LMT

Our Reports on Stocks in the Prime Aerospace & Defense Industry

by

Image Source: Robert Sullivan Structure of the Aerospace and Defense Industry The global commercial aerospace duopoly is being challenged by encroaching international competitors who are intent on increasing market share, but Boeing and Airbus continue to dominate the large commercial aircraft segment. Long-term demand for commercial aircraft is cyclical and depends on the health of the credit markets, airline customers, and lessors, but massive backlogs and a strong multi-decade demand outlook are reasons for confidence. The defense industry has strong competition in all market segments and remains dependent on government funding decisions and competing budget priorities. We’ve optimized our industrials coverage. Our reports can be found here.

Honeywell’s Aerospace Division Its Crown Jewel

by

We’re huge fans of Honeywell. The company’s Aero operations are its crown jewel, and while Boeing is facing some troubles these days, we don’t expect much impact on Honeywell at all. In fact, we expect commercial aerospace to remain strong, even in the face of broader industrial weakness. The risks to the company’s HBT business could be starting to mount given some concerns in commercial real estate, but management isn’t really seeing any signs of yet, pointing to only moderating growth in 2020. The SPS division, while a headwind, probably won’t be a factor next year, but it could bounce back as inventories are cleared from the channel. By Brian Nelson, CFA Honeywell (HON) has facilitated a number of changes … Read more

ICYMI: Interview with Valuentum’s President Brian M. Nelson, CFA

by

Catch up with Valuentum’s President Brian M. Nelson, CFA in a recent interview with dividend growth investor Arne Magnus Lorentzen Ulland of the blog stockles. By Brian Nelson, CFA Recently, I was interviewed by Arne Magnus Lorentzen Ulland of the blog stockles. Arne is a dividend growth investor like many of you, and I sincerely hope you enjoy the interview he put together. I’m very grateful for his interest. His questions were fantastic. We discuss why and how I incorporate independence and integrity into the service at Valuentum. We go into detail regarding why Valuentum views stocks the way it does, and how Valuentum combines enterprise valuation and the information contained in prices in its stock-selection process. I discuss the pitfalls … Read more

Dividend Increases/Decreases for the Week Ending September 27

by

Below we provide a list of firms that raised their dividends during the week ending September 27. 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 American Express (AXP): now $0.43 per share quarterly dividend, was $0.39. American Tower (AMT): now $0.95 per share quarterly dividend, was $0.92. Artesian Resources (ARTNA): now $0.2496 per share quarterly dividend, was $0.2459. BancFirst (BANF): now $0.32 per share quarterly dividend, was $0.30. City Holding (CHCO): now $0.57 per share quarterly dividend, was $0.53. CSB Bancorp (CSBB): now $0.28 per share quarterly dividend, was $0.26. DENTSPLY … Read more

Saudi Arabia Attacked, Oil Prices Shoot Higher

by

Image Shown: Saudi Arabia’s oil infrastructure was attacked over the weekend, causing WTI and Brent to rally at the start of the trading session. By Callum Turcan Disaster struck this weekend when several drones took out the Abqaiq oil processing facility and the massive onshore Khurais oil field in Saudi Arabia (KSA) on Saturday, with WTI and Brent both surging on the news once trading resumed at the start of the week. The Khurais oil field produces around 1.5 million barrels of crude per day and the Abqaiq oil processing facility is the largest in the world. Saudi Arabia’s oil production capacity was reduced by 5.7 million barrels of crude per day due to these attacks and the country is … Read more

The United Technologies-Raytheon Merger Will Create a Defense and Commercial Aerospace Giant

by

Image Source: United Technologies Corporation – IR Presentation By Callum Turcan On June 9, United Technologies Corporation (UTX) and Raytheon Company (RTN) agreed to a merger of equals that if approved, will create a new giant in the aerospace & defense world. The combined company will sell anything from Patriot surface-to-air missile systems to national governments to power generation and cyber protection products for commercial aircraft. United Technologies and Raytheon hope that as a combined entity, the new company will have the scale required to be truly competitive in the commercial aerospace industry while maintaining the status of a reliable defense contractor. Both CEO’s went on CBNC together to defend the deal and explained it as “complementary” to highlight the … Read more

Markets Swooning, Expect Extreme Volatility, Finger on Put-Option Trigger

by

Image shown: We notified members December 26 that we had  moved  the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to a “fully invested” position, from a 30% and 20% cash “weighting” at the high end of the range, respectively.  — No change to simulated newsletter portfolios…at this time.  — Hi everyone, — Hope you’re navigating these tumultuous markets well.   — If you recall, during the holiday season last year, we had moved the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio to “fully invested.” See image above (point of the arrow). Because many members were traveling and out of the office, not all were able to read the notification until a week or two after. They were … Read more

Earnings Reports Flying In!

by

Earnings reports are flying in. We thought Air Products’, Hasbro’s, and Lockheed’s quarterly updates were standouts. By Brian Nelson, CFA It’s time to make some noise! Seriously, we just debunked a decades-old myth that the average active investor theoretically cannot outperform, net of fees. We also just showed theoretically how empirical asset pricing models in using realized data are off the mark. I think both of these are huge deals in the field of finance. Make some noise. I talk about these developments in subchapters of our new book, Value Trap! You can read about the contents of the book on Amazon. I hope that we hear more about these developments on a larger scale in the coming years. How wonderful that might be. … Read more

ATTN: Advisors and Planners — Disruption Is Looming

by

“With the commoditization of investment advice and intense competition from robos and other more cost-efficient solutions, growth-minded advisors want to create bespoke experiences for clients.” — WealthManagement.com By Brian Nelson, CFA Hi Valuentum members, colleagues and friends, Valuentum has a large subscriber base and is one of the most successful paid subscription financial information websites launched this decade. Over the past eight years or so, individuals, financial advisors and money managers from all over the world have subscribed to our services. We pride ourselves on independence and transparency, and we’re a champion of the investor. Today, I’d like to talk directly to our financial advisor, financial planner, and professional money-manager members. You probably already heard the news yesterday: Charles Schwab, which handles … Read more

Lockheed Martin May Be a FCF Cow But the Company Should Consider Debt Reduction Over Share Buybacks

by

Image Source: Lockheed Martin By Callum Turcan Known around the world as the manufacturer of F-35 stealth fighters and Blackhawk Helicopters, Lockheed Martin Corporation (LMT) is the world’s leading defense contractor and as of this writing yields a nice 3.0%. While burdened by a significant net debt load, Lockheed Martin has consistently been a free cash flow cow enabling the firm to sport decent dividend coverage. Last year, 70% of Lockheed Martin’s net sales came from the US government, highlighting how domestic annual defense spending levels are very important to the company’s financial performance. Growing Backlog Lockheed Martin’s order backlog stood at $130.5 billion at the end of 2018, up 24% or $25.0 billion from year-end 2017 levels. The company … Read more