This global financial tech platform, and dividend-growth machine, announced quarterly results after the close on Tues, whereby it beat rev and earnings est., but provided mixed fwd guide w/ rev growing at 10-12% (impressive!) vs street est of 12-14%, and also reaffirmed FY’23 EPS guide. It announced its 45th consec qrtrly dividend (annual div has grown 11 years in a row). W/ impressive gross (>82%) and net (>16%) margins, and trading at ~28x fwd non-GAAP earnings, shares remain an attractive buy as its strong moat (high switching costs + network effects) remain firmly intact. We are long the shares in our Income Equity Portfolio w/ no intention of selling anytime soon.
Top 10 REITs: Big Dividends, Discounted Prices
If you like steady dividend income and the potential for healthy share price appreciation, REITs are worth considering. Especially this year as share prices are down and dividend yields have mathematically risen. However, not all REITs are created equally. In this report, we share data on over 100 REITs, sorted by industries (and including a brief commentary and outlook for several important REIT industries), and then countdown our top ten REIT ideas (starting with #10 and finishing with our top idea).
Top 10 Big-Yield Bond Ideas (4.7% to 13.5% Yields)
For years, income-investors have decried the artificially low interest rates set by the Fed. However, if you’ve not been paying attention, things have changed significantly in recent months. Yields are a lot more interesting now, ranging from bond closed-end funds to specific individual bonds. In this report, we countdown our top 10 bond ideas for you to consider.
Compelling Healthcare REIT: 9.1% Yield, Improving Fundamentals
To some investors, this healthcare REIT has been an obvious short this year, and the shares have sold off dramatically while the dividend yield has climbed to an impressive 9.1%. However, there are reasons to believe the short thesis is now falling apart (for example, fundamentals are improving and macroeconomic headwinds are moderating). In this report, we share comparative data on over 25 healthcare REITs, then review this healthcare REIT’s business in particular, including a discussion of how its four big risk factors are abating, dividend safety and valuation, and then conclude with our strong opinion on investing.
Retail REIT: Despite E-Commerce, Attractive 6.1% Dividend Yield
You know the story. Brick-and-mortal retail was dying, and covid accelerated its death spiral. However, not all retail properties are created equally. For example, the A-class retail property owner we review in this report is financially strong and so is its 6.1% dividend yield. In particular, we review the business, growth potential, dividend safety, current valuation and risks, and then conclude with our strong opinion on investing.
Bath & Body Works (BBWI): Earnings Note
Shares of this specialty retailer (home fragrance, body care, and soaps and sanitizer products) ripped 25% higher after announcing better-than-expected quarterly numbers (whereby they beat earnings and revenue estimates and raised guidance). We are currently long shares in our Income Equity Portfolio, and we have increased our “Buy Under” price following the announcement.
Portfolio Update: Disciplined Growth, Income Equity
Portfolio Updates: You’ll notice both the Income Equity and Disciplined Growth Portfolios have been updated for November. Many of the “Buy Under” prices have been updated to reflected changed market conditions (mainly interest rate hike impacts and quarterly earnings results). There were several rebalancing trades (and one new purchase) in the Disciplined Growth Portfolio, and no new purchases or sales in the Income Equity Portfolio. Rebalanced positions are shown in red (reduced) or green (increased) fonts, and new buys and complete sells are reflected in red (sells) and green (adds) highlights.
This Mega-Cap Growth Stock—On Sale and Attractive
It’s been a rough year for growth stocks as rising rates are slowing the economy and analysts revise down their previously over-extrapolated long-term high-growth targets that were based on the relatively short-lived pandemic bump. But don’t let the negative short-term sentiment fool you into believing certain long-term secular trends have ended; they have not, and attractive businesses are now trading at increasingly attractive prices. In this report, we review one mega-cap high-growth stock in particular (including the financial metrics that mislead some investors) and then conclude with our strong opinion on investing.
100 Preferred Stocks: This 7.6% Yielder is Attractive
Need Income: 5 Bond Strategies Worth Considering (5% to 13% Yields)
Huge Rally: Inflation Slowing, Upside Ahead
With this morning’s inflation numbers coming in lower than expected, the market is up a ton. One data point does not constitute a trend, and no one knows where the market will be later today, next week, next month or even next year. But over the long-term it IS going higher, and right now is a GREAT time to be an investor. This report shares some brief thoughts and ideas on where you should be invested going forward.
