I am developing a passive income stream from dividends to generate financial independence. Last year, the portfolio managed to generate $27,000 in dividends. I am adding PepsiCo (NYSE:PEP) to my dividend portfolio.
PepsiCo is one of the dominant consumer beverage and snack food companies in the world. The company specifically manufactures and markets a range of juices, beverages and snack food products to consumers and retailers around the globe. The brand recognition of the company's flagship brands is global and universal in nature. The company has over 20 brands that generate sales in excess of $1B, including Pepsi, Aquafina, Tropicana, Frito Lay, Gatorade and Quaker Oats.
PepsiCo has a market capitalization of $140B with revenues of $66B and a gross margin in excess of 53%. PepsiCo generates a net income of almost $6.7B. PepsiCo currently trades at a forward P/E of 19 and offers a dividend yield of
I've been trying to do the math on Apple's ("AAPL") Apple Pay since it was announced on September 9th. That's because when it introduced the new plan, it felt very reminiscent of 2001, when it announced the iTunes Music Store, which now adds about $4 billion of revenue per quarter. However, due to the nature of the iTunes store, infrastructure build out and management of the store costs eat into this revenue, leaving little for the bottom line. Even the most optimistic analysis of the iTunes Music Store has it only doing slightly better than breaking even, with 15% margins.
The point is, iTunes Music Store generates significant revenues for Apple and generates anywhere from zero to $500 million profit per quarter for the company. Apple Pay has the ability to do the same, while differing from the Music Store in that there will be significantly less infrastructure and management
Johnson Controls (NYSE:JCI), widely known as an auto supplier, is now turning itself into a multi-faceted company. Under the leadership of its new CEO, Alex Molinaroli, the company has made several strategic changes, including the change in the revenue mix and geographic mix.
As part of the restructuring, the company sold its automotive electronics business to Visteon, and is now focusing on the expansion of its building-efficiency portfolio. Through these strategic changes, Johnson Controls will reduce its exposure to the cyclical and lower-profit automotive industry, and redesign itself into a conglomerate.
These strategic changes are projected to create a loss of $5 billion in annual sales from the automotive industry and gain $3 billion from products sold to the building efficiency markets. However, it is expected that the company's margins will expand after the restructuring, consequently improving per share earnings.
Change in Revenue Mix
As part of its building-efficiency portfolio
BCE Inc. (NYSE:BCE) functions through two operating units, "Bell Canada" and "Bell Aliant" (OTC:BLIAF). Through Bell Canada, it provides services in telecom and media sectors, whereas Bell Aliant is focused only on regional communication services across Atlantic Canada and non-urban areas of Ontario and Quebec. This Canadian giant is among the three big companies who have captured more than 90% of the telecom-wireless market in Canadian telecom sector. Bell Canada holds approximately 28%, Rogers Communications Inc. (NYSE:RCI) holds 35% and Telus Corporation (NYSE:TU) holds approximately 27% of this market share. Apart from growing wireless segment, Bell Canada has a solid presence in Wireline and Media segments.
Recently BCE Inc. has faced a decline in its stock price following its second quarter earnings report in August. However, the dip is not based on the earnings report that showed improvements in almost every respect. I shall discuss the reason why the company
By Tim Melvin
In chapter two of his classic book "The Intelligent Investor," Benjamin Graham spelled out what it takes for investors to succeed:
The investor cannot enter the arena of the stock market with any real hope of success unless he is armed with mental weapons that distinguish him in kind, not in a fancied superior degree, from the trading public. One possible weapon is indifference to market fluctuations; such an investor buys carefully when he has money to place and then let's prices take care of themselves.
But, if the investor intends to buy and sell recurrently, his weapons must be a frame of mind and a principle of action, which are basically different from those of the trader and speculator. He must deal in values, not in price movements. He must be relatively immune to optimism or pessimism and impervious to business or stock market forecasts.
A new round of U.S. and EU sanctions on Russia triggered a massive sell-off in Seadrill's (NYSE: SDRL) shares. There are three interconnected reasons for the recent downside. First, sanctions could hurt Seadrill's deals with Exxon Mobil (NYSE: XOM) and Rosneft. The fear of sanctions was intensified after the release of a widely discussed Bloomberg article, in which Seadrill's John Fredriksen stated that sanctions against Russia could affect the company's $4.25 billion deal with Rosneft. Second, the drilling market looks soft while Seadrill has a plethora of new rigs coming in 2015. The risk of losing deals with Rosneft in combination with muted outlook for the drilling market has prompted many market observers to question the sustainability of Seadrill's dividend. The sustainability of the dividend is probably the main factor that affects Seadrill's valuation, as the company's hefty yield attracts many income investors.
Seadrill's share price was $30.75
Huge discounts in the regional banking space have been harder to find lately, but that doesn't mean there aren't a lot of high quality businesses trading at fair and attractive prices. Home Loan Financial Corp. (OTCQB:HLFN) is one of them. The bank's three branches have a long record of consistent and growing shareholder returns, which I expect to continue to grow based on profitability and management's intent to keep this regional bank operating like the cash cow it has been since its initial conversion in 1999.
