US Dividends Aristocrats thread

[Mr. Wood]

Apple to acquire the majority of Intel's smartphone modem business

 

[Mr. Wood]

The Top 10 Highest Yielding S&P 500 Stocks
Updated on July 25th, 2019

High Yield S&P 500 Stock
#10: Occidental Petroleum (OXY)
#9: AbbVie Inc. (ABBV)
#8: Invesco Ltd. (IVZ)
#7: AT&T (T)
#6: Newell Brands (NWL)
#5: Altria Group (MO)
#4: Macy’s Inc. (M)
#3: Iron Mountain (IRM)
#2: CenturyLink (CTL)
#1: Macerich Co. (MAC)

Final Thoughts
In this article, we examined the 10 S&P 500 stocks with the highest dividend yields. Interestingly, each of the companies in this article are generating sufficient cash flow or earnings to fund their dividend for the foreseeable future.

 

[Mr. Wood]

insert shameless advertising
http://www.signup.suredividend.com/?ref=29922a27d9

 

[Mr. Wood]

Investing in retirement or investing to fund your future retirement can get very complicated. But it doesn't have to.

That's because at its core, retirement investing is actually very simple.

In retirement, you no longer have your primary job related income stream. It's not retirement if you are still working 40+ hours a week, after all.

That means you must replace your income stream from working without actually working.

And the sad reality is that in many cases social security will not cover the normal retirement expenses and standard of living of most retirees. Getting bogged down into why or how that is doesn't change economic reality.

Retirement is when your savings and investments get to shine. The purpose of a retirement portfolio is to replace your income stream from your job.

That's where income producing securities come into play...

Perhaps the most straightforward way to generate income - without trading your time for money - is to invest your savings into income producing securities.

At Sure Dividend, we believe dividend paying stocks (and closely related REITs and MLPs) are the best way to invest your assets to create a growing income stream.

That's because publicly traded equities have the following favorable characteristics:
• Stocks have generated the strongest returns of any major asset class over the long run - and it isn't close. I cannot emphasize this point enough - you want as much of your money as possible in the stock market over the long run so long as you understand and can tolerate the steep declines the market occasionally goes through.

• The cost of buying and selling individual securities is cheap now - and holding stocks after purchasing them is free (no management fees is a good thing). This means more money left in your account to compound and pay you income, instead of going to a financial institution.

• The stock market's combination of transparency (readily available financials) and liquidity reduce uncertainty relative to more opaque and illiquid investments (like hedge funds or your second cousin's 'brilliant' CBD for cows idea).
The big drawback of the stock market is volatility and market declines... But that isn't a real drawback with income investing.

That's because volatility affects prices, not dividends.

There's a difference between the stock price and the dividends the stock pays. One fluctuates based on market whims. The other is based on the earnings power of the actual business.

If stock prices fall by 10% or 50% your income doesn't (assuming you are invested in strong businesses likely to increase their dividend rather than reduce it). So price declines don't impact the reason of investing; income.

But price declines do mean that putting new money into the market from any source (like reinvested dividends) is invested at more attractive rates.

Example: A stocks costs $100 per share and pays $3 per share in dividends for a 3% yield. If a recession occurs (and this is a recession safe company), the stock price may go down to $50 per share, but the dividend stays at $3 per share. This brings the yield up to 6%. Putting money to work at 6% is better (twice as good in fact) as putting it to work at 3%.

When you invest for income you get to profit from market volatility by choosing when you buy and sell.

That's why we believe income investing makes sense for many retirees and those preparing for retirement.

But this hasn't touched on an important part of retirement and pre-retirement investing; what specific securities to invest in.

Individual securites have the advantage of not costing anything to hold, unlike ETFs and mutual funds, which charge annual fees. Again, the more money in your account to invest and grow your income stream, the better.

Picking exactly what to invest in can get complicated and time consuming) but it doesn't have to be time-intensive and uncertain.

The financial industry has a wide variety of options that range in cost from asset managers and active mutual funds which can cost more than 1% of your assets under management annually, to investing directly in individual securities which is free after paying nominal brokerage fees (usually ~$5 per trade).