Meta Platforms (Facebook parent) Update
Shares down ~70% ytd, but this big tech co remains a money-printing machine. Ad rev still astronomical at $27.7B in Q3 (down 4.5% y/y, tough pandemic comp); gross profit margin astounding 79.5%. The prob is spending whereby opex was ~$15.9B (as if it were still late 2020 and int rates were still ~0.0%). The mkt is reacting positively to today’s announced layoffs of 11,000 employees (13% of workforce)—a step in the right direction considering slowing economic growth/ recession risks. To put things in perspective, every $1B in lower opex spend is ~$0.35 in EPS. W/ 12.8% fwd rev growth (& trading at 10.6x fwd EPS and only 2x EV/Sales), this business is impressive.
100 Dividend-Growth Blue-Chip Stocks: These 4 Worth Considering
Dividend-growth investing has been one of the most underrated strategies in recent years, however the tide is shifting. Specifically, with interest rates rising, and style leadership now shifting from growth to value, dividend-growth stocks are increasingly attractive and many of them are still significantly undervalued by the market. In this report, we share data on over 100 top dividend-growth stocks (those that have raised their dividend for at least 10 consecutive years), and then dive into four specific stocks that are particularly attractive, undervalued and worth considering as long-term staples in a prudently-diversified income-focused portfolio.
Top 10 Big Yields: BDCs, MLPs, REITs and CEFs
The market has been ugly this year. Steep interest rate hikes are not yet slowing inflation, but they are dragging down stock and bond prices, as energy costs continue to soar. And as counterintuitive as it may seem, these conditions are creating select attractive contrarian opportunities, particularly for disciplined high-income investors. In this report, we share data on over 100 big-yield investments (including REITs, MLPs, CEFs and BDCs), and then rank our top 10, starting with 10 and counting down to our top idea.
Owl Rock (ORCC) Earnings Note
This big-dividend BDC just raised its quarterly dividend by 6.5% and announced a new supplemental dividend, following its strong Q3 results (shares +8%). Net Investment Income was $0.37 (beating expectations by $0.02) and total Investment Income of $314.05M (+16.7% Y/Y) beating by $21.96M. As per the CEO, the strong results were supported by the “tailwind of rising interest rates.” The board also approved a 2022 Repurchase Program under which the BDC may repurchase up to $150 million of the its common stock. Long.
Members Mailbag: 10.3% Yield Lazard CEF (LGI)
Members Mailbag: It looks like this 10.3% Yield CEF sets its distribution rate annually on 12/31 as 7% of the NAV at that time. With the market down this year, this fund is down nearly 30%, so a significant distribution cut is likely coming… However, this one does have some attractive qualities like you mentioned (such as discount to NAV and a modest use of leverage), plus it gets you some interesting non-US market exposures… From an equity CEF standpoint, one of my current favorites is…
SoFi (SOFI) Earnings Note
Shares of this fintech +13% today after beating EPS expect and raising guidance. Some argue despite strength across all 3 segments (lending, tech platform, fin services) EPS is still negative (-$0.09 in Q3), but there is a clear path to profitability. The company’s new bank charter is providing flexibility against the challenging macro backdrop and the student loan business seems less handicapped as competing fed loan forgiveness on hold (at least for now). Rapid revenue growth (+51% y/y), very large market opportunity.
Phillips 66 (PSX) Earnings Note
This diversified energy co ($50B mkt cap) announced strong Q3 earnings Tues am (non-GAAP EPS of $6.46 beat by $1.43). Shares up 4% this am. The co generated $3.1B in op cash flow and returned $1.2B through dividends and share repurchases (div yield is 3.7%). Trading at 4.7x EV-to-EBITDA (fwd), the co is special b/c as it continues to expand midstream, it deserves a higher valuation multiple due to the steadier nature of that largely-fee-based business. During Q3, the co increased its economic interest in DCP Midstream. Long.
Top 10 Big-Yield Bond CEFs and BDCs
This has been a terrible year for bonds. As interest rates have risen sharply, bond prices have fallen sharply (and lending in general has been tumultuous). Both Bond Closed-End Funds (“CEFs”) and Business Development Companies (“BDCs”) have been impacted dramatically (i.e. their prices have plummeted as rates have risen). However, this has created select opportunities offering bigger than normal yields and higher than normal price appreciation potential. In this report, we offer an overview of Bond CEF and BDC opportunities, we share important data on over 50 of them, and then we countdown our top 10 big-yield Bond CEFs and BDCs.
ServiceNow (NOW) Earnings Note
Business remains strong for this profitable SaaS company despite slowing economic growth. Shares jumped 13% on Thursday following earnings. Revenue grew at an impressive 21.2% y/y, and subscription revenue grew at 28.5%. The magic of this company is two-fold: (1) customers love the solution (98% renewal), and (2) land and expand. Long.