Valuentum Exclusive Analysis for the Discerning Investor

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Dec 24, 2021

High-Yielding Crown Castle Is One of Our Favorite REITs
Image Shown: We include Crown Castle International Corp as an idea in our High Yield Dividend Newsletter portfolio. Image Source: Crown Castle International Corp – October 2021 IR Presentation. Crown Castle International Corp is a real estate investment trust (‘REIT’) that owns and operates cell towers, fiber networks, and small cell nodes in the US. These assets form the backbone of wireless infrastructure and are key to enabling the domestic rollout of 5G networks and supporting existing 4G networks. We include shares of CCI in our High Yield Dividend Newsletter portfolio as we are big fans of its strong dividend coverage (when taking its ability to tap capital markets into account), impressive growth outlook, and high-quality cash flow profile. Shares of CCI yield ~2.9% as of this writing after the REIT boosted its quarterly dividend by 11% sequentially in October 2021, bringing its annualized payout up to $5.88 per share. Over the long haul, Crown Castle targets 7%-8% annual dividend growth. The REIT’s expansive asset base stretches across the US with operations in virtually every major metropolitan market. Crown Castle’s long-term contracts with its tenants (namely telecommunications giants) provide substantial visibility as it concerns its future cash flow performance. Additionally, Crown Castle generates substantial free cash flows, something we like a lot.

Nov 30, 2021

We Remain Bullish on Disney’s Capital Appreciation Upside Potential
Image Shown: Shares of The Walt Disney Company have shifted lower over the past month, though are still bullish on its capital appreciation upside. Our fair value estimate sits at $192 per share of Disney. The Walt Disney Company reported fourth-quarter earnings for fiscal 2021 (period ended October 2, 2021) on November 10 that missed consensus top- and bottom-line estimates. While the company’s ‘Disney Parks, Experiences and Products’ segment (includes its theme parks and resorts operations) staged an impressive turnaround last fiscal quarter, its ‘Disney Media and Entertainment Distribution’ segment (includes its video streaming businesses) grew at a slower pace than expected. Shares of Disney sold off after its latest earnings report, though we remain confident that the company’s free cash flow growth outlook remains stellar and continue to view Disney’s capital appreciation upside potential quite favorably. Disney is included as an idea in the Best Ideas Newsletter portfolio.

Sep 27, 2021

Update on High-Yielding AT&T
Image Source: AT&T Inc – Second Quarter of 2021 IR Earnings Presentation. The communications and media giant AT&T Inc is pivoting back to its roots, a strategy that we think will pay off handsomely in the long run, though there have been plenty of rough bumps along the way. Management has finally found a strategy that AT&T can stick with. We include AT&T as an idea in the High Yield Dividend Newsletter portfolio and shares of T yield ~7.7% as of this writing (note that the company will rightsize its dividend in the coming quarters, resulting in a yield adjustment lower).

Aug 16, 2021

Best Idea Disney’s Video Streaming Business Booms
Image Shown: The Walt Disney Company’s video streaming growth ambitions showed signs of significant progress last fiscal quarter. Image Source: The Walt Disney Company – Third Quarter of Fiscal 2021 Earnings Press Release. On August 12, The Walt Disney Company reported third quarter earnings for fiscal 2021 (period ended July 3, 2021) that beat both consensus top- and bottom-line estimates. Disney’s video streaming services reported a sharp uptick in paid subscribers while the financial performance of the segment that includes its theme park and resort operations staged an immense rebound. We continue to be huge fans of Disney’s capital appreciation potential and include shares of DIS as an idea in the Best Ideas Newsletter portfolio.

Jul 27, 2021

High-Yielding AT&T Remains Free Cash Flow Cow
Image Shown: AT&T Inc’s core businesses in the wireless and fiber arenas continue to gain subscribers at a rapid pace, while its HBO/HBO Max offerings are also growing at a nice clip. Image Source: AT&T Inc – Second Quarter of 2021 IR Earnings Presentation. On July 22, AT&T reported second quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The company added 1,156,000 net postpaid customers to its core ‘Mobility’ business including 789,000 net postpaid phone customers, aided by its lowest churn rates ever at just below 0.7%. AT&T also added 174,000 net prepaid phone customers while its AT&T Fiber business added 246,000 net customers last quarter. We include shares of AT&T as an idea in the High Yield Dividend Newsletter portfolio (more on that here), and shares of T yield ~7.4% as of this writing.

