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  • Strayer Remains A Troubled Stock
    Thu, Jul. 10 STRA 2 Comments

    Summary

    • The for-profit education space remains challenged.
    • Strayer recently suspended its $1 per share dividend, and fundamentals continue to move in the wrong direction.
    • The company registers a 6 on the Valuentum Buying Index. We tend to prefer higher-rated firms in the Best Ideas portfolio and Dividend Growth portfolio.
  • Evaluating GlaxoSmithKline's Dividend
    Thu, Jul. 10 GSK 10 Comments

    Summary

    • Investors should do their best to avoid backward-looking dividend analysis.
    • The most important time period for dividend growth investors is the future.
    • We think GlaxoSmithKline's dividend growth potential in the future is bright.
  • Declining Propane Demand Will Eventually Threaten AmeriGas' Dividend
    Sun, Jul. 6 APU 34 Comments

    Summary

    • AmeriGas loses customers every year.
    • Its MLP structure means it is heavily dependent on the healthy functioning of the capital markets.
    • The entity's ~8% annual distribution yield is not backed by growing end-market (propane) demand.
  • Why Texas Instruments Is Slowly Going Private
    Fri, Jul. 4 TXN 4 Comments

    Summary

    • Very few firms have bought back 40% of shares in the past decade. Texas Instruments is one of them.
    • Texas Instruments is committed to returning cash to shareholders, and the firm's Valuentum Dividend Cushion score remains solid. It boasts a ~2.5% annual yield.
    • The company registers a 3 on the Valuentum Buying Index. We're waiting for a higher score, and prefer highly-rated companies in the Best Ideas portfolio.
  • Why CarMax Is Priced To Perfection
    Fri, Jul. 4 KMX 1 Comment

    Summary

    • The discounted cash flow model is a lens into market expectations of a company.
    • If shares are trading at the fair value estimate, the firm must achieve forward financial projections to justify its stock price.
    • We think CarMax is priced to perfection. Strong revenue and earnings growth, and a low discount rate drive our fair value estimate of $52 per share.
  • Evaluating Caterpillar's Dividend Growth Potential
    Wed, Jul. 2 CAT 17 Comments

    Summary

    • Do your best to avoid backward-looking analysis.
    • The future is the most important time horizon for dividend growth investors.
    • Caterpillar has a Dividend Cushion ratio of 1. Let's find out what that means.
  • Add KLA-Tencor To The Dividend Growth Watch List
    Sun, Jun. 29 KLAC 4 Comments

    Summary

    • The market is full of strong dividend growth ideas.
    • It's good to always keep an open mind when you're building a dividend growth portfolio for the next 10, 20, or 30 years.
    • The strongest dividend payers of the past few decades may not be the strongest in the next few decades. Resist the urge to do backward-looking analysis.
  • Why This Oil Giant Is Tried And True
    Sun, Jun. 29 XOM 39 Comments

    Summary

    • Exxon Mobil is a company that every investor should become familiar with.
    • The firm's reserve replacement ratios and return on capital metrics are impressive.
    • It pays a healthy dividend, and shares have performed well since early February.
  • Is This Homebuilder's Hefty Dividend On Solid Ground?
    Sun, Jun. 29 MDC 3 Comments

    Summary

    • It's difficult to avoid backward-looking dividend analysis, but investors must focus on the future.
    • The Dividend Cushion is a forward-looking measure that assesses a company's dividend on the basis of the firm's cash flow generation and balance sheet health.
    • Let's examine the industry-leading dividend payer in homebuilding, MDC.
  • Why Intel's Dividend Is A Head-Turner
    Fri, Jun. 27 INTC 18 Comments

    Summary

    • The most important time horizon for dividend growth investors is the future.
    • Do your best to avoid backward-looking analysis.
    • We think Intel will be one of the best dividend growth stocks over the next few decades.
  • Will Minimum Wage Hikes Add New Risks To Apollo?
    Fri, Jun. 27 APOL 4 Comments

    Summary

    • Will higher minimum wages sound the death knell for the for-profit education space?
    • Enrollments are already in steep decline at most of the for-profit institutions.
    • We think Apollo is fairly valued under a base-case scenario, as we're not considering the very real impact that a higher minimum wage will have on enrollments. Should we?
  • Whoa! ConocoPhillips Has Moved Too Far Too Fast
    Wed, Jun. 25 COP 31 Comments

