Weekend Reading Links - January 31, 2010

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends Value presented 10 Stocks With 100+ Years of Dividend Payments
  
• The Dividend Guy presented Dividend Capturing: Should You Use It?
  
• Dividend Growth Investor presented Stocks with fluctuating dividends to avoid
  
• Barel Karsan presented Keying In On Value
  
• Dividend Tree presented Dividend Investing: Two Common Questions?
  
• moneygardener presented freight and food make investors richer
  
• Disciplined Approach to Investing presented High Yield Spreads Near Long Term Average
  
• Living Off Dividends & Passive Income presented Best Trade of 2009
  
• Old School Value presented Stock Market Thoughts & Action Items
  
• Triaging My Way To Financial Success presented Dividend Growth Portfolio - Jan 2010
  
• Everyday Finance presented 41 Stocks That Have Increased Dividends Every Year for Over a Decade
  
• BuyLikeBuffett.com presented FDIC Shuts Down 6 More Banks
  
• 40percent 20years presented Berkshire Hathaway instead of Investor?
  
• EPIC INVESTOR presented Notes on Foreign Exchange

There are some really good articles here, please take time and read a few of them.

If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Pink Slips

A recent mass layoff at my company has given me a fresh perspective on layoffs. Normally, as an investor, we see layoffs as a courageous way to drive profits forward by shaking off some areas of weakness. I have personally invested in companies shortly after a mass layoff if I believe that such changes will benefit the profitability of the business. From a purely financial perspective viewing a company as a machine is an easy thing to catch one’s self doing. However there are some soft costs involved in layoffs to a company culture that I wasn’t really aware of until the week after I witnessed fellow employees walking out the door for the last time:

• The Straw that breaks the Camels back. Employees remaining after a layoff will fear that this is the first of many layoffs- this is only to be expected. This fear will most assuredly drive them to explore other opportunities and possibly accept them. Everyone would rather leave on their terms rather than finding a box on their desk in the morning. The intent of a layoff is to keep your best; unfortunately it can have the opposite effect of driving your best into the arms of a competitor.

• Showing a company’s financial health. If you work at a private company getting a gauge on the overall health of a business is a difficult task. There is no clearer message about health than to see a layoff in action. If employees are already feeling under appreciated or under paid the message “no pay raises in the foreseeable future” will come through loud and clear during a layoff, again driving your best talent to explore other options outside the company.
  
  
• The belt tightening turns into a corset. No one really likes to work in a company doing belt tightening- belt tightening usually means there is a better way to do things and we are going to choose the cheaper way. Anyone with pride in their work will not thrive under this environment and innovation is often stunted.
  
  
• Dad kicks your sibling out of the house. Creating a family atmosphere is critical in getting people to go above and beyond. If you expect employees to take a panicked call from you at 2AM when your servers crash then family is key. When a company does a layoff it shows how that the family dynamic is vulnerable and the trust that both parties share for one another can be broken.
  

What makes a company successful in the long term is its service, innovation, management, and products. All of these do not happen without good people. From a short term perspective layoffs make the company more viable but from a long term perspective it can seriously damage the culture and effect the good people who you need to run the business in the future.

This article was written by buyingvalue. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Unilever Stock Analysis

Unilever PLC, together with its subsidiaries, engages in the production and supply of fast moving consumer goods in food, home, and personal care product categories in Western Europe, the Americas, Asia, Africa, and Central and Eastern Europe. This international dividend achiever has raised dividends for over one decade.

This dividend stock pays dividends semi-annually. Another odd factor about it is the fact that it trades in the UK and the Netherlands. In this analysis I am concentrating on the British based, American Depositary Receipts. Unilever operates as a single business entity. However, there are two owners: Unilever (NV) and Unilever (PLC) are the two parent companies of the Unilever Group, having separate legal identities and separate stock exchange listings for their shares. You can find Unilever shares trading on NYSE as (UN) or (UL) representing NV and PLC respectively. (source)

The stock has delivered an average annual total return of 10.20% over the past decade.

