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Eli Inkrot

 
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  • Valuation Shortcuts For DuPont
    Today, 6:29 AM DD Comment!

    Summary

    • Analysts are expecting DuPont to grow in the 7-8% range over the intermediate-term.
    • Using a bit of caution, a 6% growth expectation would result in 5-year total annualized return expectation around 6% as well.
    • More importantly, this article provides two tables that allow the readers to come to their on conclusions.
  • The Point Of No (Negative) Return
    Sun, Sep. 21 JNJ, KO, PG 18 Comments

    Summary

    • Many focus on everyday price movements rather than the long-term prospects of a business.
    • This article demonstrates a countervailing ideology that allows an investor to get to a moment whereby a negative nominal return is literally impossible.
    • It takes time and effort, but surely it will be worth it.
  • 7% Expected Returns Appear 'Ho-Hum' For Boeing
    Thu, Sep. 18 BA 2 Comments

    Summary

    • Boeing has a $440 billion backlog -– roughly 5 years' worth of work to fulfill.
    • As such, analysts see double-digit growth possibilities for the company.
    • This article scales those expectations down a bit and provides a means by which readers can formulate their own assumptions.
  • Don't Own A Company If You Wouldn't Display It On Your Wall
    Wed, Sep. 17 JNJ, WAG, KO 60 Comments

    Summary

    • I have previously conversed with someone who indicated that they would be “embarrassed” to share what equity holdings they partner with.
    • In this commentary, I detail why you don't need to feel this way.
    • This article speaks directly about owning a company, but this is a reasonable ideology to carry through to all aspects of your life.
  • Kellogg Or General Mills For Your Retirement Portfolio?
    Wed, Sep. 17 K, GIS 21 Comments

    Summary

    • Kellogg and General Mills collectively own about three-fifths of the cereal aisle.
    • Due to this staying power, each company has shown a great propensity to continuously reward shareholders.
    • This commentary looks at which one might be a better investment opportunity today.
  • United Technologies: Average Yield, Above-Average Prospects?
    Mon, Sep. 15 UTX 6 Comments

    Summary

    • Shares of United Technologies routinely have a dividend yield below 3%.
    • This is a result of a relatively low payout ratio and certainly shouldn’t act as a dividend growth deterrent.
    • As a baseline, one might expect UTX to have expected total returns around 10% per year over the next half-decade.
    • More importantly, two tables are presented to allow the readers to develop their own expectations.
  • It's Hard To Make A Case For Pessimism
    Fri, Sep. 12 AXP, CVX, DIA 25 Comments

    Summary

    • In a past article, I demonstrated that each of the Dow components had annualized expected returns in the 5% to 11% range over the next half decade.
    • The takeaway was the underlying math involved, but some advocated that you might expect negative returns in the future.
    • This commentary demonstrates that while this is possible, it certainly is not prudent to expect.
  • Your Guide To The Best And Worst Stocks In The Dow
    Thu, Sep. 11 DIA 48 Comments

    Summary

    • Not all investment opportunities are the same.
    • This article lays out possible total return expectations for the Dow Jones Industrial Average – organizing them from highest to lowest.
    • In the end it’s often not a choice of “best” and “worst” but rather “good” and “better.”.
  • The Mechanics Behind IBM's Double-Digit Return Possibility
    Tue, Sep. 9 IBM 8 Comments

    Summary

    • IBM doesn’t have to grow revenues all that quickly to provide solid dividend growth over the intermediate term.
    • As such, the total return prospects appear quite reasonable.
    • This article works through the underlying math and presents two tables to allow the readers to develop their own expectations.
  • Is A 5% Expected Return Too Lofty For Nike?
    Tue, Sep. 9 NKE 1 Comment

    Summary

    • Nike is expected to grow quite fast, but also carries a reasonably lofty valuation.
    • As a baseline, one might expect Nike to have expected total returns around 5% per year over the next half decade.
    • The beginning part of this commentary works through the underlying math behind these assumptions.
    • More importantly, two tables are presented to allow readers to develop their own expectations.
  • Does JPMorgan Chase Have Double-Digit Return Prospects?
    Tue, Sep. 9 JPM 8 Comments

    Summary

    • JPMorgan Chase has been re-establishing both its business and dividend payout since the recession.
    • As such, shares presently trade with what appears to be both a reasonable “current” yield and valuation; leading to a baseline 10% total return expectation.
    • However, as there are many factors that lead to this insight, this commentary gives the readers the tools to come to that conclusion on their own.
  • Visa: Destined To Keep Its Low Dividend Yield?
    Fri, Sep. 5 V 17 Comments

