BCE

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

AT&T Is Not a Position in Valuentum’s Dividend Growth Portfolio

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Sometimes it’s difficult to entertain a variant perspective on a tried-and-true investment. But that’s what we think investors should do when they think about AT&T’s dividend growth potential. AT&T’s Valuentum Dividend Cushion score is below 1 (meaning that the sum of our expectations of the company’s future dividend payments and existing debt balance overwhelms the sum of its future expected free cash flow and existing cash balance). We don’t expect this telecom bellwether to cut its dividend anytime soon (especially given its shareholder base, which comprises mostly of investors holding shares for the dividend payment), but we think there are many other more attractive places for long-term dividend growth than AT&T’s equity. The historical track record of a company’s dividend … Read more

Verizon Posts Highest Adjusted EBITDA Margin in 8 years; Pro forma Debt Load Reduces Attractiveness of Idea

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On Tuesday, Verizon’s (VZ) fourth-quarter performance showed us why we had been considering the firm for inclusion in the Dividend Growth Newsletter. The company experienced revenue growth across all strategic areas (84% of business), showcasing 3.4% year-over-year expansion. The most recent quarter marked the fifth consecutive period of at least 8% service revenue year-over-year growth. The communication giant’s strong cost management controls sent its full-year adjusted EBITDA margin to the highest levels in 8 years (34.9%), a very impressive showing. Wireless segment EBITDA jumped more than 22% from last year’s quarter. Verizon’s fourth-quarter adjusted earnings-per-share of $0.66 was also impressive, coming in nearly 74% higher than the level posted in the same period a year ago. For all of 2013, the … Read more

SoftBank Reported to Be Exploring a Deal for Sprint to Scoop Up T-Mobile

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On Friday, Bloomberg reported that SoftBank is exploring a deal for Sprint (S) to scoop up the majority of T-Mobile US (TMUS). The news outlet reported that SoftBank has discussed financing a bid with as many as six banks, including Credit Suisse, Mizuho, and Goldman Sachs. The banks are reported to be the same ones that backed the SoftBank-Sprint tie-up. According to Bloomberg’s sources: The plan would be to take control of T-Mobile by paying cash for the 67 percent stake owned by Deutsche Telekom AG…Sprint would then be integrated with T-Mobile, combining the third- and fourth-largest U.S. wireless carriers. Deutsche Telekom has said that it’s prepared to sell its $16 billion stake in T-Mobile, which has mostly been an … Read more

Verizon’s Investment Grade Credit Rating May Be Challenged

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On Thursday, Verizon (VZ) reported better than expected top- and bottom-line performance in its third quarter, which showed impressive subscriber additions and healthy iPhone sales. We continue to evaluate Verizon for addition to the portfolio of our Dividend Growth Newsletter, though we note its pursuit of Verizon Wireless has complicated matters quite a bit (given the outsize debt load it will take on). We’d like to see how the financials shake-out post-transaction, as there are quite a few moving parts that will negatively impact the firm’s Valuentum Dividend Cushion score (and potentially challenge its investment-grade rating). Verizon added 1.1 million net retail wireless connections and 927,000 net retail postpaid connections in the period, leading to quarter-end marks of 101.2 million total … Read more

Rising Rates Spur Verizon-Vodafone Deal

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Although financing isn’t fully secured yet, earlier this week Verizon (click ticker for report: ) and Vodafone (click ticker for report: ) agreed to a $130 billion deal for Verizon to acquire Vodafone’s 45% stake in Verizon Wireless. The deal values Verizon Wireless at nearly $290 billion (or nearly 10 times EBITDA), and it could immediately boost earnings per share by 2%-10%. Though this is certainly a large deal, we think Verizon acted quickly to capitalize on interest rates that have moved sharply to the upside in recent months (it didn’t want to wait for a further increase, which may have made the deal cost-prohibitive). As we noted in our prior discussion of the deal, rising rates and a declining … Read more

Verizon Might Jump Into Canada

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After weeks of mounting speculation, US telecom giant Verizon (click ticker for report: ) has allegedly offered a deal valued at $700 million to acquire Canadian mobile provider Wind Mobile. In addition to potentially acquiring Wind Mobile, Verizon is also in talks to acquire another carrier, Mobilicity, and it could enter the bidding for government spectrum offers. Why is Verizon interested now? For years, Canadian regulations have previously disallowed a foreign entity from fully-owning a domestic telecom business, but it has only been recently that ownership rules have started it loosen. Still, the country remains dominated by the “Big Three” in the mobile carrier space: Rogers Communications (RCI), BCE (click ticker for report: ), and Telus (TU). However, Canadian regulators … Read more

Dividend Increases/Decreases for the Week Ending February 3

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Below we provide a list of firms that raised/lowered their dividends during the week ending February 3. 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 Allegion (ALLE): now $0.16 per share quarterly dividend, was $0.12. Amanda Hoffler Properties (AHH): now $0.19 per share quarterly dividend, was $0.18. Apartment Investment (AIV): now $0.36 per share quarterly dividend, was $0.33. Apollo Global Management (APO): now $0.45 per share quarterly dividend, was $0.35. AvalonBay Communities (AVB): now $1.42 per share quarterly dividend, was $1.35. Avista Corporation (AVA): now $0.3575 per share quarterly dividend, was … Read more

ICYMI — Video: Will Hasty Policy Facilitate the Next Leg Down, or Do We Have It Coming Anyway?

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President of Investment Research and award-winning author of Value Trap: Theory of Universal Valuation Brian Nelson explains how US policymakers are stuck between a rock and a hard place, and how the market may be factoring in too high of a probability of a return to normalcy before 2021. This and more in the latest video report. Summary Make sure you review Value Trap on Amazon. Do so here. We think those that bought equities near the bottom of this swoon may be looking to take profits at present levels. The market is currently reflecting an 80%-85% probability of a return to normalcy before 2021, which we believe is too high at this time. Our main concern is that government … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more