be flattish in 2025. McDonald's has worked fast to put the recent E. coli outbreak behind it. We don't expect the situation to damage McDonald's brand or impact the trajectory of its business in the long run. The U.S. Presidential election is on November 5, and while there are differences between the agendas of former President Donald Trump and Vice President Kamala Harris, we're not making changes to the newsletter portfolios on account of political risk and uncertainty.
Oct 25, 2024
UPS Returns to Revenue and Profit Growth
Image: UPS’ shares have been under pressure the past couple years. For the first nine months of the year, UPS hauled in $6.8 billion in operating cash flow and generated free cash flow of $4 billion. For full year 2024, UPS is targeting consolidated revenue of approximately $91.1 billion (was $93 billion), while it now expects its consolidated non-GAAP adjusted operating margin to be roughly 9.6% (was 9.4%). For the year, capital expenditures are targeted at $4 billion, while dividend payments are expected to be around $5.4 billion. Shares yield 4.7% at the time of this writing.
Oct 25, 2024
IBM Targeting $12+ Billion in 2024 Free Cash Flow
Image: Shares of IBM are flirting with record highs. IBM continues to expect to generate more than $12 billion in free cash flow for 2024 and for fourth-quarter constant currency revenue growth to be consistent with its most recently reported third quarter. IBM ended the third quarter with $13.7 billion in cash and marketable securities versus debt, including financing debt, of $56.6 billion. Though IBM has a large net debt position, we’re generally positive on its dividend given free cash flow coverage. Shares yield 3% at the time of this writing.
Oct 25, 2024
Dividend Increases/Decreases for the Week of October 25
Let's take a look at firms raising/lowering their dividends this week.
Oct 24, 2024
Coca-Cola’s Organic Growth Shines in Third Quarter
Image: Coca-Cola’s shares have done quite well the past couple years. Coca-Cola’s organic growth continues to be impressive, and the firm’s non-GAAP numbers show expansion in the core business. Still, it’s hard for us to get excited about a company reporting unadjusted net revenue declines, with global unit case volume also declining in the period. We think Coca-Cola retains its place as a top blue chip stock, but we think there are better ideas for consideration in the newsletter portfolios. Our fair value estimate stands at $61 per share.
Oct 24, 2024
Honeywell Adjusts Full Year 2024 Guidance
Image: Honeywell’s shares have traded sideways the past couple years. Honeywell has a lot of moving parts these days. The company closed its $1.9 billion acquisition of CAES Systems and $1.8 billion acquisition of Air Products’ LNG business, while it plans to spin off its Advanced Materials business and exit its PPE business. We’re big fans of Honeywell’s aerospace division, which recorded its ninth consecutive quarter of double-digit organic growth thanks to strong commercial original equipment and solid growth in commercial aftermarket. Though the firm reduced its revenue and free cash flow outlook for 2024, we like the long-term story at Honeywell, and the company remains a core holding in the Dividend Growth Newsletter portfolio. Our fair value estimate stands at $216 per share.
Oct 24, 2024
Clean Energy Idea GE Vernova Reaffirms 2024 Guidance
Image: GE Vernova shares have powered higher as of late. GE Vernova reaffirmed its 2024 financial guidance, with revenue now trending towards the higher end of the range of $34-$35 billion, adjusted EBITDA margin of 5%-7%, and free cash flow of $1.3-$1.7 billion, also now trending towards the higher end of the free cash flow range. In Power, the company expects mid-single-digit organic revenue growth and 150-200 basis points of organic segment EBITDA margin expansion. In Wind, the company expects flat organic growth, and it expects material segment EBITDA improvement. In Electrification, the company now expects high teens organic revenue growth, up from prior guidance of mid-to-high teens.
Oct 23, 2024
Tesla’s Margins, Free Cash Flow Swell in Third Quarter
Image: Tesla has returned to a free cash flow rich entity. Tesla reported solid third quarter results that showed a business that is getting back on track. Not only did production and deliveries increase nicely on a year-over-year basis, but the firm’s margin improvement is a sight to see and comes in the wake of lowered vehicle selling prices. Tesla also showcased its cash generation capacity in the quarter, with free cash flow more than tripling. We like Tesla’s net-cash-rich balance sheet, its free cash flow generation, and its ability to drive growth, but we fall short of including shares in any newsletter portfolio.


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