Example: 1% of assets under management doesn't sound like a lot, but if you do the math, it adds up. If you had a $500,000 portfolio you would pay $5,000 every year. $5,000 over a 20+ year retirement comes to $100,000 or more. Maybe I'm 'too cheap', but there aren't a lot of services I'd like to pay 6 figures for.

And it actually gets worse than that because typically an advisor will put you in funds that also charge based on assets under management, so you may well be paying closer to 1.5% than 1%.

The less you pay in investing fees, the more money is left in your investment account to grow and produce income for you.



“The person that turns over the most rocks wins the game. And that’s always been my investing philosophy.”
- Peter Lynch

 

[Mr. Wood]

why pay 2 day course $4k+ $10k+ to learn when we can easily get the same information for free?
after 2 day course, the "gurus" will upsell more advance courses, more software, but still give u the same public information.

it is like selling drugs to a otherwise normal human, after one puff not enuff must go back for more.

 

[Mr. Wood]

in be4 30% withholding tax.
yes. boring dividend investing is not for everyone.

if u like volatile growth stocks, there are oso many free resources out there.

no need to pay those fkers $4k $10++ course fees.

 

[Immortal]

ABBV down 30% from a year ago. Sigh.

 

[Mr. Wood]

http://financials.morningstar.com/valuation/price-ratio.html?t=ABBV&region=usa&culture=en-US
http://financials.morningstar.com/ratios/r.html?t=ABBV&region=usa&culture=en-US

share price down, but dividends not cut, FCF still strong
concern is payout ratio is getting higher, Ebit lower.

think this is a good stock to hold or even buy more?

 

[Mr. Wood]

free analysis T
Updated July 24th, 2019

We acknowledge the risks in the business, especially as it relates to the transition away from legacy businesses, but we believe the current value proposition more than makes up for this. We continue to award the security with a buy rating.

 

[Immortal]

http://financials.morningstar.com/valuation/price-ratio.html?t=ABBV&region=usa&culture=en-US
http://financials.morningstar.com/ratios/r.html?t=ABBV&region=usa&culture=en-US

share price down, but dividends not cut, FCF still strong
concern is payout ratio is getting higher, Ebit lower.

think this is a good stock to hold or even buy more?

Probably just a Hold for now for me..

 

[Mr. Wood]

PFE earnings
PFIZER REPORTS SECOND-QUARTER 2019 RESULTS
July 29, 2019

Analyst view:

Pfizer Reports Second Quarter Results; Announces Spinoff + Merger of Upjohn Unit with Mylan

This morning before the markets opened, Pfizer (PFE) reported financial results for the second quarter of fiscal 2019. Although the company beat consensus earnings-per-share expectations, it also reduced its guidance for the remainder of the fiscal year, causing shares to fall by 2% in this morning’s premarket trading.

In the quarter, revenues of $13.3 billion decreased by 2% year-on-year, while adjusted earnings also decreased by 2% and adjusted diluted earnings-per-share increased by 4%.

Fortunately, Pfizer’s results through the first six months of the year were better. The company’s revenues were flat through the first six months of fiscal 2018 while adjusted net income increased by 3% and adjusted diluted earnings-per-share increased by 8%.

Pfizer also updated its financial guidance for the remainder of the fiscal year with the publication of its second quarter results. The company now expects to generate adjusted earnings-per-share between $2.76 and $2.86.

Previous guidance was for adjusted earnings-per-share between $2.83 and $2.93. The new midpoint ($2.81) represents a 2.4% decrease over the previous guidance band’s midpoint ($2.81).

The company’s revenue guidance was also reduced. Pfizer now expects to generate sales between $50.5 billion and $52.5 billion, down from $52 billion to $54 billion previously.

In a separate but concurrent press release, Pfizer announced a definitive merger agreement to combine Mylan (MYL) with Upjohn, Pfizer’s off-patent branded and generic established medicines business.

