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  • Consumer Staples Stock Valuation Update 1-29-15
    Grocery Portfolio 1-29-15

    The Q4-14 dividend is used for yield calculations. The second Div/EPS ratio has the 2015 EPS projection as the denominator. The change in the target, EPS and DCF is the percentage change in the consensus 2015 projection that has happened since the beginning of 2015. "Div 1 yr" measures the change in the dividend since Q4-13. "Div 5 yr" measures the average change in the dividend since Q4-09.


      12-31-141-29DivCurrentDiv/Div/Percent Change
    CompanyPricePrice/QuarterYieldEPS14EPS15PricePr+DivEPS15TargetDiv 1yrDiv 5yr

    Archer-Daniels(NYSE:ADM)52.0047.920.2402.0031%28%-7.85-7.85-3.90-2.5426.3212.00
    Campbell(NYSE:CPB)44.0046.460.3132.6949%51%5.595.590.001.990.005.00
    Coke(NYSE:KO)42.2242.100.3052.9060%60%-0.28-0.28-0.981.368.939.76
    ConAgra(NYSE:CAG)36.2836.470.2502.7446%44%0.520.520.001.150.005.00
    Colgate(NYSE:CL)69.1969.030.3602.0949%47%-0.23-0.23-1.610.775.8812.73
    Ingredion(NYSE:INGR)84.8484.250.4201.9931%28%-0.70-0.70-1.16-0.1910.5340.00
    Clorox(NYSE:CLX)104.21108.650.7402.7269%66%4.264.260.224.354.239.60
    Flowers(NYSE:FLO)19.1919.960.1202.4055%49%4.014.010.000.006.6710.85
    General Mills(NYSE:GIS)53.3353.630.4103.0658%58%0.560.560.000.967.8914.89
    Hershey(NYSE:HSY)103.93103.290.5352.0753%48%-0.62-0.620.226.5910.3115.91
    Hormel(NYSE:HRL)52.1052.540.2001.5236%32%0.840.84-0.390.0017.6522.11
    Kellogg(NYSE:K)65.4467.340.4902.9150%49%2.902.90-0.741.596.526.13
    Kimberly-Clark(NYSE:KMB)115.54110.220.8403.0561%59%-4.60-4.60-4.971.593.708.00
    Lancaster(NASDAQ:LANC)93.6492.500.4601.9950%49%-1.22-1.220.000.004.5512.28
    McCormick(NYSE:MKC)74.3072.600.3702.0444%41%-2.29-2.29-0.56-1.168.8210.83
    Pepsi(NYSE:PEP)94.5696.030.6552.7357%55%1.551.55-2.242.2015.429.11
    Procter&Gamble(NYSE:PG)91.0985.670.6423.0063%64%-5.95-5.95-7.141.676.649.20
    JM Smucker(NYSE:SJM)100.98105.100.6402.4445%46%4.084.080.002.1710.3416.57

    Average    2.4650%49%0.030.03-1.291.258.3212.78

    The SPY [S&P 500 EFT] is up -1.73% year to date. - and with unreinvested dividends is up -1.73% year to date.
    The KXI [Consumer Staples ETF] is up 3.24% year to date - and with unreinvested dividends is up 3.24%.
    With the 10 Treasury at 1.75% and the sector average yield on the Q4 dividend at 2.46% - the spread is 71 basis points.
    * The change in the dividend is for the last twelve months and not year to date.

    Note - only 10 of the 17 have 2016 EPS projections provided at Yahoo Finance

    Price/Earnings Ratios 1-29


     EPS / Share% EPS GrowthPrice/EPS2015 Fiscal Year EPSYear
    Co.2011201220132014201511-1212-1313-1414-15201320142015HighLowRangeEnd

