BIG

Dividend Increases/Decreases for the Week Ending March 4

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Image: Gulfstream, a General Dynamics company, makes some of the most technologically-advanced business jet aircraft, Charley W. Karl Below we provide a list of firms that raised/lowered their dividends during the week ending March 4. 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 Bank of Nova Scotia (BNS): now C$0.72 per share quarterly dividend, was C$0.70. Big Lots (BIG): now $0.21 per share quarterly dividend, was $0.19. Broadcom (AVGO): now $0.49 per share quarterly dividend, was $0.44. Chatham Lodging Trust (CLDT): now $0.11 per share monthly dividend, was $0.10. Citizen Community Bancorp … Read more

Bellwether Snapshot: Walmart, Boeing, CSX

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Alcoa (AA) kicked off third-quarter earnings season with a wimper, which had been preceded by Yum! Brands’ (YUM) doozy of a showing. Incremental news impacting the expected performance of Walmart (WMT), Boeing (BA), and CSX (CSX) hasn’t been great either. Investors continue to write off weakness as “normal,” even “macroeconomic” as if it doesn’t matter, pointing to the transient nature of a struggling global economy suffering from a slowdown in the pace of growth in China and weakness in export-dependent countries, not the least of which is Brazil, as somehow a “good thing,” but it may not matter. The trajectory of expectations of future free cash flow generation is being impacted, and so are fair value estimates as a result, … Read more

Walgreen’s and Target Distracted; Dollar General Enters the Fray

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Walgreen’s (WAG) and Target (TGT) have been in the news quite a bit as of late–Walgreen’s bowing to political pressure from the proposed ban on tax ‘inversion deals’ and Target as a result of its delayed disclosure of the magnitude of its credit card data breach. Both items have been a major distraction to the respective executive suites, and it is starting to show. In the case of Walgreen’s, the CFO and pharmacy chief lost their jobs today, in part as a result of a ~$1 billion forecasting error related to its prescription-drug business. Though the revision is not an act of illegal wrongdoing (companies change forecasts all the time), the revision is still an embarrassment for the company, especially in light … Read more

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

Dollar General’s Outlook A Little Light; Could Consolidation Be Brewing in the Dollar Store Space?

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The retail discount store industry (or the dollar-store industry) provides consumable basic needs to customers primarily in the low- and middle-income brackets. More than one third of the industry’s customers live in households that earn less than $20,000 per year, making the group’s results counter-cyclical–as more households generate lower income due to poor economic conditions, store growth and same-store-sales opportunities increase. Still, competition is fierce among constituents and with many other retailers, including grocery stores. But given the niche low-price strategy of participants and their counter-cyclical nature, we tend to like the group.  Dollar General (DG) has been operating at a level higher than that of its dollar-store peers, but its outlook for fiscal year 2014, released in its fourth … Read more

Surveying the Retail Landscape: Dollar General, Kroger, and Costco

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On Thursday, Dollar General (DG), Kroger (KR) and Costco (COST) reported quarterly results. Dollar General’s third-quarter report showed same-store sales advancing 4.4%, which propelled total sales 10.5% higher during its third quarter (ending November 1). Kroger’s third-quarter report showed 3.5% identical supermarket sales growth, without fuel, during the period ending November 9, while Costco’s fiscal first-quarter results (ending December 1) revealed same-store sales expansion of 3% during the quarter. Dollar General’s quarterly performance not only bested that of Kroger and Costco, but it also stood head-and-shoulders above that of Wal-Mart (WMT), which reported a comparable store sales decline in Walmart US and only a 1.1% increase at Sam’s club, and Target’s (TGT) third-quarter performance, where US comparable store sales advanced only … Read more

Surveying 3Q Performance Across the Retail Spectrum

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Sears There’s not much to say about Sears’ (SHLD) operational performance during its third quarter (results issued Thursday), except that it was atrocious. The firm lost more money in the most recently-reported quarter ($534 million) than it did through the first nine months of last fiscal year ($441 million). CEO Eddie Lampert has his hands full with the company’s multi-year transformation, but we think investors are hanging on to shares largely on hopes the firm will be able to monetize its real-estate portfolio in the future. Image Source: Sears But it seems that (lately) too many investors have been buying into this line of thinking, and the ‘real estate’ thesis continues to proliferate among investor psyches, particularly (now) with J.C. … Read more

Family Dollar’s “Upside” Surprise Wasn’t Great

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Off-priced retailer Family Dollar (click ticker for report: ) reported stronger-than-anticipated third quarter results Wednesday morning, led by strong sales of consumables. Revenue at the discount chain increased 9% year-over-year to $2.6 billion, roughly in-line with consensus expectations. Earnings per share actually declined a penny to $1.05, but that figure was better than the consensus estimates which called for a steeper decline. Free cash flow stands at a negative $275 million year-to-date as the company invests heavily in expanding and renovating its store base. The company has engaged in numerous sale-leaseback transactions, so the increase in capital spending has not materially drained the firm’s coffers. Taking a closer look at the numbers, we can see that the quarter was not … Read more