Out of the gates running
After raising cash in an offering related to a mutual conversion, investors typically hope to see the money used to grow the loan portfolio, pay-off expensive debt, or for buybacks to shrink the number of outstanding shares. Home Loan Financial, comfortable with its place in the world, has done these. Since 1999, the balance sheet is 70% larger ($170
Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL)
Q4 2014 Earnings Conference Call
September 17, 2014 11:00 AM ET
Jessica Hesal - IR
Sandy Cochran - President and CEO
Larry Hyatt - SVP and CFO
Chris Ciavarra - SVP, Marketting
Imran Ali - Wells Fargo
David Carlson - KeyBanc Capital Markets
Joe Buckley - Bank of America
Steve Anderson - Miller Tabak
Good day, and welcome to the Cracker Barrel Fiscal 2014 Fourth Quarter Earnings Conference Call.
At this time, I would like to turn the call over to Jessica Hesal. Please go ahead.
Thank you, Eric. Good morning, and welcome to Cracker Barrel's fourth quarter fiscal 2014 conference call and webcast. This morning, we issued a press release announcing our fourth quarter and fiscal year results and our outlook for the 2015 fiscal year. In this press release and on this call, we will
On July 9th 2014 under an article entitled "The VirnetX Tinderbox" we posted the following comment:
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While our timing prediction that a decision would come in the next four weeks was incorrect, we correctly anticipated that VirnetX (AMEX: VHC) would lose on appeal at the Court of Appeals for the Federal Circuit (CAFC). At the time we posted this comment, we did not elaborate on why we felt VirnetX would go to approximately $0, because borrow on the stock was in short supply and we did not want our cost of borrow to rise nor did we want our borrowed stock to get called away. Now that borrow availability has eased, we will elaborate on why we think VHC is worth less than $1 a share.
On September 16th, the CAFC released its decision in "VirnetX, Inc. v. Cisco Systems, Inc. et al." The judges ruled: "We
In May Rackspace (NYSE:RAX)(or the "company") hired Morgan Stanley to consider strategic options ahead of a potential sale of the business to a strategic or private equity buyer. At the news, the company's stock price rose from $30 to $36 driving speculation a large managed hosting play was in the market.
Rackspace is a San Antonio-based provider of cloud computing services for small and medium-sized businesses and large enterprises. The company's stock is down approximately 24% over a 1 year horizon as it has been excessively punished from Google's entry in the cloud computing market. Rackspace finds itself in a particularly testing position in today's cloud infrastructure market as players such as Amazon Web Services, Google Cloud and Microsoft Azure can put forward lower prices and cover eventual losses with profits from other divisions. Public cloud prices have been declining by 6 to 8% annually with Google more recently cutting
Start Time: 11:00
End Time: 12:06
Lennar Corporation (NYSE:LEN)
Q3 2014 Earnings Conference Call
September 17, 2014, 11:00 AM ET
David Collins - Controller
Stuart Miller - CEO
Bruce Gross - CFO
Rick Beckwitt - President
Jeff Krasnoff - CEO, Rialto
Jon Jaffe - COO
Michael Rehaut - JPMorgan
Eli Hackel - Goldman Sachs
Ivy Zelman - Zelman & Associates
Stephen Kim - Barclays Capital
Stephen East - ISI Group
Robert Wetenhall - RBC Capital Markets
David Goldberg - UBS
Welcome to Lennar’s Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today’s conference is being recorded. If you have any objections, please disconnect at this time.
I will now turn the call over to David Collins for the reading of the forward-looking statement.
Thank you, and good morning,
Analysts at Citigroup believe that Microsoft (NASDAQ:MSFT) has the capacity and is willing to increase the payouts to investors given the strong free cash flows and the comfortable cash holdings of the company.
While Microsoft very much has the ability to hike payouts to investors, in a move that could indeed boost the dividend yield towards 3%, I am very cautious at current levels. Operating assets have nearly increased by 50% in value over the past twelve months, making the risk-reward not so appealing in my eyes.
Bullish On Capital Returns
Citigroup's Walter H. Pritchard believes that Microsoft will catch up with other large technology companies in the form of returning capital through share buybacks and dividends.
Pritchard sees Microsoft potentially increasing its dividend by a quarter to $1.40 per share, perhaps setting a free cash-flow payout target of 70% for 2015, up from 58% at the moment.
By Steven Carroll
Despite the doom and gloom forecasts that have enveloped the sector since 2008, revenue has held up surprisingly well - and there are always new large-scale projects (long range bombers, army vehicles, cyber warfare) on which governments are going to spend money.
Here's an example: despite its well-known frugality, the U.K. coalition government recently awarded GD a £3.5 billion contract to supply 589 Scout specialist vehicles to the British Army between 2017 and 2024. Given the wear and tear on both British and American military vehicles in the Middle East and Asia, this represents a major opportunity for GD.
