RSG

The Dividend Growth Newsletter Portfolio’s Outperformance

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The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. Note: This article corrects the degree of outperformance of the simulated Dividend Growth Newsletter portfolio, as of the date of the calculation (~3.6% –> ~9.4%). By Brian Nelson, CFA Excluding dividends, we estimate that the simulated Dividend Growth Newsletter portfolio is down roughly 4.9% through the interim session October 30 from the beginning of 2022, beating the … Read more

ICYMI: Questions for Valuentum’s Brian Nelson

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Valuentum’s President Brian Nelson, CFA, answers your questions. Q: What Is Valuentum? A: In short, it is a strategy that combines the concepts of value and momentum within individual stocks. We measure value through the cash-based sources of intrinsic value – net cash on the balance sheet and future expected free cash flow. We measure momentum rather simply, generally via relative strength or other technical and momentum indicators. We like stocks with strong net cash positions on the balance sheet, ones that are generating tremendous free cash flow, and have strong secular growth prospects such that the prospect for expectations of free cash flow can continue to be ratcheted higher. Today, most Valuentum stocks are included in the stylistic area … Read more

Our Reports on Stocks in the Industrial Leaders Industry

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Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

Trash Taker Republic Services’ Outlook Keeps Getting Better

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Image Source: Republic Services By Brian Nelson, CFA Republic Services (RSG) reported solid second-quarter 2023 results July 31, and it raised its full-year 2023 guidance across the board. During the period ending June 30, 2023, total revenue advanced 9.1% with more than half coming via organic means, while GAAP earnings per share of $1.41 exceeded the consensus forecast by $0.10. Republic Services continues to experience strong pricing power, helping to drive double-digit EBITDA expansion in the quarter. Adjusted free cash flow came in at ~$1.265 billion through the first six months of the year. Earlier in July, Republic Services increased its dividend ~8% to a quarterly payout of $0.535 per share (was $0.495). Shares yield ~1.4% at the time of this … Read more

Best Ideas Newsletter Portfolio Idea Republic Services Continues to Execute Well

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Image: Republic Services has been executing nicely, growing its adjusted free cash flow at a 14% compound annual growth rate the past three years. Image Source: Republic Services By Brian Nelson, CFA Things are looking good at garbage hauler Republic Services. (RSG). The company reported fourth-quarter 2022 results a couple months ago that showed revenue growth of 19.7% and non-GAAP earnings per share of $1.13. Both numbers came in better than expected. Roughly 8.3 percentage points of the firm’s top-line expansion in the quarter came organically, with core price comprising 7.4 percentage points of the organic increase. For the full year, Republic Services beat its guidance that called to grow adjusted free cash flow 15% and adjusted earnings per share … Read more

This Remains a Technically-Driven Stock Market

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Image: We expect the S&P 500 (SPY) to test support at both its technical uptrend and the 200-day moving average. In the event the SPY breaks through technical support, we’d be looking to “raise cash” across the newsletter portfolios. By Brian Nelson, CFA S&P 500 companies will end 2022 with roughly a 4%-5% decline in fourth-quarter 2022 earnings, according to a February 17 report from FactSet. The Communications Services (XLC), Materials (XLB), Consumer Discretionary (XLY) were the three weakest sectors showing year-over-year earnings declines in the fourth quarter. The two biggest earnings misses during the quarter, in our view, were Goldman Sachs’ (GS) nightmare report and Intel’s (INTC) huge miss and terrible outlook. However, for the most part, fourth-quarter earnings … Read more

Exclusive Call: What To Expect From Valuentum in 2023

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Video: 2022 was a successful year by almost every measure from the simulated Best Ideas Newsletter portfolio and simulated Dividend Growth Newsletter portfolio to the simulated High Yield Dividend Newsletter portfolio and Exclusive publication and beyond. There were some disappointments in 2022, of course, but the year showed the value of a Valuentum membership. Join President of Investment Research Brian Nelson on this year’s Exclusive conference call to learn what to expect from Valuentum in 2023. Cheers! Transcript President of Investment Research Brian Nelson: Happy Holidays everyone! I hope that you are enjoying this special time of year with family and friends, and I wish you all a wonderful 2023! I just wanted to take a few minutes to recap … Read more

Waste Management’s Free Cash Flow Facing Pressure from Sustainability Initiatives

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Image Source: Valuentum By Brian Nelson, CFA We’re huge fans of the environmental services industry. Solid waste simply must be disposed of somewhere in good times or bad times, and garbage haulers operate within an attractive oligopoly when it comes to disposal capacity (i.e. transfer stations, disposal facilities). Many players offer attractive dividend yields to boot. We include Republic Services (RSG) as an idea in our simulated newsletter portfolios, but Waste Management (WM) is yet another consideration. On December 8, Waste Management announced that its board gave the thumbs up for a 7.7% increase in its quarterly payout for 2023, to $0.70 per share. The hike to $2.80 per share on an annual basis implies a forward estimated dividend yield … Read more

2022 Showcased the Value of a Valuentum Membership

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In bull markets, almost everyone is a winner. But 2022 was different. This year was a big test for Valuentum, and we passed with flying colors. We delivered across the board during the year from ideas in the Exclusive publication and the efficacy of the dividend growth methodology to the resilience of high yield ideas and simulated Best Ideas Newsletter portfolio relative performance–despite setbacks from Meta Platforms, PayPal, and beyond. Tune in to the latest video installment from Valuentum. Thanks for listening! Tickerized for holdings in the SPY. ——————————————— About Our Name But how, you will ask, does one decide what [stocks are] “attractive”? Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” … Read more

Market Whipsaw: Crypto Collapse and a Lower-than-Expected Inflation Print

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Image: Uncertainty in the cryptocurrency markets has surged with concerns over the liquidity of a key exchange. Investors are weighing the spillover effects of crypto with the view that the pace of inflation may have peaked. — By Brian Nelson, CFA — The U.S. equity market continues to be highly volatile as it whipsaws between concerns over the health and sustainability of cryptocurrency and optimism over lower-than-feared inflation readings. We maintain our bearish/defensive stance on equities, but at the same time, we continue to be “fully-invested” across the simulated newsletter portfolios in part because we don’t want to miss out on days like today, November 10, when the markets are soaring ~2.5%-5.5% depending on which index you are monitoring. We’re also … Read more