Valuentum Exclusive Analysis for the Discerning Investor

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Dec 27, 2021

Nike Beats Estimates in the Face of Supply Chain Constraints
Image Shown: Shares of Nike Inc shifted higher in the wake of its latest earnings report. On December 20, Nike reported second quarter earnings for fiscal 2022 (period ended November 30, 2021) that beat both consensus top- and bottom-line estimates. The company did its best to navigate supply chain hurdles as efforts by public health officials and governments to contain the spread of the coronavirus (‘COVID-19’) pandemic in Southeast Asia (a major production hub for apparel and footwear) weighed quite negatively on its ability to meet demand.

Dec 10, 2021

What Really Is the ”S” in ESG Investing
Image: The Valuentum Environmental, Social and Governance (ESG) Scoring System shows how “Social” considerations are analyzed. Social considerations tend to ebb and flow and reflect the values of society. Renewed interest in diversity, inclusion, and equity, for example, have made these areas a greater focus for companies and investors. As we have evolved as a society over decades and generations, the types of social considerations that may have primacy will change over time, so it’s important to make sure social considerations are just one part of your research. In addition to looking at how a company scores on the Valuentum ESG rating system and how it aligns with your own values, be sure to also look at whether such an idea is in the simulated newsletter portfolios, how it rates on the Valuentum Buying Index (VBI), its Dividend Cushion ratio for dividend-paying stocks, and much more. It’s extremely important to reward those companies doing the social good, but equity prices and returns will always be driven in part by a company’s cash-based sources of intrinsic value: net cash on the balance sheet and future expected free cash flow.

Dec 2, 2021

Dividend Growth Idea Dick’s Sporting Goods Is Firing on All-Cylinders; Raises Guidance (Again) While Generating Gobs of Free Cash Flow
Image Source: Valuentum. On November 23, Dick’s Sporting Goods reported third quarter earnings for fiscal 2021 (period ended October 30, 2021) that beat both consensus top- and bottom-line estimates. The sporting goods retailer once again raised its full-year guidance for fiscal 2021 in conjunction with its latest earnings report. Dick’s Sporting Goods also raised its guidance when reporting its fiscal second quarter earnings back in August 2021 and its fiscal first quarter earnings back in May 2021, highlighting management’s growing confidence in the company’s near term performance. Though shares of DKS sold off following its latest earnings update, likely due to concerns over inflationary pressures and supply chain hurdles, Dick’s Sporting Goods’ outlook remains rock-solid. We continue to like the firm as an idea in the Dividend Growth Newsletter portfolio.

Oct 27, 2021

Lockheed Martin Shocks the Market
Image: After years of backlog growth at Lockheed Martin, the third quarter of 2021 revealed a sharp year-over-year decline to the tune of ~8.3%. The company’s outlook also left a lot to be desired. Lockheed Martin reported a terrible third-quarter 2021 report and offered a gloomy outlook, but there are still reasons to be optimistic. The company retains strong coverage of the dividend with traditional free cash flow and has a burgeoning backlog of $134.8 billion (2.04x expected 2022 revenue). Its acquisition of Aerojet Rocketdyne may breathe new life into an executive team that may need to sharpen its focus on delivering for investors, and it's hard to argue with the strength of its competitive position. We’ll be lowering our fair value estimate upon the next update, but investors are getting paid a ~3.4% dividend yield to wait for management to right the ship. The company retains its position in the simulated Dividend Growth Newsletter portfolio.

Aug 27, 2021

Dividend Growth Idea Dick’s Sporting Goods Announces Great News
Image Shown: Dividend Growth Idea Dick’s Sporting Goods Inc has put up tremendous performance of late. On August 25, Dick’s Sporting Goods reported second-quarter earnings for fiscal 2021 (period ended July 31, 2021) that soared past consensus top- and bottom-line estimates. Furthermore, Dick’s Sporting Goods raised its full-year guidance for fiscal 2021, doubled its minimum share buyback program to $0.4 billion for fiscal 2021, increased its regular quarterly dividend by 21% on a sequential basis to $0.4375 per share (bringing its annualized payout up to $1.75 per share), and announced a special dividend of $5.50 per share during its latest earnings update. We are incredibly pleased with the company’s performance of late. Dick’s Sporting Goods is included as an idea in the Dividend Growth Newsletter portfolio.