Under the terms of the merger agreement, which is structured as an all-stock, Reverse Morris Trust transaction, each Mylan share will be converted into one share of the new company. Legacy Pfizer shareholders will own 57% of the new company while legacy Mylan shareholders will own 43%.

The new company is expected to have pro forma 2020 revenue of $19 to $20 billion. Pro forma 2020 adjusted EBITDA is anticipated to be in the range of $7.5 billion to $8.0 billion, including synergies of approximately $1 billion annually to be realized by 2023. Pro forma free cash flow for 2020 is expected to be more than $4 billion.

For dividend investors, the following passage from the announcement is particularly encouraging:

“The new company will be focused on returning capital to shareholders, while maintaining a solid investment grade credit rating. It expects to achieve a ratio of debt to adjusted EBITDA of 2.5x by the end of 2021. In addition, the new company intends to initiate a dividend of approximately 25% of free cash flow beginning the first full quarter after close and the potential for share repurchases once the debt to adjusted EBITDA target is sustained.”

Overall, it was a solid quarter from Pfizer. The company has decent growth prospects and an appealing 3%+ dividend yield, but it trades above our fair value estimate today. Accordingly, Pfizer earns a hold recommendation from Sure Dividend today.

Mylan and Upjohn, a Division of Pfizer, to Combine, Creating a New Champion for Global Health Uniquely Positioned to Fulfill the World’s Need for Medicine
July 29, 2019

 

[Mr. Wood]

PG earnings
P&G Announces Fourth Quarter and Fiscal Year 2019 Results
7/30/2019

Analyst view

Procter & Gamble Beats Earnings Expectations; Shares +4%

This morning before the markets opened, Procter & Gamble (PG) reported fourth quarter and full year results for fiscal 2019. The company beat expectations on both earnings and revenue, causing shares to jump by 4% in this morning’s premarket trading.

Here are what the numbers look like. On the top line, Procter & Gamble saw net sales of $17.1 billion increase by 4%, comprised of 3% growth in volumes, a 4% headwind from foreign exchange fluctuations, 3% growth from price and a 2% boost from mix. On an organic basis (excluding foreign exchange impacts) the company’s sales grew by 7% in the quarter.

Looking at Procter & Gamble’s net sales by segment is an interesting exercise:
• Beauty: 3% net sales growth
• Grooming: -3% net sales growth
• Health Care: 13% net sales growth
• Fabric & Home Care: 5% net sales growth
• Baby, Feminine, & Family Care: 1% net sales growth
Clearly, Procter & Gamble’s Health Care segment was the most important contributor to its revenue growth in the most recent quarter.

On the bottom line, it appears on the surface that Procter & Gamble’s performance was terrible. The company’s diluted earnings-per-share were negative $2.12, which represents a decrease of $2.84 versus the same period a year ago. With that said, this is entirely due to a one-time, non-cash accounting adjustment to the carrying value of the Gillette Shave Care business.

Excluding this nonrecurring accounting charge, Procter & Gamble generated core earnings-per-share of $1.10, which represents year-on-year growth of 17%.

Procter & Gamble’s results for the entire fiscal year were not as robust as its fourth quarter performance. In the twelve-month reporting period, Procter & Gamble generated net sales of $67.7 billion, an increase of 1% versus the prior year. Organic net sales increased by 5%, including a 2% increase in organic volume.

On the bottom line, Procter & Gamble’s core earnings-per-share were $4.52 in fiscal 219, an increase of 7%. The company’s earnings growth was due primarily to the combination of higher revenues and a lower tax rate.

Procter & Gamble also published preliminary financial guidance for fiscal 2020 with the release of its 2019 results. The company expects all-in sales growth in the range of 3% to 4%, with organic sales growth expected to be in the same range. Core earnings-per-share are expected to increase 4% to 9%.

Overall, it was a solid earnings release from Procter & Gamble. The company is one of the most consistent dividend payers in our investment universe, yet trades with a sky-high valuation. Accordingly, the company earns a sell recommendation from Sure Dividend at current prices despite its better-than-expected fourth quarter financial results.

