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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.
Feb 21, 2024
Market Darling Nvidia Delivers in Fiscal Fourth Quarter
Image: Nvidia has been a market darling, and the company did not disappoint in its fourth-quarter fiscal 2024 report. We like what we’re seeing at Nvidia these days, and what it implies for big cap tech and large cap growth, and we expect ongoing strength at the company. Competition from AMD and others is looming, but Nvidia continues to capture the lion’s share of AI investment at this time, and that will likely continue for some time yet. Speculative investors have made a bundle on Nvidia during the past 12-18 months, but we’ve been quite satisfied with the performance of Best Ideas Newsletter portfolio holding, the Technology Select Sector SPDR, which includes Nvidia as one of its top three holdings. Nvidia’s shares are showing strength after the quarterly report.
Feb 21, 2024
Lithium Prices Remain Volatile; Albemarle Adjusts Long-term Demand Forecast
Image: Albemarle’s shares have faced significant pressure as a result of depressed lithium prices. Albemarle’s shares have been under significant pressure of late due to volatile lithium prices, and the firm’s cash flows have faced weakness as a result. Operating cash flow dropped to ~$1.325 billion in 2023 from ~$1.91 billion in 2022, as capital spending soared. Unless lithium prices start to better reflect the underlying demand profile ahead of it, Albemarle will likely be free cash flow negative in 2024 as well. Right now, Albemarle is facing a tough road ahead with its fundamentals largely tied to lithium prices, but the firm is positioned well for a potential lithium-price rebound. Regardless, we view Albemarle as a speculative stock and one only for the most aggressive, risk-seeking investors.
Feb 21, 2024
Public Storage Puts Up Record Revenue and Net Operating Income in Fourth Quarter
Image Source: Public Storage. Self-storage giant Public Storage reported solid fourth quarter results February 20, with revenue and funds from operations [FFO] coming in better than expectations. The company is one of our favorite income-oriented ideas. It has now been in business for more than 50 years, and it boasts an enviable A2/A credit rating, allowing it easy access to the capital markets to fund future deals and projects. Public Storage’s same-store operating margin also runs higher than many of its peers, showcasing its more efficient operating model. We like Public Storage quite a bit, and the company yields ~4.2% at the time of this writing.
Feb 21, 2024
Walmart’s Free Cash Flow Remains Robust, Buys Vizio to Boost Advertising Business
Image: Walmart’s free cash flow generation during fiscal 2024 was superb and comfortably covers its cash dividends paid. Walmart is doing a fantastic job executing on its value proposition, and the company is in a sweet spot with respect to consumer trends given the step change in prices the past few years that is causing consumers to trade down to value offerings. The firm’s comp sales are coming in better than expected, and its free cash flow generation remains well in excess of its cash dividends paid, providing ample support for further dividend hikes. Walmart will execute a 3-for-1 stock split on February 23 and will begin trading on a post-split basis February 26. Though Walmart retains a massive net debt position, perhaps its only drawback from a financial standpoint, the company is a fantastic dividend grower and perhaps one of the best considerations within the retail space these days. Shares yield ~1.4% at the time of this writing.
Feb 20, 2024
Dividend Growth Idea Home Depot Hikes Payout Nearly 8%!
Image: Home Depot is working through some soft sales trends following robust home improvement spending during the pandemic, but the company’s free cash flow generation remains top notch. On February 20, Dividend Growth Newsletter portfolio holding Home Depot reported mixed fourth quarter results that showed revenue pressure in the period, but the company still beat expectations on both the top and bottom lines. We’re huge fans of Home Depot’s resilience through the ups and downs of the real estate market, and the company’s pace of dividend growth remains solid. Our fair value estimate of Home Depot stands at $369 per share, modestly higher than where it is trading, and the company has a strong 1.4x Dividend Cushion ratio, which speaks to future dividend expansion.
Feb 19, 2024
The Price-to-Earnings Ratio Demystified
Let's examine the price-to-earnings (P/E) ratio. The key takeaways are: 1) without using a discounted cash-flow model, the P/E ratio that should be applied to a company's future expected earnings stream can never be appropriately calculated, and by extension, 2) when investors assign an arbitrary price-to-earnings multiple to a company’s earnings (based on historical trends or industry peers or the market multiple), they are essentially making estimates for all of the drivers behind a discounted cash-flow model in one fell swoop (and sometimes hastily). As earnings for next year are often within sight and can be estimated with some confidence (though this certainly varies among firms), calculating the price-to-earnings ratio via a discounted cash-flow process, in our opinion, is of far greater importance than worrying about whether a firm will beat or miss earnings in its next fiscal year. Because the P/E ratio is a discounted cash-flow model that considers the long-term qualitative dynamics of a particular entity, cash-flow analysis remains the first and most important pillar of our Valuentum Buying Index. And finally, investors cannot ignore valuation analysis or the future. Valuation is an important driver behind stock prices, and it is based on future expectations that can only be estimated. This is just a fact of the markets.
Feb 19, 2024
Energy Transfer’s Lofty Distributions Are Much More Sustainable These Days
Image: Energy Transfer covered its distributions with traditional free cash flow in 2023, and the company offers investors an elevated distribution yield. Energy Transfer reported mixed fourth-quarter results on February 14, but the company’s traditional free cash flow metrics continue to hold up well, providing support to its lofty distribution. Years ago, pipeline entities were spending much more than they reasonably could to be able to sustain their distributions at prior levels, and many have readjusted both their capital spending trajectories as well as their distributions over the years. These days, pipeline entities such as Energy Transfer, with their geographically diversified portfolio of assets, are in much better shape to sustain their payouts. Units of Energy Transfer yield ~8.7% at the time of this writing.
Feb 18, 2024
Tanger’s External Growth Activity Looks Encouraging
Image Source: Tanger Inc. Tanger Inc. is an owner and operator of outlet and open-air retail shopping destinations, and the REIT has done a great job of late, with shares advancing more than 50% during the past year. While traditional real estate equities have languished, Tanger has managed to keep moving in the right direction. The REIT reported better than expected fourth-quarter results February 15, and its ~3.6% dividend yield isn’t too shabby. For investors looking to take a leap into retail REITs, Tanger may be among the top considerations.
Feb 18, 2024
Digital Realty Trust Has Bucked Broader REIT Sector Weakness
Image: Digital Realty Trust has outperformed the broader REIT sector by quite the margin since the beginning of 2023. Real estate investors have had a difficult time the past year, with shares of the Vanguard Real Estate Index ETF falling roughly 6% versus a 22%+ return on the S&P 500, both measured on a price-only basis. Data center REIT Digital Realty, however, has bucked the trend of the broader real estate sector’s weakness advancing 20% over the same time period on a price only basis. Digital Realty’s fourth-quarter results and guidance for 2024, released February 15, weren’t great, but the company is much better positioned than other REITs, in our view. Shares yield ~3.6% at the time of this writing.
Feb 17, 2024
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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.