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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 23, 2024
Starbucks Posts Lower Than Expected Performance, Turnaround “Will Take Time”
Image: Starbucks’ shares have been volatile the past couple years. Starbucks suspended its guidance for the full year 2025, given new CEO Brian Niccol and “the current state of the business.” That said, the company increased its quarterly cash dividend to $0.61 per share from $0.57 per share, which equates to a 2.5% forward estimated dividend yield, pointing to optimism regarding the long term. We’re cautious on Starbucks’ shares, as even the executive team noted that a turnaround “will take time.” Our fair value estimate stands at $85 per share, below where shares are trading at the time of this writing.
Oct 23, 2024
Lockheed Martin Raises 2024 Guidance, F-35 Program in Focus
Image: Lockheed Martin’s shares have done well of late. We liked Lockheed Martin’s guidance revisions for 2024, but we’re keeping a watchful eye on its F-35 program revenues, which experienced lower sales in the quarter due to delays in receiving additional contractual authorization and funding under its Lots 18-19 contract. The company’s Missiles and Fire Control (MFC) segment and Rotary and Mission Systems (RMS) segment experienced sales increases of 8% and 6%, respectively, in the quarter. Operating profit growth was most pronounced in its MFC division. The high end of our fair value estimate range stands at $649 per share, and we continue to like shares as an idea in the Dividend Growth Newsletter portfolio.
Oct 22, 2024
Philip Morris Raises 2024 Guidance, Shares Catapult to All-Time Highs
Image: Shares of Philip Morris catapult to all-time highs. On the heels of strength witnessed in the third quarter, Philip Morris raised its outlook for adjusted diluted earnings per share, excluding currency, to $6.85-$6.91 (was $6.67-$6.79 per share), reflecting 14%-15% growth, up from prior expectations of 11%-13%. We like the earnings momentum behind Philip Morris’ business, and the company has a big winner on its hands with ZYN nicotine pouches. The high end of our fair value estimate range for Philip Morris stands at $134 per share. Shares yield 4.5%.
Oct 21, 2024
Procter & Gamble Maintains Outlook for Fiscal 2025
Image: P&G maintained its outlook for fiscal 2025, as shares flirt with all-time highs. For fiscal 2025, P&G expects adjusted free cash flow productivity to be 90% and to pay roughly $10 billion in dividends while buying back $6-$7 billion in shares. P&G’s quarterly update revealed some top-line pressure and expectations for higher commodity prices, but the company maintained its all-in sales guidance, organic growth guidance, diluted net earnings per share growth guidance, and core earnings per share guidance for fiscal 2025. Shares of P&G yield 2.4% at the time of this writing.
Oct 19, 2024
Netflix Continues to Deliver on Content and Engagement, Free Cash Flow Robust
Image: Netflix’s shares are trading at all-time highs. We liked Netflix’s revenue and operating income improvement in the third quarter, as well as its outlook for the fourth quarter of 2024 and 2025. Netflix is delivering with respect to content and customer engagement, and we like the fact that the firm continues to generate strong free cash flow. Netflix continues to build its advertising business, with ads membership up 35% on a sequential basis. Looking to the fourth quarter, Netflix has a nice slate of content, including Squid Game S2, the Jake Paul/Mike Tyson fight, and two NFL games on Christmas day, which Netflix expects to drive paid net additions higher in the quarter than in its most recently reported third quarter. The high end of our fair value estimate range for Netflix is $867 per share.
Oct 17, 2024
Kinder Morgan’s Dividend Is Much Healthier These Days
Image: Kinder Morgan’s shares have done quite well thanks to improved free cash flow performance. Year-to-date Kinder Morgan's free cash flow, as measured by cash flow from operations less all capital spending, totaled $2.27 billion, higher than the $1.92 billion it paid in cash dividends during the same time period. Years ago, Kinder Morgan’s capital spending and cash dividends paid were significantly higher than cash flow from operations, necessitating a dividend cut. Things are much different these days, as Kinder Morgan’s free cash flow covered cash dividends paid by $353 million during the first nine months of the year. Though the firm retains a large net debt position, Kinder Morgan’s dividend is much healthier than it was years ago. Shares yield 4.6% at the time of this writing.
Oct 17, 2024
Taiwan Semiconductor Benefiting from Strong Smartphone and AI Demand
Image: Taiwan Semiconductor released better than expected results. Taiwan Semiconductor ended the quarter with NT$2,167.6 billion in cash and marketable securities against long-term interest-bearing debt of NT$936.16, showcasing a nice net cash position. Free cash flow in the quarter advanced to NT$184.91 billion from NT$68.03 in the year-ago period. Looking to the fourth quarter of 2024, revenue is targeted in the range of US$26.1 billion and US$26.9 billion (consensus was at US$25.02 billion), while gross profit margin and operating profit margin, based on the exchange rate assumption of 1 US dollar to 32 NT dollars, are expected to be 57%-59% and 46.5-48.5%, respectively. We liked Taiwan Semiconductor’s results and outlook, and the company remains a key idea in the ESG Newsletter portfolio.
Oct 16, 2024
ASML Holding Lowers 2025 Outlook
Image: ASML Holding is falling from recent highs as its third quarter report and outlook disappointed investors. ASML’s guidance for 2025 came in below what consensus had been looking for. 2025 net sales are now expected in the range of €30 billion and €35 billion, which compares to guidance of €30 billion to €40 billion previously and the consensus estimate of €35.94 billion. The company’s updated gross margin outlook for 2025 in the range of 51%-53% is below the 54%-56% it had previously forecast and below the consensus estimate of 53.9%. The bookings number in the third quarter coupled with lowered 2025 guidance is weighing on the stock. Though the news isn’t great, we continue to like ASML Holding as a long-term idea in the ESG Newsletter portfolio.
Oct 16, 2024
Goldman Sachs Beats Third Quarter Estimates, Puts Up Strong Economic Returns
Image: Goldman Sachs’ shares have done well the past couple years. Goldman Sachs continues to generate value for shareholders. Annualized return on average common shareholder equity [ROE] was 10.4% for the third quarter of 2024 and 12.0% for the first nine months of 2024. We liked Goldman’s revenue growth in the quarter, and the company continues to put up double-digit economic returns. Shares trade at 1.6x book value, so we’re not viewing them as cheap at this time. Shares yield 2.3%.
Oct 16, 2024
Johnson & Johnson's Shares Look Fairly Valued
Image: Johnson & Johnson’s 2024 P&L guidance. Looking to all of 2024, Johnson & Johnson expects the midpoint of adjusted operational sales growth of 6%, up from its prior expectation of 5.8%. At the midpoint, diluted adjusted operational earning per share expansion is targeted at $9.91 per share down from $10.05 per share due to a negative impact from its recent acquisition of V-Wave. Our fair value estimate stands at $165 per share, about in-line with where shares are currently trading. Shares yield ~3%.


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