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Huntington Ingalls Industries Dividend Analysis

This is a Dividend Analysis on HII Pre-Amble As you may or may not be aware, people can request an analysis on the stock of their choice on INVRS.  Sometimes something very interesting comes of of it and I want to present my finding on the blog.  However, I need to be respectful of the person who requested the stock and give them "alone" time with the information. 

In this case, during the period of silence, the company released quarterly earnings which caused the price of the shares to pop approximately $17.  I re-ran all of the analysis components to reflect the new numbers, and the company still has some favourable elements, but the weak points have to be looked out more carefully, especially since the margin of safety is not what it was earlier in the week.
Company Background Huntington Ingalls Industries, Inc. engages in the shipbuilding business. It operates through the following business segments: Ingalls, Newport News, and Technical Solutions. The Ingalls segment de…

UFS is Currently a Strong Dividend Investment

Domtar Corp. engages in the design, manufacturing, marketing, and distribution of fiber-based products, which includes communication papers, specialty and packaging papers and absorbent hygiene products. It operates through the following segments: Pulp and Paper, and Personal Care. The Pulp and Paper segment is involved in the design, manufacturing, marketing, and distribution of communication, specialty and packaging papers, as well as softwood, fluff, and hardwood market pulp. The Personal Care segment consists of the design, manufacturing, marketing, and distribution of absorbent hygiene products. The company was founded on March 7, 2007 and is headquartered in Fort Mill, SC.

Founded: 2007

Number of Employees: 10,000
Analysis Framework We looked for industrial stocks with a dividend yield between 3.69% and 9.6% and found 70.  Out of that 70 we removed any that had not increased their dividend each year for the past five years.  That left a portfolio of 21 stocks.  We then ran thre…

Sunny CSIQ

Canadian Solar, Inc. engages in the manufacture of solar photovoltaic modules and a provider of solar energy solutions. It operates through the Module and System Solutions (MSS), and Energy segments. The MSS segment involves in the design, development, manufacture, and sales of solar power products and solar system kits, and operation and maintenance services. The Energy segment comprises primarily of the development and sale of solar projects, operating solar power projects and the sale of electricity. The company was founded by Shawn Qu in October 2001 and is headquartered in Guelph, Canada.

Founded: 2001

Number of Employees: 12,442

Headquarters: Guelph CA
Analysis Structure This analysis will look at three factors for CSIQ and it's peers:
Quality of Earnings,Valuation, and Growth. We'll look at both relative and absolute numbers.

We're running this model against a portfolio of eight stocks including CSIQ.  The other companies selected were chosen because they were in a…

CNQ: Too Bad About the Price

VALUATION MODEL FOR CNQ
The Model We'll start by looking at CNQ's value relative to the group and then we'll look at it's dividend yield relative to its five year average. 
Group Valuation Metrics We're looking at four valuation metrics  and then ranking them from best to worst.  The ranks are summed and a final rank is calculated.
SecurityPrice to Book
RankPrice to Sales
RankPE Ratio
RankEV/EBITDA
RankSumFinal
RankCNQ0.0132
31.9171
517.86
35.92
4152CVE.009
4.5659
10na (negative)
123.14
2174HSE .0054
9.6423
97.12
84.68
63210ECA.0076
61.06
75.09
103.93
8319

ALA.0089
5.739
8na (negative)
1na (negative)
1152TOU.0052
102.7331
110.099
66.50
3205VET.0142
22.6826
212.5324
45.87
5131PXT.0196
12.4163
36.8331
92.45
10236VII.0063
81.2609
67.57
73.24
9308ARX.007     
72.0627 
4   11..87 
54.50   
7 236   CNQ doesn't look like good value relative to its peers.
Dividend Yield Relative to 5 Year Average A rule of thumb for this metric is to only purchase a stock when it'…

CNQ - Great Dividend Profile

INCOME ANALYSIS FOR CNQ
The Model There are a multitude of ways to look at dividends.  This report is going to combine two elements: the sum of the current yield and the five year average growth rate (total return) and the dividend coverage.
The Total Return The graph below shows the sum of the current yield and the five year average growth rate.