Earnings per share have grown at an average pace of 12.10% per annum. Future growth in EPS would depend on how the company balances its pricing with the need for volume growth in its segments. For 2009, analysts expect the company to earn $2.01/share, which is lower than 2008’s EPS of $2.53. For 2010 analysts expect Unilever PLC to earn $2.21/share.

Annual dividends per share have increase by an average of 10.30% annually, which is lower than the growth in earnings. The reason why the dividend fluctuates is because it is typically translated from the British Pound to the US Dollar, and the exchange rate is fluctuating constantly. A 10% growth in dividends translates into the payment doubling every seven years.

The return on equity has fluctuated between a low of 13.50% in 2001 and a high of 58.40% in 2004. Over the past few years it has remained above 30%, which is impressive.

The dividend payout ratio has consistently remained above 50%, with the exception of 2000, 2001 and 2009.

Unilever (UL) currently trades at a P/E of 15.50 times 2009 earnings, has an adequately covered dividend, and yields 3.20. Overall Unilever (UL) does seem attractively valued at the moment.
I would definitely consider initiating a position in the stock when funds are available.

Full Disclosure: None

Relevant Articles:

- Best International Dividend Stocks
- Dividends versus Share Buybacks/Stock repurchases
- Dividend Aristocrats List for 2010
- Capital gains for dividend investors

This article was written by Dividend Growth Investor. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

ADM – Priced for Dividend Growth Portfolio

Archer Daniels Midland (ADM) is one of the world's leading agribusiness companies, with significant market presence in agriculture processing and merchandising. ADM has approximately 230 plants located worldwide. It is one of the world's largest processors of agricultural commodity products such as oilseeds, corn, wheat, protein meal, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients.

ADM is a dividend aristocrat and has been raising its dividends for last 34 years. The last dividend increase was in February 2009. I last reviewed ADM in July 2009. My objective here is to see if ADM continues to be a good dividend growth stock and how does it rate on my scale of risk-to-dividends.

Trend Analysis

Here I am looking at trends for past 10 years of corporation’s revenue and profitability. These parameters should show consistently growth trends. The trend charts is shown in image below.

• Revenue: In general, a growing trend since 2000. The average revenue growth for last 9 years is 21.3%.
• Cash Flows: Very erratic operating cash flow with significant reductions since 2005. Negative in 2007 and 2008. Same trends for free cash flow. Not a good observation.
• EPS from continuing operation: In general, increasing trend, between 2000 and 2007. Slow reduction since 2007.
• Dividends per share: Consistently growing dividends since 2000 (and before that since last 34 years).

Risk Parameter Calculation

Here I use the corporation’s financial health to assign a risk number for measuring risk-to-dividends. The risk number for risk-to-dividends is 2.09. This is a medium risk category as per my 3-point risk scale. The negative EPS growth rate in 2008/2009 makes it a medium risk to dividends.

Quality of Dividends

This section measures the dividend growth rate, duration of growth, consistency over a period of past five years.

• Dividend growth rate: The average dividend growth of 17% (stdev. 8.7%) is less than average EPS growth rate of 28.6% (stdev. 39.1%). Dividends have grown slower than earnings per share.
  
• Duration of dividend growth: 34 years.
  
• 4 year rolling dividend growth rate for past ten years: More than 10% for past 8 years. 14% for last five years.
• Payout factor: In the past 8 years, it has always been less than 35%. Presently, it is at 21%.
  
• Dividend cash flow vs. income from MMA: Here, I analyze how the dividend cash flow stacks up against the income from FDIC insured money market account. The baseline assumption is (a) stock is yielding 2.1%; and (b) MMA yield is 1.75%. Last 8 years average dividend growth rate has been 17%, however, my expected dividend growth rate is 8.5%. With my projected dividend growth of 8.5%, the dividend cash flow is 1.76 times MMA income in 10 years time period.
  

Fair Value Calculation

• This section determines what price I should pay to buy a given stock
  
• Net present value (NPV) price based on 15 year DCF: $28.6
  
• Average high yield price calculated based on past 10 years: $20.5
  
• Pricing based on past 10 year relative price-to-earnings ratio. $45.7
  
• Pricing based on price-to-earnings ratio of 12: $35.0
  
• Graham number: $31.4
  

The range of fair value is calculated as $24.1 to $30.3.

