FTR

The Risks of Dividend Growth Investing

by

Did you know that if you invested in retail-focused REIT Realty Income’s (O) stock in October 1994 with an original investment of $8,000, your current annual dividend income would be $2,190, equivalent to a yield on cost north of 27%?!?! For any dividend growth investment, yield on cost is the current annualized dividends divided by the original investment, or $2,190/$8,000 in this example. The benefits of dividend growth investing have never been more evident, and a prudent, well-defined dividend growth plan targeting the ‘right’ companies over the next 20 years could result in your portfolio generating a 27% yield on cost in a couple decades, too! Though this sounds fantastic (and perhaps, unreal), investors must be aware of the significant … Read more

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

by

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

by

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

by

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

by

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

by

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

Search Dividend Reports by Company Name: F to J

by

Going forward, please use the ‘Symbol’ search box to download stock and dividend reports of companies you are interested in. The ‘Symbol’ search box can be found in our website header. Image shown from above. Use the active search box in the website header above. Learn more about your membership >>  Note: We have now discontinued this list. Please use the ‘Symbol’ search box in the website header for stock and dividend reports. Please read about our Valuentum Dividend Cushion score (ratio) here. Just having access to this valuable metric alone could save your income portfolio thousands of dollars! The past meets the future as we showcase the Valuentum Dividend Cushion scores of Dividend Aristocrats in this article (click here). The dividend reports below … Read more

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

by

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

SEC Approves Financial Weapon of Mass Destruction and More Earnings Reports

by

Let’s talk about quadruple-leveraged ETFs, Apple’s and Altria’s earnings reports, Coach’s fundamental improvement, Gilead’s fall from grace, IBM’s ongoing deterioration and more. By Brian Nelson, CFA Well, it is what it is as they say. In our ETF research and analysis, we consistently warn readers about the long-term price erosion dynamics of ultra-leveraged ETFs (of the double and triple variety), vehicles that we have emphasized are for “day traders,” not long-term investors. Believe it or not, however — we received news May 3 that the SEC approved a request to now list quadruple-leveraged ETFs, what we describe to be “financial weapons of mass destruction.” Yikes. You read that correctly–quadruple-leveraged exchange traded funds, ones that mimic the movement of the index … Read more