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Lockheed Martin May Be a FCF Cow But the Company Should Consider Debt Reduction Over Share Buybacks

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Image Source: Lockheed Martin By Callum Turcan Known around the world as the manufacturer of F-35 stealth fighters and Blackhawk Helicopters, Lockheed Martin Corporation (LMT) is the world’s leading defense contractor and as of this writing yields a nice 3.0%. While burdened by a significant net debt load, Lockheed Martin has consistently been a free cash flow cow enabling the firm to sport decent dividend coverage. Last year, 70% of Lockheed Martin’s net sales came from the US government, highlighting how domestic annual defense spending levels are very important to the company’s financial performance. Growing Backlog Lockheed Martin’s order backlog stood at $130.5 billion at the end of 2018, up 24% or $25.0 billion from year-end 2017 levels. The company … Read more

FB/FIZZ Methodologically Speaking and CMG, AAPL, BA!

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By Brian Nelson, CFA Hi everyone, Hope you are doing great. There a few things I wanted to put on your radar this evening. We’re going to talk the importance of having CFA charterholder research at your advisory practice. We’ll discuss Facebook (FB) and National Beverage (FIZZ) in the context of our methodology, and we’re going to touch on a couple things at Chipotle (CMG), Apple (AAPL) and Boeing (BA). Did you hear about the 737 MAX 8? Not good. I also wanted to remind you of the new 40/40 Goal (click here), of which we are already making progress (the book reviews keep coming in). Thank you! First, just a quick reminder on the 40/40 Goal. We now have 15 reviews … Read more

Valuentum Stock Screeners

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This article was sent to members via email December 29. That email can be accessed at the link that follows this article. By Brian Nelson, CFA Hi everyone, I wanted to provide an update with respect to Valuentum’s stock screeners. We believe our stock screeners are among the most robust when it comes to providing forward-looking data, or data that is important with respect to the investment decision-making process. We publish screens in each of the monthly newsletters, but we also provide a basic weekly screener for download on the left column of the website, “Download Weekly Stock Screener (xls) — login required.”   We also have other products. The more robust DataScreener, for example, is part of the quarterly Financial … Read more

Market Mayhem — Alerts for Members

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During these extremely volatile times, it’s important to stay focused. On December 15, we informed all of our members to “Pay Attention.” Shortly thereafter, we notified members of the potential for a stock market technical breakdown. This morning, we offered a pre-market briefing about the importance of thinking about portfolio protection. For Best Ideas Newsletter and Dividend Growth Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=e2406cd6-c113-4344-8731-493f33fc44a4&id=preview For High Yield Dividend Newsletter members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=b3ba530f-38b3-489a-ac96-2961dca89c6b&id=preview For Exclusive members: http://campaign.r20.constantcontact.com/render?preview=true&m=1110817109903&ca=ba6d90c0-4433-48b2-9b8a-aac4ddf9006e&id=preview We’re here for any questions. Please just let us know how we can help! Kind regards, Brian Nelson, CFA  brian@valuentum.com

Dividend Increases/Decreases for the Week Ending November 9

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Below we provide a list of firms that raised their dividends during the week ending November 9. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Aaron’s (AAN): now $0.035 per share quarterly dividend, was $0.03. Air Lease (AL): now $0.13 per share quarterly dividend, was $0.10. AmerisourceBergen (ABC): now $0.40 per share quarterly dividend, was $0.38. Assurant (AIZ): now $0.60 per share quarterly dividend, was $0.56. Atmos Energy (ATO): now $0.525 per share quarterly dividend, was $0.485. Atlantica Yield (AY): now $0.36 per share quarterly dividend, was $0.34. Black Hills (BKH): … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Boeing’s Massive Backlog Still Growing, Near-Term Margin Concerns Crop Up

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Image Source: Robert Sullivan Commercial aerospace giant Boeing continues to ride a wave of strong demand as its massive backlog continues to grow, but a write down related to the troubled KC-46 tanker appears to have investors thinking twice about its near-term margin performance. By Kris Rosemann Shares of former simulated Dividend Growth Newsletter portfolio idea Boeing (BA) faced a bit of selling pressure in the July 25 trading session following its second quarter earnings release as a write down related to additional costs in the troubled KC-46 tanker program helped caused a margin guidance reduction in its ‘Defense, Space & Security’ segment. Delivery of the first aircraft in the program is expected in October 2018, more than two years … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

United Tech Ups Guidance; Outlook Bodes Well For Aerospace Supply Chain

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Image Source: hj_west We think activist pressure on United Technologies is unwarranted, and we were highly encouraged by the company’s execution during the first quarter of 2018. Performance at Pratt & Whitney and UTC Aerospace Systems bodes well for the aerospace supply chain. By Brian Nelson, CFA There’s a lot to like about United Technologies (UTX). The company is one of our favorite industrial companies, and we’re probably most fond of its aerospace exposure. We’re against a break-up of the company as we continue to believe United Technologies is on the verge of fantastic top and bottom-line expansion in coming years thanks in part to the burgeoning backlog of unfulfilled deliveries at the airframe makers, Boeing (BA) and Airbus (EADSY). … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more