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Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Dividend Increases/Decreases for the Week Ending June 8

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Below we provide a list of firms that raised their dividends during the week ending June 8. 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 Alexandria Real Estate Equities (ARE): now $0.93 per share quarterly dividend, was $0.90. AMEN Properties (AMEN): now $20.00 per share quarterly dividend, was $10.00. Boyd Gaming (BYD): now $0.06 per share quarterly dividend, was $0.05. Capital Southwest (CSWC): now $0.29 per share quarterly dividend, was $0.28. Clough Global Equity Fund (GLQ): now $0.1234 per share monthly dividend, was $0.1222. Clough Global Opportunities Fund (GLO): now $0.1000 … Read more

Study: Valuentum’s Best Ideas Newsletter Portfolio

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To read the study, please click on the image to download the pdf document (pdf).

Campbell Soup Representative of Weakening Consumer Staples Equities

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Image Source: Neil Conway When our team presented at the CFA Society of Houston in March 2017, we warned about the possible coming pressures on consumer staples stocks, and so far, our concerns have come to fruition. Not only have a number of high-profile players in the tobacco and beverage arena soured, but household consumer products and packaged foods players have felt the pain, too. Campbell Soup’s recent fallout has been among the worst. Shares have been halved since mid-2017. Download slide deck — March 8, 2017: Trust the Numbers, Not Just Management, CFA Society Houston, Kris Rosemann and Brian Nelson, CFA By Brian Nelson, CFA The consumer staples sector, as measured by the Consumer Staples Select SPDR ETF (XLP), has … Read more

We Said Consumer Staples Would Underperform

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Consumer Staples Stocks Underperform — We think investors are wising up to the risks of consumer staples stocks, and increasing risk-free rates seem to already be complicating the investment decision-making process for many investors. Consumer staples equities in the S&P 500 are currently trading at ~19.4 times forward 12-month earnings, well above their sub-17 times 10-year trailing average. We believe investors will continue to swap out of these steady-eddy, but overpriced, gems in the near term, in favor of higher-beta commodity and energy-oriented companies as the market sets up to surge in 2017. We have been warning about the tipping point in Treasury yields and implications on dividend-paying consumer staples equities for some time. – Brian Nelson CFA, December 2016, … Read more

Philip Morris Shocks the Tobacco Space But Why?

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Image Source: Philip Morris Investors are overreacting to Philip Morris’ first-quarter 2018 report, and the company is dragging the entire tobacco industry down with it. By Brian Nelson, CFA The market seems like it has gone “mad,” with Philip Morris trading off nearly 20% following its first-quarter report April 19. The company beat on the bottom line, while revenue roughly came in-line for the period, and the cigarette maker raised its full-year diluted earnings per share forecast to be in a range of $5.25-$5.40, above consensus forecasts of $5.26 and representing ~35%-39% growth versus the $3.88 mark in 2017. The regulatory landscape in tobacco remains in influx, with the FDA looking to set maximum nicotine levels in cigarettes, new rules … Read more

ICYMI: Valuentum’s Improved Stock and ETF Web Pages

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Valuentum has rolled out improved stock and ETF web pages on its website valuentum.com/. Now, subscribers can access key proprietary information on the stock and ETF web pages in addition to the customary stock and ETF reports. Dear reader, We have some exciting news that we can’t wait to share with you! At valuentum.com/, we have rolled out new stock and ETF pages that conveniently include a variety of our proprietary metrics from the Dividend Cushion ratio to the Economic Castle rating and beyond! There’s even mouseover functionality so you can learn about how we define the key metrics across our stock-selection and dividend growth methodologies. You’ll still have access to the stock and dividend reports on the landing pages, … Read more

The “Luck” and “Randomness” of Index Funds

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Please select the image below to download the document. Image shown, page 1 of 14. Tickerized for Valuentum’s coverage universe.

Video: Quants! You’re NOT Measuring VALUE and Nelson’s Theory of Universal Value

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President of Investment Research Brian Nelson defines the concept of universal value and shows how quantitative statistical methods are inextricably linked to those of fundamental, financial, business-model related analysis. Value does not exist in respective process vacuums! Value is universal. Find out why. Running time: ~10 minutes.  Tickerized for Valuentum’s stock and ETF coverage universe. Transcript Hi this is Brian Nelson from Valuentum Securities, and this is the tenth edition of a series that I call “Off the Cuff,” where I get in front of the camera and I talk for ten minutes. This is what we have to talk about today. We have to talk about this concept: The Theory of Universal Value. Value does not exist in vacuums … Read more

Dividend Increases/Decreases for the Week Ending September 15

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Below we provide a list of firms that raised/lowered their dividends during the week ending September 15. 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 Tower (AMT): now $0.66 per share quarterly dividend, was $0.64. Argan (AGX): now $1.00 per share annual dividend, was $0.70. Broadridge Financial Solutions (BR): now $0.365 per share quarterly dividend, was $0.33. Curtis-Wright (CW): now $0.15 per share quarterly dividend, was $0.13. Entravision (EVC): now $0.05 per share quarterly dividend, was $0.03125. Farmers & Merchants Bancorp (FMAO): now $0.26 per share quarterly dividend, was $0.25. … Read more