GIS

Walmart’s ‘Great Value’ Brand and Position Across Retail Never Stronger

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  Image: Walmart’s shares have gotten back on track.  By Brian Nelson, CFA  Grocer Aldi may have been the greatest beneficiary of the past 12-18 months due to consumers trading down from lofty grocery prices, but Walmart (WMT) has kept pace, in our view, as Target (TGT) struggles from a public relations nightmare and membership warehouses like Costco (COST) feel the need to cut down on membership card sharing as comparable store sales weaken. We think Walmart’s ‘Great Value’ brand and position across bargain retail has never been stronger, and its share price reflects a company that is at a sweet spot of consumer demand as rivals continue to struggle. The high end of our fair value estimate range of … Read more

Dividend Increases/Decreases for the Week of June 30

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Below we provide a list of firms that raised their dividends during the week ending June 30. 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                          Amdocs (DOX): now $0.435 per share quarterly dividend, was $0.395. Amplify BlackSwan ISWN ETF (ISWN): now $0.1414 per share quarterly dividend, was $0.127. ASUSTeK Computer (ASUUY): now $1.9078 per share dividend. Bancolombia S.A. (CIB): Now $0.852 per share quarterly dividend, was $0.6505. Bankinter (BKNIY): now $0.0818 per share quarterly dividend. Benchmark Bankshares (BMBN): now $0.40 per share semi-annual dividend. BOC Hong Kong (Holdings) (BHKLY): … Read more

Brief Take: Best Idea PepsiCo Hits All-Time High! Beautiful Breakout!

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Image: PepsiCo, an idea in the Best Ideas Newsletter portfolio, has broken out to all-time highs. We continue to like the name. By Brian Nelson, CFA We added PepsiCo (PEP) to the Best Ideas Newsletter portfolio in October 2022, and shares are breaking out to new all-time highs! On April 25, the beverage and snacks giant reported strong first-quarter 2023 results and raised its guidance for fiscal 2023, now expecting to deliver 8% organic revenue growth (up from 6% previously) and 9% core constant currency earnings per share growth (up from 8% previously). PepsiCo now expects core earnings per share to advance to $7.27 in the fiscal year, too, a 7% increase (up from 6% previously). As in the case … Read more

Fed Winning the Fight Against Inflation, Food-at-Home Prices Easing

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Image: CPI-U, not seasonally adjusted. The 12-month percent change in the pace of inflation for all items has fallen from north of 9% in June 2022 to 5% in March 2023. Image Source: BLS By Brian Nelson, CFA The Bureau of Labor Statistics (BLS) released the Consumer Price Index for All Urban Consumers (CPI-U) on April 12, and it showed that the Fed is winning its fight against inflation. The CPI-U rose just 0.1% in March on a seasonally adjusted basis, down 0.3 percentage points from the increase in February. During the past 12 months, the all-items index has advanced 5.0% before any seasonal adjustments, a level that is still higher than the Fed’s long-term target, but not one indicative of … Read more

General Mills Experiencing Tremendous Pricing Power, Positive Elasticities

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Image Source: Mike Mozart By Brian Nelson, CFA Cereal maker General Mills (GIS) continues to flex its pricing power. The company’s third-quarter results for its fiscal 2023, released March 23, showed a company that is raising prices almost at will and driving tremendous adjusted operating profit expansion, while organic pound volume remains essentially flat. The company continues to optimize its revenue model as it forgoes volume expansion in favor of pricing growth, and we would expect further price increases across its product line-up for some time. With adjusted operating profit surging, price elasticities remain in its favor, much to the detriment of the cash-strapped consumer, which can only expect more food-at-home inflation. Shares of General Mills yield ~2.5% at the … Read more

Our Reports on Stocks in the Recession Resistant 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

PepsiCo’s Pricing Actions Fantastic; Needs Better Free Cash Flow in 2023 to Cover 10% Dividend Hike

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Image Source: PepsiCo By Brian Nelson, CFA On February 9, PepsiCo, Inc. (PEP) reported impressive fourth-quarter 2022 results that showed organic revenue growth of 14.6% and core constant-currency earnings-per-share expansion of 10%. The company also added to its long streak of consecutive annual dividend increases, raising the payout by 10%, to $5.06 per share on an annualized basis, starting with the June 2023 payment. PepsiCo has rewarded dividend growth investors with 51 consecutive years of dividend growth, and we have no reason to believe that the streak will be broken anytime soon. The firm expects to buy back $1 billion worth of its shares during 2023. PepsiCo showcased tremendous product pricing power. During the fourth quarter, volumes across its portfolio … Read more

Consumers Feeling the Pinch; S&P 500 Bounces Off Technical Resistance; Elasticities Breaking Down for Staples Stocks

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By Brian Nelson, CFA Microsoft Corp. (MSFT) is the latest big tech company to announce big job cuts. The company that is still working to close its deal with Activision (ATVI) announced that it would slash 10,000 jobs, or about 4.5% of its workforce. The unemployment rate in the U.S. stands at just 3.5%, as recorded in December 2022, so even though we’re witnessing quite a number of layoffs in Silicon Valley, the labor markets are still very, very healthy. Those being laid off are finding jobs rather quickly, too. According to the WSJ, “about 79% of workers recently hired after a tech-company layoff or termination landed their new job within three months of starting their search.” Businesses have been … Read more

The Fed ‘Can’t Stop, Won’t Stop’ Until Labor Market Feels More Pain

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  Image: Prices for private label brands at Aldi are considerably lower than those of branded products. The consumer staples sector, however, remains fully-priced with a 21+ forward earnings multiple, and many constituents hold large net debt positions. We believe the sticking point for the Fed is not groceries or gasoline prices, but rather the labor markets, which remain very strong, despite layoffs. Image Source: Valuentum By Brian Nelson, CFA We’ve yet to see the worst of job cuts, in our view. The rapid shift in the global economy mid-2022 was profound, as many companies were still building in anticipation of increased demand during the first half of the year to the point where demand growth started to dry up, … Read more

Exclusive Call: What To Expect From Valuentum in 2023

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Video: 2022 was a successful year by almost every measure from the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to the simulated High Yield Dividend Newsletter portfolio and Exclusive publication and beyond. There were some disappointments in 2022, of course, but the year showed the value of a Valuentum membership. Join President of Investment Research Brian Nelson on this year’s Exclusive conference call to learn what to expect from Valuentum in 2023. Cheers! Transcript President of Investment Research Brian Nelson: Happy Holidays everyone! I hope that you are enjoying this special time of year with family and friends, and I wish you all a wonderful 2023! I just wanted to take a few minutes to recap … Read more