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Packaging Sector Stat Update 90215
This is a small subsector of 'industrial' stocks. Why bother with this sector? (1) Dividend growth is superior to average. (2) EPS is superior to average. (3) Total returns since 2010 have beaten the S&P 500. (4) The 'yield + CAGRs' are attractive  because the CAGRs are big.
What are the problems within this sector? It takes years of data before I feel comfortable setting RRRs (Required Rates of Return or risk assessments) in a given sector. I have only followed this sector for two years. Where you find attractive 'yield + CAGRs'  you strongly tend to have poor 'historical earnings projection accuracy'. And that condition is beginning to prove true. Where you find lower credit ratings (which is the case with these companies), you also tend to find poor accuracy. When I find higher RRRs, I want to have greater diversification. There is a problem diversifying here: (1) There are not that many companies  and a few of them are not attractive when it comes to their growth story. (2) Some of the better growth stories (BLL and WST) come with yields that are too dang low for this income investor.
First  the year to date data and the P/Es. Second  the data that support the good growth stories:
Packaging Sector 90215The Q315 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 Q214. "Div 5 yr" measures the average change in the dividend since Q210. On 12815 RKT agreed to combine with MeadWestvaco (MWV) to form a new company  WestRock (NYSE:WRK). Each RKT share = one WRK share. On 130 RKT declared a dividend of $0.320525/share, reflecting the regular quarterly dividend payment of $0.1875 per share plus an additional amount of $0.133025 per share which equalizes the absolute dividend between RockTenn and MeadWestvaco. This moved the payout ratio from 18% to 30%. On 701 WRK declared a dividend of $0.375/share and confirmed plans to spinoff its specialty chemical unit. On 226 PKG increased its Q2 dividend from $0.40 to $0.55 with the payout moving from 32% to 44%.
Dividend dates are:
Price/Earnings Ratios 90215
WRK started fiscal 2015 at the beginning of calendar Q414
The growth story numbers:
Price Changes and Total Returns Since the Beginning of 2012, 2011 and 2010The dividends are displayed rounded to a tenth of a the penny. For the last to columns, 'Av Grw Last 2Yrs' is for the average dividend growth over the last two years and 'Av Grw Last 6 Yrs' is average growth over six years. The average is derived by calculating the dividend growth for each year, and dividing by the number of years. This is not a compounded growth rate.
Technology & Industrial Dividend Growth Companies Stats For 90215
The Q315 dividend is used for yield calculations. This is another sector where the fiscal and calendar years are not in sync. ACN pays dividends only twice per year  and that quirk is accounted for in the yield calculation and the dividend/EPS ratio. The change in the price, price + dividend, 2015 EPS projection and target is the change since market's close of 123114. DD had a 1053 to 1000 Stock Split  and I have not adjusted some of the data (except for the dividends) for that atypical event  target changes, YTD changes  many of the stats could be 5.3% off.
The Importance of EPS Revisions year to date The following companies had growing EPS estimates since the beginning of 2015: ADI, AAPL, CSCO, MCHP, MXIM, DHR, GD, NOC and PPG. Their mean price change for the year is 1.83%. Their mean total return for the year is 0.49%  and 8 of the 9 beat the sector median yearly price gain.
The following companies had decreases  but decreases of less than 5%  to the EPS estimates: ACN, APH, ADP, DE, MMM, MON and RTN. Their mean price change for the year is 7.30%. Their mean total return for the year is 5.96%  and 5 of the 7 beat the sector median yearly price gain.
The following companies had decreases to the EPS estimates of more than 5% since the beginning of 2015: AMAT, BRCM, IBM, INTC, MSFT, NATI, ORCL, QCOM, TEL, TXN, STX, BA, CAT, DD, EMR, ETN, GE, PH, PNR and UTX. Their mean price change for the year is 15.11%. Their mean total return for the year is 13.52%  and 7 of the 20 beat the sector median yearly price gain.
The Importance of Rising Price Targets year to date This parttime cynic at times believes that 'people have to be told to buy stocks  and which ones to buy'. One way to test this universe to see if the market is 'following the talking heads' is via tracking the changes in their price targets compared to the changes in price.
The following companies had more than 10% increases in their price targets since the beginning of the year: ACN, ADI, APH, AAPL, BRCM, CSCO, MXIM, BA, GD, NOC and PPG. Their mean price gain for the year is 1.09%. Their mean total return for the year is 2.41%  and 10 of the 11 beat the sector median yearly price gain.
The following companies had increases in their price targets of less than 10%: AMAT, ADP, IBM, INTC, MCHP, MSFT, NATI, ORCL, QCOM, TEL, TXN, STX, CAT, DE, DD, DHR, EMR, ETN, GE, HON, MMM, MON, PH, PNR, RTN and UTX. Their mean price change for the year is 14.75%. Their mean total return for the year is 13.23%  and 11 of the 26 beat the sector median yearly price gain.
The Importance of CAGR projections year to date The following companies had CAGR projections of 10% or more: APH, AAPL, TEL, DHR, MON and PPG. Their mean price change for the year is 7.57%. Their mean total return for the year is 6.65%  and 4 of the 6 beat the sector median yearly price gain.
The following companies had CAGR projections of less than 10%  but more than 7%: ACN, ADI, AMAT, ADP, CSCO, MCHP, NATI, QCOM, TXN, STX, BA, CAT, ETN, GD, GE, HON, MMM, NOC, PH, PNR, RTN and UTX. Their mean price change for the year is 10.31%. Their mean total return for the year is 8.7%  and 12 of the 22 beat the sector median yearly price gain.
