Valuentum Exclusive Analysis for the Discerning Investor

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Jul 29, 2021

Microsoft’s Dividend Is Rock Solid But Why?
Image Shown: Valuentum’s Dividend Report on Microsoft. The Dividend Cushion Ratio Deconstruction reveals the numerator and denominator of the Dividend Cushion ratio for Microsoft. At the core, the larger the numerator, or the healthier a company's balance sheet and future free cash flow generation, relative to the denominator, or a company's cash dividend obligations, the more durable the dividend. In the context of the Dividend Cushion ratio, Microsoft's numerator is larger than its denominator suggesting strong dividend coverage in the future. The Dividend Cushion Ratio Deconstruction image puts sources of free cash in the context of financial obligations next to expected cash dividend payments over the next 5 years on a side-by-side comparison. Because the Dividend Cushion ratio and many of its components are forward-looking, our dividend evaluation may change upon subsequent updates as future forecasts are altered to reflect new information. We estimate the efficacy of the Dividend Cushion ratio in warning against dividend cuts at about 90%. We measure this efficacy by looking at the Dividend Cushion ratios of companies that have cut their payouts in our coverage. If the company had a Dividend Cushion ratio below 1, we’d view the Dividend Cushion ratio as doing its job. Not all companies with high Dividend Cushion ratios are insulated from dividend cuts, and not all companies with low Dividend Cushion ratios will cut their dividend, but the Dividend Cushion ratio is yet another Valuentum-driven tool for your investor tool kit.

Jul 28, 2021

The Valuentum Buying Index’s Flow Chart
Image: The Valuentum Buying Index flow chart. Each stock in our general operating coverage receives a systematically-applied rating. The Valuentum Buying Index is a powerful tool to use in conjunction with a variety of other investment considerations from the Economic Castle, the Dividend Cushion ratio, the fair value estimate and range to forward-looking relative valuation assessments, the dividend yield, dividend growth prospects and beyond. We hope you continue to enjoy your membership, and please let us know if you have any questions.

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.

Jul 27, 2021

The Valuentum Buying Index as a Differentiating Factor
Image: The Valuentum Buying Index explanatory stock market return model. For illustratiive and educational purposes only. The Valuentum Buying Index should not be used by itself. No other research provider has approached mapping the market in this manner, making Valuentum’s research a differentiating factor behind your practice and a must-have for any investor. No system is perfect, but we continue to be impressed with how well 9- and 10-rated equities have performed, including the most recent 10, Facebook. We hope to continue to help you in all your equity research needs, but please be sure to always do your own due diligence. We can never provide you with buy/sell advice.

Jul 27, 2021

Why Valuentum Buying Index Ratings Matter
Let's take a look at the results of a case study of an institutional money manager's application of the Valuentum Buying Index rating system.

Jul 23, 2021

Shares of Best Idea Domino’s Pizza Jump Higher!
Image Shown: In the wake of Domino’s Pizza Inc’s stellar fiscal second quarter earnings report published on July 22, shares of DPZ surged higher. We include Domino’s Pizza as an idea in the Best Ideas Newsletter portfolio and continue to be huge fans of the name. On July 22, Domino’s Pizza reported second quarter earnings for fiscal 2021 (period ended June 20, 2021) that smashed past consensus top- and bottom-line estimates with its US same-store sales growing by 3.5% and its international same-store sales increasing by 13.9%. The company noted that last fiscal quarter represented its 41st consecutive quarter of same-store sales growth in the US as its digital and delivery investments over the past decade have really paid off. Domino’s Pizza announced that it had authorized a new $1.0 billion share buyback program after the end of the fiscal second quarter after recently completing its previous $1.0 billion share repurchase program via an accelerated share repurchase (‘ASR’) agreement.

Jul 23, 2021

Dividend Increases/Decreases for the Week July 23
Let's take a look at companies that raised/lowered their dividend this week.

Jul 22, 2021

Johnson & Johnson Beats Estimates, Raises Guidance Once Again
Image Source: Johnson & Johnson – Second Quarter of 2021 IR Earnings Presentation. On July 21, Johnson & Johnson reported second-quarter 2021 earnings that beat both consensus top- and bottom-line estimates. The company (once again) boosted its full-year guidance in conjunction with its latest earnings update as Johnson & Johnson’s business is steadily rebounding from the worst of the coronavirus (‘COVID-19’) pandemic, with an eye towards the ongoing recovery in the sales of its medical devices and related offerings. We include shares of JNJ as an idea in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Its latest earnings report and guidance boost reinforced our favorable view towards the name. Shares of JNJ yield ~2.5% as of this writing, and the top end of our recently updated fair value estimate range sits at $206 per share of Johnson & Johnson, well above where shares are trading at as of this writing.

Jul 22, 2021

Best Idea Chipotle Rockets Higher!
Image Shown: We include Chipotle Mexican Grill Inc an as idea in the Best Ideas Newsletter portfolio. On July 21, shares of CMG surged higher after the firm reported a stellar earnings report after the market close on July 20. In our April 2021 article covering the company, we highlighted how Chipotle’s management team sees room for the firm to more than double its restaurant unit count in the coming years. Chipotle’s growth runway is immense. The company’s second-quarter earnings report was stellar, and the market continues to warm up to Chipotle’s promising long-term growth story. We are big fans of Chipotle and expect that the firm’s free cash flows will continue to grow at a steady clip over the coming years.

Jul 21, 2021

Philip Morris’ Transformation Continues
Image Shown: Philip Morris International Inc’s IQOS offering, a heated tobacco unit product (also classified as a “reduced risk product” by the company) that seeks to replicate the experience of traditional cigarettes for smokers in a bid to get those users to switch over to an offering the company views as relatively “safer,” has continued to post solid user base growth of late. We are big fans of Philip Morris and its ongoing transformation and include shares of PM as an idea in the High Yield Dividend Newsletter portfolio. Image Source: Philip Morris International Inc – Second Quarter of 2021 IR Earnings Presentation. On July 20, the company behind the Marlboro cigarette brand (excluding sales of the cigarette brand in the US) and the smokeless IQOS nicotine offering Philip Morris International reported second quarter 2021 earnings. The company missed consensus top-line estimates but beat consensus bottom-line estimates and boosted its full-year guidance for 2021 in conjunction with the report. Now Philip Morris expects to generate (the following are non-GAAP metrics) organic net revenue growth of 6%-7% (up from 5%-7% previously) and adjusted diluted EPS growth of 12%-14% (up from 11%-13% previously) on an annual basis in 2021 as its business steadily recovers from the worst of the coronavirus (‘COVID-19’) pandemic.