CNQ is really high, almost 24%.  This is a combination of a 3.95% dividend yield and a 5 year growth rate of 19.95%.  Note, the 3 year growth rate was 13.97%.
Dividend Coverage We want to see that the TTM dividend is less than 75% of the company's free cash flow with this metric.

CNQ is 37%. 
Summary CNQ has an impressive total return and good coverage.
Disclaimer The point of this report is to demonstrate what INVRS can do.  This is not a comprehensive analysis and we cannot be held responsible for any investment decisions you make. 
We may publish this report after three business days.
Thank you for your interest in INVRS.  Discover and…

11 Reasons Why INVRS is Better Than Excel Alone

If you work with your own investment models you likely use excel to build them, but excel isn’t ideal for many reasons and it costs you in other ways.
First, you need good data and it isn’t just lying around in an easy to import format.You’re either keying it in yourself or paying money for excel downloads.
When you need data from numerous sources – price information, data from different statements and across multiple years - you must merge it from multiple sheets.  It's an inefficient process which can lead to data corruption.
After all this data is collected and merged, models built and tested, the net result is one statistic for one company.A stand-alone number without context has limited use.To be meaningful, you need to compare it to similar companies. This is just a sample of the challenges.  You need software that overcomes these problems and is designed for investment model creation.
Surprise!  This software exists, it's INVRS.  You can get a free analysis report on …

TSLA Shows Decent Quality of Earnings

Tesla creates a lot of polarization.  It's like the industrial equivalent of our current political state.

I find that the main narrative is vitriolic in nature.  The people in the love-camp don't have a tonne to write about because Tesla's financial and operating results aren't meeting expectations, it's difficult to argue back.

I'm going to offer this item of information to the debate.  It's a quality of earnings I ran on the large cap automotive and automotive aftermarket.

TSLA's are good.  Not great, but good and they are the highest, along with two other firms in the group, which further impresses. 

The quality of earnings matter.  They tell us whether what's being presented can be trusted or not.


TSLA got a 6 out of 9, compared to a group average of less than 4.

UPS Margin of Safety of 93%

According this Ohlson Clean Surplus valuation model, UPS is under-valued. Its "theoretical" price is $199 (why the quotes? because it's ridiculous to suppose that a model could really give you the true value of a stock, but it can be a useful guideline, ball park or an indication of a margin of safety).

CHRW is also trading with a margin of safety of 43%.


GlaxoSmithKline Scores High in Quality

I created a portfolio of the top pharmaceutical companies trading in the US and ran a quality of earnings analysis on them.  With the highest possible score being nine, GSK scored the best with seven.

Here are the results:

Here's the balance of the companies in the portfolio.  We can see that AZN was the worst at two.


Just for laughs, lets see how GSK and AZN have performed from a price perspective.

Interestingly, AZN has been outperforming GSK. It'll be interesting to say if this trend will continue or if it will, more correctly I believe, reverse.

We've Got a Winner

Income  Only three of the six stocks have a dividend: NLSN, JCDXF and IPG, and they all look quite good.  Over the past three years, each company has grown their dividend.

Let's look at the measures, the ranks and the final ranking in this category.  The measures are dividend yield, 3 year dividend per share CAGR and 1 year dividend per share growth.


Dividend
YieldD/S 3 year
CAGR1 year
D/S growthSumFinal RankJCDXF2%
43%
48%
513

4NLSN6%
65%
55%
415

5IPG4%
512%
617%
617

6
IPG has some very nice dividend results.
Value The value metrics are:
price to bookprice to salesprice to earnings (if the company has negative earnings they get a rank of zero)enterprise value to EBITDA.

P/BP/SP/EEV/EBITDASumFinal
RankTTD.21
111.1
1103
243
151RAMP.03
58.1
2173
116
2102NLSN.03
41.3
4negative
09
5133JCDXF.02
61.6
323
313
3155IPG.04
3.8
513
49
4166GRPN.06
2.7
6negative
07
6144 All of the companies in the group have what would generally be considered good P/B ratios except for TTD.  The same can be said fo…

Factor-Based Analysis on Mid Cap Advertising/Marketing Firms, Part 2

Quality  The quality factor uses five measures:
Standard deviation of earnings - the lower the better,Gross margin - the higher the better,Net margin - the higher the better,Sales/assets - the higher the better,Financial leverage - the lower the better.

