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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.
Dec 27, 2022
Verizon’s Big Share-Price Drop Opens Opportunity for 6.8% Dividend Yield
Image: Verizon’s shares have been punished, but this has opened an opportunity for a 6.8% dividend yield. Image Source: TradingView. With Verizon’s dividend hike to $0.6525 per quarter in September this year, 2022 has marked the 16th consecutive year of a dividend increase. Shares yield ~6.8% at the time of this writing. Though we wouldn’t be looking to add Verizon’s shares to the simulated Best Ideas Newsletter portfolio or simulated Dividend Growth Newsletter portfolio at this time, it may be worth a look for high yield and income investors. Its big share-price drop has made its dividend a head-turner.
Dec 24, 2022
Raising Our Fair Value Estimate of Dividend Aristocrat Caterpillar
Image: Caterpillar’s financial momentum is impressive. Image Source: Caterpillar. Things are looking good for Caterpillar, and the company’s free cash flow strength continues to support its payout and Dividend Aristocrat status. Caterpillar’s results are cyclical and exhibit operating leverage, which cuts both ways, but the firm’s pricing power is working wonders on its financials at the moment. Higher dealer inventories due in part to timing and labor shortages, foreign currency headwinds, and weakening dynamics in the residential construction market and in Europe and China are concerns, but the company’s strong performance warrants a fair value estimate increase, in our view. Though we like Caterpillar quite a bit, we’re not looking to add shares to any simulated newsletter portfolio at this time, however.
Dec 23, 2022
FedEx’s Revenue Falls, Operating Income Tumbles in Fiscal Second Quarter
Image: FedEx’s forecast for fiscal 2023 earnings have almost been halved since it gave guidance in June of this calendar year. Image Source: FedEx.We thought FedEx would be able to offset weakness in its business with yield and cost savings initiatives, but things have deteriorated even further than what we had been expecting. Revenue faced considerable pressure during the company’s second-quarter fiscal 2023 results, while operating income tumbled more than 60% in the period. The firm has now cut its fiscal 2023 earnings per share forecast practically in half since it gave updated guidance in June of calendar 2022, and its financial targets for fiscal 2025 may be in jeopardy. We’re no longer evaluating FedEx for inclusion in the Dividend Growth Newsletter portfolio, despite shares yielding ~2.6% at the time of this writing.
Dec 20, 2022
Stock Market Locked in Technical Downtrend; Millionaires Expect More Pain in 2023
Image: The stock market has been locked in a downtrend through all of 2022, and the latest bull trap has spoiled the Santa Claus rally. 2023 may be an equally rough year. This market just doesn’t want to go higher in the near term, and the latest bull trap wasn’t encouraging at all. We think long term investors should stay the course, but it is looking more and more like we won’t see a stock market bottom until sometime in 2023. Santa brought coal this year.
Dec 16, 2022
Waste Management’s Free Cash Flow Facing Pressure from Sustainability Initiatives
Image Source: Waste Management’s 2022 Sustainability Report. 2023 will mark the 20th consecutive year that Waste Management has increased its dividend payout. Though free cash flow is facing pressure due to its sustainability growth initiatives that are driving total capital expenditures higher, the company’s valuable disposal capacity and pricing power across its municipal solid waste operations are a couple qualities that we like. Shares are trading about in line with our fair value estimate at the moment, as they boast a ~1.6% forward estimated annual dividend yield.
Dec 14, 2022
Union Pacific Outperforming North American Rail Traffic Trends But Facing Inefficiencies and Inflation Hurdles
Image Source: Union Pacific. The rail industry may have avoided a labor strike, but North American rail traffic remains under pressure, while many operators are struggling with inflationary pressures and operational inefficiencies. Union Pacific remains our favorite way to play the rails, but 2022 has been a difficult year for the firm, with free cash flow coming under pressure as capital investments have soared so far in 2022. Union Pacific garners an ‘A’ rating by Moody’s, Fitch and S&P, so we’re not too worried about its large net debt position. Shares yield ~2.4% at the time of this writing, but we’re not pulling the trigger.
Dec 13, 2022
Oracle Puts Up Huge Revenue Growth Number in Second Quarter Fiscal 2023 Results
Image: Trailing four-quarter free cash flow trends at Oracle are strong but lumpy. Image Source: Oracle. On December 12, Oracle Corporation reported better than expected second quarter fiscal 2023 results for the three months ended November 30. Total revenue advanced 18% in the quarter on a year-over-year basis, leaping 25% in constant currency, thanks in part to strong performance at its infrastructure and application cloud businesses. Non-GAAP operating income increased 5%--and 12% in constant currency--and its non-GAAP operating margin was 41% in the period. Fiscal second-quarter non-GAAP earnings per share of $1.21 beat the consensus estimate, despite foreign currency headwinds. We liked that we saw in the quarterly results, and we’ll be sticking with the company as one of our best ideas.
Dec 12, 2022
American Tower Ups Dividend Payout 6%+ But Shares Not Immune to REIT Sector Weakness
Image Source: American Tower. Cell tower operator American Tower raised its dividend more than 6% from its last payout in October, and while we like the payout growth momentum, we’re taking note of weakening AFFO and free cash flow trends. The REIT’s net debt position takes on greater prominence in the current rising interest rate environment, too, and its forward estimated dividend yield stands at just ~2.9%, about in line with traditional near-term rates on certificates of deposits. We’re watching deteriorating REIT economics closely.
Dec 12, 2022
CubeSmart Raises Dividend 14% But We’re Monitoring High Net Debt Load and Deteriorating Occupancy Rates
Image Source: CubeSmart. CubeSmart announced a 14% increase in its dividend payout December 7. The REIT upped its guidance for earnings per share and adjusted FFO when it reported its third-quarter results last October but deteriorating occupancy rates and the impact of rising interest rates on the firm’s massive net debt position have us on alert. We continue to monitor these dynamics closely in light of the REIT’s weak share-price performance during 2022.
Dec 10, 2022
Honeywell's ESG Efforts May Benefit from More Board Diversity and Moving Beyond Its Asbestos-Saddled Past
Image: Honeywell continues to put together a long resume of ESG highlights. Image Source: Honeywell’s Environmental, Social and Governance Report. Honeywell’s 100+ page Environmental Social and Governance Report for 2022 is a tremendous resource that indicates Honeywell means business when it comes to ESG-related efforts. The firm has a lot of work to do to get to carbon neutral by 2035, and we’d like to see a more diverse board and perhaps more reasonable compensation at the top, but the trajectory for ESG considerations at Honeywell is moving in the right direction. Prior asbestos-related issues weigh heavily on our ESG assessment of Honeywell, but we expect continued improvement across all areas of ESG in the years to come at the firm.


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