The following companies CAGR projections of 7% or less: BRCM, IBM, INTC, MSFT, MXIM, ORCL, DE, DD and EMR. Their mean price change for the year is 11.04%. Their mean total return for the year is 9.58%  and 5 of the 9 beat the sector median yearly price gain.
Price/Earnings Ratios 90215
Companies that have fiscal years that match calendar years: BRCM, IBM, INTC, NATI, TXN, CAT, DD, GD, GE, HON, MMM & UTX
NorthEast, MidAtlantic & MidWest Regional Banks 090215
As a share holder in USB, I want to know why it is under performing in 2015. The USB EPS projection is down  but it is down less than the sector average decrease. So that is not the reason. The USB price target is up  and it is up less than the sector average increase. That is part of the reason. Looking for a reason the target might be falling  look at dividend growth. The year over year dividend for USB is up 4.08%  while the increase in 2014 was 6.52%. A falling dividend CAGR is a good reason for a price target fall. Year over year book growth has been 7.29%. At the end of 2014 (which would compared book values of Q314 to Q313), book growth was 10.72%. Slowing book growth would be a second metric to justify a falling CAGR. With a falling EPS projection, year over year EPS growth is down compared to the expectation at the beginning of the year.
Here is the rest of the data:
NorthEast, MidAtlantic & MidWest Regional Banks 090215Yields below are based on the Q215 dividends. Price/book ratios are based on the Q115 book values. The change in book compares Q114 to Q115. The change in the dividend compares Q214 to Q215. BB&T completed its acquisition of Susquehanna Bancshares effective Aug. 1, 2015.
Banks Price/EPS Ratios 090215
The Predictive Power of ROEs on Price/Book Ratios: Price/Book ratios range from as low as 0.90 to 2.00 and may look all too random. But the Q215 ending ROE (return on equity) stats go a long way to explaining the variety of valuations  as well as some of the YTD price changes.
The following companies had ROEs in Q115 of less than 7.00%: ASB, FMBI, MBFI, SNV, SUSQ and VLY. Their mean price gain for the year is 0.81%. Their mean total return for the year is 2.15%  and 4 of the 6 beat the sector median yearly price change of 2.97% and they sold at an average price/book ratio of 1.13.
The following companies had ROEs in Q115 of greater than 7.00% but less than 9.00%: CMA, FITB, FMER, FULT, MTB, NBTB and ONB. Their mean price change for the year is 6.61%. Their mean total return for the year is 5.03%  and 1 of the 7 beat the sector median yearly price change of 2.97% and they sold at an average price/book ratio of 1.12. (There should be more of a spread in the price to book ratios.)
The following companies had ROEs of more than 9.00%: BBT, CHCO, HBAN, NTRS and USB. Their mean price change for the year is 2.40%. Their mean total return for the year is 0.66%  and 3 of the 5 beat the sector median yearly price gain and they sold at an average price/book ratio of 1.61.
The Importance of Changes in Target Prices The following companies had target price increased over 10% since the beginning of the year: CHCO, HBAN, NTRS and SNV. Their mean price gain for the year is 3.59%. Their mean total return for the year is 5%  and 4 of the 4 beat the sector median yearly price gain. Their mean accuracy rating is 3.43%.
The following companies had target price increases of less than 10% since the beginning of the year: ASB, BBT, FITB, FMBI, FMER, FULT, MBFI, MTB, NBTB, SUSQ, USB and VLY. Their mean price change for the year is 4.12%. Their mean total return for the year is 2.48%  and 4 of the 12 beat the sector median yearly price gain. Their mean accuracy rating is 3.16%.
The following companies had target price decreases since the beginning of the year: CMA and ONB. Their mean price change for the year is 4.84%. Their mean total return for the year is 3.26%  and 4 of the 14 beat the sector median yearly price gain. Their mean accuracy rating is 3.19%.
The Importance of Intrayear EPS Projection Growth The following companies had 2015 EPS projections that were higher than their beginning of the year EPS projections: CHCO, HBAN, NTRS and SNV. Their mean price gain for the year is 3.59%. Their mean total return for the year is 5%  and 4 of the 4 beat the sector median yearly price gain.
The following companies had 2015 EPS projections that were less than the 2015 EPS at the beginning of the year: ASB, BBT, CMA, FITB, FMBI, FMER, FULT, MBFI, MTB, NBTB, ONB, SUSQ, USB and VLY. Their mean price change for the year is 4.84%. Their mean total return for the year is 3.26%  and 4 of the 14 beat the sector median yearly price gain.
The Importance of yearoveryear EPS Projection Growth The following companies had 2015 beginning of the year EPS projections that were at least 8% higher than the 2014 actual EPS at the beginning of the year: ASB, FMBI, HBAN, MBFI, MTB, NTRS, ONB and SNV. Their mean price change for the year is 1.34%. Their mean total return for the year is 0.17%  and 5 of the 8 beat the sector median yearly price gain.
The following companies had 2015 EPS projections that were less than 8 percent higher than the 2014 actual EPS at the beginning of the year: BBT, CHCO, CMA, FITB, FMER, FULT, NBTB, SUSQ, USB and VLY. Their mean price change for the year is 4.27%. Their mean total return for the year is 2.42%  and 3 of the 10 beat the sector median yearly price gain.