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Thinking Slow: 3 Research Blind Spots That Changed the Investment World

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Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Realty Income’s Dividend Remains on Solid Ground

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Image Source: Realty Income By Brian Nelson, CFA Realty Income (O) recently reported second quarter results with revenue exceeding the consensus forecast, but funds from operations coming in-line with expectations. In the quarter, net income available to common shareholders was $0.22 per share, while adjusted funds from operations (AFFO) came in at $1.05 per share. The REIT invested $1.2 billion at an initial weighted average cash yield of 7.2% in the quarter, while net debt to annualized pro forma adjusted EBITDAre was 5.5x. It achieved a rent recapture rate of 103.4% on properties re-leased in the quarter. Management had the following to say about the results: Realty Income’s ability to deliver attractive, consistent total operational returns across economic cycles reflects … Read more

Dividend Increases/Decreases for the Week of September 12

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Below we provide a list of firms that raised their dividends during the week ending September 12. 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                          AGNC Investment Corp. 6.5% DP SH PFD E (AGNCO): now $0.6115 per share quarterly dividend, was $0.6013. AGNC Investment Corp. 6.875 DEP REP D (AGNCM): now $0.5693 per share quarterly dividend, was $0.5595. AGNC Investment Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (AGNCN): now $0.6191 per share quarterly dividend, was $0.6088. AGNC INVT 1000 DR REP 1 SRS F PRF (AGNCP): now $0.5926 per … Read more

Realty Income’s Monthly Dividend Is Durable

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Image Source: Realty Income By Brian Nelson, CFA Realty Income (O) recently reported mixed first quarter results that showed revenue beating the consensus estimate but funds from operations coming up a bit short relative to forecasts. Adjusted funds from operations increased 2.9%, to $1.06 per share, in the quarter, up from $1.03 per share in last year’s period, while the company invested $1.4 billion at an initial weighted average cash yield of 7.5% in the first quarter. Net debt to annualized proforma adjusted EBITDAre was 5.4x at the end of the quarter. Management had the following to say about the results: Realty Income’s ability to deliver reliable and stable performance through varying market conditions continues to be a hallmark of … Read more

Dividend Increases/Decreases for the Week of June 13

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Below we provide a list of firms that raised their dividends during the week ending June 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                          AGNC Investment Corp. 6.5% DP SH PFD E (AGNCO): now $0.6013 per share quarterly dividend, was $0.5976. AGNC Investment Corp. 6.875 DEP REP D (AGNCM): now $0.5595 per share quarterly dividend, was $0.5563. AGNC Investment Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (AGNCN): now $0.6088 per share quarterly dividend, was $0.6050. AGNC INVT 1000 DR REP 1 SRS F PRF (AGNCP): now $0.5826 per … Read more

3 Undervalued Stocks to Consider Buying Now

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Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Trump Tariffs Higher than Expected; What We’re Doing

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By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

Realty Income Has Raised Its Dividend 130 Times Since Listing on the NYSE in 1994

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Image Source: Realty Income By Brian Nelson, CFA Realty Income (O) recently reported mixed fourth quarter results with the REIT’s top line exceeding the consensus forecast, but funds from operations coming up a little light. For the three months ended December 31, net income was $199.6 million, or $0.23 per share. Adjusted funds from operations (AFFO) per share increased 4%, to $1.05. In the quarter, Realty Income invested $1.7 billion at an initial weighted average cash yield of 7.1%. Net debt to annualized pro forma adjusted EBITDAre was 5.4x. Management was pleased with the report, as noted in the press release: I (Sumit Roy, Realty Income’s President and Chief Executive Officer) am pleased with our performance in 2024 as we … Read more

Dividend Increases/Decreases for the Week of March 14

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Below we provide a list of firms that raised their dividends during the week ending March 14. 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                          Acer (ACEYY): now NT 1.70 per share annual dividend, was NT 1.60. Afya (AFYA): now R$1.348923 pare share dividend. Aker Carbon Capture (AKRCY): now NOK 4.82 per share dividend. Altius Minerals Corporation (ALS:CA): now CAD 0.09 per share quarterly dividend, was CAD 0.08. Annaly Capital Management (NLY): now $0.70 per share quarterly dividend, was $0.65. Applied Materials (AMAT): now $0.46 per share quarterly dividend, … Read more