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A Dual Focus on Valuation and Yield Is the Best Way to Combat Changes in Future Dividend Tax Rates

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With a potential hike in the dividend tax rate just around the corner, there is no more important time than now for income investors to evaluate their existing portfolio holdings to determine whether they are well-positioned for a higher-tax environment. Assuming there are no changes to the current trajectory, the top dividend tax rate is expected to rise to 39.6% next year (up from 15% currently), and the highest-income earners will see a Medicare surtax on top of that. Evaluate All Aspects of a Dividend Investment First of all, we think those investing in high-yielders (firms) at any price (HYAAP) may be most affected by this change in tax rates. These high-yielders at any price (HYAAP) tend to be favorites of those at or near retirement, particularly given the paltry payouts on fixed … Read more

Linn Energy Continues to Capture Cash Flow

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Linn Energy (click ticker for report: ) and newly-formed entity LinnCo (LNCO) reported solid third quarter results Thursday morning. Net of non-cash derivative losses, the firm earned $0.45 per unit during the quarter, up a penny from last year, and significantly higher than consensus estimates. More importantly, the firm achieved $1.01 in distributable cash flow per share, achieving a coverage ratio of 1.40x. Perhaps the most meaningful event during the quarter was the IPO of LinnCo, an entity formed to exclusively own shares of Linn Energy. The one caveat is that LinnCo is a traditional corporation, while Linn Energy receives K-1 tax treatment, which can be a long and convoluted process. As a result, Linn hopes to spur institutional and … Read more

Dividend Increases/Decreases for the Week of September 13

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Below we provide a list of firms that raised their dividends during the week ending September 13. 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                          Absa Group Limited (AGRPY): now $0.5992 per share dividend, was $0.5707. AFC Gamma (AFCG): now $0.33 per share quarterly dividend, was $0.15. Altria (MO): now $1.02 per share quarterly dividend, was $0.98. ANTA Sports Products Limited (ANPDY): now $3.712 per share semi-annual dividend, was $3.602. Bangkok Dusit Medical Services Public Company Limited (BDUUY): now $0.3199 per share semi-annual dividend, was $0.3095. Benchmark Electronics (BHE): … Read more

Dividend Increases/Decreases for the Week of December 13

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Below we provide a list of firms that raised their dividends during the week ending December 13. 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                          Abbott Laboratories (ABT): now $0.59 per share quarterly dividend, was $0.55. AGNC Investment Corp. 6.5% DP SH PFD E (AGNCO): now $0.6326 per share quarterly dividend, was $0.4062. Alexandria Real Estate Equities (ARE): now $1.32 per share quarterly dividend, was $1.30. Amgen (AMGN): now $2.38 per share quarterly dividend, was $2.25. Andersons (ANDE): now $0.195 per share quarterly dividend, was $0.190. Andover Bancorp, Inc. … Read more

January 5-9: The Week That Was – Drowning in Crude

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By Brian Nelson, CFA The first full week of 2015 was a wild one! Monday and Tuesday brought some hefty losses to the indices, but the middle of the week helped recover most of the ground, only to give some of it back Friday. When all was said and done, however, the S&P 500 still closed comfortably above 2040, a huge leap from just 5-6 years ago. We’re still enjoying the good times, with economic data still coming in relatively sanguine. Like a frog in water, the markets are just waiting for the next shoe to drop, and the Federal Reserve is doing all that it can to assure investors that the Yellen-put is there to prop up the markets should … Read more

In The Name of Our Independence and Integrity…For Goodness Sake

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Last week, an article was published that associated us with hedge funds, questioned our integrity as honest hard-working equity analysts with years of experience, dismissed our fantastic performance track record and Brian Nelson’s Chartered Financial Analyst designation, tarnished our independence as an equity research provider, and offered another author in free form the opportunity to misinterpret our completely independent and unbiased thesis and address it in ways of their preference, belittling our entire team at Valuentum and doing irreparable harm to our brand and image, in our vew. We were willing to let it go, but then another article ran in the print edition Saturday. First, let’s address the online piece, and the print piece subsequent to this. Valuentum’s thoughts … Read more

Efficacy of the Dividend Cushion Ratio

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A version of this article was originally published September 2019. The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Valuentum Analysts  Key Takeaways: The Dividend Cushion ratio is a helpful tool to use to cushion your dividend growth or income portfolio against potential dividend cuts. The ratio also helps to assess the growth potential of a company’s dividend, above and beyond current expectations of payout … Read more

Valuentum’s Comprehensive Outlook for Crude Oil and Natural Gas Prices

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Let’s take a deep dive into the energy sector. The best dividend growth ideas, the most likely takeout candidates and more…

Creditor Risk Aversion Rises Considerably in Energy, Metals & Mining Sectors

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Not all is well with commodity producers. Moody’s (MCO) has been very quick to point out that “the latest plunge by base metals prices and the renewed slide (in) crude oil prices are more ominous for corporate credit than was the earlier plummet by crude oil prices amid relatively steady industrial metals prices.” The credit rating agency’s industrial metals price index has dropped more than 10% in the past 20 days ending July 9, reaching levels not seen since the depths of the Financial Crisis in 2009. Moody’s industrial metals price index has fallen an incredible 25% since the same time stamp last year, something we’ve been witnessing anecdotally. The International Energy Agency recently warned that the bottom in crude oil … Read more