JNJ

Three Huge Red Flags for the Airlines, Hotels

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The airline industry is a good barometer of global economic activity as it not only gauges leisure travel but also business activity. We picked up three important red flags recently that may weigh on shares of the airline group (and by extension the hotel space). For those that don’t know us, we’re not at all fans of the investment prospects of the airline industry, but nonetheless, we pay very close attention to airlines for unique economic insights. Read about our recent call on cyclicals here, in case you missed it. 1. Ebola. According to CNN, the first case of Ebola has been diagnosed in the US. Just like the SARS and West Nile virus before it, the news will likely … Read more

The Dividend Dilemma

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One of the core tenets of the Valuentum process not only rests in the all-important price vs. value consideration (see Valuentum’s Brian Nelson talk about that here), but also in “letting winners run.” At first read, these two items appear to be at odds with each other. For example, we preach about getting stocks at a bargain, but yet, we don’t sell holdings when they start to move beyond our estimate of their fair value. What gives? At the Valuentum core, we prefer an entry point that corresponds to the time when shares have substantial valuation and pricing support (i.e. they have high Valuentum Buying Index ratings), and we prefer an exit point when shares have little valuation and pricing … Read more

Procter & Gamble Wraps Up a Strong Fiscal Year 2014

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Procter & Gamble (PG) reported strong fiscal fourth-quarter results Friday. The April-June quarter revealed organic sales expansion of 2% thanks to strong pricing expansion and core earnings-per-share growth of 20%, to $0.95. Excluding the negative impact of foreign exchange, currency-neutral core earnings per share increased 25%. We continue to like the pricing power of Procter & Gamble’s brands, and the pace of earnings growth was fantastic during the last quarter of its fiscal year. Management continues to deliver on its top and bottom-line commitments. P&G’s brands include Tide, Ariel, Gillette, Venus, Bounty, Charmin, Pantene, Olay, Pampers, Crest, Oral-B, Duracell, and Vicks. These brands aren’t going away anytime soon, in our view. Though management indicated that it will shed some lower-margin brands, … Read more

Johnson & Johnson: Beat and Raise

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Johnson & Johnson (JNJ) has built one of the most comprehensive health care businesses, generating approximately 70% of revenue from top positions in its respective markets. The firm is focused on innovation while broadening its geographic presence, and it benefits from one of the best pharmaceutical portfolios on the market today. All of this was on display when J&J reported better than-expected second-quarter results Tuesday. Sales during the period advanced more than 9% thanks to a near-15% increase in domestic revenue. Excluding one-time items, net earnings for the quarter came in at $4.8 billion, equivalent to $1.66 per share – up 11.3% and 12.2% respectively, as compared to the same period in 2013. Leading the charge was the company’s pharmaceutical … Read more

Valuentum Economic Castleâ„¢ Rating Update

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Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more

Dividend Increases for the Week Ending April 25

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Below we provide a list of firms that raised their dividends during the week ending April 11. 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 1st Source Corp (SRCE): now $0.18 per share quarterly dividend, was $0.17. Altra Holdings (AIMC): now $0.12 per share quarterly dividend, was $0.10. Apple (AAPL): now $3.29 per share quarterly dividend, was $3.05. Aspen Insurance Holdings (AHL): now $0.20 per share quarterly dividend, was $0.18. Avery Dennison (AVY): now $0.35 per share quarterly dividend, was $0.29. BCB Bancorp (BCBP): now $0.14 per share quarterly dividend, was … Read more

Johnson & Johnson’s Patent Expiration Profile Is Fantastic

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Very few firms have a more attractive investment profile than Johnson & Johnson (JNJ). On Tuesday, the consumer products and healthcare company showed us why when it reported better-than-expected first-quarter performance on both the top and bottom lines. The company continues to drive outperformance in the Dividend Growth portfolio as it approaches $100 per share. Operating sales during the period jumped 5.3% compared to the same quarter a year ago, consisting of 2.2% domestic expansion and 7.9% international growth. Excluding one-time items, net earnings for the quarter came in at $4.4 billion and diluted earnings per share came in at $1.54, representing advances of 7.8% and 6.9%, respectively, compared to last year’s quarter. Management credited successful new product launches and continued growth … Read more

General Electric and Johnson & Johnson Shed Assets

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When dividend growth companies shed assets, the proceeds can be used for further dividend expansion. We like this quite a bit. General Electric (GE), a holding in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio, continues to streamline and optimize its portfolio of businesses. We’ve long held the belief that General Electric needs to simplify its business focus, a view that has been supported by its dividend cut in 2009. Global economic conditions and the credit crunch threatened GE Capital (GECC) at the time, and management’s moves since then have been to diversify away from its financial subsidiary. The industrial and finance conglomerate is far healthier than it was at the depths of the Great Recession in 2009, and the … Read more

Update: Digging Into the Valuentum Dividend Cushion

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Sign Up to Receive our Dividend Growth Newsletter! Add the High Yield Dividend Newsletter to Your Membership! History has revealed that the best performing stocks during the previous decades have been those that shelled out ever-increasing cash to shareholders in the form of dividends. In a recent study by Ned Davis Research, S&P 500 stocks that initiated dividends or grew them over time registered roughly a 9.6% annualized return since 1972 (through 2010), while stocks that did not pay out dividends or cut them performed poorly over the same time period.  Such analysis is difficult to ignore, and we believe investors may be well-rewarded in future periods by finding the best dividend-growth stocks out there. As such, we’ve developed a rigorous dividend investment … Read more