US Dividends Aristocrats thread

[Mr. Wood]

Tyson Foods Reports First Quarter 2021 Results
FEB 11, 2021

First Quarter Highlights

GAAP EPS of $1.28, down 7% from prior year; Adjusted EPS of $1.94, up 28% from prior year
GAAP operating income of $705 million, down 7% from prior year; Adjusted operating income of $1,025 million, up 24% from prior year
Total Company GAAP operating margin of 6.7%; Adjusted operating margin of 9.5%
Liquidity of $4.2 billion at January 2, 2021
Results impacted by approximately $120 million of direct incremental expenses related to COVID-19
Repaid $750 million of our $1.5 billion outstanding term loan in February 2021

“As we navigate continued market volatility, our multi-protein portfolio creates the fuel for disciplined investments in higher margin, higher growth opportunities ahead. We will continuously seek to remove unnecessary costs from the business and invest in the right areas. Looking forward, I’m confident that our team is executing on the right priorities to meet our commitments and drive shareholder value creation.”

 

[Mr. Wood]

Kellogg Company Reports Strong 2020 Results and Issues 2021 Financial Guidance
February 11, 2021

Full year reported net sales increased by approximately 1% year on year, as the absence of results from businesses divested in 2019 and adverse currency translation were more than offset by business momentum, elevated demand for food at home brought on by the COVID-19 pandemic, and a 53rd week in the fiscal year. On an organic basis, net sales increased by approximately 6%

Full year reported operating profit increased approximately 26% year on year largely due to a significant reduction in one-time charges. On an adjusted basis, operating profit increased by nearly 3%, as the impact of higher net sales and a 53rd week in the fiscal year more than offset the absence of results from the divested businesses, incremental COVID-related costs, and adverse currency translation. Excluding currency translation, adjusted operating profit increased by approximately 4%.

Full year reported earnings per share increased 30% from the prior year due primarily to reduced one-time charges and a lower reported effective tax rate, more than offsetting the absence of results from divested businesses. On an adjusted basis, earnings per share increased approximately 1%, as higher adjusted operating profit and other income more than offset the absence of divested businesses and a higher adjusted tax rate. On a currency-neutral basis, adjusted earnings per share increased by approximately 2%.

 

[Mr. Wood]

UPS Announces Quarterly Dividend
February 10, 2021

announced its regular quarterly dividend of $1.02 per share on all outstanding Class A and Class B shares.

The dividend is payable March 10, 2021 to shareowners of record on February 22, 2021.

 

[Mr. Wood]

Disney earnings: Surge by Disney+ to nearly 95 million subscriptions leads to surprise profit
Feb. 12, 2021

A surge in Disney+ subscriptions, to 94.9 million, led a revenue rebound from the previous quarter as the media giant continues to double-down on direct-to-consumer sales.

After adjusting for restructuring charges and other effects, Disney reported earnings of 32 cents a share, down from $1.53 a share in the year-ago quarter. Analysts on average expected Disney to report an adjusted loss of 34 cents a share on sales of $15.9 billion, according to FactSet.

 

[Mr. Wood]

Kraft Heinz Confirms Sale Of Planters Brand To Hormel Foods
February 12, 2021

The majority of products included in the transaction include those sold under the Planters brand, including single and mixed nuts, trail mix nuts, among others. The deal also includes Kraft's global intellectual property rights to the Planters brand and property including two of Kraft's Planters production facilities.

 

[Mr. Wood]

Not Just Tesla: Why Big Companies are Buying into Crypto-Mania
Feb. 11, 2021

On Thursday, BNY Mellon (BK), the oldest bank in the U.S., said it will hold and transfer cryptocurrencies for customers. “Growing client demand for digital assets, maturity of advanced solutions, and improving regulatory clarity present a tremendous opportunity for us to extend our current service offerings to this emerging field,” said Roman Regelman, the bank’s CEO of asset servicing and head of digital.