SDGMNMS/AFLSumRankTTD.98
176%
618%
643%
10%
6204RAMP.12
549%
53%
376%
523%
5236NLSN.47
247%
3-11%
143%
273%
191JCDXF.27
426%
27%
557%
336%
4183IPG.32
312%
17%
462%
459%
2142GRPN.11
648%
40%
2161%
638%
3215
Based on an equal ranking of the factors, RAMP comes out on top.  This is a factor that you personally might want to weight differently.  Perhaps you don't care about volatility in the stock price or you think a certain amount of debt is desirable.  You then might make other choices for the highest quality stock.

Growth This factor looks at the year over year growth rate in revenue, EBITDA, free cash flow and gross income margin.


RevenueEBITDAFCFGMSumFinal RankTTD55%
655%
6215%
6-3%
2206RAMP30%
51%
30%
423%
6185NLSN-1%
2-10%
1-20%

Factor Based Analysis, Mid Cap Adv/Mkt - Part 1

Overview This is a factor-based analysis looking at six mid-sized companies in the marketing and advertising space.  It will look at the relative strengths and weaknesses of the group members with the goal of finding a gem.

Peer Group:Stock Name (Symbol)Last Price (May 31, 2019)Market CapTrade Desk, Inc. Class A(TTD:XNAS)$198.818.8429BLiveRamp Holdings, Inc.(RAMP:XNYS)$51.383.4986BNielsen Holdings PLC(NLSN:XNYS)$22.738.0804BJcdecaux SA(JCDXF:OOTC)$27.805.9161BInterpublic Group of Companies, Inc.(IPG:XNYS)$21.228.1952BGroupon, Inc. Class A(GRPN:XNAS)$3.532.0050B   Analysis Factors This analysis will look at six factors:
Price MomentumQualityGrowthIncomeValueProfitability. Price Momentum This factor includes a long, medium and short-term measure.  Long term is the percentage price change over two years, medium is 12 month less one month price change and short-term is the price less three month moving average.  I'm going to look the market, the sector and then each stock in the group…

NextEra - Good Dividend in the Renewable Energy Sector

NextEra had good results relative to a group of peers in a factor-based analysis.NextEra has an appealing profitability and income profile.Its price momentum looks decent, with a caveat.Its relatively small size (a small mid-cap) coupled with its industry (renewable energy) further weight the odds that this company could be a strong performer in the future.
The Analysis Overview
I created a portfolio of stocks in the alternative energy sector, looking specifically for companies with a market cap over $1B but less than $4B.  This is a sweet spot that offers strong potential for growth but is also substantial enough not to be too speculative.

It's my believe that alternative energy is on the ascendance, where as fossil fuels will inevitably decline (NextEra isn't a pure play in this regard however, natural gas assets are part of its portfolio).  If you share this belief and you want exposure to this market, NextEra looks like a good bet.

This is a factor-based analysis on seven …

Omnicell - No Stand-Out Features

This analysis was created on December 29, 2018 using closing prices from December 28, 2018 with the goal to determine if there is a viable investment strategy in Omnicell (OMCL).

It will be a peer based analysis, evaluating OMCL relative to companies in the same sector and industry and having a market cap within 65% of OMCL and over $950M.  When you subscribe to INVRS you can customize the peer group any way you wish. 

Why peer based? It gives the numbers context, you can benchmark and you might find another opportunity.  It provides you with another vital dimension upon which to evaluate your target company.  Once you've established your peer group, you can do analysis on the group as easily as you analyze a single stock. 

OMCL and its peer group will be analyzed on six factors:
Price momentum,Quality,Growth,Income,Value,Profitability. Each factor calculates several metrics each providing different insight.  For example the profitability factor looks at gross profit to assets, ne…