Qualitative Analysis

ADMs history can be traced back to 1902. It has survived all the significant ups and downs in the economic growth of United States. This demonstrates that it keeps adapting to changes in the market place.

• ADM is continues to maintain its leadership position in agriculture business, with its unparalleled global asset base, flexible processing capabilities, and financial strength. Unlike its business competitors, ADM focus on long term profitability and sustainability.
  
• It is operates in a cyclical commodity industry. While current recession seems to have had an impact on its year-over-year financial results, it continues its asset expansion through acquisitions and capacity expansion. To me any corporations that still can go down that path in recession is something that shows positivity and management’s confidence.
  
• It’s year-over-year may show cash flow concern or reduced EPS. However, I believe those are due to capacity expansions and acquisitions.
  
• In addition, a lot has been said about ADM’s push into ethanol business and its long term viability and sustainability. I believe ADM has positioned itself (and still continues to do so) as an undisputed leader of ethanol producer. The market for alternative fuel is bound to grow in future.
  
• One thing that came as a surprise to me was the gross margins and operating margins are in single digits. Perhaps, it is the operational capability that allows it to maintain continued profitability at such low margins. However, at such low margins, there is no room for error.

Conclusion
I like ADM’s global asset base, focus on long term profitability, and diversified product strategy. I also like ADM as a proxy for agriculture commodity asset class. It has been raising dividends for last 34 years. The stock’s current risk-to-dividend rating is 2.09 (medium risk). I am long on ADM, and would continue to add based on my allocation levels. However, before I add any new positions, I will wait for declaration for 2010 dividend increase which I expect sometime in February 2010.

Full Disclosure: I am long on ADM.

This article was written by [link to your blog]. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Catching Up With Innovation

Where management has a significant portion of its net worth invested along with shareholders, agency costs are likely to be at a minimum. Shareholders can easily determine how invested management is in a company by looking in the same place that a company's executive compensation can be found. Unfortunately, the use of equity swaps, becoming more common in the financial world, can render the information on management's stake in the company essentially useless.

Equity swaps are a financial innovation that allows one party to swap the returns of one asset for the returns of another asset. Consider an example of how this might be useful:

Andre Preneur started a company from scratch, and recently took it public. His net worth is now several hundred million, but all of his wealth is invested in just this one company, a risky portfolio no matter how strong the company. Andre has family commitments and wants to lock in some of this gains, however, and this undiversified portfolio could result in a significant loss of capital should something go wrong. Selling 20% of his holdings in order to diversify would drag down the stock price, hurting all investors in the process. But a swap in which he trades the returns on a portion of his holdings to a dealer that pays him the return on the S&P 500 (minus a fee) allows him to achieve some diversification without high transaction costs.

Clearly, this type of swap serves a useful purpose. Unfortunately, regulators must constantly play catch-up to avoid unforeseen problematic consequences. For one thing, Mr. Preneur would owe a substantial sum of taxes if he actually sold his shares, so when this product first came out, it would have saved him a tidy sum (regulators have since closed this loophole). Furthermore, an insider could effectively sell his shares in a company - without having to report any insider sales, which shareholders often count on as a clue towards management's outlook! (This loophole has been closed as well.)

Unfortunately, one loop hole that has not (yet?) been closed has to do with the fact that management may show ownership of a number of shares, but may have swapped the returns away. Shareholders wouldn't know unless they pieced together disclosures of insider sales, insider buys, restricted stock issuances, stock option issuances, and stock option exercises - and even then, these particular disclosures are not likely to form a complete picture of exactly how much a manager owns. In an extreme case, this could lead to a problematic situation where a manager has voting control, but suffers no consequences as a result of his actions (for he has swapped the returns away), while shareholders believe that the manager has a full stake in the company!

Innovation in the banking and financial industry has benefited us all. Of course, if unchecked, things can go awry in a hurry, as evidenced by the bank-induced recession that took the world by storm last year. This doesn't mean innovation should be stifled, but it does mean investors and regulators must stay abreast of what's going on, and take corrective action when publicly disclosed information is unintentionally suppressed as a collateral result.

