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I am a private investor who has invested in individual stocks for over a decade. I have a BBA from the University of Texas at Austin. I am retired and living off of dividends and distributions from a portfolio of BDCs, consumer staple stocks, MLPs, regional banks and REITs.
  • Consumer Staple Earning Projection Accuracy & RRRs 1 comment
    Aug 19, 2013 8:02 PM

    The is the second in a series of earning projection accuracy spreadsheets. These are provided to make the point that the earnings accuracy of MLPs is lacking. That results in higher RRRs - and more attractive "yield plus CAGR" stats.

    Projection accuracy is very high for most of the stocks in this sector. Due to having high CAGR projections - there is more risk in these stocks compared to the Health Care REITs. This is a sector where the "two birds in a bush" are expected to be caught. But the RRRs are higher. Why? Their valuations are justified only by a high dividend CAGR projection.

    Changes in EPS estimates by Year:
    Some Companies Have Assets That Produce More Predictable EPS Projections

     

     

      2010 2011 2012 2013 Accuracy 14 EPS
    comp Beginning Ending Change Beginning Ending Change Beginning Ending Change Beginning Cur Change Rating Spread

    ADM 2.80 3.06 9.3% 2.91 3.47 19.2% 2.97 2.30 -22.6% 3.11 2.27 -27.0% 3.0% 28%
    CPB 2.47 2.47 0.0% 2.51 2.54 1.2% 2.37 2.44 3.0% 2.54 2.61 2.8% 1.0% -9%
    KO 1.72 1.75 1.7% 1.92 1.92 0.0% 2.07 2.01 -2.9% 2.19 2.10 -4.1% 1.0% 7%
    CAG 1.75 1.74 -0.6% 1.75 1.75 0.0% 1.81 1.84 1.7% 2.08 2.16 3.8% 1.0% 4%
    CL 2.42 2.42 0.0% 2.53 2.52 -0.4% 2.76 2.68 -2.9% 2.95 2.83 -4.1% 1.0% 6%
    INGR 2.52 3.24 28.6% 3.62 4.68 29.3% 5.11 5.57 9.0% 5.87 5.26 -10.4% 2.0% 18%
    CLX 3.94 4.24 7.6% 4.15 3.93 -5.3% 4.08 4.10 0.5% 4.31 4.31 0.0% 1.5% 4%
    FLO 0.71 0.66 -7.0% 0.74 0.64 -13.5% 0.73 0.69 -5.5% 0.77 0.97 26.0% 3.0% 37%
    GIS 2.30 2.30 0.0% 2.48 2.48 0.0% 2.60 2.56 -1.5% 2.68 2.69 0.4% 1.0% 12%
    HSY 2.30 2.55 10.9% 2.76 2.82 2.2% 3.12 3.24 3.8% 3.55 3.71 4.5% 1.0% 5%
    HRL 1.31 1.51 15.3% 1.59 1.74 9.4% 1.82 1.86 2.2% 1.94 1.95 0.5% 1.0% 18%
    K 3.62 3.30 -8.8% 3.46 3.38 -2.3% 3.52 3.61 2.6% 3.63 3.79 4.4% 2.0% 8%
    KMB 5.17 4.68 -9.5% 5.01 4.80 -4.2% 5.25 5.25 0.0% 5.59 5.68 1.6% 2.0% 6%
    LANC 3.78 4.07 7.7% 3.64 3.84 5.5% 3.83 3.45 -9.9% 4.03 3.99 -1.0% 2.0% 3%
    MKC 2.52 2.65 5.2% 2.81 2.79 -0.7% 3.10 3.04 -1.9% 3.36 3.17 -5.7% 1.5% 5%
    PEP 4.17 4.13 -1.0% 4.61 4.40 -4.6% 4.60 4.10 -10.9% 4.41 4.36 -1.1% 2.0% 6%
    PG 4.14 4.11 -0.7% 3.98 3.95 -0.8% 4.19 3.85 -8.1% 3.96 4.05 2.3% 1.5% 4%
    SJM 4.06 4.35 7.1% 4.66 4.81 3.2% 5.02 4.73 -5.8% 5.21 5.37 3.1% 1.2% 10%

    Yield + CAGR Total Return Expectations

     

     


    Company Q3-13 Consensus Total Bonds EPS My Total Rtn Consensus Pr Impl Dividend
        Yield CAGR Return Ratings Accr RRRs - RRR Ratings CAGR / EPS

    ArDanMidlnd ADM 2.08% 8.90% 10.98% A 3.00 11.00 -0.02 2.8 8.92 33.48
    Campbell CPB 2.52% 6.50% 9.02% A 1.00 10.00 -0.98 3.1 7.48 44.44
    Coke KO 2.89% 7.80% 10.69% A+ 1.00 10.00 0.69 2.1 7.11 53.33
    ConAgra CAG 2.86% 7.50% 10.36% BBB- 1.00 10.50 -0.14 2.1 7.64 46.30
    Colgate CL 2.30% 8.20% 10.50% AA- 1.00 10.00 0.50 2.7 7.70 48.06
    Ingredion INGR 2.40% 9.10% 11.50% none 2.00 11.00 0.50 2.4 8.60 28.90
    Clorox CLX 3.38% 7.50% 10.88% BB 1.50 11.00 -0.12 2.9 7.62 65.89
    Flowers FLO 1.33% 9.50% 10.83% none 3.00 11.20 -0.37 2.4 9.87 30.93
    General Mills GIS 3.07% 7.70% 10.77% BBB+ 1.00 10.50 0.27 2.2 7.43 56.51
    Hershey HSY 2.05% 9.50% 11.55% A 1.00 10.00 1.55 2.4 7.95 52.29
    Hormel HRL 1.60% 9.50% 11.10% A 1.00 10.00 1.10 2.8 8.40 34.87
    Kellogg K 2.93% 7.70% 10.63% BBB+ 2.00 10.50 0.13 2.8 7.57 48.55
    Kimberly-Clark KMB 3.42% 7.50% 10.92% BBB- 2.00 10.80 0.12 3.0 7.38 57.04
    Lancaster LANC 2.01% 8.90% 10.91% A 2.00 10.50 0.41 3.0 8.49 40.10
    McCormick MKC 1.92% 8.40% 10.32% none 1.50 10.30 0.02 2.8 8.38 42.90
    Pepsi PEP 2.81% 7.50% 10.31% A- 2.00 10.40 -0.09 2.3 7.59 52.06
    Procter&Gamble PG 3.03% 7.40% 10.43% A- 1.50 10.20 0.23 2.2 7.17 59.51
    JM Smucker SJM 2.13% 8.30% 10.43% AA 1.20 10.10 0.33 2.5 7.97 43.20

    Average   2.48% 8.19% 10.67%         2.58

    Disclosure: I am long CL, CLX, HRL, GIS, PEP, PG, SJM.

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Comments (1)
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  • Butterfly Seeker
    , contributor
    Comments (784) | Send Message
     
    very interesting data! Thanks for collecting & putting it up! :)
    7 Sep 2013, 03:35 AM Reply Like
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