How Safe Are Any Of The Telecom Dividends? [View article]
DIY DG Investor - thanks for your comments. Yes, cash flow should be included and I will make sure add it into future reviews.
So, lets look at this a bit closer. In looking at depreciation it should be compared against capital expenditures. For T, their most recent full year depreciation was $18,143 million and cap ex was $19,465 million, indicating they are spending more on cap ex than is being removed through depreciation. On top of that, in the last fiscal year they net added $4,754 million to their cash position through net new borrowings (new loans). For VZ, their depreciation last year was $16,460 million and cap ex was $16,175 million, showing they are just depreciating at rate slightly higher than their reinvestment rate. VZ paid down their debt by a new $3,351 million.
Of the two, VZ looks to be on a course to strengthen their balance sheet and cash flow while T is on a course to leverage their balance sheet at the expense of shareholder equity.
S, FTR, CTL & WIN are all depreciating at rates about 30% higher than their capital investments.
I am not suggesting VZ or T are going to cut dividends anytime soon. However, if T continues on this path of leveraging up, at some point, a shift in total cash management will be needed. That change may or may not impact dividends. I would think there would be significant institutional pressure to maintain the dividend given the position T holds in many funds. So T will need to make other changes in their cash strategy which could impact the P/E valuation. In other words, for T, the dividend may be safer at the expense of higher stock price risk.
With this review, my purpose is simply to share some color behind the headline yield rate.
Which Soda Company Could Put Some Pop In Your Portfolio? [View article]
Blix - thanks for your comment. Of the five stakeholders, you are right, this is the hardest to read. I will take a look at the IV idea and see if that provides any better fidelity.
Chiquita Brands: This Fruit Company Is Looking Sweet [View article]
Thanks for your comments, that is very good insight. The comments about a possible sale are very interesting because of some moves being made at DOLE to clean up their balance sheet and the 86 year old chairman returning to run the operations. I cannot help but wonder what DOLE will do with a balance sheet free of debt -- could they be a possible buyer for Chiquita ? Below is the link to my review of recent activity at DOLE.
Since then, I have found another website has data as of 27 November, it shows MCP had a 44% short interest as of that date, so while declining from 15 Nov, this is still a substantial open short position.
If you agree with the bears on this, one way to play is 'buy the rumor, sell the news' and go long through 3rd week of Jan and then reverse course. If you are a bull, then just go long and stay long. Obviously I am a bear on this one but do not want to take the risk of a short squeeze if I am wrong so I am playing it through puts waiting for the fall to define the risk. So far it has been a profitable play.
Kurt - your comments makes my point exactly - there is very little that actually differentiates smart phones in today's market - they are all just flavors of the same thing. There is no new break-through, no amazingly new software, no new form factor, no new integration with other tech gadgets, it will be just one more phone on the market with perhaps some slightly better security.
Special Dividend Candidates From Beyond The Headlines [View article]
Thanks for the comment. I don't think there is anything which says regular and special dividends must be announced at the same time. If they wanted to use a special to goose the stock price, a better way to do that would be to have a separate announcement to get an additional news cycle focused on the stock.
Nice article. Possible shifts in strategy and the balance sheet construction like this are often harbingers of bigger changes. I am also long BGS so this is very helpful. It would be great if you could give us an update after the conference next week.
How Safe Are Any Of The Telecom Dividends? [View article]
So, lets look at this a bit closer. In looking at depreciation it should be compared against capital expenditures. For T, their most recent full year depreciation was $18,143 million and cap ex was $19,465 million, indicating they are spending more on cap ex than is being removed through depreciation. On top of that, in the last fiscal year they net added $4,754 million to their cash position through net new borrowings (new loans). For VZ, their depreciation last year was $16,460 million and cap ex was $16,175 million, showing they are just depreciating at rate slightly higher than their reinvestment rate. VZ paid down their debt by a new $3,351 million.
Of the two, VZ looks to be on a course to strengthen their balance sheet and cash flow while T is on a course to leverage their balance sheet at the expense of shareholder equity.
S, FTR, CTL & WIN are all depreciating at rates about 30% higher than their capital investments.
I am not suggesting VZ or T are going to cut dividends anytime soon. However, if T continues on this path of leveraging up, at some point, a shift in total cash management will be needed. That change may or may not impact dividends. I would think there would be significant institutional pressure to maintain the dividend given the position T holds in many funds. So T will need to make other changes in their cash strategy which could impact the P/E valuation. In other words, for T, the dividend may be safer at the expense of higher stock price risk.
With this review, my purpose is simply to share some color behind the headline yield rate.
Which Soda Company Could Put Some Pop In Your Portfolio? [View article]
Which Soda Company Could Put Some Pop In Your Portfolio? [View article]
Chiquita Brands: This Fruit Company Is Looking Sweet [View article]
http://seekingalpha.co...
17 Stocks In The Battle Zone -- Insiders Vs. Short Sellers [View article]
http://yhoo.it/Za4NzT
Since then, I have found another website has data as of 27 November, it shows MCP had a 44% short interest as of that date, so while declining from 15 Nov, this is still a substantial open short position.
http://bit.ly/hIJMpb
17 Stocks In The Battle Zone -- Insiders Vs. Short Sellers [View article]
RIM: Short-Term Trade, Long-Term Sell [View article]
RIM: Short-Term Trade, Long-Term Sell [View article]
RIM: Short-Term Trade, Long-Term Sell [View article]
RIM: Short-Term Trade, Long-Term Sell [View article]
http://bit.ly/RzYiUV
Special Dividend Candidates From Beyond The Headlines [View article]
B&G Foods Altering Strategy [View article]
Special Dividend Candidates From Beyond The Headlines [View article]
Special Dividend Candidates From Beyond The Headlines [View article]