This article was written by Saj Karsan of Barel Karsan. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Stock Analysis: United Technologies Corp. (UTX)

Linked here is a detailed quantitative analysis of United Technologies Corp. (UTX). Below are some highlights from the above linked analysis:

Company Description: United Technologies Corp. is an aerospace-industrial conglomerate with a portfolio including Pratt & Whitney jet engines, Sikorsky helicopters, Otis elevators and Carrier air conditioners, among other products.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
   
2. 20-Year DCF Price
   
3. Avg. P/E Price
   
4. Graham Number
   

UTX is trading at a discount to 1.) and 2.) above. Since UTX's tangible book value is not meaningful, a Graham number can not be calculated. The stock is trading at a slight discount to its calculated fair value of $69.44. UTX earned a Star in this section since it is trading at a fair value.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
   
2. Debt To Total Capital
   
3. Key Metrics
   
4. Dividend Growth Rate
   
5. Years of Div. Growth
   
6. Rolling 4-yr Div. > 15%
   

UTX earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. UTX earned a Star for having an acceptable score in at least two of the four Key Metrics measured. Rolling 4-yr Div. > 15% means that dividends grew on average in excess of 15% for each consecutive 4 year period over the last 10 years (1999-2002, 2000-2003, 2001-2004, etc.) I consider this a key metric since dividends will double every 5 years if they grow by 15%. The company has paid a cash dividend to shareholders every year since 1936 and has increased its dividend payments for 17 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
   
2. Years to > MMA
   

UTX earned a Star in this section for its NPV MMA Diff. of the $3,003. This amount is in excess of the $1,800 target I look for in a stock that has increased dividends as long as UTX has. If UTX grows its dividend at 15.0% per year, it will take 5 years to equal a MMA yielding an estimated 20-year average rate of 3.98%.

Other: UTX is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index.

Conclusion: UTX earned one Star in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of five Stars. This quantitatively ranks UTX as a 5 Star-Strong Buy.

Using my D4L-PreScreen.xls model, I determined the share price would need to increase to $83.47 before UTX's NPV MMA Differential decreased to the $1,800 minimum that I look for in a stock with 17 years of consecutive dividend increases. At that price the stock would yield 1.84%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $1,800 NPV MMA Differential, the calculated rate is 13.3%. This dividend growth rate is slightly less than the 15.0% used in this analysis, thus providing only a slim margin of safety. UTX has a risk rating of 1.25 which classifies it as a low risk stock.

UTX's product leadership has produced a wide-moat. Over the last ten years, the company has shown steady growth in both earnings and dividends. UTX has a strong balance sheet with 34% debt to total capital and an excellent free cash flow payout of 29%. Large backlogs at Airbus and Boeing, moderate demand for global infrastructure, strong demand for military helicopters and sustained productivity improvements will benefit UTX in the near-term. UTX is trading near my buy price of $69.44. However, I will limit purchases based on its low dividend yield. For additional information, including the stock's dividend history, please refer to its data page.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I was long in UTX (4.2% of my Income Portfolio). See a list of all my income holdings here.

Recent Stock Analyses:

• Stock Analysis: Raven Industries Inc. [RAVN]
  
• Stock Analysis: AT&T Inc. [T]
  
• Stock Analysis: SYSCO Corporation [SYY]
  
• Stock Analysis: Harleysville Group Inc. [HGIC]
• More Stock Analyses

This article was written by Dividends4Life. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below. [RSS] [Email] [Twitter]

Read More...

Summary only...

Weekend Reading Links - January 24, 2010

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends Value presented 10 Dividend Stocks With Above Target Returns
  
• The Dividend Guy presented Why Most People Fail at Investing
  
• Dividend Growth Investor presented Dividend growth stocks are attractive buyout targets
  
• Barel Karsan presented Fooled By Yahoo
  
• Dividend Tree presented Understanding Risk and Return Characteristics
  
• Buy Value presented Patience
  
• Stock Market Prognosticator presented Twitter Comment
  
• The Div Guy presented Health Care Stock Picks for 2010
  
• Disciplined Approach to Investing presented Comprehensive Review Of The Dividend Aristocrats
• Living Off Dividends & Passive Income presented Berskshire Hathaway Splits 50-to-1
  
• Old School Value presented More Free Value Stock Screeners
  
• Triaging My Way To Financial Success presented Dividends in the Rough
  
• Everyday Finance presented Review of 2010's Leading ETFs
  
• Wide Moat Investing presented Trolling for Bargains
  
• BuyLikeBuffett.com presented Buffett In The News
  
• 40percent 20years presented Realty Income - Good alternative to the Canada Trust
  
• EPIC INVESTOR presented Infrastructure Opportunities in Brazil

There are some really good articles here, please take time and read a few of them.

