VGR

Reynolds American and Lorillard Looking to Join Forces; Altria Benefits from SABMiller Strength

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According to recent reports, tobacco giants Reynolds American (RAI) and Lorillard (LO) continue to work to tie the knot. The speculated deal is rumored to be a three-way transaction that involves Reynolds’ shareholder British American Tobacco (BTI), but the timing of any deal is uncertain, and any specific pricing information has been limited. Usually, consolidation results in an industry with significantly more pricing power, but the tobacco makers already have substantial strength in this department. We would therefore expect the transaction, if consummated, to result more in cost savings than in revenue enhancements. We’d also expect the deal, if completed, to result in some divestitures to please regulators, and we think this could pave the way for either Philip Morris (PM), … Read more

Big Tobacco, Brewers Want to Continue Consolidation; Altria to Benefit

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Altria (MO) is a holding in both the portfolio of the Best Ideas Newsletter and the portfolio of the Dividend Growth Newsletter. The company operates in one of the strongest industries in our coverage universe as it relates to structural composition (think Porter’s 5 forces). The oligopolistic tobacco industry is attractive in a number of ways. Firms in the industry sell an “addictive” product (cigarettes and/or smokeless tobacco), have significant pricing power, generate high margins, and have strong returns on invested capital. Though declining trends in smoking in the US, threats of tobacco-related litigation, new tobacco regulation (labeling) that discourages tobacco use, and excise tax price shocks that may impact demand will always be concerns, we tend to like the structural … Read more

Philip Morris’ Operating Income Growth Stalls in 3Q; Learn About Altria’s Hidden $21.6 Billion Potential Cash Load

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On Thursday, Philip Morris International (PM) reported third-quarter results that showed the continuation of a very challenging cigarette volume environment. Reported net revenues held the line thanks to significant pricing strength, but adjusted ‘operating companies income’ (OCI) still fell 1.9% (shown below). We’re growing skeptical of the firm’s ability to control costs, as there should have been better performance on the operating line given that pricing completely replaced volume losses in the period (price falls straight to the bottom line). Profit margin improvement was surprisingly absent, with the company’s adjusted OCI margin falling 0.9 percentage points from the year-ago period. Image Source: Philip Morris Adjusted diluted earnings per share of $1.44 was 4.3% higher than the same period a year ago, … Read more

Altria Posts Second Quarter Results; Earnings Outlook Raised But Volume Declines Evident

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On Tuesday, Best Ideas portfolio and Dividend Growth portfolio holding Altria (click ticker for report: ) reported solid second-quarter results. Though Altria’s revenue fell nearly 3% (down 1.2% net of excise taxes), the firm was able to drive operating earnings expansion of 6.6% thanks to a combination of strong pricing and cost-cutting initiatives. The cigarette maker’s second quarter adjusted diluted earnings per share advanced 5.1% to $0.62, as all three of the firms’ divisions drove ‘operating companies income’ and margin expansion during the period. Adjusted ‘operating companies income’ at its ‘Smokeable Products’ division nudged higher, but only because cigarette price increases stuck. Its total retail cigarette share grew during the quarter, but industrywide headwinds were massive as the firm’s domestic … Read more

Philip Morris’ Second Quarter Reveals Volume Pressures

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Philip Morris (click ticker for report: ) issued lower-than-expected revenue and earnings in its second quarter Thursday. Net revenues, excluding excise taxes and currency, rose modestly (0.5%) thanks to improvements in ‘Latin America and Canada,’ while operating income, excluding unfavorable currency movements, fell more than 3% (led by more than a 9% slide in operating income in its ‘Asia’ division). Adjusted diluted earnings per share nudged up a penny, to $1.37, and we note that such improvement was augmented by its share repurchase program. Philip Morris’ cigarette shipment volume of 228.9 billion units fell nearly 4%. Though the pace of the volume decline slowed from the first quarter of the year, performance was clearly subdued, and volumes in the ‘Eastern … Read more

Search Dividend Reports by Company Name: Q to Z

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Going forward, please use the ‘Symbol’ search box to download stock and dividend reports of companies you are interested in. The ‘Symbol’ search box can be found in our website header. Image shown from above. Use the active search box in the website header above. Learn more about your membership >>  Note: We have now discontinued this list. Please use the ‘Symbol’ search box in the website header for stock and dividend reports. Please read about our Valuentum Dividend Cushion score (ratio) here. Just having access to this valuable metric alone could save your income portfolio thousands of dollars! The past meets the future as we showcase the Valuentum Dividend Cushion scores of Dividend Aristocrats in this article (click here). The dividend reports below … Read more

2,350-2,750 on the S&P? Could the Coronavirus Catalyze a Financial Crisis?

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Image: We think a rather modest sell-off in the market to the target range of 2,350-2,750 on the S&P 500 is rather reasonable in the wake of one of the biggest economic shocks since the Global Financial Crisis. The chart above shows how far markets have advanced since 2011, and an adjustment lower to the target range of 2,350-2,750 is rather modest in such a context and would only bring markets to late 2018 levels (note red box as the target range). The range reflects ~16x S&P 500 12-month forward earnings estimates, as of February 14, adjusted down 10% due to COVID-19. When companies like Visa talk about a couple percentage points taken off of growth rates, one knows that … 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 6

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Below we provide a list of firms that raised their dividends during the week ending March 6. 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 Aecon (AEGXF): now CAD 0.16 per share quarterly dividend, was CAD 0.145. Alamos Gold (AGI): now $0.015 per share quarterly dividend, was $0.010. Americold Realty Trust (COLD): now $0.21 per share quarterly dividend, was $0.20. Angel Oak Financial Strategies Income Term (FINS): now $0.1116 per share monthly dividend, was $0.1112. Armanino Foods of Distinction (AMNF): now $0.0275 per share quarterly dividend, was $0.0250. B. Riley Financial … Read more

US Congress Is Getting Ready to Pass a Massive ~$2.2 Trillion Fiscal Stimulus Bill

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Image Shown: US equities have started to recover some of their lost ground as the likelihood that the US Congress will pass a massive ~$2.2 trillion fiscal stimulus and emergency spending package, dubbed the CARES Act, has increased significantly over the past week as seen through the bounce in the SPDR S&P 500 ETF Trust (SPY). President Trump has clearly indicated that he intends to sign such a bill into law as soon as possible, with the US House of Representatives expected to take up the legislation this upcoming Friday morning on March 27. By Callum Turcan On March 25, the US Senate worked late into the night to secure a bipartisan compromise on a massive ~$2.2 trillion fiscal stimulus … Read more