    Summary

    • Like AT&T, Visa might be able to return 9% annually over the next half decade.
    • However, the way in which each company could do so is drastically different.
    • This article looks into this 9% baseline and provides the means for readers to develop their own expectations.
  • Can Chevron Provide 8% Annual Returns Moving Forward?
    Fri, Sep. 5 CVX 8 Comments

    Summary

    • As a baseline, one might expect Chevron to have expected total returns around 8% per year over the next half decade.
    • The beginning part of this commentary works through the underlying math behind these assumptions.
    • More importantly, two tables are presented to allow the readers to develop their own expectations.
  • Dividend Growth Investing Is Capital Appreciation Investing
    Wed, Sep. 3 AFL, PG 26 Comments

    Summary

    • Often there’s a strict line drawn between investments with an income component and a capital appreciation (“growth”) element.
    • Yet in both instances, you’re simply partnering with a business and assigning a value based on your expectations of a future value.
    • This article demonstrates that a focus on a growing stream of income doesn’t so much preclude capital appreciation as it demands it.
  • Should You Expect 9% Annual Returns From AT&T?
    Tue, Sep. 2 T 11 Comments

    Summary

    • Often commentaries will provide statements without the giving assumptions; for instance: AT&T is expected to return 9% annually.
    • Even when the underlying assumptions are provided, it’s frequently the case that these are limited to a single scenario.
    • This article allows the readers to make their own assumptions about the company to quickly reach an expected 5-year total return number.
  • When A Higher Yield Leads To Lower Income
    Thu, Aug. 28 MCD, V, ED 52 Comments

    Summary

    • In 2002, McDonald’s had a 1.5% dividend yield as compared to Consolidated Edison’s 5.2% mark.
    • As such, it might appear that Consolidated Edison had an overwhelming income advantage.
    • This article looks at this “advantage” and provides a cautionary tale for automatically favoring higher yields.
  • Procter & Gamble Valuation Shortcuts
    Thu, Aug. 28 PG 5 Comments

    Summary

    • Often articles and reports give a single concluding number such as a $98 price target or 9% annual expected returns.
    • This is a solid baseline, but lacks the ability to be easily adjusted or tested against varying hypotheses.
    • This article tries to create two valuation shortcuts for the reader to independently determine what they believe the future return prospects of Procter & Gamble might be.
  • Valuation Shortcuts For McDonald's
    Wed, Aug. 27 MCD 13 Comments

    Summary

    • Often my articles provide a range of expectations without also including the underlying math.
    • This commentary provides three shortcuts to quickly identify whether or not a company is worthy of further research.
    • In the end it’s a bit more complicated, but taking a 2-minute high-level view is often more efficient than an in-depth investigation.
  • Kinder Morgan Inadvertently Names A 'Dividend Growth Starter Kit'
    Tue, Aug. 26 ABBV, ABT, CSCO 21 Comments

    Summary

    • In a recent article, I detailed Kinder Morgan’s upcoming dividend prospects – which seem quite solid.
    • Kinder Morgan’s management provided a comparison of the new entity to nine companies that appear to have similar dividend income prospects.
    • This article reviews these nine companies and looks into the possibility of using them as a “dividend growth starter kit”.
  • AT&T Or Kinder Morgan For Your Retirement Portfolio?
    Wed, Aug. 20 KMI, T 84 Comments

    Summary

    • Kinder Morgan recently announced its dividend plans for the next 6 years or so.
    • AT&T is known as a staple among the high-yield, high-consistency dividend payers.
    • This article compares the two companies and determines which one might be a better fit for a retirement portfolio.
  • The High-Yield Vs. Low-Yield Battle
    Wed, Aug. 20 BCR, BEN, EGN 4 Comments

    Summary

    • In two previous articles I reviewed how the highest- and lowest-yielding Dividend Champions got to where they are today.
    • This article pits the four highest-yielding companies against the four lowest-yielding companies.
    • In the end, it all comes down to the individual company, valuation and expectations.
  • The Characteristics Of The Highest-Yielding Dividend Champions
    Mon, Aug. 18 UHT, MCY, HCP 7 Comments

