Valuentum Exclusive Analysis for the Discerning Investor

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May 20, 2022

Dividend Increases/Decreases for the Week May 20
Let's take a look at companies that raised/lowered their dividend this week.

May 19, 2022

Cisco Systems Reduces Guidance After Noisy Quarter, Remains Free Cash Flow Giant Backed By Pristine Balance Sheet
Image Source: Cisco Systems Inc – Third Quarter of Fiscal 2022 IR Earnings Presentation. On May 18, Cisco Systems reported third quarter earnings for fiscal 2022 (period ended April 30, 2022) that missed consensus top-line estimates but beat consensus bottom-line estimates (specifically for its non-GAAP performance). One of the biggest updates from this earnings report was that Cisco Systems reduced its full year guidance for fiscal 2022. The news initially sent shares of CSCO sharply lower, though Cisco Systems remains a free cash flow cow with a pristine balance sheet. It was an incredibly noisy earnings report for the firm for reasons we will cover in this article. We include Cisco Systems as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios and continue to like the name.

May 19, 2022

Dividend Growth Idea Home Depot Beats Estimates and Boosts Guidance
Image Shown: Dividend growth idea Home Depot Inc is a tremendous generator of shareholder value due to its stellar return on invested capital performance. Image Source: Home Depot Inc – First Quarter of Fiscal 2022 Non-GAAP Reconciliation Financial Package. On May 17, Home Depot reported first quarter earnings for fiscal 2022 (period ended May 1, 2022) that beat both consensus top- and bottom-line estimates. Demand from professionals remains robust, offsetting waning demand from do-it-yourself (‘DIY’) customers. In the wake of its strong fiscal first quarter performance, Home Depot boosted its fiscal 2022 guidance in conjunction with its latest earnings report. We are big fans of Home Depot’s income growth potential and include shares of HD as an idea in the Dividend Growth Newsletter portfolio. Shares of HD yield ~2.6% as of this writing.

May 18, 2022

Newsletter Portfolio Idea Republic Services Holding Up Quite Well in the Face of Major Headwinds
Image Shown: Shares of Republic Services Inc have held up quite well over the past several months while equity markets swooned lower. On May 5, Republic Services reported first quarter 2022 earnings that beat both consensus top- and bottom-line estimates. The waste management firm is benefiting from its immense pricing power and volume growth. We continue to like Republic Services as an idea in both the Dividend Growth Newsletter and ESG Newsletter portfolios. Shares of RSG yield ~1.4% as of this writing.

May 13, 2022

Dividend Increases/Decreases for the Week May 13
Let's take a look at companies that raised/lowered their dividend this week.

May 12, 2022

PayPal and Visa Remain Attractive Long-Term Ideas
Image Source: Visa Inc – Second Quarter of Fiscal 2022 IR Earnings Presentation. The payment processing and payment solutions space is attractive. Companies operating in this industry have asset-light business models with relatively modest capital expenditure requirements to maintain a given level of revenues, making free cash flows easier to come by. Additionally, the industry’s growth outlook is incredibly bright and supported by secular tailwinds as the world continues to shift away from cash and towards other payment options (card, mobile apps, QR codes, online payment platforms). Our two favorite companies in this space are PayPal Holdings and Visa, and we include both as ideas in the Best Ideas Newsletter portfolio. Online spending levels remain robust even as the worst of the coronavirus (‘COVID-19’) pandemic fades and households resume outdoor activities, while global travel activities are resuming in earnest as the economy opens back up. PayPal and Visa both recently updated investors on their financial standing and outlook, and overall, we liked what we saw.

May 12, 2022

Dividend Growth Idea Qualcomm Beats Estimates; Near Term Guidance Incredibly Bright
Image Shown: Dividend growth idea Qualcomm Inc has a stellar cash flow profile. Image Source: Qualcomm Inc – 10-Q SEC filing covering the Second Quarter of Fiscal 2022. Qualcomm recently reported second quarter earnings for fiscal 2022 (period ended March 27, 2022) that beat both consensus top- and bottom-line estimates. The company is a leader in the technologies relating to 5G wireless, Internet of Things (‘IoT’) trend, semi-autonomous and autonomous driving, and handset operations. We include Qualcomm as an idea in the Dividend Growth Newsletter portfolio as we view its dividend strength and payout growth outlook quite favorably. Shares of QCOM yield ~2.3% as of this writing. The firm’s latest earnings update and near term guidance reinforces our bullish view towards the name.

