Valuentum Exclusive Analysis for the Discerning Investor

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Jul 23, 2024

Philip Morris Puts Up Excellent Second Quarter Results, Raises 2024 Guidance
Image: Philip Morris’ stock has done quite well over the past few months. Philip Morris put up excellent second quarter results showcasing strong organic performance across key financial measures. The company continues to have traction with its nicotine pouch product ZYN, with impressive growth rates attained despite supply constraints. The company raised its 2024 guidance for revenue, adjusted operating income and adjusted earnings, and we continue to like the firm’s transition to becoming a smoke-free company. Shares of Philip Morris yield 4.9% at the time of this writing.

Jul 22, 2024

Verizon’s First Half 2024 Operating Cash Flow Declines, Adjusted Earnings Fall
Image Source: Verizon. On July 22, Verizon reported mixed second-quarter results with revenue missing the consensus expectation but non-GAAP earnings per share coming in line. Earnings per share, excluding special items, was $1.15 in the quarter, worse than the $1.21 mark in the second quarter a year ago. Cash flow from operations during the first half of 2024 was $16.6 billion, down from $18 billion in the same period a year ago. Free cash flow did improve to $8.5 billion in the first half of 2024 versus $8 billion in the first half of last year, but the improvement came in the form of lower capital expenditures, which were $8.1 billion in the first half versus $10.1 billion in the same period a year ago. Dividends paid for the first half of 2024 totaled $5.6 billion, so Verizon is doing a good job covering dividends with free cash flow, despite pressure on operating cash flow. Verizon ended the quarter with total debt of $149.3 billion and an unsecured debt to consolidated adjusted EBITDA ratio of 2.5x. Shares of Verizon yield ~6.4% at the time of this writing.

Jul 19, 2024

Netflix Still Has a Long Runway of Growth Ahead of It
Image Source: Netflix. Netflix reported solid second quarter results and raised its forward-looking guidance for the full year 2024. The company is winning the streaming wars and has a long runway of future membership growth given the 80% of TV time it and Youtube don’t already own. Its nascent ads business continues to gain traction, too. Netflix still expects to haul in free cash flow of $6 billion in 2024, as it continues to buy back stock. The company ended the quarter with $14 billion in gross debt versus cash and cash equivalents of $6.7 billion. We think Netflix is performing well, but we're already quite tech heavy in the newsletter portfolios and won't be adding shares to any portfolio at this time.

Jul 19, 2024

Dividend Increases/Decreases for the Week of July 19
Let's take a look at firms raising/lowering their dividends this week.

Jul 18, 2024

Crown Castle’s AFFO In Excess of Cash Dividends Paid
Image: Crown Castle’s shares look to be bottoming, and the firm’s AFFO is expected to remain well above cash dividends paid during 2024. Crown Castle reiterated its outlook for 2024 that it issued on June 11. It expects site rental billings of $5.74-$5.78 billion, site rental revenues in the range of $6.317-$6.362 billion, adjusted EBITDA between $4.143-$4.193 billion, and AFFO per share in the range of $6.91-$7.02. Though Crown Castle’s full year performance reveals pressure, the company’s AFFO remains in excess of its annual dividend rate of $6.26, and with a dividend yield of ~5.9%, we think it makes the cut for inclusion to the High Yield Dividend Newsletter portfolio.

Jul 18, 2024

Domino’s Suspends Long-term Global Net Store Growth Guidance
Image: Domino’s shares have done well since the beginning of 2023, but visibility into its long-term global net store growth has become murky given problems at one of its master franchisees. Domino’s quarterly results and free cash flow performance weren’t poor by any stretch, but the firm disappointed investors with respect to its updated global net store growth forecast. The company noted that it will come up 175-275 stores short of its international store growth target in 2024, and it temporarily suspended its guidance that previously called for 1,100+ global net stores annually over the period 2024-2028. It now expects 825-925 net new stores in 2024. We didn’t like the news, but we remain fans of Domino’s long-term story and are keeping the idea as a holding in the Best Ideas Newsletter portfolio.

Jul 18, 2024

Taiwan Semiconductor Impresses in Second Quarter, Gives Strong Outlook
Image: Taiwan Semiconductor reported better-than-expected second quarter results. Though Taiwan Semiconductor is exposed to geopolitical uncertainty, perhaps exacerbated by former President Donald Trump’s latest comments about how Taiwan should pay the U.S. for national defense, the company’s outlook remains robust, in our view. Taiwan Semiconductor remains one of our favorite ideas in the ESG Newsletter portfolio.

Jul 17, 2024

Johnson & Johnson Finetunes 2024 Bottom Line Guidance
Image: J&J’s shares have faced pressure since the beginning of 2023. Looking to all of 2024, J&J continues to expect adjusted operations sales growth in the range of 5.5%-6%, but it finetuned adjusted operational earnings per share to the range of $10.00-$10.10 from $10.60-$10.75 previously. The company’s improved performance was offset by the collective impact of its recent acquisitions of Shockwave Medical, Proteologix, and NM26 Bispecific Antibody. We’re not reading too much into the downward bottom-line guidance revision as J&J remains a free-cash-flow cow with a pristine AAA credit rating. Though J&J is not included in any newsletter portfolio, it’s hard not to like the company. Shares yield ~3.3% at the time of this writing.

Jul 17, 2024

ASML Holding Reports Strong Bookings in Second Quarter
Image: ASML Holding has been a strong stock performer since the beginning of 2023. Though performance in the second quarter could have been better, ASML reiterated its outlook for 2024, which it describes as a “transition year.” Total net sales in 2024 are expected to be similar to 2023. The company ended the quarter with €4.6 billion in long-term debt and €5.0 billion in cash and short-term investments. Second quarter results were disappointing, but we continue to like ASML as one of the most prolific innovators in the semiconductor industry.

Jul 16, 2024

UnitedHealth Group Reports Messy Second Quarter Results
Image: UnitedHealth Group’s shares have been choppy since the beginning of 2023. UnitedHealth Group’s second quarter results were quite messy with a lot of moving parts, but cash flow remains resilient and the firm’s dividend growth trajectory remains solid. Back in June, the firm raised its annual dividend rate by 12%, marking the 15th consecutive year that UnitedHealth has increased it at a double-digit pace. UnitedHealth ended the quarter with $75.1 billion in total debt and $77.4 billion in cash and investments. We continue to include UnitedHealth Group as an idea in the Best Ideas Newsletter portfolio.