Exclusive Analysis for the Discerning Investor
President of Investment Research Brian Nelson gives a plethora of reasons why the dividend discount model is dead and expresses his worries about how it continues to be used academically and professionally. Also included is a discussion about why the weighted average cost of capital, or the WACC, is used in the enterprise free cash flow valuation process, or the free cash flow to the firm process. Running time: ~13 minutes.
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
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
Image shown: Wall Street Journal front pages from the Financial Crisis — a reminder that an investor cannot control the markets.
Should this be added to the “13 Steps…” piece?
The Valuentum analyst team explains the difference between the adjusted Dividend Cushion ratio and its unadjusted counterpart. The success of the Dividend Growth Newsletter portfolio is covered, and Valuentum’s top 3 dividend growth ideas are unveiled. ~13 minutes. If you are unable to view the video below, please select the link here or view the transcript below. Kris Rosemann: Hello and welcome to the Valuentum Securities podcast. My name is Kris Rosemann and with me today is Chris Araos and Brian Nelson, the president of equity research and ETF analysis here at Valuentum, and today we’re going to be discussing the Dividend Cushion ratio, the Dividend Growth Newsletter portfolio, and some of our favorite dividend ideas on the market today. So … Read more
Below we provide a list of firms that raised/lowered their dividends during the week ending April 22. 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 Water Works (AWK): now $0.375 per share quarterly dividend, was $0.34. Aspen Insurance Holdings (AHL): now $0.22 per share quarterly dividend, was $0.21. Canadian Pacific Railway (CP): now C$0.50 per share quarterly dividend, was C$0.35. Celanese (CE): now $0.36 per share quarterly dividend, was $0.30. Charles Schwab (SCHW): now $0.07 per share quarterly dividend, was $0.06. Citizens Financial (CFG): now $0.12 per share quarterly dividend, … Read more
One of the core tenets of the Valuentum process not only rests in the all-important price vs. value consideration (see Valuentum’s Brian Nelson talk about that here), but also in “letting winners run.” At first read, these two items appear to be at odds with each other. For example, we preach about getting stocks at a bargain, but yet, we don’t sell holdings when they start to move beyond our estimate of their fair value. What gives? At the Valuentum core, we prefer an entry point that corresponds to the time when shares have substantial valuation and pricing support (i.e. they have high Valuentum Buying Index ratings), and we prefer an exit point when shares have little valuation and pricing … Read more
Read: Keeping the Horse Before the Cart: Valuentum’s Economic Castle™ Rating The Economic Castle Focuses on the Magnitude of Economic Value Creation The Valuentum Economic Castle™ rating is an enhancement of the competitive advantage framework (commonly known as economic moat analysis) that has become widespread and ubiquitous within the investing world. Whereas an economic moat framework evaluates a firm on the basis of the sustainability and durability of its competitive advantages, Valuentum’s Economic Castle™ rating evaluates a firm on the basis of the firm’s future economic profit spread (return on invested capital less its weighted average cost of capital). The companies with the strongest Valuentum Economic Castle™ ratings are poised to generate the most economic value for shareholders in the … Read more
Below we provide a list of firms that raised their dividends during the week ending April 18. 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 CSX (CSX): now $0.16 per share quarterly dividend, was $0.15. Discover Financial Services (DFS): now $0.24 per share quarterly dividend, was $0.20. Donegal Group, Inc. (DGICA): now $0.1315 per share quarterly dividend, was $0.1275. Kinder Morgan (KMI): now $0.42 per share quarterly dividend, was $0.41. Kinder Morgan Energy Partners (KMP): now $1.38 per share quarterly dividend, was $1.36. LyondellBasell Industries (LYB): now $0.70 per share quarterly … Read more
Monday morning, Packaging Corporation of America (click ticker for report: ) announced that it will pay $12.55 per share in cash to acquire paper company Boise (BZ) for a total deal value of $1.995 billion. The deal increases PCA’s containerboard presence by 42% to 3.7 million tons, while also giving PCA a presence in the Pacific Northwest—an area previously underrepresented. Source: BZ 2012 10-K Though Boise has struggled with large amounts of excess capacity in its newsprint segment, we’ve seen the firm move capacity closer to production over the past two years, leading to stabilized profitability. Nevertheless, the small, Idaho-based player was unable to truly compete with national competitors. Further, Boise had a large net-debt position, leaving the company fairly … Read more