With Starbucks (Nasdaq: SBUX) still trading range-bound, long-term investors are definitely waiting to see if this stock drops further. Why? Well, this stock has a wide moat, an excellent dividend growth rate and spins off huge amounts of free cash flow every year. Furthermore the company is currently selling on the cheap as it has an earnings multiple of 31.55 and a forward earnings multiple of 25.5. Its softer sales comps of 4% in its third quarter wasn't viewed well by the market and the stock remains down 2% since fiscal Q3 earnings were released. However I can't foresee the S&P500 continuing to go in the opposite direction to this stock. Starbucks is down 6% year to date whereas the S&P continues to flirt with its all-time highs and is up 7%+.
Despite the... more
Gems are always hard to find. But this energy downturn is here to help fundamental investors like me who move off the beaten path discover first what the market will discover later. Therefore, tumbling markets are my friend, they are not my enemy.
That said, Gulf Island Fabrication (Nasdaq: GIFI) was a steak priced like a hamburger at about $7/share between May 2016 and July 2016, when I recommended the subscribers to my Premium Research load this energy gem.
Back then, its price got far out of line relative to its value. And despite the fact that the stock has risen over the last weeks, it has still significant upside left.
Gulf Island Fabrication is engaged in the fabrication of offshore drilling and production platforms and other steel structures for... more
The following is a list of companies trading ex-dividend on Wednesday, August 24th:
Cabot Corp. (NYSE: CBT) declared a quarterly dividend of $0.30 per share, or $1.2 annualized. The dividend will be payable on September 9, 2016, to stockholders of record on August 26, 2016, with an ex-dividend date of August 24, 2016. The annual yield on the dividend is 2.5 percent.
Find out which companies are about to raise their dividend well before the news hits the Street with StreetInsider.com's Dividend Insider Elite. Sign-up for a FREE trial here. Carnival Corp. (NYSE: CCL) declared a quarterly dividend of $0.35 per share, or $1.4 annualized. The dividend will be payable on September 16, 2016, to stockholders of record on August 24, 2016, with an ex-dividend date of August 22, 2016.... more
(Source: Chicago Tribune)
Back in late 2014, a Forbes article titled, "Investors, Just Say No To Illinois, NJ, and PR Muni Bonds" was released. In it, the author mentioned the "mile-high pension promises given to public employees - with a snowball's chance of ever being paid." This was definitely prescient as since then, Puerto Rico has gone into default and is now in the process of restructuring its debt with others extremely likely.
Puerto Rico came a few years after the City of Detroit was forced to file for bankruptcy. Investors in those muni bonds received between 34 and 74 cents on the dollar. Atlantic City is now a near certainty to file in the next year, with its debt well into junk territory. The Mayor noted that the city was... more
I have figured out why many find investing difficult and have a hard time making money in the market. It has to do with this notion of outperformance, and the need for useless valuation models. Nobody can figure out outperformance before it happens. It is only after the fact. In essence, we all are playing a fancy guessing game. (Since we are in election year, I will be politically correct. We use assumptions based on the current capital market expectations given to us by the data currently available to project, within a 95% confidence interval, an intrinsic value that should reveal whether or not the stock is overvalued compared to the overall market.)
The Simple Theory
I propose a theory, which is rock solid, that states that a potential investor just goes with a company that... more
Income investors actively seek exposure to MLPs due to juicy distributions. However, the crude oil and natural gas markets have been sailing through harsh seas. Crude oil prices have dropped by 60% since 2014, and natural gas prices have been in a bear market since 2005. Consequently, several MLPs have slashed their distributions. Moreover, because of the high levels of debt, several MLPs have declared bankruptcy such as Atlas Resource Partners. Nonetheless, there are still significant opportunities for income investors.
Even though the future does not look bright for crude oil and natural gas, the World Bank forecasts prices to increase in the next decade. According to the entity, the price of crude oil will recover slowly, and it is expected to trade at $43 per barrel in 2016.... more
Limited Brands' (NYSE: LB) second quarter performance has propelled shares higher despite recent weakness in the broader retail sector. Comparable sales grew 3% from the year-ago period thanks to a strong 5% comparable sales gain from its Bath & Body Works segment, and a solid 2% increase from its Victoria's Secret brand. However, the driver in the sales growth for Victoria's Secret may not be sustainable.
The gross margin of Victoria's Secret deteriorated in a meaningful way as a result of promotional activity during the quarter, however. The business is exiting its swimwear and apparel lines, and the clearing of such merchandise contributed negatively to margin performance in the quarter. While such a move will continue to pressure results in the near term, we... more
Cementos Pacasmayo S.A.A. (NYSE: CPAC; BVL:CPACASC1) (“the Company” or “Cementos Pacasmayo”) announced today that the Company's Board of Directors in its session held on August 22, 2016 approved a cash dividend of S/ 0.285 per common and investment share, which represents a total of S/ 165,859,911.86 related to retained earnings as of December 31, 2014, in accordance with what was authorized at the Annual Shareholder’s Meeting held on March 26, 2016.... more
A lot of people have shunned Illinois-based farm equipment maker Deere & Co. (NYSE: DE) as of late, but there's a lot of impressive history there. Aside from an iconic and longstanding brand, the company has pumped out billions in profits (anywhere from $1.5 to $3.5 billion annually over the last decade) to go along with a solid and increasing dividend payment.
Perhaps just as impressive has been the share repurchase program. Deere targets a dividend payout ratio of 25% to 35% of mid-cycle earnings, which leaves plenty of room for additional capital allocation.
At the end of 2004 the company had about 494 million common shares outstanding. Today that number is closer to 316 million - representing a compound decline of about 3.6% per annum. Usually when you talk about... more
If you are the type of investor who screens for stocks paying dividends while trading under book value, you might have come across Apollo Residential Mortgage (NYSE: AMTG), an MBS REIT. At first glance, the security appears to be very attractive, but upon further investigation, it is clear that any arbitrage opportunity that may have been available has already been taken.
The most recent quarter's 10-Q showed shareholders' equity of $664.8 million. With 31.9 million shares issued and outstanding, that means AMTG is worth $20.84 per share, which is well above the current price of $13.62.
With AMTG's dividend yield listed at 14%, a potential value/income investor might get so excited and ahead of themselves that they may jump in and buy without further investigation.