Mastercard (MA) said on Wednesday that it will let merchants accept some cryptocurrencies through its network later this year. The payments will be converted to traditional money before it enters the companies’ systems. Twitter (TWTR) is also considering a Bitcoin investment. And Square (SQ) has already put some on its balance sheet, as well as given users of its Cash App access to buy the cryptocurrency.

 

[Mr. Wood]

topish

broke out and tested s/r line.

 

[Mr. Wood]

Week Ahead: Holidays, lockdowns, inflation and Platinum
February 13, 2021

Just as many people were seeing light at the end of the tunnel, more areas are going into lockdowns. Athens are just gone into lockdown due to the rapid spread of the UK variant, which is said to be more contagious. In Australia, Victoria has gone into a snap lockdown 5-day lockdown after a contagious variant was discovered. Countries already in lockdown are having the timeframe extended. The UK, Germany and Japan have had their lockdowns extended to March 8th.

While many are hoping economies will reopen soon, central banks may not be in the same mindset. Just last week, Fed Chairman Powell, ECB President Lagarde and sources from the BOJ have all expressed doubt that a “reopening” will inject much needed consumer funds back into the market, at least in the long run.

The saying goes that “central banks are often the last to know”. Therefore, central banks will be pumping out more money. But when risk assets begin to move lower, it may be too late, and central banks may have to taper quickly. In short, watch inflation expectations and stock markets!

 

[Mr. Wood]

Dividend Aristocrats In Focus: McDonald’s Corporation

Updated on February 11th, 2021

Using the current share price of ~$214 and expected earnings-per-share for 2020 of $8.40, the stock has a price-to-earnings ratio of 25.5.

Over the past decade, shares of McDonald’s have held an average P/E ratio of 21. We consider 19 times earnings as a reasonable fair value estimate. If shares were to revert to a P/E valuation of 19, annual returns would be reduced by 5.7% through 2026.

Therefore, McDonald’s appears to be overvalued, based on relative comparisons to the broader market, as well as to its own historical average. Fortunately, the impact of overvaluation will be offset by earnings-per-share growth and dividends. In addition to expected EPS growth of 6% per year through 2026, the stock also offers a current dividend yield of 2.4%.

Overall, McDonald’s is expected to generate total returns of just 2.7% per year, a weak projected rate of return. The relatively low expected return is due to McDonald’s stock valuation, which is abnormally high at the present time.

That said, investors aren’t likely to see sizable gains with the high valuation of the stock. As a result, we believe investors should avoid the stock and wait for a pullback before buying McDonald’s.

 

[Mr. Wood]

FLOWERS FOODS, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2020 RESULTS
February 11, 2021

Fiscal 2020 Summary:

Compared to the prior year where applicable

Sales increased 6.4% to $4.388 billion. The additional week contributed 1.8%.
Net income decreased 7.4% to $152.3 million. Adjusted net income increased 36.1% to $278.0 million.
Adjusted EBITDA increased 23.4% to $521.7 million, representing 11.9% of sales, a 160-basis point increase.
Diluted EPS decreased $0.06 to $0.72. Adjusted diluted EPS increased $0.35 to $1.31. The additional week contributed $0.02.

For the 52-week Fiscal 2021, the Company Expects:

Sales in the range of approximately $4.212 billion to $4.300 billion, representing a change of approximately -4.0% to -2.0%. This change includes a 1.8% reduction in sales due to one fewer week in fiscal 2021.
Diluted EPS in the range of approximately $1.07 to $1.17. The effect of one fewer week in fiscal 2021 impacts EPS by approximately $0.02.

 

[Mr. Wood]

Asian Open: Implied volatility for bonds spook equity markets
February 18, 2021

Given the rise in inflation expectations and of course bond yields of late, we doubt the top for yields is here yet. In turn, this could cause investors to seriously reconsider if they want to be so long equities at multi-year highs. In fact, we’re already seeing signs of this (see below). Moreover, the effects of fiscal stimulus on the US economy is becoming apparent, with strong retail sales (up 5.9% in January versus 1% forecast) and higher producer prices overnight.

Given that the FOMC minutes released this morning revealed that the Fed are discussing how to lay the groundwork for higher inflation, it remains plausible the Fed may be forced to act sooner than 2023 and gently discuss tapering, as inflation may indeed overshoot their own expectations sooner than anticipated. Bond markets certainly appear to think this may happen.

