DK

Phillips 66 Hovering Near All-Time Highs, Shares Yield ~2.7%

by

Image: Phillips 66’s shares continue to hover near all-time highs thanks to a favorable energy resource environment. By Brian Nelson, CFA Shares of refining giant Phillips 66 (PSX) continue to hover near all-time highs as the company benefits from a favorable energy resource environment. The company’s fourth quarter non-GAAP earnings per share of $3.09 beat expectations handily, as it hauled in $2.2 billion in operating cash flow in the period. Phillips full-year 2023 performance was solid as it generated $7 billion in operating cash flow and returned $5.9 billion to shareholders in the form of dividends and share buybacks. Shares yield ~2.7% at the time of this writing. Management remains shareholder-friendly and said much in its fourth-quarter press release: As we … Read more

How Some Members Use Valuentum’s Investment Services

by

By Brian Nelson, CFA Thank you for your membership to Valuentum. 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. We wanted to make sure that you know that, if you’re a dividend growth or income investor, that there are others that use our website to utilize the Valuentum process, fair value estimates and other metrics. Similarly, if you’re a practitioner of the Valuentum system, I wanted to make sure that you are … Read more

Phillips 66’s Stock May Be Volatile But Its Management Remains Very Shareholder Friendly

by

Image: Phillips 66’s shares have been quite volatile as refining margins ebb and flow, but shares are up nicely since the start of 2021 even as they’ve given up some ground so far in 2023. By Brian Nelson, CFA The refining business isn’t an easy one. Not only are refiners exposed to potentially higher feedstock costs but prices at the pump could further squeeze refining margins at times. What we like about Phillips 66 (PSX) is that it generally has advantaged feedstock resources, and it is extremely shareholder friendly. The company recently raised its dividend to $1.05 per common share on a quarterly basis and expects to return $10-$12 billion in shareholder distributions between July of last year and year-end … Read more

2022 Oil & Gas Market Update: “The Outlook for Crude Oil Prices Remains Quite Bullish”

by

Transcript Hello, this is Callum Turcan, Associate Director of Research at Valuentum Securities. WTI and Brent have pulled back moderately from recent highs, though near-term futures remain just above $100 per barrel which is well above levels seen last year. As of early July, both WTI and Brent are in backwardation, meaning spot prices are trading at a higher price than later dated future contracts. In other words, the trajectory of future crude oil prices is expected to have a downward slope. Please note that backwardation does not mean that things are going to rapidly deteriorate for the global energy complex, as this dynamic is due to global oil inventories steadily declining over the past two years or so. Backwardation … Read more

Dividend Increases/Decreases for the Week of June 24

by

Below we provide a list of firms that raised their dividends during the week ending June 24. 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      AMEN Properties (AMEN): now $10.00 per share quarterly dividend, was $7.50. Conifex Timber (CFXTF): now CAD 0.20 per share special dividend. Darden Restaurants (DRI): now $1.21 per share quarterly dividend, was $1.10. First Farmers Financial (FFMR): now $0.42 per share quarterly dividend, was $0.40. Healthcare Trust 7.125% PFD SER B (HTIBP): now $0.4453 per share quarterly dividend, was $0.4206. Horizon Bancorp (HBNC): now $0.16 per share … Read more

Valuentum’s Theses on Best Ideas Chevron and Exxon Mobil Playing Out

by

By Callum Turcan Raw energy resources pricing has surged higher during the past year with room to run. The global energy complex is on the rebound as demand for crude oil and refined petroleum products is steadily recovering from the worst of the coronavirus (‘COVID-19’) pandemic. As demand for electricity and heating needs held up well during the pandemic, liquified natural gas prices (‘LNG’) put up a strong year in 2021 and remain elevated. The OPEC+ cartel is committed to slowly phasing out its crude oil supply curtailment agreement first enacted in 2020, effectively limiting growth in global oil supplies at a time when demand is rebounding at a brisk pace. We view the near-term outlook for the global energy … Read more

High Yielding Philips 66 Has a Solid Plan in Place to Reward Its Shareholders

by

Image Shown: An overview of Phillip 66’s expansive asset base. Image Source: Phillips 66 – November 2021 IR Presentation By Callum Turcan Demand for diesel and gasoline has largely recovered from the worst of the coronavirus (‘COVID-19’) pandemic, though kerosene demand (jet fuel) has a way to go given depressed levels of international travel. The refining giant Phillips 66 (PSX) took advantage of the rebound seen over the past year to pare down its debt levels on a consolidated basis. At the end of December 2020, Phillips 66 had $13.4 billion in net debt (inclusive of short-term debt) on a consolidated basis, which fell down to $12.0 billion in net debt (inclusive of short-term debt) at the end of September … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

by

Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Value Is Not Static and the Qualitative Overlay Is Vital to Our Process

by

With prudence and care, the Valuentum Buying Index process and its components are carried out. Our analyst team spends most of its time thinking about the intrinsic value of companies within the context of a discounted cash-flow model and evaluating the risk profile of a company’s revenue model. We have checks and balances, too. First, we use a fair value range in our valuation approach as we embrace the very important concept that value is a range and not a point estimate. A relative value overlay as the second pillar helps to add conviction in the discounted cash-flow process, while a technical and momentum overlay seeks to provide confirmation in all of the valuation work. There’s a lot happening behind the scenes even before a VBI rating is published, but it will always be just one factor to consider. Within any process, of course, we value the human, qualitative overlay, which captures a wealth of experience and common sense. We strive to surface our best ideas for members.

Dividend Increases/Decreases for the Week Ending November 9

by

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