May 11, 2022

Domino’s Longer Term Growth Runway Intact, Chipotle's Free Cash Flow Remains Robust
Image Source: Domino’s Pizza Inc – 2022 ICR Conference Presentation. Domino’s Pizza is contending with serious inflationary pressures and headwinds from changing consumer spending habits as the worst of the coronavirus (‘COVID-19’) pandemic fades. We continue to view the firm’s longer term outlook quite favorably and appreciate its franchise-heavy business model (~98% of its stores are franchised), which enables Domino’s to generate substantial free cash flows in almost any operating environment. Our fair value estimate for Domino’s sits at $517 per share, and we include shares of DPZ as an idea in the Best Ideas Newsletter portfolio. Shares of DPZ yield ~1.3% as of this writing, offering incremental income generation upside potential to its favorable capital appreciation risk-reward scenario, in our view. Another one of our favorite restaurants, Chipotle Mexican Grill posted 9.0% year-over-year comparable restaurant sales growth in the first quarter of 2022. During Chipotle’s latest earnings call, management noted that in-store sales surged 33% due to the economy opening back up and consumers resuming “normal” dining activities. The firm’s digital sales held up relatively well and represented 42% of Chipotle’s total sales last quarter. During the period, Chipotle reported 16% year-over-year GAAP revenue growth and 18% year-over-year GAAP operating income growth as the firm effectively took advantage of its pricing power to get ahead of inflationary pressures. As with Domino's, we continue to like Chipotle as an idea in the Best Ideas Newsletter portfolio.

May 11, 2022

Ameresco Posts Solid First Quarter Earnings Update
Image Source: Ameresco Inc – First Quarter of 2022 Earnings Press Release. The rise of ESG investing and the political shift towards encouraging developments within the realm of green energy--from renewable energy projects to efforts to reduce water consumption and much more--has created numerous opportunities for investors. Ameresco offers energy efficiency solutions, infrastructure upgrades, and renewable energy solutions to its customers. The company also operates some of the renewable energy facilities it helps develop such as solar farms and biogas plants. Ameresco provides its services all over the globe, though the US remains its most important market (and the source of over 90% of its revenues). In the US, Ameresco will often help its clients secure the financing needed to fund relevant projects, particularly for its federal government customers. We include Ameresco as an idea in the ESG Newsletter portfolio and view its capital appreciation upside favorably. Due to Ameresco utilizing energy savings performance contracts (‘ESPC’), its financials can be a messy read. ESPCs enable its governmental customers in the US to finance infrastructure upgrades without needing to tap their capital budgets by taking advantage of the expected future energy cost savings. The company generally experiences large working capital builds on an annual basis due to growth in its federal ESPC receivables asset, a product of Ameresco’s overall business growing, making gauging its free cash flows a more difficult task.

May 9, 2022

ESG Newsletter Portfolio Idea Albemarle Beats Consensus Estimates and Raises Guidance
Image Shown: Albemarle Corporation’s lithium operations are benefiting from the favorable supply-demand dynamic and strong pricing of late, which is supporting its company-wide financial performance and outlook in a big way. Image Source: Albemarle Corporation – First Quarter of 2022 IR Earnings Presentation. On May 4, Albemarle Corp reported first quarter 2022 earnings that beat both consensus top- and bottom-line estimates. Due primarily to the outperformance of its ‘Lithium’ business reporting segment, Albemarle boosted its full-year guidance for 2022 in a big way during its latest earnings update. Shares of ALB skyrocketed after the news broke, and we continue to be big fans of the company. We include Albemarle as an idea in the ESG Newsletter portfolio.