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Microsoft’s Dividend Is Rock Solid But Why?

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Image Shown: Valuentum’s Dividend Report on Microsoft. The Dividend Cushion Ratio Deconstruction reveals the numerator and denominator of the Dividend Cushion ratio for Microsoft. At the core, the larger the numerator, or the healthier a company’s balance sheet and future free cash flow generation, relative to the denominator, or a company’s cash dividend obligations, the more durable the dividend. In the context of the Dividend Cushion ratio, Microsoft’s numerator is larger than its denominator suggesting strong dividend coverage in the future. The Dividend Cushion Ratio Deconstruction image puts sources of free cash in the context of financial obligations next to expected cash dividend payments over the next 5 years on a side-by-side comparison. Because the Dividend Cushion ratio and many … Read more

Conagra Brands Facing Major Inflationary Headwinds

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Image Shown: Conagra Brands Inc recently reduced its full-year guidance for fiscal 2022 in the face of major inflationary headwinds. Image Source: Conagra Brands Inc – Fourth Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan On July 13, the company behind the Slim Jim, Duncan Hines, Gardein brands (among other), Conagra Brands Inc (CAG), reported fourth quarter earnings for fiscal 2021 (period ended May 30, 2021) that beat both consensus top- and bottom-line estimates. However, its guidance for fiscal 2022 came in a bit light in the face of major inflationary headwinds which saw shares sell off initially after the report was published. Please note that its fiscal 2020 was a 53 week reporting period while its fiscal … Read more

ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline

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ICYMI — Video: Exclusive 2020 — Furthering the Financial Discipline — — In this 40+ minute video jam-packed with must-watch content, Valuentum’s President Brian Nelson talks about the Theory of Universal Valuation and how his work is furthering the financial discipline. Learn the pitfalls of factor investing and modern portfolio theory and how the efficient markets hypothesis holds little substance in the wake of COVID-19. He’ll talk about which companies Valuentum likes and why, and which areas he’s avoiding. This and more in Valuentum’s 2020 Exclusive conference call.   Note: This video was originally published August 2, 2020.    To watch the video >>   The Theory of Universal Valuation —– Valuentum members have access to our 16-page stock reports, … Read more

3 Strong Dividend Payers to Consider Within Consumer Staples

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By Brian Nelson, CFA Dividend growth may never go out of style. For one, there are tremendous compounding benefits to investing in dividend growers over the long haul, “3 Substantial Benefits of Dividend Growth Investing.” A focus on traditional cash-based sources of intrinsic value and dividend health is therefore essential to avoid tragic dividend cuts in your portfolio (see our walk-through of the cash-based sources of intrinsic value and how to find them in our article/video about Apple here). Three dividend growers that we do not include in the Dividend Growth Newsletter portfolio but that have recently-reported calendar first-quarter 2021 earnings and may be worth considering in a diversified equity portfolio are Kellogg (K), Colgate-Palmolive (CL) and Clorox (CLX). These three … Read more

General Mills Prepares for Cost Inflation, Pet Business Growing Rapidly

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Image Source: General Mills Inc – Third Quarter of Fiscal 2021 IR Earnings Presentation By Callum Turcan On March 24, General Mills Inc (GIS) posted third quarter earnings for fiscal 2021 (period ended February 28, 2021) that beat consensus top- and bottom-line estimates on a GAAP basis, though its adjusted non-GAAP bottom-line performance missed consensus estimates. General Mills has seen demand surge higher for its products in the wake of the coronavirus (‘COVID-19’) pandemic as households stockpiled goods and started eating at home more often. The company posted a solid fiscal third quarter earnings report, though its outlook is facing headwinds as General Mills is contending with cost inflation concerns. Shares of GIS yield ~3.4% and are trading just above … Read more

Mondelez Capturing Share, Generating Strong Free Cash Flow

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Image Source: Mondelez International Inc – November 2020 IR Presentation By Callum Turcan On January 28, snacks giant (generates most of its annual revenues from biscuits, chocolates, gum and candy) Mondelez International Inc (MDLZ) reported fourth quarter earnings for 2020 that beat both consensus top- and bottom-line estimates. Management noted in the earnings press release that the firm “enter[ed] 2021 in a strong position financially and in the marketplace which gives us confidence that we can deliver on our long-term growth targets in 2021 and beyond.” Mondelez reported 3.7% net organic revenue growth in 2020, supported by favorable volume and pricing movements, and negatively impacted by product mix. The firm’s GAAP revenues were up just under 3% year-over-year in 2020, … Read more

ALERT: Raising Cash in the Newsletter Portfolios

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January 27, 2021 ALERT: Raising Cash in the Newsletter Portfolios We are raising the cash position in the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to 10%-20%. — By Brian Nelson, CFA — Our research has been absolutely fantastic for a long time, but 2020 may have been our best year yet. You can read the 2020 recap here. With the S&P 500 trading within our fair value estimate range of 3,530-3,920 (and the markets rolling over while showing signs of abnormal behavior), we’re raising the cash position in the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to 10%-20%. — For more conservative investors, the high end of this range may even be larger, especially … Read more

Kraft Heinz Shows the Power of the VBI

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Image: Years ago, shares of Kraft Heinz registered a rating of 1 on the Valuentum Buying Index (VBI) on two separate occasions, highlighting the company’s overpriced nature and weakening technicals. Rare and extreme ratings on the VBI, 1 = worst; 10 = best, tend to be the most informative and/or the most actionable for investors.    There are just too many net cash rich, free cash flow generating powerhouses with tremendous competitively advantaged business models tied to secular growth tailwinds that taking a flier on an overleveraged turnaround such as Kraft Heinz almost feels irresponsible. That said, shares yield ~5.2% as of this writing, so income investors might find a decent risk reward at the right price. With a 27% stake, … Read more

3 Lessons in Portfolio Management Over 10 Years

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Dear members: — We’re finally getting a pause in the rapid ascent of the markets on September 3rd. Though headlines may look scary and momentum/volatility investors could start to pile on to the downside, a modest retracement is actually a good thing. We continue to focus on the long haul with our processes, and we’re viewing the sell-off as profit taking, for the most part. — In the near term, the markets will also have to digest some speculators betting on mean reversion between “value” (cyclical) versus “growth” (secular), but we maintain the view that the value-versus-growth conversation is largely nonsense (see block quotes below), and mean reversion is something akin to the gamblers’ fallacy, in my humble opinion. Investors should also continue … Read more

Valuentum Website Overview

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Overview of the key features of valuentum.com/ (03:55). Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports, dividend reports, and ETF reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information. The Benefits of Premium Membership >> Subscribe Now!