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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.
Nov 9, 2022
Taiwan Semiconductor’s Operations Remain Solid But Uncertainty Has Punished the Stock
Image: Taiwan Semiconductor’s shares have faced considerable pressure during 2022, despite strong operational performance. We’re disappointed with the performance of Taiwan Semiconductor’s stock during 2022. Operational performance has been strong, but uncertainty stemming from weakness across the tech space to rising Sino-American tensions have punished shares. We continue to monitor its equity performance closely.
Nov 9, 2022
ALERT: Replacing Disney with Republic Services in BIN Portfolio
Image Source: Valuentum. With content costs on the rise and the potential for the streaming business to become irrational as rivals fight for the incremental customer, Disney has a tough road ahead of it, in our view. Its ‘Parks, Experiences and Products’ segment is recovering nicely from the COVID-19 lockdowns, but losses in its ‘Media and Entertainment Distribution’ business remain very concerning in a difficult advertising environment. Disney has already cut its dividend payout, and while the firm remains free cash flow positive, we’re not fans of its massive net debt position. Our updated fair value estimate of Disney now stands at $93 per share, and it no longer fits the bill of a best idea. We’re replacing it with Republic Services in the simulated Best Ideas Newsletter portfolio. The change will be reflected in the next edition of the Best Ideas Newsletter.
Nov 8, 2022
Berkshire Continues to Be a Staple in the Best Ideas Newsletter Portfolio
Image Source: Fortune Live Media. Warren Buffett has made some missteps over the years. For every Occidental Petroleum, there is a Kraft Heinz that hasn’t worked out. For every Apple, there is an IBM that has failed to live up to expectations. We hope our readers view our work in a holistic way, much like they view Buffett’s. In the Best Ideas Newsletter portfolio, for example, where Meta Platforms, PayPal, and Disney haven’t lived up to expectations, other Best Ideas Newsletter portfolio “holdings” such as Exxon Mobil, Chevron, and Vertex Pharma are up 79%, 56%, and 40% so far this year, respectively. We don’t think investors judge Warren Buffett solely on his missteps in Kraft Heinz and IBM (during a bull market no less!), no more than we hope readers won’t judge our work solely on Meta, PayPal, or Disney (during a punishing bear market!), particularly when other ideas are soaring--and the simulated Best Ideas Newsletter portfolio is outdistancing the SPY so far this year. Within any investment portfolio, there will be winners and there will be losers. It’s all part of investing. Buffett understands this. Valuentum understands this. We hope you understand this, too!
Nov 7, 2022
We’ve Updated Our Fair Value Estimate of Boeing; Has Aerospace Bottomed?
Image: Boeing is expecting to turn the corner with respect to positive free cash flow in 2022 and grow it to ~$10 billion annually by 2025/2026. We think this is achievable. Image Source: Boeing. The breakout of COVID-19 wreaked havoc on the airline business and the commercial aircraft-making business alike. But has the commercial aerospace industry finally bottomed?
Nov 6, 2022
Shares of Lithium Producer Albemarle Are Soaring So Far In 2022
Image: Albemarle's shares have rocketed higher the past few years and are soaring during 2022. We think Albemarle remains a great fit for ESG-related investment considerations, and we’re sticking with shares in the ESG Newsletter portfolio following the company’s third-quarter results, released November 2. The lithium producer remains well-positioned, and its growth rates remain fabulous in an undersupplied market. Prices for lithium can be volatile at times, but Albemarle’s financial leverage remains manageable, and the firm expects to churn out free cash flow during 2022 as it continues to invest aggressively in its business and pay out dividends to shareholders. Albemarle’s fundamental and relative share-pricing strength have been a sight to see thus far in 2022. We still like shares of Albemarle based on the high end of our fair value estimate range.
Nov 4, 2022
Life Storage Operates Within An Attractive Slice of the REIT Sector
Image Source: Life Storage. Life Storage operates in one of the most attractive areas of the REIT sector, the self-storage arena. The company has raised its dividend considerably during the past five years, and its 35-year history in the self-storage business coupled with its investment-grade credit ratings speak to sustainability. We like its diversified, coast-to-coast presence in the U.S. with roughly 60% of its owned stores positioned in the fast-growing Sun Belt states. Since 2010, Life Storage has raised its dividend at a 10.4% compound annual growth rate, and we expect further hikes to come. Shares yield ~4.2% at this time.
Nov 4, 2022
Dividend Increases/Decreases for the Week of November 4
Let's take a look at firms raising/lowering their dividends this week.
Nov 3, 2022
Realty Income: An Outperformer in 2022
Image Source: Realty Income. We continue to be impressed with Realty Income’s ability to keep raising its dividend payout, and while REIT economics have deteriorated in 2022, the company is doing much better than peers. We’re not fans of the capital-market dependence risk of REITs, in general, and Realty Income holds a rather elevated net debt to annualized pro forma adjusted EBITAre ratio of 5.2x, but we’re sticking with the company as an idea in the simulated Dividend Growth Newsletter portfolio at this time. The company has raised its dividend 117 times since it was listed on the New York Stock Exchange in 1994.
Nov 3, 2022
ALERT: Replacing Qualcomm with McDonald’s in Dividend Growth Newsletter Portfolio
Image: The semiconductor space is experiencing a number of headwinds, and while we still like Qualcomm’s long-term prospects, we’re replacing it with McDonald’s in the simulated Dividend Growth Newsletter portfolio. Image Source: Qualcomm. We’re huge fans of Qualcomm’s business model over the long haul, but risks continue to add up. First, the adjustment in the pace of Qualcomm’s expectations for handset volumes for calendar 2022 is rather concerning, given the delta from its commentary in July and over a period of what is only a couple months remaining this year. In light of U.S.-China geopolitical tensions, new export restrictions on chip technology to China (announced October 7) that are further complicating industry matters, and Qualcomm customers retrenching by drawing down on their inventory, we’re going to remove the small “position” in Qualcomm in the simulated Dividend Growth Newsletter portfolio. McDonald’s will be taking its place in the portfolio. This change will be reflected in the next edition of the Dividend Growth Newsletter.
Nov 3, 2022
Lumen’s Dividend Cut Highlights Effectiveness of Valuentum’s Dividend Methodology and Uniqueness of Dividend Cushion Ratio
A lot of times investors only focus on the dividend payout ratio – dividends paid per share divided by earnings per share – or free cash flow coverage of the dividend, but the balance sheet is so very important to the sustainability of the dividend, too – something that the Dividend Cushion ratio embraces but other dividend health metrics do not. For example, Lumen’s dividend payout ratio was 50% ($0.75 in dividends dividend by $1.50 in earnings per share during the first three quarters of the year), and its free cash flow was enough to cover its cash dividends paid during the first nine months of 2022, too. However, the company held a massive ~$25 billion net debt position at the end of the quarter, which pushed its Dividend Cushion ratio deep into negative territory, raising a huge red flag with respect to the sustainability of the payout. Ignoring the balance sheet both with respect to intrinsic value and dividend analysis could be a recipe for disaster.



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.