NEE

NextEra Energy’s Outlook Looks Great

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Image Source: NextEra Energy By Brian Nelson, CFA NextEra Energy (NEE) recently reported mixed second quarter results with revenue coming in light, but non-GAAP earnings per share exceeding the consensus forecast. On an adjusted basis, NextEra Energy’s earnings for the second quarter of 2024 were $0.96 per share, up from $0.88 per share in the same period a year ago. Management’s outlook, as provided in the press release, was quite upbeat: NextEra Energy delivered strong second-quarter results, increasing adjusted earnings per share by more than 9% year-over-year, reflecting continued solid financial and operational performance at both our businesses. At FPL, we continued to invest to support strong customer growth, while keeping O&M low and reliability high. At NextEra Energy Resources, … Read more

Paper: Value and Momentum Within Stocks, Too

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Please select the image below to download, “Value and Momentum Within Stocks, Too:” Abstract: This paper strives to advance the field of finance in four ways: 1) it extends the theory of the “The Arithmetic of Active Management” to the investor level; 2) it addresses certain data problems of factor-based methods, namely with respect to value and book-to-market ratios, while introducing price-to-fair-value ratios in a factor-based approach; 3) it may lay the foundation for academic literature regarding the Valuentum, the value-timing, and ultra-momentum factors; and 4) it walks through the potential relative outperformance that may be harvested at the intersection of relevant, unique and compensated factors within individual stocks. To download the full report, please click here (pdf). ———- Actual results … Read more

NextEra Energy Expects 10% Annual Dividend Growth Through 2026

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Image Source: NextEra Energy By Brian Nelson, CFA Back on April 23, NextEra Energy (NEE) reported mixed first quarter results with non-GAAP earnings per share beating expectations, but revenue coming in light versus the consensus forecast at the time. Net income attributable to NextEra Energy on an adjusted basis came in at $0.91 per share, which was up modestly from $0.84 per share in the year-ago period. Management had a lot to say about the quarter and outlook: NextEra Energy delivered strong first-quarter results, growing adjusted earnings per share by approximately 8.3% year-over-year. Both FPL and NextEra Energy Resources delivered solid financial and operating performances to start off the year. FPL placed into service 1,640 megawatts of new, cost-effective solar, … Read more

You Already Own Whatever Your Investment Will Pay You in Dividends

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“Business owners across the world know that their business is not more or less valuable because they paid themselves a higher distribution this quarter.” – Brian Nelson, CFA Image Source: Images Money Stocks are generally valued on the present value of all their future free cash flows, which already include future dividend payments. A company’s dividend policy may impact an investor’s eagerness to pay a higher price for shares on the basis of a higher yield, but the dividend is a symptom of future free cash flows (and therefore intrinsic value), not a driver behind it. where A (t) is an Enterprise Free Cash Flow (1) at year t,                 B (0) is a Total Debt at time 0,                 … Read more

We Remain Bullish; Is This 1995 – The Beginning of a Huge Stock Market Run?

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Image: Large cap growth stocks have trounced the performance of the S&P 500, REITs, and bonds since the beginning of 2023. We expect continued outperformance in this area of the market. By Brian Nelson, CFA We’re now roughly four years past the depths of the COVID-19 meltdown, where equities collapsed in February and March of 2020. As the markets began to recover through 2020, our long-term conviction in equities only grew stronger. We think the biggest risk for long-term investors remains staying out of the market on the basis of what could be considered stretched valuation multiples. As we outlined heavily in the book Value Trap, valuation multiples hardly tell the complete story about a company and often omit key … Read more

Earnings Roundup: TSLA, NEE, IBM, CMCSA, NOW

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By Brian Nelson, CFA Tesla (TSLA) Misses Fourth-Quarter Expectations as Continued Uncertainty Looms Image: The Model Y was the best-selling vehicle globally in 2023. Image Source: Tesla Tesla missed fourth-quarter expectations on January 24, and the market continues to shy away from the electric-vehicle maker surrounding continued controversy over CEO Elon Musk’s request to have greater voting control over the company. We think Tesla may be past its prime heyday years, and while the firm hauled in a nice chunk of free cash flow during 2023 ($4.4 billion) as it retains a net cash position ($29.1 billion), the company will likely never find its way into the newsletter portfolios, which house our favorite ideas for consideration. In the quarter, Tesla’s … Read more

3 Substantial Benefits of Dividend Growth Investing

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Dear members: There are three primary benefits of a well-executed dividend growth strategy, one that is carried out with prudence and care and one that pays careful attention to the intrinsic value of the stock and its critical cash-based components. Albert Einstein is reported to have called compound interest the “eighth wonder of the world,” but dividend growth investing has the potential to offer long-term investors so much more! Let’s explain. 1) Reinvested Dividends Compound Over Time Over the past decade, I have grown to appreciate the compounding dynamics of reinvested dividends on appreciating stocks even more than historical studies have revealed. The strategy of dividend growth investing not only benefits from the reinvestment of dividends into the purchase of … Read more

Kinder Morgan’s ~6.4% Dividend Yield Is Much Stronger These Days

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Image: Kinder Morgan is back on track. Image Source: Kinder Morgan. By Brian Nelson, CFA Early in December, Kinder Morgan (KMI) released financial expectations for 2024 that showed the midstream energy giant is back on track. Excluding its recent purchase of NextEra Energy Partners’ (NEP) STX Midstream assets, Kinder Morgan expects 5% expansion in adjusted EBITDA and distributable cash flow [DCF] in 2024 thanks to growth in its Natural Gas Pipelines and Energy Transition Ventures segments coupled with rate escalations across its operations. For 2024, management is targeting its 7th consecutive year of dividend increases with a projected annualized dividend of $1.15 in 2024. Net debt-to-Adjusted EBITDA is targeted at 3.8x at the end of 2024, a level that is materially … Read more

12 Reasons to Stay Aggressive in 2024

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By Brian Nelson, CFA 1. The Fed has signaled that rate cuts could start with inflation at a 2 handle (2 point something) and not at exactly 2.0%. That means that the Fed may become anticipatory to prevent overshooting to the downside with inflation. We see this as positive for long-duration equities, particularly those whose free cash flow generation is robust in the out-years, inclusive of big cap tech and the stylistic area of large cap growth. 2. Unemployment is at structural lows of 3.7%. Employers are working hard to keep talent on board, and with each paycheck, employees are pumping more and more money into the stock market via retirement accounts. This tailwind remains a stiff one and will … Read more

ICYMI — Video: Our Top Stocks for 2024

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Video: Valuentum’s President of Investment Research Brian Nelson walks through the success of Valuentum’s newsletter suite, the state of the economy and markets, and offers his favorite idea for each sector. Tune into this must-watch video. ———- It’s Here!  The Second Edition of Value Trap! Order today!   —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.  Valuentum members have access to our 16-page stock … Read more