    ADM3.472.302.333.083.45-33.721.3032.1912.0120.5715.5613.893.653.2114.29%Dec
    CPB2.542.442.642.532.46-3.948.20-4.17-2.7717.6018.3618.892.502.423.16%Jul
    KO1.922.012.082.042.024.693.48-1.92-0.9820.2420.6420.842.171.9311.76%Dec
    CAG1.751.842.162.172.265.1417.390.464.1516.8816.8116.142.312.233.69%May
    CL2.522.682.842.923.066.355.972.824.7924.3123.6422.563.202.958.56%Dec
    INGR4.685.575.055.415.9419.02-9.347.139.8016.6815.5714.186.075.657.76%Dec
    CLX3.934.104.314.264.464.335.12-1.164.6925.2125.5024.364.614.375.63%Jun
    FLO0.640.690.910.880.987.8131.88-3.3011.3621.9322.6820.371.050.8819.32%Dec
    GIS2.482.562.692.822.833.235.084.830.3519.9419.0218.953.152.8610.28%May
    HSY2.823.243.724.014.4614.8914.817.8011.2227.7725.7623.164.564.364.99%Dec
    HRL1.741.861.972.232.536.905.9113.2013.4526.6723.5620.772.602.447.17%Oct
    K3.383.613.773.904.026.804.433.453.0817.8617.2716.754.163.877.44%Dec
    KMB4.805.255.775.515.749.389.90-4.514.1719.1020.0019.205.915.635.08%Dec
    LANC3.843.453.983.693.79-10.1615.36-7.292.7123.2425.0724.413.823.751.90%Jun
    MKC2.793.043.133.373.588.962.967.676.2323.1921.5420.283.663.514.45%Nov
    PEP4.404.104.374.594.79-6.826.595.034.3621.9720.9220.054.984.559.37%Dec
    PG3.953.854.054.094.03-2.535.190.99-1.4721.1520.9521.264.183.955.62%Jun
    SJM4.814.735.375.645.55-1.6613.535.03-1.6019.5718.6318.945.755.455.32%Apr

    Average     8.213.794.7521.3320.6419.72   

    To calculate first price implied CAGR - I take the RRR and subtract the yield. What justifies that formula? When a stock is correctly valued AND the CAGR is not discounted, then the Yield + CAGR = RRR. Doing the kind of formula manipulation we learned in algebra, we can arrive at a formula for CAGR by subtracting 'Yield' from both sides of that equation. Doing that, we get to 'CAGR = RRR - Yield'. I would want the RRRs to be higher for the riskier stocks for such a formula to produce meaningful output.
    When it comes to arriving at a price-implied CAGR from the P/E ratios, I want the opposite. A low ratio would logically belong to a stock with a lower CAGR or higher risk - and a high ratio would logically belong to a stock with a higher CAGR or lower risk. My formula is 'Ratio - adjustment = CAGR'. The AA rated stocks have RRRs of 8.5 and P/E subtractions of 15. The A rated stocks tend to have RRRs of 9.5 and P/E subtractions of 12. The BBB+ rated have RRRs of 10.0 and P/E subtractions of 10. The two 'high CAGR' A rated stocks have RRRs of 10.5 and P/E subtractions of 11. The two commodity sensitive stocks have RRRs of 11 and P/E subtractions of 5.5. I began the effort of setting price implied CAGRs based on P/E ratios in Q4-14 for this sector. The formula I use to set the adjustment numbers is still in flux.
    Why do I provide two different price implied CAGRs? Using the 'CAGR = RRR - Yield' formula, the CAGR can not be greater than the RRR. There are not that many stocks with 5 year CAGRs above the 10% to 14% range I use for RRRs - but there are some. Due to EPS' failing to grow in equally stair stepped increments, there are times when the 'PE ratio' based formula fails to produce meaningful output. A stock can also sell at a logical P/E ratio based on EPS projections other than the 2014 projection. The ratios that I use in the following spreadsheet are 2014 EPS projection based ratios.