 

[Mr. Wood]

 

[Mr. Wood]

A. O. Smith reports second quarter earnings of $0.61 per share

July 30, 2019

2019 outlook
"We continue to see prolonged headwinds in the appliance market in China. As a result of weakness in consumer demand and recent communications with key customers in China indicating that they will scale back their purchases in the third quarter due to continued elevated channel inventory levels, our outlook for the back half of the year includes a year-over-year decline in China sales," noted Wheeler. "We project full year China sales to be down between 16 and 17 percent year-over-year in local currency terms and 19 and 20 percent after a three percentage point currency headwind. As a result, we have revised our full year guidance to $2.35 to $2.41 earnings per share."

 

[Mr. Wood]

GE ANNOUNCES SECOND QUARTER 2019 RESULTS
July 31, 2019

Analyst view

General Electric Beats Earnings Expectations, CFO to Resign; Shares +5%

This morning before the markets opened, General Electric (GE) reported financial results for the second quarter of fiscal 2019. Due to an earnings beat and a separate press release detailing its CFO’s resignation, shares of General Electric have risen by 5% in this morning’s premarket trading.

First, let’s briefly discuss the company’s CFO succession. General Electric’s outgoing CFO is Jamie S. Miller, who joined the company as Vice President, Controller and Chief Accounting Officer in 2008. She then became Chief Information Officer for two and a half years before moving to become the President and CEO of GE Transportation. Ms. Miller became GE’s CFO in October of 2017.

General Electric has not identified a replacement yet, but instead has initiated a search to identify its next CFO. Ms. Miller has agreed to remain in her role to assist with a smooth transition. It is difficult to say the exact cause of Ms. Miller’s departure from the company, but its performance certainly can’t have helped – GE’s stock is down by more than 50% since she became CFO amid a slew of financial and debt problems.

Moving on, let’s discuss the company’s actual financial results. General Electric’s second quarter revenues of $28.8 billion decreased by 1% year-on-year while total orders of $28.7 billion decreased by 4%. Importantly, the company’s key Industrial segment performed better, with Industrial segment organic revenues of $27.7 billion increasing by 7% year-on-year.

On the bottom line, General Electric generated adjusted earnings-per-share of $0.17, including a $0.06 benefit from a tax audit resolution.

With the publication of its second quarter earnings release, General Electric also increased its financial guidance for the remainder of the fiscal year. The company now expects the following (March’s financial guidance is included in parentheses):
• Industrial Segment Organic Revenue Growth: Mid-single digits (low-to-mid-single digits)
• Adjusted EPS: $0.55 to $0.65 ($0.50 to $0.60)
• Adjusted Industrial Free Cash Flows: negative $1 billion to $1 billion (negative $2 billion to flat)
• Adjusted GE Industrial Margin Expansion: flat to up ~100 basis points (unchanged)
• Restructuring (Industrial) Expense: $1.7 billion to $2.0 billion ($2.4 billion to $2.7 billion)
• Restructuring (Industrial) Cash: $1.5+ billion ($2.0+ billion)
General Electric’s Chief Executive Officer, Larry Culp, made the following statement in conjunction with General Electric’s guidance increase in the earnings release:

“Due to improvements at Power, lower restructuring and interest, higher earnings, and better visibility at the half, we are raising our full-year outlook for Industrial segment organic revenues, adjusted EPS, and Industrial free cash flows, and we are holding our margin guidance. We will continue to take planned actions to improve our businesses and monitor some market headwinds, and we remain focused on driving continuous improvement and delivering for our customers. I am encouraged by our team’s progress and dedication to date.”

General Electric’s earnings release was better than expected and, overall, we are pleased to see the company’s turnaround is progressing better than we expected. With that said, the stock does not seem to offer particularly attractive returns, but it does have high risk. Because of this, General Electric earns a sell recommendation from Sure Dividend at current prices.