    Summary

    • In a previous article, I looked at the lowest-yielding Dividend Champions.
    • This article looks at the highest-yielding Dividend Champions.
    • It seems that both instances might involve a few trade-offs.
  • The Characteristics Of The Lowest-Yielding Dividend Champions
    Fri, Aug. 15 BEN, IBM, CVX 44 Comments

    Summary

    • When the “Dividend Champions” are referenced, the higher-yielding securities are frequently the focal point.
    • There are 5 Dividend Champions that “currently” yield less than 1%.
    • This article looks into the characteristics that these companies share.
  • Constructing A Monthly Income Portfolio
    Wed, Aug. 13 ABBV, ABT, CL 132 Comments

    Summary

    • When constructing a portfolio investors look at a variety of options including: asset allocation, capitalization size, whether the company pays a dividend and the dynamics of the expected income.
    • However, what is often overlooked is the timing of the expected cash flows.
    • This article brings this distinction to light and suggests a few methods of dealing with a potential cash flow hiccup.
  • How Do You Hold Cash When Realty Income Or AT&T Are Available?
    Tue, Aug. 12 T, O 133 Comments

    Summary

    • Despite the logical notion that equities tend to be quite profitable over the long-term, many hold cash* and wait for an opportunity.
    • *Not only cash, but cash that is above and beyond what one might consider reasonable for an emergency fund.
    • Waiting for an opportunity sounds great in theory, but is much harder to accomplish in practice.
    • As such, there are many high-yielding alternatives that appear to be a perfectly reasonable alternate to unproductive cash today.
  • The Comfort In Watching Coca-Cola Decline 25%
    Tue, Aug. 12 KO 65 Comments

    Summary

    • Many take the view that potential price declines far outweigh a company’s dividend yield.
    • With a short-term or ephemeral view, this could very well be the case.
    • However, as this article indicates, if you have a long-term mindset you should probably be rooting for lower prices.
  • Ben Graham's Explanation For The Dividend Champions' Premium Valuation
    Fri, Aug. 8 HSY, SHW, SON 50 Comments

    Summary

    • As a group, longstanding dividend payers routinely demand a premium valuation in the market.
    • Conventional wisdom suggests that this is a result of the inherent quality that is involved with owning these companies.
    • Ben Graham backs this view up in his book, “The Intelligent Investor”.
    • Additionally, this article contends that the higher valuations result from an even more fundamental reason.
  • Were You Really Owning Walgreen For A Tax Inversion?
    Fri, Aug. 8 WAG 24 Comments

    Summary

    • On August 6th Walgreen announced a bevy of news; including acquisition, “tax inversion,” guidance, repurchase and dividend updates.
    • The “market” hated the news, sending bids for shares down over 17% from Tuesday’s open.
    • However, this seems to be more “hoopla” than a true concern as none of these events appear particularly troubling from a long-term view.
  • McDonald's Vs. Chevron: All Dividend Yields Are Not Created Equal
    Tue, Aug. 5 MCD, CVX 80 Comments

    Summary

    • Both McDonald’s and Chevron “currently” yield about 3.4%.
    • However, it would be inaccurate to assume that the income produced by each is equivalent.
    • This article looks into the idea that all dividend yields are not created equal.
  • Sherwin-Williams: A Company That's Truly Hard To Buy Today
    Mon, Aug. 4 SHW Comment!

    Summary

    • In a previous article I demonstrated that the Hershey Company was a solid company that always appeared “overvalued.”.
    • The conclusion to that commentary was that shares of Hershey often traded at a premium and thus “paying up for quality” might not be the worst investment thesis.
    • At first blush, the Sherwin-Williams Company seems to share a lot of similarities – with a current P/E ratio in the mid-20’s.
    • However, this article demonstrates why a bit more caution with Sherwin-Williams could be warranted.
  • Why It's Hard To Buy The Hershey Company
    Thu, Jul. 31 HSY 23 Comments

    Summary

    • The Hershey Company has many iconic brands that regularly demand a solid premium in the marketplace.
    • However, by common metrics the business appears to be chronically “overvalued” in comparison to the average firm.
    • This article details why this consistent “overvaluation” might not be as large of an obstacle as it seems.
  • The Day I Held Everything
    Wed, Jul. 30 COP, GIS, PG 63 Comments

    Summary

    • A recent SA article detailed how one contributor sold nearly all of his holdings based on fear.
    • This article looks at the underlying premise on both a conceptual and mechanical level.
    • In the end, once you have a solid group of holdings in place, it appears that “inactivity” can often be a reasonable policy.