If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Check your sources

It has become formulaic that when a movie comes out one of the advertisements will feature reviewers comments like "riveting", or "one of the must see movies of the year" and of course my favorite "an instant classic". The point, obviously, of these reviews is to convince you, based on some other expert's testimony, that you need to see this movie.

Have you noticed though that over the last few years that the font on the source of the quote has gotten smaller and smaller? To the point now that on my 36 inch TV I would need a microscope to make out the author of the quotes in the advertisement for the new Sherlock Holmes movie. The reason for the ever shrinking font is equally simple, there are just so many people calling themselves experts out there that their is always someone at a media agency that will have found something good to say about a terrible movie.

Analyst downgrading/upgrading of stocks is the same. I have one stock in my portfolio with 40 analyst following it. Analysts like movie reviewers come in a varying degrees of credibility, so why would you buy or sell based off a change in view one may have of a stock in your portfolio? There are some analysts who's opinions I respect having listened to their questions to management on calls and having an understanding of their fund's investment philosophy. I treat their opinions like those of an acquaintance who tells me about a good movie they recently watched, it doesn't mean I will watch it, but I respect their opinions enough to hear them out- the others are just noise.

It never fails to perplex me how aggressive a stock price can move when an analyst recommends a sell or buy on a company's stock. By the way Sherlock Holmes was not "riveting".

This article was written by buyingvalue. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Universal Corporation (UVV) Stock Dividend Analysis

Universal Corporation (UVV), together with its subsidiaries, operates as the leaf tobacco merchants and processors worldwide. It engages in selecting, procuring, buying, processing, packing, storing, supplying, shipping, and financing leaf tobacco for sale to, or for the account of, manufacturers of consumer tobacco products. This dividend champion has raised dividends for 39 consecutive years.

Over the past decade, Universal has delivered a total return of 11.60% to shareholders.

At the same time earnings per share have grown by 1.50% on average since 2000. Analysts expect UVV to earn $5.25/share in 2010 and $5.63/share in 2011. This is an increase over the $4.32/share Universal earned in 2009. The slow growth in tobacco consumption worldwide and risk of increased taxation and regulation in the sector represent one of the major risks for the company going forward.

The annual dividend has increased by 4% annually over the past decade. A 4% growth in dividends translates into the distribution doubling every 18 years. The current quarterly dividend of $0.46/share is double what it was in 1993-1994. The latest dividend increase was for 2.20% in November 2009.

The return on equity has generally decreased from a high of 22% in 2000 down to 15.30% in 2009. I generally like to see a stable value of this indicator over time.

The dividend payout ratio has generally remained below 50%, with the exception of 2006 and 2007, which struck as outliers.

Overall Universal Corporation does appear to be attractively valued, trading at a P/E of 9, yielding 3.90% and having an adequately covered dividend. The main problem for the company is the slow earnings growth, and concentration in the tobacco industry, which comes with its own inherent risks. I already have exposure to the tobacco sector through my position of already, Altria (MO) and Philip Morris International (PM). However I would consider initiating a position in UVV on dips whenever I have extra cash on hand.

Full Disclosure: None

Relevant Articles:

- Four Dividend Raisers in the news

- Altria (MO) - a recession proof high yield dividend stock

- Philip Morris International versus Altria

- 2010’s Top Dividend Plays

This article was written by Dividend Growth Investor. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Dividend Investing: Two Common Questions?

Whenever I have a conversion about dividend investing, I get few different types of questions. It is very natural for people to ask questions. What is interesting is often these questions can be grouped into following two:

1. If any dividend stocks in your portfolio become overpriced, do you sell?
2. How many number of stocks do you need in a dividend portfolio?