Jul 2, 2021

Dividend Increases/Decreases for the Week July 2
Let's take a look at companies that raised/lowered their dividend this week.

May 27, 2021

Dick’s Sporting Goods Soars, Reports Record First-Quarter Sales, Highest-Ever Quarterly Earnings!
Image Shown: Dick's Sporting Goods' stock price soared following the release of its first-quarter fiscal 2021 earnings report and robust guidance for the remainder of the year. We added the sporting goods retailer to the Dividend Growth Newsletter portfolio last November, and we continue to like shares. Dick’s Sporting Goods surprised the market to the upside in a big way when it reported first quarter earnings for fiscal 2021 on May 26. Management is targeting non-GAAP earnings per share for fiscal 2021 in the range of $8.00-$8.70, implying shares of the sporting goods retailer are trading at just 11.3 times the high end of this year’s earnings guidance. A solid balance sheet and strong free cash flow generation support the company’s dividend growth profile. We continue to like how Dick’s Sporting Goods is positioned for the long haul, and it remains an idea in the Dividend Growth Newsletter portfolio.

Apr 23, 2021

Lockheed Martin Boosts Guidance
Image Source: Lockheed Martin Corporation – First Quarter of Fiscal 2021 IR Earnings Presentation. Lockheed Martin Corp, maker of missile systems, space offerings, radar systems, jet fighters (including the F-35), and other advanced weaponry, will play a leading role in keeping Western armed forces (and the militaries of Western allies) ahead of rising geopolitical tensions. We include the defense contractor as an idea in the Dividend Growth Newsletter portfolio, and shares of LMT yield ~2.7% as of this writing. Lockheed Martin’s dividend growth trajectory is impressive, its free cash flow generating abilities are stellar, and it has an enormous backlog which provides a high degree of visibility as it concerns its future cash flow generating abilities.

Mar 10, 2021

Dividend Growth Portfolio Idea Dick’s Sporting Goods Raises Dividend 16%!
Image Source: Mike Mozart. Dick's Sporting Goods put up its best same-store-sales growth rate in history during 2020. We continue to like shares of the sporting goods retailer in the Dividend Growth Newsletter portfolio. Dick’s Sporting Goods showcased the strength of its business model during 2020, and while it may not be able to duplicate the results in 2021, we think the future is bright. Free cash flow generation trends are solid, its balance sheet is healthy, and dividend coverage is sound. As more and more consumers choose healthier lifestyles, Dick’s Sporting Goods remains in a sweet spot to capture continued demand. With a solid 2% dividend yield, the company remains a holding in the simulated Dividend Growth Newsletter portfolio. We expect continued strong dividend growth for years to come.

Feb 8, 2021

Stock Market Outlook for 2021
2020 was one from the history books and a year that will live on in infamy. That said, we are excited for the future as global health authorities are steadily putting an end to the public health crisis created by COVID-19, aided by the quick discovery of safe and viable vaccines. Tech, fintech, and payment processing firms were all big winners in 2020, and we expect that to continue being the case in 2021. Digital advertising, cloud-computing, and e-commerce activities are set to continue dominating their respective fields. Cybersecurity demand is moving higher and the constant threats posed by both governments (usually nations that are hostile to Western interests) and non-state actors highlights how crucial these services are. Retailers with omni-channel selling capabilities are well-positioned to ride the global economic recovery upwards. Green energy firms will continue to grow at a brisk pace in 2021, though the oil & gas industry appears ready for a comeback. The adoption of 5G wireless technologies and smartphones will create immense growth opportunities for smartphone makers, semiconductor players and telecommunications giants. Video streaming services have become ubiquitous over the past decade with room to continue growing as households “cut the cord” and instead opt for several video streaming packages. We’re not too big of fans of old industrial names given their capital-intensive nature relative to capital-light technology or fintech, but there are select names that have appeal. Cryptocurrencies have taken the market by storm as we turn the calendar into 2021, but the traditional banking system remains healthy enough to withstand another shock should it be on the horizon. Our fair value estimate of the S&P 500 remains $3,530-$3,920, but we may still be on a roller coaster ride for the year. Here’s to a great 2021!