    Yield + CAGR Total Return Expectations


    CompanyQ4-14Factoid'sTotalBondsEPSMyTotal RtnConsensusPrice Implied CAGRDivPrice
      YieldCAGRReturnRatingsAccrRRRs- RRRRatingsRRR-YldP/E/Earn/Earn

    Archer-DanielsADM2.00%8.50%10.50%A5.0011.00-0.502.29.007.89%27.8313.89
    CampbellCPB2.69%3.00%5.69%BBB+1.009.50-3.813.36.816.89%50.8118.89
    CokeKO2.90%4.50%7.40%AA2.008.50-1.102.45.605.84%60.4020.84
    ConAgraCAG2.74%6.00%8.74%BBB-1.3010.50-1.762.87.768.64%44.2516.14
    ColgateCL2.09%6.50%8.59%AA-1.508.500.092.66.417.56%47.0622.56
    IngredionINGR1.99%9.10%11.09%none2.7011.000.092.89.018.18%28.2814.18
    CloroxCLX2.72%3.50%6.22%BBB+1.5010.00-3.783.37.2814.36%66.3724.36
    FlowersFLO2.40%8.50%10.90%none4.0010.500.402.18.109.37%48.9820.37
    General MillsGIS3.06%6.00%9.06%BBB+1.0010.00-0.942.96.948.95%57.9518.95
    HersheyHSY2.07%9.60%11.67%A1.0010.501.172.68.4312.16%47.9823.16
    HormelHRL1.52%9.60%11.12%A1.0010.500.622.58.989.77%31.6220.77
    KelloggK2.91%5.30%8.21%BBB+1.7010.00-1.793.27.096.75%48.7616.75
    Kimberly-ClarkKMB3.05%6.50%9.55%A1.809.500.053.06.457.20%58.5419.20
    LancasterLANC1.99%4.50%6.49%A2.009.50-3.013.57.5112.41%48.5524.41
    McCormickMKC2.04%7.00%9.04%none2.309.50-0.462.87.468.28%41.3420.28
    PepsiPEP2.73%5.20%7.93%A2.209.00-1.072.16.276.55%54.7020.05
    Procter&GamblePG3.00%5.00%8.00%AA-2.008.50-0.502.45.506.26%63.7721.26
    JM SmuckerSJM2.44%7.00%9.44%BBB+2.0010.00-0.562.57.568.94%46.1318.94

    Average 2.46%6.41%8.87%    2.72   19.72

    Disclosure: The author is long CL, GIS, HRL, HSY, INGR, PEP, PG, SJM.

    Jan 29 9:02 PM | Link | Comment!
  • Packaging Sector Update 1-28-15
    Packaging Sector 1-28-15

    The Q4-14 dividend is used for yield calculations. The second Dividend/EPS ratio has the 2015 EPS projection as the denominator. "Div 1 yr" measures the change in the dividend since Q4-13. "Div 5 yr" measures the average change in the dividend since Q3-09. RKT had a two for one stock split on 8-28-14 - and that is not yet reflected in the pricing in the data below. On 1-28-15 RKT agreed to combine with MeadWestvaco or MWV to form a new and yet unnamed company.


      12-31-141-28DivCurrentDiv/Div/Percent Change
    CompanyPricePrice/QuarterYieldEPS14EPS15PricePr+DivEPS15TargetDiv 1yrDiv 5yr

    Aptar Group, Inc.(NYSE:ATR)66.8462.090.2801.8039 %36 %-7.11-7.11-1.900.7212.0017.33
    Ball Corporation(NYSE:BLL)68.1763.390.1300.8213 %13 %-7.01-7.01-1.722.080.0032.00
    Bemis Company, Inc.(NYSE:BMS)45.2144.620.2702.4247 %43 %-1.31-1.310.807.713.854.00
    Greif, Inc.(NYSE:GEF)47.2339.930.4204.2171 %72 %-15.46-15.46-16.19-15.080.002.11
    International Paper Company(NYSE:IP)53.5853.160.4003.0153 %40 %-0.78-0.78-0.251.6314.29300.00
    Mobile Mini, Inc.(NASDAQ:MINI)40.5136.990.1701.8463 %43 %-8.69-8.691.95-3.77-0.00Infinity
    Packaging Corporation of America(NYSE:PKG)78.0576.590.4002.0934 %30 %-1.87-1.360.766.440.0033.33
    Rock-Tenn Company(NYSE:RKT)121.96130.500.3751.1520 %18 %7.007.003.1915.257.1430.00
    Sealed Air Corporation(NYSE:SEE)42.4339.430.1301.3230 %25 %-7.07-7.070.986.370.001.67
    Silgan Holdings Inc.(NASDAQ:SLGN)53.6052.060.1501.1519 %18 %-2.87-2.87-0.892.387.1411.58
    Sonoco Products Co.(NYSE:SON)43.7044.060.3202.9151 %47 %0.820.82-0.372.103.233.70
    West Pharmaceutical Services(NYSE:WST)53.2449.810.1100.8824 %22 %-6.44-6.44-1.460.0010.007.50

