Valuentum Exclusive Analysis for the Discerning Investor

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Oct 25, 2021

Supply Chain Issues Won’t Disrupt Honeywell’s Free Cash Flow Trajectory
Image: Honeywell’s third-quarter 2021 results were mighty impressive. We continue to like what we see at this industrial dividend growth giant. Image Source: Honeywell. We loved Honeywell’s third-quarter results, and while we didn’t like the sales guidance adjustment, cash flow trends remain solid, supporting its robust Dividend Cushion ratio of 2.6 and fair value estimate of $243 per share. The company has increased its dividend a dozen times in the past 11 years, and we expect continued dividend growth for many more years to come.

Sep 24, 2021

Honeywell’s Dividend Growth Supported by Promising Cash Flow Growth Outlook
Image Source: Honeywell International Inc – Second Quarter of 2021 IR Earnings Presentation. We view Honeywell International as one of the best industrial plays out there and include shares of HON as an idea in the Dividend Growth Newsletter portfolio. Honeywell has exposure to the aerospace and downstream energy markets--industries that were hit hard by the coronavirus (‘COVID-19’) pandemic but are now recovering in earnest--and to the proliferation of e-commerce and “smart buildings.” Furthermore, in the event that a bipartisan infrastructure bill currently awaiting approval in the US House of Representatives gets signed into law, Honeywell has exposure to the expected surge in domestic infrastructure investments. Our fair value estimate for Honeywell sits at $240 per share with room for upside as the top end of our fair value estimate range sits at $288 per share. As of this writing, shares of HON yield ~1.7%.

Feb 8, 2021

Stock Market Outlook for 2021
2020 was one from the history books and a year that will live on in infamy. That said, we are excited for the future as global health authorities are steadily putting an end to the public health crisis created by COVID-19, aided by the quick discovery of safe and viable vaccines. Tech, fintech, and payment processing firms were all big winners in 2020, and we expect that to continue being the case in 2021. Digital advertising, cloud-computing, and e-commerce activities are set to continue dominating their respective fields. Cybersecurity demand is moving higher and the constant threats posed by both governments (usually nations that are hostile to Western interests) and non-state actors highlights how crucial these services are. Retailers with omni-channel selling capabilities are well-positioned to ride the global economic recovery upwards. Green energy firms will continue to grow at a brisk pace in 2021, though the oil & gas industry appears ready for a comeback. The adoption of 5G wireless technologies and smartphones will create immense growth opportunities for smartphone makers, semiconductor players and telecommunications giants. Video streaming services have become ubiquitous over the past decade with room to continue growing as households “cut the cord” and instead opt for several video streaming packages. We’re not too big of fans of old industrial names given their capital-intensive nature relative to capital-light technology or fintech, but there are select names that have appeal. Cryptocurrencies have taken the market by storm as we turn the calendar into 2021, but the traditional banking system remains healthy enough to withstand another shock should it be on the horizon. Our fair value estimate of the S&P 500 remains $3,530-$3,920, but we may still be on a roller coaster ride for the year. Here’s to a great 2021!

Feb 5, 2021

Dividend Increases/Decreases for the Week February 5
Let's take a look at companies that raised/lowered their dividend this week.

Nov 19, 2020

Boeing’s Financials Are Absolutely Frightening
The reality is that Boeing’s financials are still pretty scary. During the first nine months of 2020, the company burned through an incredible $15.4 billion in free cash flow, even as it cut capital spending by a few hundred million. As of the end of the third quarter of 2020, its total consolidated debt now stands at $61 billion, with total cash and marketable securities of $27.1 billion. This compares to total consolidated debt of $24.7 billion and total cash and marketable securities of $10.9 billion, as of the end of the third quarter of 2019. The grounding of the 737 MAX and the outbreak of COVID-19 have combined to be an absolute wrecking ball to Boeing’s financials, and it may take a very, very long time before things start looking better on the books. S&P, Moody’s and Fitch still give the company investment-grade credit ratings (BBB-/Baa2/BBB-), but we’re not sure the aerospace giant deserves them. Here’s what Fitch noted October 2020: “…many of the company's quantitative rating factors will be inconsistent with the 'BBB' category for three years (2019-2021) and into 2022.” It’s probably fair to say that Boeing’s debt should be rated junk, but that would cause some severe reverberations in the credit markets, in our view.

Jun 1, 2020

June Dividend Growth Newsletter & Intrinsic Value Investing
"But how, you will ask, does one decide what [stocks are] "attractive"? Most analysts feel they must choose between two approaches customarily thought to be in opposition: "value" and "growth,"...We view that as fuzzy thinking...Growth is always a component of value [and] the very term "value investing" is redundant." -- Warren Buffett, Berkshire Hathaway annual report, 1992

May 1, 2020

Dividend Increases/Decreases for the Week Ending May 1
Let's take a look at companies that raised/lowered their dividend this week.

Jan 31, 2020

Dividend Increases/Decreases for the Week Ending January 31
Let's take a look at companies that raised/lowered their dividend this week.

Feb 1, 2019

Dividend Increases/Decreases for the Week Ending February 1
Let's take a look at companies that raised/lowered their dividend this week.

May 14, 2018

Boeing’s Long-Term Strength Intact; Embraer Deal Nearing?
Image Source: Robert Sullivan. Boeing’s first-quarter report was highlighted by stable top-line growth, impressive bottom-line expansion, and increased full-year guidance. The long-term health of its business is supported by its massive backlog of unfulfilled deliveries.