GMT

REITs Will Likely Continue To Underperform

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By Brian Nelson, CFA Stock prices and returns are in part a function of the cash-based sources of intrinsic value: net cash on the balance sheet and future expectations of free cash flow. Though there are many ways to slice and dice a company with respect to equity analysis, to arrive at an intrinsic value estimate of a firm, it generally comes down to these two important cash-based dynamics. Due to the nature of their business models, most REITs have lofty net debt positions, and many are investing in real estate at a pace that is faster than that which they are generating operating cash flow. One good example of the trouble brewing on many a REIT’s cash flow statement … Read more

Dividend Increases/Decreases for the Week Ending February 6

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Below we provide a list of firms that raised/lowered their dividends during the week ending February 6. 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 Armada Hoffler Properties (AHH): now $0.17 per share quarterly dividend, was $0.16. Artisan Partners (APAM): now $0.60 per share quarterly dividend, was $0.55. Assured Guaranty (AGO): now $0.12 per share quarterly dividend, was $0.11. Avista (AVA): now $0.33 per share quarterly dividend, was $0.3175. BCE (BCE): now C$0.65 per share quarterly dividend, wasC$0.62. Bemis (BMS): now $0.28 per share annual dividend, was $0.27. Brookfield Renewable Energy … Read more

Air Quality Standards Take Aim at Coal

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After competing with an abundance of lower-priced, cleaner natural gas, coal miners (KOL) may now have to deal with more demand headwinds as governments aim to reduce coal burning. The US Expectations are already for as much as 27 gigawatts’ worth of coal generation (about 8.5% of the US coal fleet) to retire by 2016. This percentage could rise to nearly 17% (one-sixth) by 2020, according to the Energy Information Administration. In addition to the expected retirements, the Environmental Protection Agency (EPA) plans to block all new coal-fired plants unless the construction of these plants coincides with expensive technology that captures greenhouse gas emissions. Image Source: Energy Information Administration Though the EPA forecasts that no traditional coal-fired power plants (1) … Read more

Valuentum’s Joint Outlook for the Railroad and Coal Industries

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Key Takeaways: North American railroads operate as an oligopoly, benefit from substantial barriers to entry, and boast significant pricing power. Free cash flow generation trends are strong at the largest operators–Union Pacific (UNP) and Canadian National (CNI)–but industry-wide free cash flow margins (free cash flow divided by revenue) average in the mid-single-digits as elevated maintenance capital costs weigh on conversion rates. Canadian National and Union Pacific are currently the most efficient operators (as measured by their respective operating ratios), while Genessee & Wyoming (GWR) and Canadian Pacific (CP) trail the pack. Coal is the single most important commodity to the railroads, accounting for more than 20% of class I railroad freight revenue. Though US coal volumes should advance over the … Read more

Dividend Increases/Decreases for the Week Ending January 29

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Below we provide a list of firms that raised/lowered their dividends during the week ending January 29. 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 A.O. Smith (AOS): now $0.24 per share quarterly dividend, was $0.19. AGCO (AGCO): now $0.13 per share quarterly dividend, was $0.12. Apartment Investment (AIV): now $0.33 per share quarterly dividend, was $0.30. Applied Industrial Technologies, Inc. (AIT): now $0.28 per share quarterly dividend, was $0.27. Archrock Inc. (AROC): now $0.1875 per share quarterly dividend, was $0.15. Arthur J. Gallagher (AJG): now $0.38 per share quarterly dividend, … Read more