 

[Mr. Wood]

Apple Reports Third Quarter Results
July 30, 2019


sure div analyst view

Apple Beats Revenue and Earnings Estimates Thanks to China Rebound Shares +4%

Yesterday after the markets closed, technology giant Apple (AAPL) reported financial results for its third quarter of fiscal 2019. Thanks to better-than-expected performance in Apple’s Greater China segment, the company’s revenue and earnings both exceeded analyst expectations, causing shares to jump 4% in after-hours trading.

On the top line, Apple posted quarterly revenue of $53.8 billion, which compares positively to the $53.4 billion consensus estimate and increased by 1% over the same period a year ago. The impressive revenue figure also represents the largest June-quarter revenue in Apple’s history. International sales accounted for 59% of the company’s revenue in the quarter.

As mentioned in the introduction to this analysis, Apple’s better-than-expected revenue number was largely due to better-than-expected sales in the Greater China segment. The geographic breakdown of Apple’s revenue is shown below:
• Americas: $25.1 billion (2.1% growth)
• Europe: $11.9 billion (1.8% decline)
• Greater China: $9.2 billion (4.1% decline)
• Japan: $4.1 billion (5.6% growth)
• Rest of Asia Pacific: $3.6 billion (13.3% growth)
It is hard to overstate the importance of the Greater China segment to Apple’s long-term growth prospects, so better-than-expected performance from that segment was a welcome sight for investors. They are not the only ones watching the numbers, either; on the earnings conference call, Apple’s Chief Executive Officer Tim Cook made the following statement about the Greater China segment’s performance in the second quarter:

“I'd like to provide some color on our performance in Greater China, where we saw significant improvement compared to the first half of fiscal 2019 and return to growth in constant currency. We experienced noticeably better year-over-year comparisons for our iPhone business there than we saw in the last two quarters and we had sequential improvement in the performance of every category. The combined effects of government stimulus, consumer response to trade-in programs, financing offers, and other sales initiatives and growing engagement with the broader Apple ecosystem had a positive effect. We were especially pleased with a double-digit increase in services driven by strong growth from the App Store in China.”

Let’s next talk about Apple’s revenue performance by product segment. On a company-wide basis, Apple’s revenue growth was driven entirely by strength in its Services segment – which is comprised of subscription services like Apple Music, the App Store, and other non-device purchases made by its customers - and partially offset by declining product sales. More specifically, Apple’s Services revenue grew by 12.6% to $11.5 billion while product sales declined by 1.7% to $42.4 billion.

It is an interesting exercise to examine Apple’s revenue by product, which we’ve broken out below:
• iPhone: $26.0 billion (11.8% decline)
• Mac: $5.8 billion (10.7% growth)
• iPad: $5.0 billion (8.4% growth)
• Wearables, Home and Accessories: $5.5 billion (48.0% growth)
• Services: $11.5 billion (12.6% growth)
Apple’s fastest-growing business both in terms of percentages and absolute dollars in the Wearables segment, driven by strength in the Apple Watch and AirPods product categories.

Moving down the income statement, Apple’s cost of sales increased faster than its revenue, which led to less gross profit in the quarter. Cost of sales increased by 2.2% to $33.6 billion while gross profit decreased by 1.0% to $20.2 billion.

Similarly, Apple’s operating expenses increased by 11.2% (driven primarily by a 15.0% increase in research and development) while operating income decreased by 8.5% to $11.5 billion.

On the bottom line Apple’s net income was $10.0 billion, a decrease of 12.8% year-on-year. Apple’s aggressive share repurchase program (more on that later) meant that the company’s per-share performance was much better, however.

The company’s diluted earnings-per-share fell by only 6.8% over 2018’s comparable period. Perhaps most importantly, Apple’s diluted earnings-per-share of $2.18 came in meaningfully higher than the $2.10 consensus estimate from sell-side analysts.