    Average    1.9739 %34 %-4.23-4.19-1.262.154.8040.29

    The SPY [S&P 500 EFT] is up -2.63% year to date. - and with unreinvested dividends is up -2.63% year to date.
    With the 10 Treasury at 1.82% and the sector average yield [on Q4 Dividends] at 1.97% - the spread is 15 basis points.
    * The change in the dividend is for the last twelve months and not year to date.

    Dividend dates are:

    ATR : 11-25-14BBL: 12-14-14BMS : 11-30-14GEF: 09-30-14IP: 12-14-14
    MINI: 12-02-14PKG : 10-14-14RKT: 11-16-14SEE : 12-18-14SLGN: 12-14-14SON: 12-09-14WST: 11-04-14

    Price/Earnings Ratios 1-28


     EPS / Share% EPS GrowthPrice/EPS15 EPS Range
    Co.2011201220132014201511-1212-1313-1414-15201320142015HighLowRange

    ATR2.762.502.792.853.09-9.4211.602.158.4222.2521.7920.093.382.8618.25%
    BLL2.642.573.283.893.99-2.6527.6318.602.5719.3316.3015.894.173.6114.40%
    BMS1.571.532.282.282.52-2.5549.020.0010.5319.5719.5717.712.622.3511.84%
    GEF3.283.352.752.362.332.13-17.91-14.18-1.2714.5216.9217.142.502.2510.59%
    IP3.221.723.163.023.96-46.5883.72-4.4331.1316.8217.6013.424.463.2340.73%
    MINI0.770.931.081.081.5720.7816.130.0045.3734.2534.2523.561.631.5012.04%
    PKG1.591.703.284.665.316.9292.9442.0713.9523.3516.4414.426.004.8424.89%
    RKT4.673.547.307.528.42-24.20106.213.0111.9717.8817.3515.509.267.7020.74%
    SEE1.212.201.231.742.0681.82-44.0941.4618.3932.0622.6619.142.251.8522.99%
    SLGN2.762.182.773.153.34-21.0127.0613.726.0318.7916.5315.593.453.178.89%
    SON2.512.252.302.512.71-10.362.229.137.9719.1617.5516.263.022.6514.74%
    WST1.171.361.631.802.0216.2419.8510.4312.2230.5627.6724.662.101.9210.00%

    Average     31.2010.1613.9422.3820.3917.78   

    Yield + CAGR Total Return Expectations

    The Total Return projection is the yield + dividend CAGR. LT Debt/Mkt Cap is the long term debt to market cap ratio with the numbers gathered from Yahoo Finance's 'key statistics' page. EPS Accr is short the historical EPS accuracy. For this sector, my accuracy stat is based on the numbers of years in the last ten that had negative EPS changes. Consensus Ratings are also gathered from Yahoo Finance. The Div/Earn is the annualized Q4-14 dividend to 2014 EPS projection ratio. The P/E ratio and price-implied CAGR based on P/E uses the 2015 EPS projection.


    CompanyQ4-14MyTotalBondsLT Debt/EPSMyTotal RtnConsensusPrice Implied CAGRDivPrice
      YieldCAGRReturnRatingsMkt CapAccrRRRs- RRRRatingsRRR-YldP/E/Earn/Earn