    Summary

    • ConocoPhillips has made its shareholders very happy.
    • The company's share price is starting to get ahead of fundamentals, however.
    • We think investors should expect some profit-taking way up here.
  • Why Genuine Parts' Dividend Is Worth A Look
    Wed, Jun. 25 GPC 8 Comments

    Summary

    • Don't fall into the trap of only using backward-looking tools in your dividend growth analysis.
    • Focus your time on investing for the future and that includes assessing the future growth and safety of your investments' dividends.
    • Genuine Parts has a strong Dividend Cushion ratio, a nice track record of dividend increases, and a ~2.5%+ yield. Let's take a look.
  • Why AIG Is Our Favorite Insurer
    Tue, Jun. 24 AIG 40 Comments

    Summary

    • We're not particular fans of the structural characteristics of the insurance industry -- please, no offense to those working at insurers.
    • Still, we think AIG is one of the most attractively-priced insurers. The company is trading at a large discount to book value.
    • The company's executive suite knows this and is buying back stock rapidly. We think shares are worth a look despite the challenging industry backdrop.
  • Why Intel Is Back On Track
    Tue, Jun. 24 INTC 11 Comments

    Summary

    • Against all odds, PC demand is stabilizing, and the firm is making a splash in mobile.
    • Intel yields ~3% and has a Valuentum Dividend Cushion ratio of 1.8.
    • Management recently raised guidance. We like the firm's 'Valuentum' prospects.
  • Evaluating Coca-Cola's Dividend Growth Potential
    Mon, Jun. 23 KO Comment!

    Summary

    • Assessing the future capacity of growth of the dividend is really what matters most for dividend growth investors. Yet, most dividend growth investors focus more on the past.
    • Coca-Cola's dividend yield is nice, offering ~3% annual payout at current price levels (~$41 per share). The firm has raised the dividend for 50+ consecutive years.
    • On the basis of its Valuentum Dividend Cushion ratio, we expect Coca-Cola's dividend to expand at an ~8%-9% compound annual growth rate going forward.
  • Energy Transfer Partners' Return To Distribution Growth Was Predictable
    Sun, Jun. 22 ETP 28 Comments

    Summary

    • Valuentum predicted Energy Transfer Partners' return to distribution expansion.
    • We like units and hold them in the Dividend Growth portfolio.
    • Let's calculate an intrinsic value for the company and run shares through the Valuentum process.
  • Canadian National Is The Most Efficient Railroad
    Sun, Jun. 22 CNI 15 Comments

    Summary

    • Canadian National's operating ratio is the lowest among railroad peers.
    • The company has a good combination of strong free cash flow generation and manageable financial leverage.
    • Though Canadian National's dividend yield isn't that high, we think it boasts one of the stronger dividends in the railroad space.
  • Tupperware's Investment Merits Are Non-U.S. Based
    Fri, Jun. 20 TUP 4 Comments

    Summary

    • To the surprise of most US-based investors, Tupperware's opportunities are primarily non-U.S. based.
    • Tupperware posts a Valuentum Buying Index score of 6, reflecting our "fairly valued" DCF assessment of the firm, its neutral relative valuation versus peers, and bullish technicals.
    • We generally prefer stocks with ratings of a 9 or 10, many of which are included in the Best Ideas portfolio.
  • Why Kinder Morgan Energy Partners Is Alright In Our Book
    Fri, Jun. 20 KMP 15 Comments

    Summary

    • We've been critical of MLPs, but generally for different reasons than the popular media.
    • Though we emphasize that the MLP business model has unique risks compared to a general corporate that cannot be ignored, we accept these risks in the case of Kinder Morgan.
    • Kinder Morgan Energy Partners' units are included in Valuentum's Dividend Growth portfolio.
  • L-3's Shares Aren't Cheap But Geopolitical Threats Intensifying
    Tue, Jun. 17 LLL Comment!