Apple’s guidance for the fiscal 2019 fourth quarter was also better than expected. The company’s guidance is listed below along with the equivalent figure from last year’s comparable quarter:
• revenue between $61 billion and $64 billion ($62.9 billion)
• gross margin between 37.5 percent and 38.5 percent (38.3%)
• operating expenses between $8.7 billion and $8.8 billion ($8.0 billion)
• other income/(expense) of $200 million ($303 million)
• tax rate of approximately 16.5 percent (14.0%)
Lastly, Apple continued to be an extraordinarily shareholder-friendly allocator of capital in the quarter. The company returned over $21 billion to shareholders, including $17 billion through open market repurchases of almost 88 million Apple shares, and $3.6 billion in dividends and equivalents.

Looking out over a longer time horizon, Apple’s capital return program is even more impressive. Since the company began its share buyback program in fiscal 2012, it has repurchased $288.2 billion of company stock while also paying $85.0 billion in dividend payments. In the second quarter alone, Apple saw its share count decline by 6.6% over the same period a year ago.

Overall, it was an excellent quarter from Apple. The company’s business performed better than expected and its per-share results continue to be boosted by its share repurchase program. The company’s stock trades slightly above our fair value estimate after yesterday’s earnings release, so Apple earns a hold recommendation from Sure Dividend today.

 

[Mr. Wood]

 

[Mr. Wood]

CINCINNATI FINANCIAL REPORTS SECOND-QUARTER 2019 RESULTS
July 30, 2019

Second-quarter 2019 net income of $428 million, or $2.59 per share, compared with $217 million, or $1.32 per share, in the second quarter of 2018.
$7 million or 5% increase in non-GAAP operating income to $140 million, or 85 cents per share, compared with $133 million, or 81 cents per share, in the second quarter of last year.

$211 million increase in second-quarter 2019 net income, primarily due to the after-tax net effect of a $204 million increase in net investment gains and a $9 million increase in after-tax property casualty underwriting income.

$55.92 book value per share at June 30, 2019, a record high, up $7.82 or 16.3% since year-end.

18.6% value creation ratio for the first six months of 2019, compared with negative 1.1% for the 2018 period.

 

[Mr. Wood]

for those who like growth stocks

 

[Mr. Wood]

Clorox Reports Q4 and Fiscal Year 2019 Results, Provides Fiscal Year 2020 Outlook
August 1, 2019

sure div analyst:

Clorox' Q2 Misses Revenue Estimates but Beats on Earnings; Shares Flat Premarket

This morning before the markets opened, the Clorox Company (CLX) reported financial results for the fourth quarter of its fiscal 2019. The company’s revenue missed expectations, but earnings were slightly ahead of consensus estimates, causing shares to trade flat in this morning’s premarket trading.

On the top line, Clorox reported a sales decline of 4% in the fourth quarter. This was comprised of a negative 3% impact from lower volume and a 2% negative impact from unfavorable foreign currency exchange rates, partially offset by higher selling prices.

The company's Household segment was its biggest sales laggard. The segment's revenue declined by 11% versus the same quarter a year ago. The Household segment is composed of the following: bags and wraps, charcoal, cat llitter, and digestive health. The charcoal and bags and wraps divisions were primarily responsible for the sales declines. Clorox' CEO Benno Dorer had the following to say on the topic:

"Fiscal year 2019 results were mixed for the company due to persistent challenges on Charcoal and Bags and Wraps, and our Q4 results were a reflection of this... We'll be leaning into stronger business plans on Charcoal and Bags and Wraps, with the expectation that we'll see a return to growth in the back half of the year."

Further down the income statement, Clorox’s gross margin expanded 110 basis points to 45.1% from 44.0% last year. The company’s gross margin expansion was driven primarily by price increases and cost savings and partially offset by higher trade spending and manufacturing and logistics costs.

On the bottom line, Clorox generated adjusted net income of $241 million, which represents an increase of 11.1% from the same period a year ago. The company’s adjusted diluted earnings-per-share increased by 13.3% year-on-year.

Overall, Clorox’s earnings release was in-line with our long-term expectations for the company. However, with average growth prospects, a below-average dividend yield, and a significantly overvalued stock price, Clorox earns a sell recommendation from Sure Dividend at current prices.