    Aptar Group, Inc.ATR1.80%9.00%10.80%none14.16%1.0010.500.302.88.7010.88%36.2520.09
    Ball CorporationBLL0.82%8.00%8.82%BB+36.05%1.0011.00-2.182.710.187.55%13.0315.89
    Bemis Company, Inc.BMS2.42%5.50%7.92%BBB33.56%2.0010.00-2.083.17.586.94%42.8617.71
    Greif, Inc.GEF4.21%6.00%10.21%BB-63.43%2.3011.50-1.292.37.299.12%72.1017.14
    International Paper CompanyIP3.01%9.00%12.01%BBB51.02%3.0010.002.012.36.993.08%40.4013.42
    Mobile Mini, Inc.MINI1.84%11.00%12.84%BB-30.06%2.8011.501.342.59.6614.90%43.3123.56
    Packaging Corporation of AmericaPKG2.09%10.00%12.09%BBB31.86%3.0010.501.592.28.415.78%30.1314.42
    Rock-Tenn CompanyRKT1.15%9.50%10.65%BBB36.61%2.8010.500.152.09.355.85%17.8115.50
    Sealed Air CorporationSEE1.32%10.00%11.32%none52.20%3.0011.50-0.182.410.1810.93%25.2419.14
    Silgan Holdings Inc.SLGN1.15%9.50%10.65%BB-60.06%1.0011.50-0.853.210.357.73%17.9615.59
    Sonoco Products Co.SON2.91%4.30%7.21%BBB+23.13%1.008.50-1.293.15.594.28%47.2316.26
    West Pharmaceutical ServicesWST0.88%10.00%10.88%none9.06%1.009.001.882.08.1212.29%21.7824.66

    Average 1.97%8.48%10.45% 36.77%   2.558.538.28 17.78

    Disclosure: The author is long PKG, RKT.

    Jan 28 10:00 PM | Link | 2 Comments
  • Transportation (Ex-Airlines) Stats 1-28-15
    Transportation 1-28-15

    The Q4-14 dividend is used for yield calculations. All companies have fiscal years that match calendar years - with the one exception of FDX - which starts in June. The change in the price, price + dividend, 2015 EPS projection and target is the change since market's close of 12-31-14. Some companies have yet to announce their Q4-14 numbers. Some analysts have yet to produce new projections for those companies that have already reported 2014 numbers. The last three years average dividend growth is calculated by dividend the total dividend growth from Q4-11 to Q4-14 by three.


      12-31-13CurrentDividendCurrentDiv/EPSPercent ChangeDiv Growth
    ----Company_and_ticker-------PricePrice/QuarterYieldRatioPricePr+Div15 EPSTargetLTM3 yrs

    CH Robinson Worldwide, Inc.CHRW74.8972.940.3802.0844%-2.60-2.602.382.628.575.05
    Canadian National RailwayCNI68.9167.110.2301.3722%-2.61-2.610.241.8713.8614.73
    Con-Way, IncCNW49.1842.290.1501.4221%-14.01-14.01-0.700.5350.00Infinity
    Canadian Pacific RailwayCP192.69176.320.3160.7212%-8.50-8.33-1.53-1.72-3.952.49
    CSX Corp.CSX36.2333.700.1601.9030%-6.98-6.98-0.921.676.6733.33
    Expeditors InternationalEXPD44.6144.330.1601.4430%-0.63-0.630.480.616.679.33
    FedEx CorporationFDX173.66171.450.2000.479%-1.27-1.16-0.110.7633.3317.95
    Forward Air Corp.FWRD50.3746.040.1201.0420%-8.60-8.600.00-0.7920.0023.81
    GATX Corp.GMT57.5456.770.3302.3325%-1.34-1.343.13-4.596.454.60
    JB Hunt TransportJBHT84.2580.500.2000.9922%-4.45-4.45-0.831.5733.3317.95
    Kansas City SouthernKSU122.03109.000.2801.0321%-10.68-10.45-2.00-0.4630.23Infinity
    Knight Transportation Inc.KNX33.6631.050.0600.7717%-7.75-7.750.733.960.000.00
    Landstar System, Inc.LSTR72.5364.550.0700.438%-11.00-10.910.00-2.5116.679.09
    Matson, Inc.MATX34.5236.250.1701.8839%5.015.013.576.106.254.19
    Norfolk Southern Corp.NSC109.61103.000.5702.2133%-6.03-6.03-4.96-3.579.6210.85
    Ryder System. Inc.R92.8588.030.3701.6823%-5.19-5.19-0.462.668.829.20
    Union Pacific Corp.UNP119.13119.150.5001.6830%0.020.441.853.1926.5822.22
    United Parcel Service, IncUPS111.1799.300.6702.7050%-10.68-10.68-6.02-4.578.069.62

