SEMG

Kinder Morgan Now Covers Cash Dividends with Traditional Free Cash Flow

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By Brian Nelson, CFA On October 18, Kinder Morgan (KMI) reported third-quarter results that came in lower than expectations, but we’ve taken note of the company’s improved free cash flow generation that now runs in excess of its cash dividends paid, a huge change from a decade ago, where capital spending and cash dividends paid far outweighed its operating cash flow capacity. The company’s dividend stands at $1.13 per share on an annualized basis, and Kinder Morgan now has a forward estimated dividend yield of ~6.7%, which is quite attractive. Shares are trading meaningfully below our estimate of their intrinsic value, too, and we’re warming up to the company’s financials. Its net debt position likely precludes it from being added … Read more

We Like NextEra Energy’s ESG Focus But Capital Market Conditions Now Showing Cracks

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Image Source: NextEra Energy By Brian Nelson, CFA We’ve written in the past about NextEra Energy (NEE), and our latest note can be found here. The company remains one of our favorite utilities, but mostly because of its renewables energy exposure as it relates to ESG considerations. When it comes to utilities, more generally, however, we tend to take a pass on almost all of them given the capital intensity involved in their operations and their interest-rate sensitivity, especially now in an environment where interest rates are returning to “normal” levels in the mid-single-digits. The forward estimated dividend yield on the Utilities Select Sector SPDR ETF (XLU) stands at ~3.8% at the time of this writing, and if investors are … Read more

Magellan Midstream Soars on Takeout Deal

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Image: Magellan Midstream Partners soars on a takeout offer from ONEOK, Inc. By Brian Nelson, CFA We’re as happy as we can be to see a midstream energy master limited partnership (MLP) takeout. On Sunday, May 14, it was publicly announced that Magellan Midstream (MMP) would be bought by ONEOK, Inc. (OKE) in a cash and stock deal worth ~$18.8 billion including assumed debt. According to the deal terms, the transaction would give $25 per share in cash and 0.667 common share of ONEOK for each MMP common unit. Though many are questioning the rationale behind the deal, energy infrastructure rollups continue to reduce the number of energy MLPs trading on public markets, as we predicted years ago. Units of … Read more

Energy Pipelines: What a Difference A Few Years Have Made!

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Image: Midstream energy companies have significantly improved their free cash coverage of their payouts in recent years. We’ve taken note. Source: Relevant 10-Q filings. By Brian Nelson, CFA As of our last check, no longer are the vast majority of energy pipeline players not covering their dividends/distributions with traditional free cash flow, as measured by cash flow from operations less all capital spending. Said another way, free cash flow after dividends, distributions is positive for a great many energy pipeline players these days. We’re pleased by the developments across midstream, and we expect to make some moves in the simulated newsletter portfolios to potentially add the Alerian MLP (AMLP) ETF to the simulated newsletter portfolios as a result. This is … Read more

Prepared Remarks From Nelson Exclusive Conference Call June 30

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Read President of Investment Research Brian Nelson’s prepared remarks for the yearly roundup conference call, held for Nelson Exclusive members. If you would like to subscribe to the Nelson Exclusive publication, please learn more about the publication here. The Nelson Exclusive publication does not reflect real performance. Performance is hypothetical and does not represent actual trading. Ladies and Gentlemen, Thank you very much for joining us on the first conference call for members of the Nelson Exclusive publication. The first year of the publication has surely been an exciting one for all involved. When I first wrote the introductory letter of the Nelson Exclusive on July 1, 2016, we were well-aware the market had laid down the gauntlet for this publication. … Read more

Valuentum’s 3 Breakthroughs in the Field of Finance and More

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Valuentum’s President Brian Nelson pauses for a picture before speaking at the CFA Society of Houston in March 2017. By Valuentum Editorial Staff Let’s cover Valuentum’s 3 major breakthroughs in the field of finance. The first one is big and may challenge you to rethink everything you think you know about investing. 1. On a logical framework, Valuentum has debunked John C. Bogle’s landmark syllogism that has paved the way for the concept of index investing. Index investing has been built on a logical shortcoming, whether supported by evidence or not. We think it is important that the investment community know of this. Read (pdf): The “Luck” and “Randomness” of Index Funds (2018), Brian Nelson, CFA See video documentation: /FALLACY_of_Index_Funds To … Read more

Dividend Increases/Decreases for the Week Ending August 7

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Below we provide a list of firms that raised/lowered their dividends during the week ending August 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 American International Group (AIG): now $0.28 per share quarterly dividend, was $0.125. AmTrust Financial Services (AFSI): now $0.30 per share quarterly dividend, was $0.25. Aqua America (WTR): now $0.178 per share quarterly dividend, was $0.165. Atrion (ATRI): $0.90 per share quarterly dividend, was $0.75. Carlisle (CSL): now $0.30 per share quarterly dividend, was $0.25. Chemed (CHE): now $0.24 per share quarterly dividend, was $0.22. Colony Financial … Read more

Dividend Increases for the Week Ending February 27

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Below we provide a list of firms that raised their dividends during the week ending February 27. 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 Albemarle (ALB): now $0.29 per share quarterly dividend, was $0.275. Canadian Imperial Bank (CM): now C$1.06 per share quarterly dividend, was C$1.03. Chico’s FAS (CHS): now $0.0775 per share quarterly dividend, was $0.075. Chubb (CB): now $0.57 per share quarterly dividend, was $0.50. Cohen & Steers (CNS): now $0.25 per share quarterly dividend, was $0.22. Comcast (CMCSA): now $0.25 per share quarterly dividend, was $0.225. Cubic Corp (CUB): … Read more

Nelson: The 16 Most Important Steps To Understand The Stock Market

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A previous version of this article appeared on our website July 21, 2013. Refreshed and updated throughout, as of July 2018. By Brian Nelson, CFA After earning my MBA at the University of Chicago Booth School of Business and training stock and credit analysts from large organizations over the past decade or so, I have heard just about every question (though I admit I am still surprised by many things and remain a very humble student of the markets). I’ve also spent years perfecting the discounted cash flow process for large research organizations such as Morningstar and studied under one of the most famed aggressive growth investors of all time, Richard Driehaus. My knowledge runs the gamut from value through … Read more

Dividend Increases/Decreases for the Week Ending March 9

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Below we provide a list of firms that raised their dividends during the week ending March 9. 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 Eagle Outfitters (AEO): now $0.14 per share quarterly dividend, was $0.13. American Tower (AMT): now $0.75 per share quarterly dividend, was $0.70. AMERISAFE (AMSF): now $0.22 per share quarterly dividend, was $0.20. Anthem (ANTM): now $0.75 per share quarterly dividend, was $0.70. Armanino Foods of Distinction (AMNF): now $0.0225 per share quarterly dividend, was $0.02. BHP Billiton plc (BBL): now $1.10 per ADS semi-annual dividend, … Read more