May 24, 2021

Crown Castle Is a Great Income Growth Idea
Image Shown: Crown Castle International Corp has an expansive portfolio of shared wireless infrastructure assets that covers every major market in the US. Image Source: Crown Castle International Corp – First Quarter of 2021 IR Earnings Presentation. We're huge fans of Crown Castle and believe the REIT has a promising dividend growth outlook. Looking ahead, the ongoing buildout of 5G wireless infrastructure in the US, the Internet of Things (‘IoT’) trend, and the potential emergence of smart cities supports the outlook for data demand and ultimately Crown Castle’s ability to grow its cash flows. Its expansive portfolio includes 40,000+ towers, ~80,000 route miles of fiber, and ~80,000 small cell nodes. According to Crown Castle, the REIT has a presence in every major US market. Crown Castle’s contracts generally are long term in nature and come with rent escalators and other provisions that are favorable for the REIT. As of this writing, shares of CCI yield ~2.9%.

May 18, 2021

AT&T Right-Sizing Dividend, WarnerMedia Joining Forces with Discovery
Image Shown: AT&T Inc’s WarnerMedia unit is joining forces with Discovery Inc. This transaction, if it goes through as planned, will create another giant in the video streaming services industry. Image Source: Discovery Inc – Discovery Joining Forces with WarnerMedia IR Presentation. Despite the upcoming rightsizing of its dividend payout in light of a pending spin-off, the telecommunications and media giant AT&T continues to be one of our favorite income generation ideas. We're not making any changes to the newsletter portfolios at this time, and the recent news indicates AT&T’s balance sheet is about to improve significantly.

May 17, 2021

Best Idea Disney’s Outlook Is Bright and Getting Brighter
Image Source: The Walt Disney Company – December 2020 Investor Day Presentation. The Walt Disney Company reported second quarter fiscal 2021 earnings (period ended April 3, 2021) that beat consensus bottom-line estimates but missed consensus top-line estimates. Investors were dismayed that the company’s paid video streaming subscriber base did not grow by as much as expected. However, we are not worried as Disney’s outlook is bright and getting brighter.

Apr 22, 2021

Good News from High Yielding AT&T
Image Source: AT&T. We liked AT&T’s first-quarter results and outlook for 2021 that calls for free cash flow generation to be well in excess of expected cash dividends paid for the year. Investors should be aware of its hefty net debt position, but with a ~7% dividend yield, the company may be hard to pass up for high yield dividend focused investors. We plan to make some tweaks to our valuation model following this report, but our fair value estimate of $34 per share remains unchanged at this time.

Mar 24, 2021

ViacomCBS Makes Big Bet on Streaming
Image Source: ViacomCBS Inc – Fourth Quarter of 2020 IR Earnings Presentation. After Viacom and CBS were reunited in December 2019, the new entity ViacomCBS Inc has finally started to gain some traction on the video streaming front. The service CBS All Access, which has since been rebranded as Paramount+, was largely a dud and did not gain the level of attention that Walt Disney Company’s Disney+ service, AT&T Inc’s HBO Max service, or Netflix's namesake service were able to generate. For background, ViacomCBS’s operations include various TV network and cable TV assets, TV and movie studios, various streaming services, and a book publisher. That includes various CBS networks (CBS, CBS Sports, CBS News), CBS studios, MTV, Comedy Central, Paramount, Nickelodeon, Pluto TV (another video streaming service that is free and ad-supported), BET, CMT, POP TV, half of CW (AT&T owns the remaining 50%), COLORS (focused on India), telefe (focused on Spanish-speaking content), SHOWTIME, and the book publisher Simon & Schuster. However, with ViacomCBS launching Paramount+ this month in the US and various Latin American markets, the service now has a larger slate of content than CBS All Access and is supported by ViacomCBS’ vast library (and most importantly, ViacomCBS has plans to produce dozens of original series for Paramount+ going forward). Paramount+ is leaning on properties such as Star Trek and SpongeBob SquarePants along with reboots of shows like iCarly to create engaging original content. Content is king. The combination of Viacom and CBS helped address that issue and provided the new entity with the scale required to be competitive in this business.