 

[Mr. Wood]

Dividend Aristocrats In Focus: S&P Global
Updated on February 17th, 2021

S&P Global currently trades at ~$339 per share. Using the company’s adjusted earnings-per-share guidance for 2021 of $12.35, the stock has a price-to earnings ratio of 27.4. S&P Global’s 5-year average price-to-earnings ratio is 21, but we’re assessing fair value at 26 times earnings, given the sustained, outstanding performance the company has produced.

S&P Global is a strong business, with a long runway of growth up ahead. There will always be a need for financial ratings services. And, future growth potential is strong in new areas like data and financial technology. S&P Global’s acquisitions will accelerate its growth in these segments.

The dividend yield of 0.9% might not be attractive to income investors, as it trails the S&P 500 average yield of 1.5%, but dividend growth investors should view the stock more favorably. According to the company, it has increased its dividend by 10.2% compounded annually since 1974. On January 27th, S&P Global increased its dividend by 15%.

That said, shares are somewhat expensive relative to the historical average, earning S&P Global stock a hold recommendation at the current price.

 

[Mr. Wood]

Man Who Saved Pabst Comes to Rescue Nestle’s Ailing Water Brands
February 17, 2021

Dean Metropoulos is joining up in One Rock’s purchase of the Nestle brands, which include Poland Spring, Pure Life and Deer Park. The billionaire investor is known for reviving worn-out products like Bumble Bee Tuna and Chef Boyardee.

Bottled water has been a headache for Nestle Chief Executive Officer Mark Schneider and will be challenging to fix. The segment eclipsed soft drinks in popularity in the U.S. after a surge in demand in the early 2000s. That attracted low-price competition and criticism that the business wastes plastic and precious natural resources. In 2020, Covid-19 restrictions pummeled consumption, as a large proportion of bottled water is consumed in restaurants and tourist destinations.

As big producers such as Coca-Cola Co. and PepsiCo Inc. try to find ways to sell water in more environmentally sound ways, the question remains whether Metropoulos will succeed in cracking a problem that Nestle preferred to step away from.

 

[Mr. Wood]

Asian Open: US data – all on the rise (for better or worse)
February 19, 2021

US indices traded lower initially yet recovered losses by the close of the session, leaving a series of bullish hammers along the way. That said, such candles need confirmation. So, if we are to see prices break beneath the candle lows they will then be labelled as ‘hanging men’ or bearish hammers. The Dow Jones closed -0.38% lower and our attention I on 31,270 (previously a record high) as it could prove to be pivotal for bulls and bears. The S&P 500 closed -0.44% lower and its equivalent pivotal level to monitor is 3870.

Gold continues to tease bears with a break of 1764.73 support, yet their hesitancy is underwhelming. This only increases the odds of a minor rebound from current levels, even if it is a ‘last hurrah’ before it eventually breaks to the downside anyway. Regardless, 1764.73 remains a key level (and likely pivotal) for bulls and bears to plan their trades around.

 

[Mr. Wood]

Hormel Foods Reports First Quarter Results And Provides Full Year Guidance
Feb. 18, 2021

FIRST QUARTER

Volume of 1.2 billion lbs., down 1%
Record net sales of $2.5 billion, up 3%
Pretax earnings of $277 million, down 5%
Operating margin of 10.9%, compared to 11.8% last year
Effective tax rate of 19.7%, compared to 16.3% last year
Diluted earnings per share of $0.41, down 9% compared to last year
Cash flow from operations of $206 million, up 9%
Operating free cash flow of $165 million, up 27%

"I am increasingly optimistic about generating sales and earnings growth in fiscal 2021," Snee said. "As such, we are setting our full year earnings per share guidance at $1.70 to $1.82 per share, which does not include the expected impact from the acquisition of the Planters® snack nuts business. The Planters® acquisition is exciting and a perfect strategic fit for our company."

