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Brian Nelson

 
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  • McDonald's Third Quarter Performance Ugly, Even Worse Than Yum Brands' Performance [View article]
    Thanks for the comment keith68!
    Oct 29, 2014. 03:02 PM | Likes Like |Link to Comment
  • McDonald's Third Quarter Performance Ugly, Even Worse Than Yum Brands' Performance [View article]
    Doug,

    Thanks for the comment! Excellent observations. We have some excellent coverage on the restaurants at http://www.valuentum.com. It may be worth a look, if you are interested.

    Wishing you investing success,

    Brian
    Oct 29, 2014. 03:02 PM | Likes Like |Link to Comment
  • Raise Of Dividend To 18.5% Makes Western Asset Mortgage Look Attractive [View article]
    Here's a video I did on elevated dividends and how they're more red flags than anything else. Hope you'll watch:

    http://bit.ly/YCzyji

    Kind regards,

    Brian
    Sep 29, 2014. 01:08 PM | Likes Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    PendragonY,

    Which link are you referring to? And which data were you looking to retrieve?

    Thanks for your understanding!

    Brian
    Sep 25, 2014. 10:56 PM | Likes Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    Baldy2000,

    Thank you for your opinion. I will take that into consideration.

    Hope you enjoyed the article.

    Kind regards,

    Brian
    Sep 25, 2014. 10:55 PM | Likes Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    Hi all,

    Thank you for reading. It looks like there's a good conversation going. If there are any areas where I may chime in, please just let me know.

    Wishing you all continued investment success.

    Brian
    Sep 24, 2014. 02:58 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    gabby1945,

    Thanks so much for reading! I hope you might follow my future articles.

    Brian
    Sep 24, 2014. 02:56 PM | Likes Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    Ruffdog,

    Thanks for the observation. That's correct. Valuentum is an independent contractor of Seeking Alpha. We are a pay-only site.

    Kind regards,

    Brian
    Sep 24, 2014. 02:56 PM | Likes Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    Ruffdog,

    We think the article is worth reading, not necessarily the abbreviated bullet points. In such a format, it requires the commenters to have read the article to understand the thesis.

    Thanks for your thoughts.

    Brian
    Sep 24, 2014. 02:55 PM | 2 Likes Like |Link to Comment
  • Kinder Morgan Consolidation: Not For The Reasons You Think [View article]
    Hi alanheff,

    Thanks for the question. We offer a variety of different packages to different types of investors. To get both the monthly Best Ideas Newsletter and monthly Dividend Growth Newsletter, as an individual investor, it is only $149.99/yr. Plus, you have full access to the website. Thanks for asking.

    Kind regards,

    Brian
    Sep 24, 2014. 02:54 PM | 1 Like Like |Link to Comment
  • Will Dominion Resources Cut Its Dividend? [View article]
    Rich,

    Thanks for the comment. Valuentum's fair value estimate is $64 per share. Here's the report (it is a pdf):

    http://bit.ly/XtIc3e

    Brian
    Aug 2, 2014. 04:48 PM | Likes Like |Link to Comment
  • Will Dominion Resources Cut Its Dividend? [View article]
    Hi,

    This is Brian from Valuentum. I've read a few of the comments, and I want to commend the Valuentum team for highlighting the risks related to First Energy and Exelon before they cut their respective dividends. Those were surely bold calls to make, and I'm very proud that they did so independently and against the crowd. Many have benefited from those insights.

    Very well done team!

    I think the inherent overleveraged structure of utilities is not something dividend growth investors understand too well. Nice work on bringing it to the Seeking Alpha community's attention. I think more work in this area is worthwhile.

    All the best,

    Brian Nelson, CFA
    President, Equity Research
    Valuentum Securities, Inc
    brian@valuentum.com
    Aug 2, 2014. 04:32 PM | Likes Like |Link to Comment
  • Silly Rabbit, Dividends Do Matter In Retirement [View article]
    I thought I might respond. There is truth to both -- that dividends do matter and that dividends don't matter.

    For valuation experts, and in the context of a free cash flow to the firm model, the only thing that matters is what a firm generates in enterprise free cash flow, not how that enterprise free cash flow exits the business. When calculating intrinsic value, dividends/distributions DO NOT matter to valuation.