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High scores for GD
Indeed, given the Obama administration's increased assertiveness in foreign policy, one could almost claim to see some turnaround in defense spending after five lean years, especially if Mr. Putin's strategy backfires to the point where NATO members undertake a more fundamental
The following audio is from a conference call that will begin on September 17, 2014 at 16:30 PM ET. The audio will stream live while the call is active, and can be replayed upon its completion.
Crude oil has suffered a significant drop in just the past few weeks. After climbing above $107 per barrel, West Texas Intermediate crude had fallen all the way down to $92 recently. That represents a 14% decline in just a few weeks' time, which has caught many by surprise. In this same period, geopolitical risk has grown considerably due to conflicts across the globe, which many naturally assumed would cause oil prices to rise, not fall.
The reason for oil's drop seems to be weakening economic data in international markets, such as China, which has resulted in a strengthening of the U.S. dollar. When, and if, this reverses course remains to be seen. In the meantime, here's how investors wary of energy right now, in light of declining oil, should proceed.
Here are winners from oil's decline
Oil's pain means gains for other areas of the economy. One sector that
With the first half of 2014 now in the books, many investors are happy with the performance thus far, especially given the economic headwinds that few saw coming. The 26% rally in U.S. stocks in 2013 gave way to a more modest 7% gain in the first half of 2014. Most see this as a positive development in a maturing market. But beneath the surface, important trends are emerging that should give investors reasons to re-evaluate their assumptions.
During the second quarter of 2014 the S&P 500 continued to post new all-time highs while volatility remained remarkably low. Oftentimes such a combination reflects investor complacency which can be dangerous. Already a rotation toward more defensive positions is underway. For example, through the first half of the year, total return for the Russell 2000 (a barometer for domestic growth) was just 3.3% (NYSEARCA:IWM) while total returns for defensive assets like Treasury
There's been a lot of speculation as to whether AT&T (NYSE:T) will buy a portion of America Movil's (NYSE:AMX) assets. Mexican regulators want to encourage competition, which is why AMX has to lower its market share to below 50% to prevent a forceful sale of its assets.
Currently, AMX operates throughout Latin America both in wire-line and wireless. So the reduction in market share won't be detrimental to the company, and the proceeds from selling some of its Mexico assets can go toward further expansion opportunities throughout Latin America.
According to Bloomberg:
America Movil has contacted AT&T and other potential suitors such as SoftBank Corp. as it prepares to sell assets along the East Coast of Mexico that could fetch as much as $17.5 billion, Bloomberg News reported yesterday, citing people with knowledge of the matter.
Evaluating the pros and cons of the potential deal
AT&T did mention that
In January 1848, James Wilson Marshall discovered gold while constructing a sawmill along the American River near Sacramento, California. The discovery was reported in the San Francisco newspapers by March but caused little stir amongst the local population. Then in May, a storekeeper from Sutter's Creek named Sam Brannan walked around San Francisco brandishing a bottle filled with gold dust offering first hand proof of the riches to be discovered in the American River. By August, the New York Herald had printed news of Brannan's discovery and the rush for gold accelerated into a full-blown stampede. A census of San Francisco in April 1847 reported the town consisted of 79 buildings including shanties and frame houses. By December 1849, the population had mushroomed to an estimated 100,000. The massive influx of fortune seekers assured California's inclusion as a state in the union, and it hasn't looked back since.
Advanced Drainage Systems
Mark Haney, director at Phillips 66, bought 20,000 shares in July last year at $23 a share just in time to watch the price triple to $69.21. Well, Mr. Haney has been at it again and has just bought $188,000 worth of shares in Advanced Drainage Systems Inc. (NYSE:WMS) stock, where he also holds a directorship. The next day Director Richard Rosenthal also purchased $30,000 worth of shares in the company's stock.
Advanced Drainage Systems is the leading manufacturer of corrugated pipe and drainage solutions for the construction industry with 48 plants and 19 distribution centers in the US. The company has struggled since the great recession as public works expenditure has dried up and residential construction was postponed or cancelled. However, recent results have shown a strong improvement, with first-quarter earnings per share growth of 47% on the back of 10% sales growth. The company raised
It's never too late to find a new way to evaluate mining companies and Jeff Desjardins, and James Fraser of Tickerscores.com have developed one based on over 20 different criteria. Add in some near-term catalysts and the wheat separates from the chaff. In this interview with The Mining Report Desjardins and Fraser share the names of companies with some of Tickerscores.com's highest junior mining scores.
The Mining Report: A recent article on Tickerscores.com, "The Great Divide: Inequality in Gold Juniors Means Opportunity," said: "It's clear we've reached a new level of separation between the wheat and the chaff." What does that mean for investors?
Jeff Desjardins: As the bear market has progressed, many companies have struggled to raise the necessary funds to advance their projects. Even for those that have been more fortunate, it has often come in the form of dilutive financings.
On the other hand, quality management teams