FDX

FedEx’s Cost Initiatives Drive Strong Fiscal 2025 Guidance

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Image Source: FedEx By Brian Nelson, CFA On June 25, FedEx (FDX) reported better than expected fourth quarter results for fiscal 2024. Revenue advanced 0.9% on a year-over-year basis in the fourth quarter, while adjusted operating income expanded to $1.87 billion from $1.77 billion in the same period a year ago. Net income increased to $1.34 billion in the fiscal fourth quarter from $1.25 billion in last year’s quarter. Adjusted diluted earnings per share came in at $5.41, up from $4.94 in the same period a year ago. Management had the following to say about the quarterly performance: We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin … Read more

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?

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Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. By Brian Nelson, CFA We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key … Read more

FedEx’s ESG Initiatives Are Refreshing Reminder of Great Companies Doing Things Right

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By Brian Nelson, CFA  Back on December 19, FedEx (FDX) reported second quarter results for its fiscal 2024. Revenue fell 2.6% on a year-over-year basis, but the company was still able to drive operating income and adjusted operating income higher to the tune of 9% and 17%, respectively. FedEx’s revenue outlook for the remainder of fiscal 2024 wasn’t great, and the company now expects a low-single-digit decline in revenue from 2023 (was “approximately flat” previously). The package shipping giant, however, raised its earnings per share forecast for 2024 to $15.35-$16.85 per share before the MTM (mark-to-market) retirement plans accounting adjustments (from $15.10-$16.60 previously).  Though FedEx is an important data point for the health of the consumer, we’re not reading too … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more

Use Both the Dividend Cushion Ratio (Probability of a Dividend Cut) and the Qualitative Dividend Ratings in Your Assessment of the Payout

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The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Brian Nelson, CFA Dividend investing has probably never been as popular as the past couple years. Remember, however, the dividend is capital appreciation that otherwise would have been achieved had the dividend not been paid. If you had a stock that was $10, and it paid a $1 dividend, you don’t have a $10 stock and … Read more

ICYMI: Questions for Valuentum’s Brian Nelson

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Valuentum’s President Brian Nelson, CFA, answers your questions. Q: What Is Valuentum? A: In short, it is a strategy that combines the concepts of value and momentum within individual stocks. We measure value through the cash-based sources of intrinsic value – net cash on the balance sheet and future expected free cash flow. We measure momentum rather simply, generally via relative strength or other technical and momentum indicators. We like stocks with strong net cash positions on the balance sheet, ones that are generating tremendous free cash flow, and have strong secular growth prospects such that the prospect for expectations of free cash flow can continue to be ratcheted higher. Today, most Valuentum stocks are included in the stylistic area … Read more

Our Reports on Stocks in the Industrial Leaders Industry

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Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

Stock Report Updates

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In our 16-page equity research reports, we offer a fair value estimate for each company based on a rigorous and transparent discounted cash flow process, assess the attractiveness of a stock based on a firm-specific margin of safety, and provide a relative valuation comparison in the context of the company’s industry and peers. Each report includes detailed pro forma financial statements, explicit fundamental forecasts, and scenario analysis. A cross section of the ValueCreation and ValueRisk ratings provides a financial assessment of a company’s business quality (competitive position), while the ValueTrend and Economic Castle ratings offer insight into the trajectory of a firm’s economic profit creation (ROIC versus WACC). Included in each 16-page report is a company’s rating on the Valuentum Buying Index (VBI), a methodology that combines rigorous financial and valuation analysis with … Read more

Dividend Increases/Decreases for the Week of April 7

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Below we provide a list of firms that raised their dividends during the week ending April 7. 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 America Corporation Deposit Shs Perp Pfd Shs Series E (BAC.PE): now $0.3222 per share quarterly dividend, was $0.2556. Bank OZK (OZK): now $0.35 per share quarterly dividend, was $0.34. Boston Pizza Royalties Income Fund (BPF.UN:CA): now CAD 0.107 per share monthly dividend, was CAD 0.102. CF Bankshares (CFBK): now $0.06 per share quarterly dividend, was $0.05. Constellation Brands (STZ): now $0.89 per … Read more

U.S. Economy Likely Weakened During Regional Bank Crisis; Artificial Intelligence the Next Great Platform

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  Image Source: Trong Khiem Nguyen By Brian Nelson, CFA Broader markets in the U.S. continue to be concerned about the impact of the Fed’s rapidly-rising contractionary monetary policy on the banking sector. A number of regional banks have already failed, with SVB Financial’s (SIVB) demise bringing into light concerns over the solvency of many other regional banks in the U.S., if their books of business are marked-to-market for both available-for-sale (AFS) and held-to-maturity (HTM) securities. The Fed raised rates so quickly that many regional banks may have been caught taking on too much interest rate risk. Liquidity across the regional banking sector, however, seems to have improved thanks to Fed actions, and deposit flight from regional banks seems to … Read more