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Recent Articles
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Dividend Increases/Decreases for the Week of October 6
Oct 6, 2023
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Let's take a look at firms raising/lowering their dividends this week.
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We Like NextEra Energy’s ESG Focus But Capital Market Conditions Now Showing Cracks
Oct 3, 2023
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Image Source: NextEra Energy.
NextEra Energy operates a complex business structure, and the firm’s equity is facing pressure on news that its subsidiary NextEra Energy Partners is cutting its distribution per unit growth rate to the range of 5%-8% annually through 2026, which is materially below its prior expectations of growth in the 12%-15%. Since most partnerships are owned primarily for their distribution yields, the revision has sent units of NextEra Energy Partners tumbling, hurting its partner along the way. The news, while not tragic, wasn't very welcoming, and reading between the lines, it appears that we’re starting to see some cracks in the capital markets, as most partnerships are debt-heavy, relying on continuous, affordable access to the capital markets to fund and grow their operations (distributions), which isn’t guaranteed.
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Big Cap Tech and Large Cap Growth Remain Safe Havens
Oct 2, 2023
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Image: The stylistic area of large cap growth, which is heavily represented in the Best Ideas Newsletter portfolio, is doing fantastic so far in 2023.
Brian here. I wanted to write this brief note to check in with you as the market continues to be a bit jittery following the highs it reached in late July. The Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio put up a great year of relative outperformance during 2022 versus the market-cap weighted S&P 500, and their exposure to the areas of big cap tech and large cap growth have helped them follow through during 2023. It’s easy to fall into the trap of relying just on valuation multiples and dividend yields, but we have to continue to emphasize that it is our view that enterprise valuation is the key determinant of equity prices and returns, and it should not be surprising that big cap tech and large cap growth, with their huge net cash positions and strong expected free cash flows, have dominated returns so far in 2023.
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Latest Report Refreshes
Oct 2, 2023
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Check out the latest report refreshes on the website.
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