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Fundamental data is updated weekly, as of the prior weekend. Please download the Full Report and Dividend Report for any changes.
Aug 26, 2024
Chevron Lacks Dividend Coverage with Traditional Free Cash Flow
Image: Chevron’s shares have been choppy during the past few years. During the second quarter, Chevron returned $6 billion in cash to shareholders, including $3 billion for each of dividends and share repurchases, and more than $50 billion during the past two years. The second quarter marked the ninth straight quarter of over $5 billion cash returned to shareholders. Chevron ended June with $4 billion in cash and cash equivalents and total debt of $23.2 billion. Through the first six months of the year, traditional free cash flow, as measured by cash flow from operations less all capex, was $5 billion, shy of the $6 billion it paid as dividends over the same time period. We prefer ExxonMobil, which has much better dividend coverage than Chevron.
Aug 23, 2024
Dividend Increases/Decreases for the Week of August 23
Let's take a look at firms raising/lowering their dividends this week.
Aug 22, 2024
Main Street’s Dividend Track Record Is a Sight to See
Image: Main Street has never lowered its monthly dividend, and it has paid supplemental dividends to bolster its yield. Image Source: Main Street. Main Street has never decreased its monthly dividend rate, with monthly dividends up more than 120% from $0.33 per share in the fourth quarter of 2007 to its declared dividends of $0.735 per share in the fourth quarter of this year. On a regular monthly dividend basis, shares of MAIN yield ~5.9%, but its supplemental dividends help to pad that annual rate. The company’s investment-grade credit ratings offer it the ability to take advantage of opportunities in the market, and we think shares are worth a look for the income investor.
Aug 22, 2024
ExxonMobil’s Free Cash Flow Remains Impressive
Image: ExxonMobil’s shares have done quite well since the beginning of 2022. We like the cash-flow profile of ExxonMobil, and its purchase of Pioneer offers the company continued integration and synergy benefits. Exxon’s record production in Guyana and Permian was welcome news, with total Upstream net production advancing 15% in the second quarter from the first quarter of the year. The company has achieved $10.7 billion in cumulative structural cost savings since 2019, and management noted that it is on track to deliver cumulative savings totaling $5 billion through the end of 2027 versus 2023. Our fair value estimate of ExxonMobil stands unchanged at $114 per share.
Aug 21, 2024
TJX Companies Boosts Profit Guidance
Image: TJX’s stock has been on a tear over the past couple years. TJX expects consolidated comparable store sales growth to be between 2%-3% in the third quarter. Pre-tax profit margin is expected in the range of 11.8%-11.9% for the quarter, while diluted earnings per share is targeted in the range of $1.06-$1.08. For the full year fiscal 2025, consolidated comparable store sales are expected to be up ~3% (was 2%-3%), and the company raised its pre-tax profit margin to 11.2% and raised its diluted earnings per share outlook to be in the range of $4.09-$4.13 (was $4.03-$4.09). Though we liked the quarter and raised profit guidance, TJX’s shares are not cheap. We’re sticking with our $106 per share fair value estimate at this time. Shares yield 1.3%.
Aug 21, 2024
Target’s Second Quarter Results Better Than Feared
Image: Target’s shares have been quite volatile since the beginning of 2023. Target expects a 0%-2% increase in comparable store sales and adjusted earnings per share in the range of $2.10-$2.40 in the third quarter (consensus was $2.24). For the full year, management thinks that comparable store sales growth will be in the 0%-2% range, with an increased likelihood that the increase will be in the lower half of the range. Target, however, now expects full-year GAAP and adjusted earnings per share in the range of $9.00-$9.70, which is up from previous expectations in the range of $8.60-$9.60 and the midpoint higher than the consensus forecast of $9.22 per share. Our fair value estimate of $155 per share remains unchanged at this time. Shares yield 3.1%.
Aug 20, 2024
Mastercard’s Results Point to Continued Healthy Consumer Spending
Image: Mastercard’s stock has done quite well since the beginning of 2022. Mastercard operates a fantastic business model with huge operating and free cash flow margins. As with Visa, we’re huge fans of Mastercard’s network effect--as more consumers use Mastercard, more merchants accept their cards, which drives more consumers to use Mastercard and so on and so forth. Our fair value estimate of Mastercard is north of $480 per share.
Aug 20, 2024
Ford Raises Adjusted Free Cash Flow Guidance, Warranty Costs Weigh on Shares
Image: Ford’s second quarter results weren’t great, but the company’s guidance calls for increased adjusted free cash flow in 2024. Ford is facing issues due to rising warranty costs in its Ford Blue [ICE] division, while losses continue to mount in its electric vehicle division, Ford Model e, where it anticipates a full-year loss of $5-$5.5 billion due in part to continued pricing pressures. However, it was reassuring that management maintained its 2024 company adjusted EBIT guidance, while raising its adjusted free cash flow guidance for the year. Based on Ford’s quarterly dividend of $0.15 per share, the company yields 5.6% at the time of this writing. Our $15 per share fair value estimate remains unchanged.
Aug 20, 2024
Lowe’s Lowers Full Year 2024 Outlook on Weak DIY Sales
Image: Lowe’s shares have traded sideways since the beginning of 2022. Lowe’s updated its outlook for full year 2024 to account for “lower than expected DIY sales and a pressured macroeconomic environment.” Total 2024 sales are now expected in the range of $82.7-$83.2 billion (was $84-$85 billion), with comparable store sales expected to be down 3.5%-4% (was -2% to -3%). Adjusted operating income as a percentage of sales is targeted in the range of 12.4%-12.5% (was 12.6%-12.7%). Adjusted diluted earnings per share is expected in the range of $11.70-$11.90 (was $12.00-$12.30). Our $230 fair value estimate of Lowe’s remains unchanged at this time. Shares yield 1.9%.
Aug 19, 2024
Gilead Raises Non-GAAP Diluted Earnings Outlook for 2024
Image Source: Gilead. Looking to full-year 2024, Gilead expects total product sales of $27.1-$27.5 billion, unchanged from its prior outlook. Non-GAAP diluted earnings per share is now targeted in the range of $3.60-$3.90, compared to $3.45-$3.85 previously. At the end of the quarter, Gilead had $2.8 billion in cash and cash equivalents, which was down from the $8.4 billion mark as of the end of last year due to its $3.9 billion acquisition of CymaBay Therapeutics and a $1.75 billion repayment of senior notes. All told, we liked Gilead's second quarter results and its raised non-GAAP earnings per share guidance. Shares yield 4.2% at the time of this writing.


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