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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.
Oct 18, 2019
Buffett Favorite, Bank of America a Bargain
Image Source: Bank of America Earnings Presentation. “If Bank of America can continue to narrow the return on capital gap to JPMorgan, we expect its shares will grow into our $35 fair value estimate.” -- Matthew Warren
Oct 18, 2019
Philip Morris International: Free Cash Flow King With Upside Potential
Image Shown: Philip Morris International's Marlboro cigarette brand remains very popular worldwide. Pricing power is essential to offsetting declines in traditional cigarette sales volumes as the company positions itself for alternative tobacco products to become a larger part of its revenue streams. Image Source: Philip Morris International – Third quarter 2019 earnings presentation. We continue to like Philip Morris International as a quality high-yield play with good dividend coverage in a low interest rate environment. Strong pricing power enables the firm to offset sales declines of its traditional cigarette volumes as the company waits for its alternative smoking offerings (like IQOS) to represent a bigger chunk of company-wide sales. Please note that foreign currency headwinds remain significant, but manageable. As of this writing, Philip Morris International yields 5.8%.
Oct 18, 2019
Dividend Increases/Decreases for the Week Ending October 18
Let's take a look at companies that raised/lowered their dividend this week.
Oct 17, 2019
An Update on Facebook’s Libra as Roughly Two Dozen Members Sign On
Image Shown: Facebook has room to run higher, with or without Libra. While several large financial technology and payment processing firms have recently made it clear they no longer want to be a part of the nascent Libra Association, that didn’t stop roughly two dozen members from signing the group’s charter in Geneva, Switzerland, on October 15. We really must stress that our discounted free cash flow models for Facebook don’t take in account the upside its proposed asset-back cryptocurrency Libra might generate. This opportunity represents pure upside to our forecasts, and we continue to like Facebook as a top holding in our Best Ideas Newsletter portfolio.
Oct 17, 2019
Honeywell’s Aerospace Division Its Crown Jewel
Image Source: 3Q 2019 Earnings Release. We’re huge fans of Honeywell. The company’s Aero operations are its crown jewel, and while Boeing is facing some troubles these days, we don’t expect much impact on Honeywell at all. In fact, we expect commercial aerospace to remain strong, even in the face of broader industrial weakness. The risks to the company’s HBT business could be starting to mount given some concerns in commercial real estate, but management isn’t really seeing any signs of yet, pointing to only moderating growth in 2020. The SPS division, while a headwind, probably won’t be a factor next year, but it could bounce back as inventories are cleared from the channel.
Oct 17, 2019
Citigroup Lags Peers in Key Metrics
Image Source: Matt Buck. Citigroup remains well capitalized with a 11.6% Common Equity Tier 1 Capital Ratio, but there isn’t room to lever up. Management has recently expressed less optimism about reaching its previously stated goal of reaching a 13.5% ROTCE in 2020, and the market consensus has them coming up short of the same goal. Operating leverage has helped the bank improve this metric by several percentage points in the past few years, but it appears that the cost-cutting road is getting increasingly difficult. Now more revenue dependent in improving its return metric, this leaves the bank also counting on the 11-year economic upcycle to continue. It is therefore unsurprising that this bank trades right near its tangible book value of $69.03 per share. Our fair value estimate remains $71 per share.
Oct 16, 2019
Wells Fargo’s 4%+ Dividend Yield Offers Support to Shares
Image Source: Mike Mozart. Wells Fargo’s lack of a sizable investment bank and trading operations is a bit of a Rorschach Test for analysts and investors. On the one hand, it makes it harder to compete for business from the largest of large corporates, since it is not a full one stop shop. On the other hand, it means higher-quality earnings from bread-and-butter banking and reduced exposure to the wildly cyclical and low return world of investment-banking and trading. Given its impressive dividend yield of 4.1% as of this writing, we think the shares have a floor beneath them, barring any additional scandals coming to light--something we think is unlikely at this stage. Our fair value estimate remains $52 per share.
Oct 16, 2019
BREAKING: UAW-GM Reaches Deal, More Coming from Valuentum Soon...
BREAKING: UAW-GM Reaches Deal, More Coming from Valuentum Soon...
Oct 16, 2019
JPMorgan Continues to Go from Strength to Strength
Image Source: Gideon Benari. JPMorgan CEO Jamie Dimon admitted plainly that the current benign credit losses are better than through-the-cycle averages during the conference call. He also acknowledged that revenues will come under pressure when the down cycle eventually hits. Until that time, JPMorgan is going from strength to strength, and this bank is clearly well positioned to take market share from weaker hands when the downcycle ultimately arrives. The high end of our fair value estimate range stands at $125 per share.
Oct 15, 2019
Johnson & Johnson Raises Full-Year Guidance Yet Again
Mounting legal liabilities have been weighing negatively against Johnson & Johnson and its stock price over the past year as investors fret about the size of these potential settlements/judgements. We see the firm’s latest quarterly performance and guidance increase for 2019 as validation of the strength of Johnson & Johnson’s broad-based healthcare business model. Once the market gets a better idea of Johnson & Johnson’s total potential legal liabilities, shares could begin to converge towards their intrinsic value given the underlying strength in the firm’s businesses. Our fair value estimate for shares of JNJ stands at ~$150 per share.


The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Nelson Exclusive publication, and any reports, articles and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. The sources of the data used on this website are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor and does not offer brokerage or investment banking services. Valuentum, its employees, and affiliates may have long, short or derivative positions in the stock or stocks mentioned on this site.