Selling a dividend stock when it is overpriced? This comes from the thought process that say any of my dividend stock is overpriced by 1.25x or 1.5x. In that case, it is likely that the dividend I expect in 10 years, I may get by selling the overpriced stocks. Why wait for that long for dividends to trickle in?

When we think about it, it may appear to make sense. However, I believe we should build a portfolio based on certain objectives. In my case, my primary objective is to build a portfolio for growing dividends. And hence, I buy stocks for that objective. The characteristics of such stocks are such that I do not expect to see such wild swings as 1.25x or 1.5x or more. Assuming, if they do, it is an opportunity to buy at very good initial yields (and increase your YOC). Furthermore, I also expect that as dividends grow over next 10 years or more, the price of the stocks will also grow i.e. capital appreciation. Assuming the dividends keep growing, the capital appreciation is likely to much more than 1.25x or 1.5x. So dividend investing is not for standalone dividends only. It is also accompanied by capital appreciation. It is about total returns.

What is good number of stocks? It depends upon individuals. For me, I have limited my self to 5% maximum dividends from any single company. This is for managing risk of dividend cuts. So this gives me a minimum of 20 companies. However, I am comfortable keeping around 40 to 45 stocks in the portfolio. I do not have any reasoning why this is number. I believe I would comfortable following that many number of companies. There would few stocks in those 40 that would cut dividends and I will need to replace them. While some of them would continue to increase dividends.

What is your comfortable level of number of stocks?

This article was written by [link to your blog]. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Heelys' Stock Builds In The Bad News

A few years ago, Heelys' footwear product for children was all the rage. The company had designed a sneaker with a removable wheel on the heel that had taken the consumer market by storm. Below is a demonstration of the dual-purpose footwear in action:

The company's 2006 IPO was accompanied by much fanfare, as the company had high hopes of expanding its markets and designing innovative new product lines. Consensus analyst estimates suggested the company would grow its earnings 20+% per year for the next five years. When the fad was exposed for what it was (i.e. sales began to drop, and insiders started selling) the stock price took a huge hit, falling from almost $40 to the $2 it is today.

However, it continues to hold much of the cash it took in as part of the IPO at a much higher price. The company trades for $58 million, but has $90 million in current assets (including almost $70 million of that in cash!) and just $11 million in liabilities.

Unfortunately, the company largely remains a one-trick pony. However, it appears to have cut its costs to adjust to the much lower revenue environment, as the company is now close to break-even levels on an operating basis. The company also recently settled a slew of lawsuits related to its IPO, as angry investors who lost a lot of money received some consolation (mostly from the company's insurance providers).

The risk of course, is that the company uses its large cash holdings on a foolish investment that never pays off. Fortunately, however, the company appears to have made no such plan. In fact, the company under new management has shown a willingness to return cash to shareholders, with a $1 dividend at the end of last year. If the company continues to make progress in cutting its costs, it may be more willing to dish out more of its cash holdings to shareholders in the near future. With a stock price of $2, and cash on hand of almost $3 per share, this could bode well for shareholders.

Disclosure: None

This article was written by Saj Karsan of Barel Karsan. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Stock Analysis: Raven Industries Inc. (RAVN)

Linked here is a detailed quantitative analysis of Raven Industries Inc. (RAVN). Below are some highlights from the above linked analysis:

Company Description: Raven Industries Inc. manufacturer provides electronic precision-agriculture products, reinforced plastic sheeting, electronics manufacturing services, specialty aeronautics, and sewn products.

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
   
2. 20-Year DCF Price
   
3. Avg. P/E Price
   
4. Graham Number
   

RAVN is trading at a discount to 2.) and 3.) above. The stock is trading at a slight premium to its calculated fair value of $31.75. RAVN did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
   
2. Debt To Total Capital
   
3. Key Metrics
   
4. Dividend Growth Rate
   
5. Years of Div. Growth
   
6. Rolling 4-yr Div. > 15%
   

RAVN earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. RAVN earned a Star for having an acceptable score in at least two of the four Key Metrics measured. Rolling 4-yr Div. > 15% means that dividends grew on average in excess of 15% for each consecutive 4 year period over the last 10 years (2000-2003, 2001-2004, 2002-2005, etc.) I consider this a key metric since dividends will double every 5 years if they grow by 15%. The company has paid a cash dividend to shareholders every year since 1972 and has increased its dividend payments for 23 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
   
2. Years to > MMA
   

RAVN earned a Star in this section for its NPV MMA Diff. of the $1,649. This amount is in excess of the $1,200 target I look for in a stock that has increased dividends as long as RAVN has. If RAVN grows its dividend at 15.0% per year, it will take 6 years to equal a MMA yielding an estimated 20-year average rate of 3.72%.