    Summary

    • Geopolitical threats will always remain, and Congress has reduced sequester cuts through 2015.
    • L-3 Communications posts a Valuentum Buying Index score of 6.
    • We generally prefer higher-rated firms in the Best Ideas portfolio and Dividend Growth portfolio.
  • Why Rio Tinto Has Significant Valuation Upside
    Sat, Jun. 14 RIO 6 Comments

    Summary

    • We are very selective when it comes to adding any commodity-equities exposure to our newsletter portfolios.
    • Rio Tinto is trading on the cusp of the low end of its fair value range, and the firm is attractive on a relative valuation basis.
    • We include Rio Tinto in the Best Ideas portfolio, which continues to perform well.
  • How To Perform Stock Analysis On Potash
    Thu, Jun. 12 POT 11 Comments

    Summary

    • We think stocks that are cheap (undervalued) and just starting to go up (momentum) are some of the best ones to evaluate for addition to the portfolios.
    • We liken stock selection to a beauty contest. In order to pick the winner of a beauty contest, one must know the preferences of the judges of a beauty contest.
    • Potash boasts a Valuentum Buying Index score of 6, reflecting our "fairly valued" DCF assessment of the firm, its neutral relative valuation versus peers, and bullish technicals.
  • Cisco: The Overlooked Dividend Idea In Big-Cap Tech
    Thu, Jun. 12 CSCO 5 Comments

    Summary

    • We apply a three-stage free cash flow to the firm (enterprise cash flow) valuation model, which generates an estimate of intrinsic value for every company in our coverage universe.
    • Cisco is a firm that is trading near the low end of its fair value range.
    • Apple and Microsoft often steal the thunder with respect to dividend growth in big-cap tech, but Cisco is worth a look.
  • Taking A Deep Dive Into CSX's Intrinsic Value
    Thu, Jun. 12 CSX 4 Comments

    Summary

    • We like the railroads, but CSX isn't our favorite.
    • CSX's valuation is not as attractive as that of other highly-rated equities.
    • Let's take deep dive into CSX.
  • Can Home Depot Keep Going Higher?
    Thu, Jun. 12 HD 1 Comment

    Summary

    • Home Depot is now up roughly 4 times since the market bottom in March 2009.
    • Does this strong performance pass the reasonableness test?.
    • Let's examine what we think shares are worth at this time.
  • Why Altria Is Our Favorite Dividend Growth Idea In Tobacco
    Wed, Jun. 11 MO 45 Comments

    Summary

    • Altria has been one of the strongest performers in the Best Ideas portfolio and Dividend Growth portfolio.
    • The company offers an attractive dividend yield and boasts a Valuentum Dividend Cushion score above 1.
    • Its equity stake in SABMiller gives it financial flexibility like few other dividend payers in our coverage.
  • Understanding Compass Minerals' Economic Castle
    Tue, Jun. 10 CMP 1 Comment

    Summary

    • Compass Minerals operates the largest rock salt mine in the world in Canada and is among the lowest-cost salt producers in its markets.
    • The relationship between the company's ROIC and its WACC supports our view that the company has an Economic Castle.
    • Compass is trading at the high end of its fair value range.
  • Why Best Buy's Economic Castle Is Starting To Crumble
    Mon, Jun. 9 BBY 17 Comments

    Summary

    • Let’s examine the problem that arises by focusing exclusively on companies that have economic moats, or sustainable and durable competitive advantages.
    • We'll also evaluate the attractiveness of Best Buy's economic castle and explain why it is crumbling.
    • Our favorite ideas are always included in the portfolio of the Best Ideas Newsletter.
  • Why Realty Income's Portfolio Risks Are Exaggerated
    Sat, Jun. 7 O 42 Comments

    Summary

    • Realty Income boasts an investment-grade balance sheet, and its AFFO covers its existing annualized dividend payout by a nice margin.
    • The REIT’s dividend track record and excess AFFO capacity lead us to believe that multiple dividend increases are ahead. We’re already huge fans of its 5%+ annual dividend yield.
    • We value shares at $60 each, as we believe investors are mispricing the risks of Realty Income’s retail portfolio.
  • Why Netflix's Reed Hastings Has Candor
    Sat, Jun. 7 NFLX 9 Comments

    Summary

    • Netflix's shareholders have been on a roller-coaster ride.
    • We think Reed Hastings' warning is still valid.
    • The company has significant "beta" to the downside should the broader market face declines.
  • 3 Fascinating Firms For Your Radar
    Tue, Jun. 3 SYNA, USG, PPG Comment!

    Summary

    • PPG's EBITDA margin is the best among peers, and its dividend track record is among the best we've seen.
    • Synaptics most recently registered a 9 on the Valuentum Buying Index in August 2012, at $28 per share.
    • USG may have the highest incremental margin on new revenue of any firm in our coverage universe.