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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 19, 2023
Our Reports on Stocks in the Recession Resistant Industry
Image Source: Mike Mozart. Our reports on stocks in the Food Retailing industry can be found in this article. Reports include BUD, CL, CLX, CPB, COST, FDP, GIS, HRL, K, KDP, KHC, KMB, KO, KR, MDLZ, MKC, MO, PEP, PG, PM, SJM, TAP, TGT, TSN, WMT, CHD, SYY, ADM, LANC, CASY.
Feb 19, 2023
Online Sports Betting Surges But DraftKings’ Cash Burn Continues to Intensify; We Prefer More Conservative Gaming Plays Such as Churchill Downs
Image: Online sports betting platform DraftKings continues to burn through hundreds of millions of dollars each year. Data: SEC Filings, Seeking Alpha. Over the past 52 weeks, Churchill Downs’ stock has advanced ~10%, while DraftKings’ stock is down ~7% and Penn Entertainment’s shares have fallen over 34%. Online sports betting will only grow as more and more states pass laws in favor of its adoption and more and more consumers take up gambling as a hobby, but the best risk-adjusted opportunities may still rest with the more traditional gaming operators that aren’t burning through hundreds of millions in free cash flow every year to chase growth. We don’t like the moral underpinnings of the gambling industry at all, but we cannot deny the long-term growth potential of the industry. Churchill Downs may not be levered to online sports gaming anymore, but the company remains free cash flow rich with a tremendously lucrative asset base, and for that, it’s one of our favorite picks in the group.
Feb 13, 2023
PepsiCo's Pricing Actions Fantastic; Needs Better Free Cash Flow in 2023 to Cover 10% Dividend Hike
Image Source: PepsiCo. PepsiCo revealed tremendous product pricing power during its fourth quarter of 2022, but inflationary pressures were still present across its business operations. The beverage and snacks giant raised its dividend 10%, marking the 51st consecutive year the company has upped its payout. However, PepsiCo will have to step up its free cash flow generation during 2023 in order to cover the increased payout obligations. During 2022, for example, free cash flow came up short in covering cash dividends paid. PepsiCo also has a rather large net debt position, even as it plans to spend $1 billion in buybacks during 2023. We still like PepsiCo as an idea in the Best Ideas Newsletter portfolio, however, and peg its fair value estimate at $187 per share. Shares yield ~2.8% at the time of this writing.
Feb 13, 2023
The Dividend Cushion Ratio Warned of Risk to V.F. Corp’s Dividend
Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%.V.F. Corp cut its quarterly dividend by more than 40% on February 7, to a quarterly rate of $0.30 per share from $0.51 per share previously. The cut is yet further evidence of the importance of paying attention to the cash-based sources of intrinsic value--net cash on the balance sheet and future expected free cash flow--when it comes to evaluating dividend health. Please be sure to pay attention to the Dividend Cushion ratios of firms that you follow. Even if you are not a dividend growth or income investor, the Dividend Cushion ratio provides an assessment of the cash-based sources of intrinsic value relative to future potential outlays in the form of the dividend.
Feb 12, 2023
Albemarle Outlines Strong Lithium Demand Outlook
Image Source: Albemarle. Albemarle released a very promising outlook in late January, one that implies a tremendous pace of top-line expansion, profitability growth, and free cash flow generation. We’re huge fans of the outlook and believe lithium demand will continue to be robust, even as new supply comes to market. The company has called its next five years a period of “transformational growth,” where expected net sales are targeted at 2.5x 2022 levels and adjusted EBITDA is targeted to more than double. Electric vehicle demand remains robust, and Albemarle has opportunities across the end markets of mobility, energy, connectivity, and health, too. We think Albemarle remains one of the best growth stories on the market today, and we like shares.
Feb 11, 2023
Disney: Iger’s Back, Peltz Concedes, Thousands of Jobs Gone, Dividend Coming Back Soon
Image Source: Valuentum. Disney has a lot of work to do. The company’s Parks, Experiences and Products segment has recovered nicely from the worst of the COVID-19 pandemic, but pricing increases may put the experience out of reach for many. Disney+ subscribers may have peaked given that the company will begin to cut costs to the bone in an effort to stop the billions in cash burn. Disney ended the year with $8.47 billion in cash and equivalents and a massive $48.4 billion debt load. Investors are happy that Bob Iger is back and with the company’s plans to re-instate a modest dividend later this year, but we think former CEO Bob Chapek may have gotten a bad shake. Chapek took over the week of the huge COVID-driven market crash in February 2020 and led the firm through a once-in-a-century pandemic, only to be shown the door before his investments could ever be given a chance of bearing fruit. There’s more to this story than we’ll ever know, and we doubt that Disney or Iger will have much to say about it.
Feb 9, 2023
Chipotle’s Fourth Quarter 2022 Results Not Bad, Has Incredible Long-Term Unit Restaurant Potential
Image Source: Valuentum. Long term, Chipotle has plans to expand to 7,000 restaurants, up from nearly 3,200 restaurants at the end of 2022. The company still holds the wild card of expanding into the breakfast daypart, which we believe is a huge source of upside potential for the burrito maker, especially as it adds more drive-throughs across its restaurant portfolio. We continue to like shares.
Feb 8, 2023
Net-Cash-Rich Vertex Pharma’s Lucrative Cystic Fibrosis Franchise Continues to Power Performance
Image Source: Vertex Pharma. We’re huge fans of Vertex Pharma. We love its net-cash-rich balance sheet, strong free-cash-flow generating capacity and lucrative and established CF franchise. We also like its long-term potential in CRISPR gene-editing technology and pain management alternatives to opioids and believe the company has other opportunities that may eventually reach commercialization across its pipeline. Our fair value estimate of Vertex Pharma stands at $320 per share, and we continue like the company as our primary biotech exposure in the Best Ideas Newsletter portfolio.
Feb 7, 2023
Two Top Income Ideas Locked in Hostile Takeover Battle
Image Source: Public Storage. On February 5, Public Storage announced it has launched a hostile takeover of Life Storage. Life Storage seems content in refusing to negotiate with Public Storage at this time, but the saga is not over yet. We’re anxiously awaiting either PSA’s or LSI’s next move. We think a combined entity will have higher levels of profitability, a better credit rating, and greater financial capacity to drive even further growth in adjusted funds from operations and dividends per share. Both entities yield ~3.9% on a forward estimated basis.
Feb 3, 2023
Trio of Earnings Reports from Apple, Alphabet, and Amazon Give Pause to Markets
Image Source: Valuentum. Apple’s, Alphabet’s and Amazon’s calendar fourth-quarter results, released February 2, weren’t great, but we’re keeping things in context. Apple had to deal with disruptions in China during the period, while Alphabet is contending with a slowdown in advertising. Both Apple and Alphabet continue to generate tremendous amounts of free cash flow, while boasting considerable net cash positions. Alphabet’s financial profile is second to none. Amazon, on the other hand, continues to burn through free cash flow while it holds a net-neutral balance sheet. We continue to be comfortable including Apple and Alphabet in the newsletter portfolios, but we won’t be considering Amazon anytime soon. Though we expect to make a few tweaks to our valuation models of each, our fair value estimates remain unchanged at this time.



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.