 

[Mr. Wood]

Nestlé reports full-year results for 2020
FEB 18, 2021

2021 outlook: continued increase in organic sales growth towards a mid single-digit rate. Underlying trading operating profit margin with continued moderate improvement. Underlying earnings per share in constant currency and capital efficiency expected to increase.

Mid-term outlook: sustained mid single-digit organic sales growth. Continued moderate underlying trading operating profit margin improvement. Continued prudent capital allocation and capital efficiency improvement.

Mark Schneider, Nestlé CEO, commented:"2020 was a year of hardship for so many, yet I am inspired by the way it has brought all of us closer together. I want to thank our employees and our partners - from farmers to retailers - who worked with us to ensure the supply of food and beverages to communities globally.

seldom we hear tributes to the most important farmers

 

[Mr. Wood]

Walmart reports record Q4 and FY21 revenue.
Feb. 18, 2021

• Walmart will also invest in U.S. wages, raising the associate average to above $15 per hour.

• Net sales, operating income and EPS are expected to decline in FY22 primarily due to the impact of anticipated divestitures. Excluding the effect of divestitures, net sales are expected to grow low single-digits with operating income and EPS expected to be flat to up slightly.

• The company increased its dividend for the 48th consecutive year and approved a new $20 billion share repurchase program.

Fiscal 2021 highlights
• Total revenue was $559.2 billion, an increase of $35.2 billion, or 6.7%. Excluding currency, total revenue was $564.2 billion, an increase of $40.2 billion, or 7.7%.
• Walmart U.S. comp sales increased 8.6%.
• Walmart U.S. eCommerce sales grew 79%. Contribution profit continued to improve.
• Sam’s Club comp sales increased 11.8%. Reduced tobacco sales negatively affected comp sales by approximately 400 basis points. Membership income increased 9.4%.
• Walmart International net sales increased 1.0%, or 5.2% in constant currency with strength in Mexico, Canada and Flipkart.
• The company generated $36.1 billion in operating cash flow and returned $8.7 billion to shareholders through dividends and share repurchases.
• GAAP EPS of $4.75; Adjusted EPS of $5.48.

 

[Mr. Wood]

Waste Management Announces Fourth Quarter and Full-Year 2020 Earnings
February 18, 2021

2021 OUTLOOK

Revenue Growth

Total Company revenue growth is expected to be between 10.75% and 11.25%. Combined internal revenue growth from yield and volume in the collection and disposal business is expected to be between 4% and 4.5%, primarily driven by the Company’s disciplined pricing programs which are expected to result in core price of 4.0% or greater and yield of approximately 2.5%.

Profitability

Adjusted operating EBITDA is expected to be between $4.75 and $4.9 billion for the full year.
Synergies from the completed acquisition of Advanced Disposal are included in this measure and are expected to be between $50 million and $60 million in 2021.

Free Cash Flow & Capital Allocation

Free cash flow is projected to be between $2.25 and $2.35 billion.(a)
Capital expenditures are expected to be in the range of $1.78 to $1.88 billion.
The Company is committed to returning its leverage ratio, as defined in its revolving credit facility financial covenant, to its targeted long-term range of between 2.5 and 3-to-1 during 2021.

The Board of Directors has indicated its intention to increase the dividend by $0.12 per share to $2.30 on an annual basis for an approximate annual cost of $975 million. This represents the 18th consecutive year of increases in the Company’s per share dividend. The Board of Directors must separately approve and declare each dividend.

In December 2020, the Board of Directors refreshed the Company’s share repurchase authorization, allowing for the repurchase of up to $1.35 billion of the Company’s common stock, signaling confidence in the cash flow outlook.

 

[Mr. Wood]

broke out and tested s/r line.

test again. vol supporting

 

[Mr. Wood]

Biden says world must prepare for ‘long-term’ competition with China
February 20, 2021

Biden said that would require being clear-eyed about pushing back against the Chinese government’s “economic abuses and coercion” and those that “monopolise and normalise repression”.

“Everyone must play by the same rules,” he said, adding that Chinese companies should be held to the same anti-corruption and monopolistic mechanisms that govern Western companies.

same same but different