SVU

Strong Growth Continues at Whole Foods Market

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Whole Foods Market (click ticker for report: WFM) continues to stand out among grocers, reporting yet another stellar quarter. During its fiscal year 2012 third quarter, the grocery store chain, known for its healthier product offerings, saw same-store sales increase 8.2% in spite of the Easter and 4th of July shift. Total sales surged nearly 14% compared to the same period a year ago to $2.7 billion, which was in-line with expectations. Earnings per share grew 26% year-over-year to $0.63, which was slightly more than the Street expected. As a result of strong earnings growth, the firm generated $401.3 million in free cash flow during its third quarter. This is quite different from its older competitors—namely SuperValu (click ticker for … Read more

SuperValu’s Dividend Might Not Last Long At Current Levels

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When evaluating dividend-paying stocks for addition to the portfolio of our Dividend Growth Newsletter, we like to assess the long-term safety of a company’s dividend via our Valuentum Dividend Cushion™. SuperValu (SVU) registers a -12.5 score (negative 12.5) on our Dividend Cushion measure, which suggests to us the company will have some trouble covering its dividend payments going forward (on the basis of both its future cash flow stream and capital structure). Such a poor score (among the worst in our coverage universe) also suggests that the company could eventually cut the dividend meaningfully, as the firm has done in the past two years. We don’t think the dividend is sustainable at the current payout rate, and we think these levels … Read more

Efficacy of the Dividend Cushion Ratio

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A version of this article was originally published September 2019. 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%. By Valuentum Analysts  Key Takeaways: The Dividend Cushion ratio is a helpful tool to use to cushion your dividend growth or income portfolio against potential dividend cuts. The ratio also helps to assess the growth potential of a company’s dividend, above and beyond current expectations of payout … Read more

How to Think About Corporate Tax Reform

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There Is Milk At The Store

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This article first appeared in the September edition of the High Yield Dividend Newsletter. For more information about this publication, please see here. “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” — Winston Churchill By Brian Nelson, CFA Very few of us could have imagined that we’d witness the bull market that began on that fateful day in March 2009 that might very well mark a generational low. In 2009, major investment banks around the globe were struggling to survive, and the fallout in the mortgage markets left the banks holding paper that nobody wanted to own, let alone buy. The global financial system … 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