    Average    1.4525 %-5.41-5.35-0.290.4115.62

    The ^DJT [Dow Jones Transportation Average] is up 3.88% year to date.
    The IYT [iShares Transportation Average] - with unreinvested dividends - is up -4.29% year to date.
    The SPY [S&P 500 EFT] is up -2.63% year to date.
    The SPY [S&P 500 EFT] - with unreinvested dividends - is up -2.63% year to date.
    With the 10 Treasury at 1.82% and the sector average yield [on Q4 Dividends] at 1.45% - the spread is -28 basis points.
    The number for the first dividend change is for the last twelve months and not year to date. The second change is a 3 year average.

    Dividend dates are:

    CHRW: 12-30-14CNI: 12-30-14CNW: 12-11-14CP: 01-25-15CSX: 12-14-14
    EXPD: 12-14-14FDX: 01-01-15FWRD: 12-07-14GMT: 12-30-14JBHT: 11-27-14
    KSU: 01-20-15KNX: 12-21-14LSTR: 12-04-14MATX: 12-03-14NSC: 12-09-14
    R: 12-18-14UNP: 01-02-15UPS: 12-02-14  

    Price/Earnings Ratios 1-28
    All companies have fiscal years that match calendar years - with the one exception of FDX - which starts in June.
    Stocks with large spreads between the high and low projections have varied each of the three quarters that metric has been tracked


     EPS / Share% EPS GrowthPrice/EPS15 EPS Range
    Co.2011201220132014201511-1212-1313-1414-15201320142015HighLowRange

    CHRW2.623.672.653.033.4440.08-27.7914.3413.5327.5224.0721.203.703.2614.52%
    CNI2.703.063.063.764.2313.330.0022.8812.5021.9317.8515.874.974.2319.68%
    CNW1.581.851.662.362.8317.09-10.2742.1719.9225.4817.9214.943.082.6518.22%
    CP3.342.796.428.5010.96-16.47130.1132.4028.9427.4620.7416.0911.5010.6510.00%
    CSX1.671.791.831.922.157.192.234.9211.9818.4217.5515.672.301.9219.79%
    EXPD1.791.571.681.892.11-12.297.0112.5011.6426.3923.4621.012.222.0011.64%
    FDX4.576.416.236.758.9740.26-2.818.3532.8927.5225.4019.1111.959.8031.85%
    FWRD1.601.501.772.042.41-6.2518.0015.2518.1426.0122.5719.102.612.3015.20%
    GMT2.352.883.504.485.2822.5521.5328.0017.8616.2212.6710.755.355.203.35%
    JBHT2.112.592.873.163.6022.7510.8110.1013.9228.0525.4722.363.713.409.81%
    KSU2.993.433.984.825.4014.7216.0321.1112.0327.3922.6120.195.655.238.71%
    KNX0.740.800.861.181.388.117.5037.2116.9536.1026.3122.501.451.2516.95%
    LSTR2.382.772.423.033.4716.39-12.6425.2114.5226.6721.3018.603.653.3011.55%
    MATX1.091.221.391.571.7411.9313.9312.9510.8326.0823.0920.831.841.6313.38%
    NSC5.455.375.856.396.90-1.478.949.237.9817.6116.1214.937.556.1721.60%
    R3.313.914.885.606.4718.1324.8114.7515.5418.0415.7213.616.656.257.14%
    UNP3.364.134.715.756.6022.9214.0422.0814.7825.3020.7218.056.806.505.22%
    UPS3.840.834.574.755.31-78.39450.603.9411.7921.7320.9118.706.005.0520.00%

    Average    7.8137.3418.7415.8724.6620.8117.97 

    Disclosure: The author is long NSC, UNP.

    Jan 28 5:27 PM | Link | Comment!
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