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Recent Articles
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We Win Some, We Lose Some: Best Idea Exxon Mobil Expects Huge Cash Flow Growth in Coming Years
Dec 9, 2022
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Image: Exxon Mobil has been one of the biggest contributors of alpha to the Best Ideas Newsletter portfolio during 2022. Image: Valuentum.
It would have been difficult to sit out energy during 2022 and have a good year. Though the areas of dividend growth and high-yield dividend investing have held up better than more speculative areas, energy has been a key source of alpha across our newsletter suite this year. We added Exxon Mobil mid last year, in June 2021, to the Best Ideas Newsletter portfolio, Dividend Growth Newsletter portfolio, and High Yield Dividend Newsletter portfolio, and shares have rocketed more than 60% higher during 2022 alone. We continue to like shares of Exxon Mobil and peg a per-share fair value estimate of $122 on them.
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Dividend Increases/Decreases for the Week of December 9
Dec 9, 2022
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Let's take a look at firms raising/lowering their dividends this week.
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Korn Ferry Beats Expectations in Second Quarter
Dec 8, 2022
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Image: Korn Ferry’s shares still look cheap by our estimates. Image Source: Korn Ferry.
Businesses around the world are dealing with new challenges in a post COVID-19 world, and global consulting firm Korn Ferry is working hard to build solutions for them. We continue to include Korn Ferry as an idea in the simulated Best Ideas Newsletter portfolio and remain huge fans of its enormous free cash flow generation and its pristine balance sheet that holds a material net cash position. We’re sticking with our $75 per-share fair value estimate, which implies upside potential to where shares are trading.
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REITs May Continue to Face Pressure
Dec 7, 2022
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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%.
Equity and mortgage REITs have been under considerable pressure during 2022. Institutional investors seem to be fleeing the sector, but retail investor interest still seems unusually high. We think this might be a tell-tale sign that retail investors could end up getting burned, if they haven’t been already by the terrible performance across the sector so far in 2022. Withdrawals on non-publicly traded REITs are soaring, and SL Green’s dividend cut may be the first of many in the sector to come. We only include a select few REITs across our simulated newsletter portfolios.
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