PPL

Valuentum Is Adding Sector Exposure…

by

We wanted to provide a brief update of the Best Ideas portfolio. We don’t want to make too much of the update, as we know that the future is the only thing that matters for our new members. But since the team updated the graphics, we thought we’d share. The first picture is the outperformance of the Best Ideas portfolio relative to the S&P 500 (SPY) since inception. The second is a measurement of the reward of the portfolio per unit-of-risk taken. Any portfolio that plots above the capital market line (CML) has a superior Sharpe ratio and risk-adjusted performance versus the market benchmark. This tells us that the Valuentum process is adding considerable value, as the Best Ideas portfolio … Read more

The Best Ideas for 2014 and Beyond: Part II

by

A portion of this article is excerpted from the January 2014 edition of the Dividend Growth Newsletter. Valuentum has two actively-managed portfolios: a Best Ideas portfolio and a Dividend Growth portfolio. Each portfolio has different goals and strategies. The Best Ideas portfolio seeks to find firms that have good value and good momentum characteristics and typically holds them from a Valuentum Buying Index rating of a 9 or 10 to a rating of a 1 or 2. The goal of the portfolio is to generate a positive return each year and to exceed the performance of a broad market benchmark. The Dividend Growth portfolio seeks to find underpriced dividend growth gems that generate phenomenal levels of cash flow and have … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

by

A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

PPL Corp Reports Solid 3Q; Raises Midpoint of 2013 Earnings Forecast

by

Generally speaking, we like the utility industry. Utilities provide an essential service, generally operate in a near-monopoly position and benefit from significant barriers to entry due to the capital intensity of new projects and regulatory/environmental requirements. Regulatory frameworks differ across the grid, but most utilities benefit from an assured rate of return on capital investments through predetermined rate structures, where cost adjustments are made by authorities periodically. Most constituents also benefit from stable operations and generally lower debt financing, though we note credit ratings should be monitored closely. The strong industry backdrop was apparent in PPL Corp’s third-quarter earnings release, issued last Thursday. Though adjusted earnings from ongoing operations per share declined on a year-over-year basis during the period as … Read more

Dividend Growth Holding PPL Boosts Dividend

by

After Exelon (click ticker for report: ) slashed its dividend (as we predicted), utility investors may be looking for a more stable dividend growth idea, and that is Dividend Growth Newsletter portfolio holding PPL (click ticker for report: ), in our view. PPL posted strong fourth quarter results Thursday morning, with revenue (net of a one-time hedging gain) jumping 6% year-over-year to $3.2 billion, exceeding consensus expectations. Earnings were a few cents better than consensus estimates, falling 31% year-over-year to $0.49 per share on an adjusted basis. Of course, this figure includes the spectacular gain from the prior year’s hedging activities, as well as a higher share count from the firm’s acquisition of the Midlands UK business in 2011. Most … Read more

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

by

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

Dividend Growth Portfolio Holding PPL Hikes Dividend to $1.44 Per Share

by

On Friday, electric utility PPL Corp (PPL), one of the larger holdings in the portfolio of our Dividend Growth Newsletter, issued better-than-expected fourth-quarter results. The firm’s outlook for its 2012 earnings, however, was in line with what most analysts were expecting. Specifically, the company expects 2012 earnings per share to come in the range of $2.15 and $2.45 (consensus estimates were at $2.42 per share). PPL projects that 70% of this year’s earnings will come from its regulated business, which continues to drive earnings strength. Though PPL noted that it expects lower profitability in its competitive-market supply segment due to higher-value hedge contracts, we think the upper end of firm’s guided earnings range is achievable. Importantly, the company also announced an … Read more

Dividend Increases/Decreases for the Week Ending February 7

by

Below we provide a list of firms that raised their dividends during the week ending February 7. 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 3M (MMM): now $1.47 per share quarterly dividend, was $1.44. Activision Blizzard (ATVI): now $0.41 per share annual dividend, was $0.37. Aflac (AFL): now $0.28 per share quarterly dividend, was $0.27. Allegion (ALLE): now $0.32 per share quarterly dividend, was $0.27. Amdocs (DOX): now $0.3275 per share quarterly dividend, was $0.2850. Angel Oak Financial Strategies Income Term (FINS): now $0.1112 per share monthly dividend, was $0.1097. … Read more