    Price is different than value, however, and investors can drive the price of a stock as a result of its dividend far greater than its intrinsic value. Some may argue that the dividend does matter in that it can push a firm's stock price far beyond the fundamentals that tie it down. Value is based on the future enterprise cash flows that are generated (not cash flows that are paid), but the payment of these cash flows in the form of dividends could cause income investors to bid the firm's stock price higher. Two places for additional information:

    1) Valuentum's academically-sound and professional-tested FCFF model:

    http://bit.ly/tHr7kg

    2) Valuentum's e-book on the '13 Most Important Steps to Understand the Stock Market'

    http://bit.ly/1nuzehe

    Absent the income stream that serves a vital purposes in retirement, the answer to if dividends matter or if they don't depends on your perspective. If you are a value investor, then dividends paid don't matter to the valuation (remember they matter to the price). But if you are a dividend growth investor, dividends certainly matter--this is your strategy. And if investors are overpaying for yield, the prices of these equities will go higher, and in this light, for investors focused on capturing this upside, dividends matter.

    Importantly, however, Brad's comment that paying out all excess cash flow as dividends/distributions enforces capital market discipline may be true, but it also significantly increases capital market risk. Dividend cuts from Boardwalk Pipeline to Exelon to First Energy were all tied to the fact that these entities did not have a large net cash position on their balance sheet. MLPs and REITs are unable to build large cash balances to handle exogenous shocks. Their dividend safety, as a result of their dependence on the capital markets, is lower than those entities with gobs of cash flow -- think Microsoft, Apple, etc. For income investors, they want both growth and safety -- certain business structures such as MLPs and REITs are less safe than general corporates because they require the entity to be significantly dependent on access to the capital markets, which is never guaranteed.

    Though there was a reference to Morningstar in this article, it should be known that more than a handful of the firms included in the dividend portfolios slashed their dividends -- not only in the banking sector but also within energy. The Valuentum Dividend Growth portfolio has yet to have a dividend cut, and we credit this to the framework behind the Dividend Cushion. Please read more about that at the following link:

    http://bit.ly/uFXpFr

    Kind regards,

    Brian
    Jul 21, 2014. 01:24 PM | 4 Likes Like |Link to Comment
  • The Serious Risks Of Dividend Growth Investing [View article]
    Thank you all for the fantastic feedback! As some of you have mentioned, I hope investors of all types can find something to take away from this article, especially those that are new to the markets and are just starting to learn about dividend growth investing.

    It's great to hear from all of you, and I hope you may come visit us sometime!

    Kind regards,

    Brian
    Jun 24, 2014. 01:26 PM | 4 Likes Like |Link to Comment
  • The Economic Castle Rating: Superior Than The Moat [View article]
    Hi Stratti,

    Thank you for the comment. Our Economic Castle Rating represents the future average (ROIC less WACC) over a 5-year period, expressed in percentage points. It is a different measure of economic value than traditional measures (as you mention) as it does not take into consideration the capital charge, and by essence, also does not fit the definition that you speak of above regarding EVA or MVA as a result. Our work is completely home-grown at Valuentum.

    As for what to expect in terms of presentation going forward, the Economic Castle Rating is unique, and it has been expressed as ROIC percentage points above WACC in the five examples in the article. We will also have a qualitative description of the rating, sorting from good castles to bad castles. Our team is working on this nomenclature as we speak. The rating will likely end up being a qualitative output similar to most of our other data points.

    As for the process, there are two distinct components of Valuentum's Economic Castle rating, so it is backed by a unique and distinct methodology -- 1) the ValueCreation rating -- also influenced by percentage points above WACC over history -- and 2) the forward ROIC less WACC relationship expressed in percentage points over the future five-year period. Both of these components are unique to Valuentum and roll up into the Economic Castle rating.

    I believe that the remainder of your conversation is more directly related to the term moat -- which is the durability and sustainability of the firm's ROIC less WACC spread, not the magnitude of the difference between the firm's ROIC less the WACC over a future five-year period, which is the Economic Castle.

    I believe the Economic Castle rating will be a fantastic addition to an individual investor's and financial advisor's tool kit. Thank you very much for mentioning the outperformance of our Best Ideas portfolio! The stocks that we include in the portfolio are underpriced and showing good momentum, or Valuentum stocks.

    Thank you again for the comment!

    Kind regards,

    Brian
    May 9, 2014. 09:40 PM | Likes Like |Link to Comment
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