RDI

Disney’s Free Cash Flow Is Expected to Surge But A Strong Recovery Is Already Priced In

by

  Image Source: Valuentum By Brian Nelson, CFA On November 8, Disney (DIS) reported improved fourth-quarter results for its fiscal 2023. Revenue advanced 5% on a year-over-year basis in the quarter, and the firm drove non-GAAP diluted earnings per share to $0.82 from $0.30 in the prior year period. The company’s Disney+ streaming service added 7 million core customers in the quarter, and its commentary that its streaming business would reach profitability in the fourth quarter of next fiscal year was welcome. Cost savings will be key, and the executive team expects free cash flow to grow significantly in fiscal 2024 versus the most recently reported year. All of this was great news, but a massive recovery in free cash flow … Read more

Paramount Global Cuts Payout, Dividend Cushion Ratio Caught Another!

by

Image Source: Paramount Global By Brian Nelson, CFA The Dividend Cushion ratio is not a perfect predictor of dividend health and the risks of a dividend cut, but it’s a pretty darn good one. On May 4, Paramount Global (PARA) missed expectations for its first-quarter 2023 results on both the top and bottom line and cut its quarterly dividend to $0.05 per quarter (was $0.24). The company’s Dividend Cushion ratio, which considers its balance sheet as well as future expectations of free cash flow relative to future expected cash dividends paid, was -2.5 (negative 2.5). Any ratio below 1 indicates growing risk to the health of the dividend, while any materially negative (below 0) ratio indicates severe risk of a … Read more

Disney: Iger’s Back, Peltz Concedes, Thousands of Jobs Gone, Dividend Coming Back Soon

by

  Image Source: Valuentum By Brian Nelson, CFA The Walt Disney Company (DIS) has had a rough go at it of late. The firm suffered tremendously during the worst of the COVID-19 pandemic, which forced consumers to stay at home and its parks to close. The firm eliminated its dividend to shore up cash, and recently-ousted CEO Bob Chapek may have sent the company on a crash course with Netflix (NFLX). Former CEO Bob Iger is back, however, and activist Nelson Peltz has conceded that Disney is working to get back on track. With 7,000 jobs on the chopping block and a still-yet-to-be-reinstated dividend, Disney’s wounds have yet to heal, and we remain skeptical the entertainment and media giant will … Read more

AT&T and Warner Bros. Discovery Go Their Separate Ways

by

Image Shown: AT&T Inc is spending heavily to grow its 5G wireless network while expanding the reach of its broadband footprint. Image Source: AT&T Inc – March 2022 Analyst & Investor Day Event Presentation By Callum Turcan On April 8, AT&T Inc (T) closed the merger of the WarnerMedia business with Discovery to create a powerhouse in the media and entertainment industry after then-Discovery shareholders voted to approve the deal on March 11. The new entity, Warner Bros. Discovery Inc (WBD), is home to various streaming services (HBO Max, discovery+, CNN+) along with linear and premium TV channels (Discovery Channel, HBO, TNT, HGTV, CNN, Animal Planet, Adult Swim, Cartoon Network). Warner Bros. Discovery began trading on the NASDAQ stock exchange … Read more

AT&T’s WarnerMedia Unit and Discovery Are Close to Finalizing Their Blockbuster Merger

by

Image Shown: Announced back in May 2021, the blockbuster merger of AT&T Inc’s WarnerMedia unit with Discovery Inc is expected to close in the second quarter of 2022. Image Source: AT&T Inc & Discovery Inc – May 2021 IR Presentation By Callum Turcan The blockbuster merger of WarnerMedia, currently a part of AT&T Inc (T), with Discovery Inc (DISCA) (DISCB) (DISCK) is getting closer to completion. On March 11, Discovery shareholders voted on whether to proceed with the transaction. AT&T does not need to secure shareholder approval through a vote to close the transaction. If everything goes as planned, WarnerMedia and Discovery are set to close their merger during the second quarter of 2022. Let’s dig more into the details … Read more

We Remain Bullish on Disney’s Capital Appreciation Upside Potential

by

Image Shown: Shares of The Walt Disney Company have shifted lower over the past month, though are still bullish on its capital appreciation upside. Our fair value estimate sits at $192 per share of Disney. By Callum Turcan The Walt Disney Company (DIS) reported fourth-quarter earnings for fiscal 2021 (period ended October 2, 2021) on November 10 that missed consensus top- and bottom-line estimates. While the company’s ‘Disney Parks, Experiences and Products’ segment (includes its theme parks and resorts operations) staged an impressive turnaround last fiscal quarter, its ‘Disney Media and Entertainment Distribution’ segment (includes its video streaming businesses) grew at a slower pace than expected. Shares of Disney sold off after its latest earnings report, though we remain confident … Read more

AT&T’s Outlook Is Getting Brighter

by

Image Shown: An overview of AT&T Inc’s capital allocation priorities over the coming years and a snapshot of its financial position at the end of September 2020. Image Source: AT&T Inc – Third Quarter of 2020 IR Earnings Presentation By Callum Turcan The rollout of 5G wireless packages in the US combined with expected growth at its video streaming business has significantly improved AT&T Inc’s (T) outlook during the past few months. We include shares of AT&T in the High Yield Dividend Newsletter portfolio (click here to learn more about the High Yield Dividend Newsletter), and as of this writing, shares of T yield ~6.6%. Headwinds caused by the ongoing coronavirus (‘COVID-19’) pandemic weighed negatively on AT&T’s financial and operational … Read more

3 Important Pieces of News on the Monday of This Shortened Holiday Week

by

The Hunger Games: Catching Fire Sets November Records Lions Gate’s (LGF) shares are under pressure this morning as the market’s expectations of The Hunger Games: Catching Fire, the second installment of the Hunger Games franchise, were just a bit too high, despite the film grossing approximately $160 million in North America over the weekend, setting a November record. Globally, the sequel catapulted to a $307.7 million opening, exceeding the original film’s $211.8 million debut in March 2012. The second Hunger Games movie grossed approximately $18 million in IMAX (IMAX) theaters worldwide and $12.6 million in 347 IMAX theaters in North America since the November 22 release. IMAX noted that this was the best three-day domestic opening for November in IMAX’s … Read more