Valuentum Exclusive Analysis for the Discerning Investor

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Aug 27, 2024

Toll Brothers Expects Demand to Remain Solid Into 2025
Image: Toll Brothers stock has done quite well during the past couple years. For its fiscal year 2024 guidance, Toll Brothers expects deliveries of 10,650-10,750 units (was 10,400-10,800) with an average delivered price per home of $975,000. Its adjusted home sales gross margin is targeted at 28.3% for fiscal 2024 (was 28%), while SG&A as a percentage of home sales revenue is expected at 9.4% for the year. Toll Brothers ended its fiscal third quarter with $893.4 million of cash and cash equivalents and $2.8 billion in total debt. Its net debt-to-capital ratio stood at 19.6% at the end of the fiscal third quarter. Though Toll Brothers’ backlog faced declines in its fiscal third quarter, we liked the increased guidance across its key homebuilding metrics.

Jun 18, 2024

Lennar Navigating Fluctuating Interest Rate Environment Well
Image: Lennar has been a strong performer since the beginning of 2023. We liked the quarterly update from Lennar, and while we won’t be adding this homebuilder to any newsletter portfolio, we’re interpreting its performance as another positive data point regarding the macroeconomic environment.

Mar 31, 2024

Toll Brothers Notes Strong Start to Spring Selling Season
Toll Brothers raised its full-year fiscal 2024 guidance across key metrics, and the company noted that it has seen a "marked increase in demand coinciding with the start of the spring selling season." Though we don’t include any homebuilder in the simulated newsletter portfolios, it’s good to see things are progressing well at Toll Brothers.

Mar 11, 2024

How Some Members Use Valuentum’s Investment Services
We serve a wide variety of investors, including dividend growth investors, value investors, and pure Valuentum investors, among others. Many different types of investors and professionals use our research and financial analysis in a whole host of applications from individual stock-selection to the evaluation of closed-end funds to an overlay in a money-management setting and beyond. The Best Ideas Newsletter portfolio seeks to find stocks that have good value and good momentum characteristics and typically targets capital appreciation potential over a longer-term horizon. The Dividend Growth Newsletter portfolio seeks to find underpriced dividend growth gems that generate strong levels of free cash flow and have pristine, fortress balance sheets, translating into excellent Valuentum Dividend Cushion ratios. The High Yield Dividend Newsletter portfolio seeks to find some of the highest-yielding stocks supported by strong credit profiles and solid business models, but not always robust traditional free cash flow. Ideas in this newsletter offer higher-yielding opportunities, but also much higher capital and income risk. We also offer a full suite of products to financial advisers (gold level) that range from a more extensive Excel-based screening tool (the DataScreener) to 'Ideas' and 'Dividend' publications that are released on a quarterly basis. Our research product includes hundreds of stock reports, fair values, fair value ranges, associated commentary, as well as dividend reports with Valuentum Dividend Cushion ratios and expected dividend growth rates. Silver and gold-level members can add the Valuentum Exclusive or additional options commentary/ideas to their plans. The Exclusive publication is a part of the institutional (platinum) level membership.

Feb 9, 2024

Dividend Increases/Decreases for the Week of February 9
Let's take a look at firms raising/lowering their dividends this week.

Aug 15, 2023

Home Depot’s Comparable Store Sales Continue Declines, Big Ticket Purchases Slow
Image: Our fair value estimate range of Home Depot. Shares of Home Depot are trading at the high end of the range at ~$325 per share at the time of this writing. Home Depot is one of the most resilient companies across the retail arena. The firm weathered the Great Financial Crisis [GFC] well and it handled the vicissitudes of the COVID-19 pandemic and aftermath flowingly as it juggled supply chain issues, changing consumer buying preferences, and increased demand as consumers remodeled and upgraded their working and living spaces while cocooning at home. The company’s second-quarter 2023 results, released August 15, came in better than expected, but comparable store sales fell 2% both in aggregate and in the U.S. Though comparable store sales declines improved from bigger declines in the first quarter, Home Depot’s guidance for comparable sales to fall 2%-5% for all of fiscal 2023 indicates there may be some further year-over-year weakness ahead. We’re sticking with Home Depot in the Dividend Growth Newsletter portfolio, however.

Feb 21, 2023

Home Depot’s Comps, Operating Income Fall in Q4; Hikes Dividend 10%
Image Source: Mike Mozart. On February 21, home improvement retailer Home Depot reported weak fourth quarter 2022 results that showed comparable store sales for the period falling 0.3% and operating income dropping 1.5% from the same period a year ago. Diluted earnings per share advanced 2.8% from last year’s quarter. The company is dealing with a weakened consumer spending environment and difficult comparisons from pandemic-driven demand of a year ago. Home Depot raised its dividend payout to 10%, to $2.09 per share, or $8.36 per share on an annualized basis. That translates into a forward estimated dividend yield of ~2.6%.

Feb 10, 2023

Dividend Increases/Decreases for the Week of February 10
Let's take a look at firms raising/lowering their dividends this week.

Nov 16, 2022

Home Depot Says Customers Remain “Resilient and Engaged”
Image: Home Depot's third-quarter performance wasn't bad. Inventories expanded, but management reiterated that its core customer remains resilient and engaged. Image Source: Home Depot. Home Depot’s third-quarter report was solid, all things considered. The firm offset weaker transactions with a higher average ticket to driven solid comp performance. Management noted that its core customer remains resilient, and while inventories have ballooned on a year-over-year basis, we’re less concerned about the inventory build as most of Home Depot’s inventory is of the non-perishable variety. We like the firm as an idea in the simulated Dividend Growth Newsletter portfolio, though we continue to pay attention to the health of its balance sheet, which includes a considerable net debt position.

Oct 14, 2022

Banks Held Up in 3Q 2022 But Mortgage Market Dynamics and Consumer Health Are Big Economic Concerns
Image: Homebuyer mortgage payments on new homes have increased more than 50% since last year due to rising interest rates. We think this is a precursor to lower housing prices, which could have implications across the banking and financials sector. Image Source: Redfin. Third-quarter 2022 earnings reports from the money center banks weren’t bad, but we’re concerned about the impact of rising mortgage rates on originations coupled with weakness in asset values across the residential and commercial real estate markets. Consumer personal savings rates are already suffering as many seek to use revolving credit to deal with inflationary pressures. We like the Financials Select Sector SPDR (XLF) as the best way to play diversified exposure to the banking and financials industry, an ETF that we include in the Best Ideas Newsletter portfolio, but there's a lot to worry about, including global financial contagion risk from Europe.