Valuentum Exclusive Analysis for the Discerning Investor

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Our Reports on Stocks in the Retail--Apparel (Teen-30yrs, Off-Price, Outdoor) Industry
We've dropped coverage of stocks in the Retail--Apparel (Teen-30yrs, Off-Price, Outdoor) industry.

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

General Motors’ Cost Savings Plan Still Intact
Image Shown: Shares of General Motors moved higher after its third quarter 2019 earnings report as investors looked past the UAW strike and towards the future, particularly ongoing cost structure improvements. Our fair value estimate for GM stands at $48 per share, and we continue to like the automaker in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. General Motors’ Dividend Cushion ratio of 3.5x provides for solid payout coverage at a time of trade war volatility, and its Cruise division offers plenty of long-term upside as one of the leaders in the autonomous driving space.

Our Reports on Stocks in the Food Products (Large/Mid-Cap) Industry
We've reallocated our resources to cover more recession-resistant stocks.

Tech Earnings Roundup: AAPL, FB, GOOG
Several large tech companies reported earnings this week including three of the top holdings in our Best Ideas Newsletter and Dividend Growth Newsletter portfolios.

Johnson & Johnson Announces New Test Results That Reveal No Traces of Asbestos in Johnson Baby Powder Products
Image Source: Johnson & Johnson – February 2019 CAGNY IR Presentation. Major retailers including Walmart, Rite Aid Corp, and CVS Health pulled Johnson Baby Powder products from their shelves after the announcement by the FDA. Johnson & Johnson is hoping that by fighting back it can preserve its brand power, revenues, and position on retailer’s shelves once it’s all said and done. We will continue to monitor this situation going forward and would like to note that Johnson & Johnson, potential legal liabilities aside, raised its full-year guidance for 2019 multiple times this year highlighting the underlying demand for its vast array of healthcare-related offerings. That supports a nice free cash flow growth trajectory.

Caterpillar Misses Estimates and Revises Guidance Downwards
Image Source: Caterpillar Inc – Third quarter 2019 IR presentation. Should the global economy show signs of stabilizing, particularly as it relates to industrial activity, Caterpillar would appear relatively cheap at ~$141 per share as of the end of the October 29 trading session. Recent signs have not been promising. Exports out of South Korea, a barometer for the global economy, continue to plummet while macroeconomic readings in the EU and North America are showing signs of a major slowdown materializing as we speak (particularly in the Eurozone, but that appears to be spreading to the US economy as well). China’s economy continues to feel the heat from the US-China trade war. The low end of our fair value estimate range stands at $125 per share of CAT, meaning that under more pessimistic assumptions, Caterpillar appears fairly valued as of this writing.

Waste Management’s Dividend Well-Covered with Free Cash Flow
Image Source: david.dames. Waste Management is one of our favorite companies in our coverage universe, and the strength of its dividend is undeniable. The company’s operations have performed quite well during the first nine months of 2019, and the executive team expects the momentum to continue into 2020. Management did express some caution as it relates to its industrial segment revenue but reiterated strength in consumer activity and noted that, while its recycling (commodity-sensitive) business isn’t as strong as it originally expected, it expects to achieve its “guidance range of adjusted operating EBITDA of $4.4-$4.45 billion, free cash flow of $2.025-$2.075 billion, and adjusted earnings per diluted share of $4.28-$4.38." Shares of Waste Management yield 1.8% at the time of this writing.

Our Reports on Stocks in the Luxury Goods - Ultra & Aspirational Industry
Image Source: Jill Clardy. We've optimized our consumer discretionary coverage.

High Yield Dividend Newsletter Portfolio Holdings AT&T and Philip Morris International Continue to Shine
Image Shown: AT&T continues to surge higher this year as shares of T converge towards their intrinsic value, a process supported by recent activist investor activity directed towards the company. If you may wish to add the High Yield Dividend Newsletter to your membership, please click here.We continue to like the resurgence in AT&T's shares of late. The company is rapidly converging to our $40 per share fair value estimate, and as the company divests assets and pursues deleveraging, its dividend growth profile is enhanced. Shares already yield an enticing 5.3%, too. Philip Morris has rallied considerably since it broke deal talks with Altria, and we believe the company has a relatively lower business risk profile than Altria. Both Philip Morris and Altria have Dividend Cushion ratios below the 1.25x threshold, or GOOD threshold, but given more positive overall trends at Philip Morris, we prefer the company over Altria at this time. Shares of Philip Morris yield a lofty 5.7% at the time of this writing.