Other: RAVN is a member of the Broad Dividend Achievers™ Index.

Conclusion: RAVN did not earn any Stars in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of four Stars. This quantitatively ranks RAVN as a 4 Star-Buy.

Using my D4L-PreScreen.xls model, I determined the share price would need to increase to $35.67 before RAVN's NPV MMA Differential decreased to the $1,200 minimum that I look for in a stock with 23 years of consecutive dividend increases. At that price the stock would yield 1.54%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $1,200 NPV MMA Differential, the calculated rate is 14.0%. This dividend growth rate is slightly less than the 15.0% used in this analysis, thus providing only a slim margin of safety. RAVN has a risk rating of 1.25 which classifies it as a low risk stock.

RAVN is a company that I have recently started to follow closely. Its solid cash flows, stong balance sheet and lack of debt are alluring to a dividend investor. Although RAVN is trading near my buy price of $31.75, I have two concerns: 1.) the low dividend yield and 2.) the high growth rate needed to meet my NPV MMA Differential target. For now I will pass on a buy, but ill continue to closely monitor the stock. For additional information, including the stock's dividend history, please refer to its data page.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I held no position in RAVN (0.0% of my Income Portfolio). See a list of all my income holdings here.

Recent Stock Analyses:

• Stock Analysis: AT&T Inc. [T]
  
• Stock Analysis: SYSCO Corporation [SYY]
  
• Stock Analysis: Harleysville Group Inc. [HGIC]
  
• Stock Analysis: Emerson Electric Co. [EMR]
• More Stock Analyses

This article was written by Dividends4Life. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Weekend Reading Links - January 17, 2010

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends Value presented 5 Dividend Stocks Trading Below Fair Value
  
• The Dividend Guy presented Small or Large: Does Size Really Matter When It Comes to Stocks?
  
• Dividend Growth Investor presented Buffett the dividend investor
  
• Barel Karsan presented Making The P/E Meaningful
  
• Dividend Tree presented LOWE’S Company – Steady Company for Dividend Growth Portfolio
  
• Buy Value presented CenturyTel Stock Review
  
• moneygardener presented Fortis powers dividend up
  
• The Div Guy presented 7 ways to start the new year off right
  
• Disciplined Approach to Investing presented Investor Sentiment Near Long Term Average
  
• Living Off Dividends & Passive Income presented So Long Annaly Capital!
  
• Old School Value presented Forbes Best Small Companies Part 7
  
• Triaging My Way To Financial Success presented Top Posts of 2009
  
• Dividend Money presented Take The “Slap Chop” Out of Investing!
  
• Everyday Finance presented How Well do You Know Your ETF? You May be Surprised
  
• BuyLikeBuffett.com presented Your 2010 Investment Playbook
  
• 40percent 20years presented Warren Buffett - The world's richest person

There are some really good articles here, please take time and read a few of them.

If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Patience

The largest struggle I have as an investor is not researching companies, or finding and analyzing data, or even pricing a stock; it is having the patience to do all of these things properly.

Patience serves as a protection against wrongs as clothes do against cold. For if you put on more clothes as the cold increases, it will have no power to hurt you. So in like manner you must grow in patience when you meet with great wrongs, and they will then be powerless to vex your mind.

Leonardo da Vinci

Recently I have struggled with this. Having found a good company to invest in and having arrived at what I believe to be a fair price I placed a GTC order. As the days turned into weeks this trade hung on the line never reaching my desired price. In lamenting this fact I found myself at my computer with the mouse over the cancel button on the order with all the intention of canceling my current order and increasing my bid to a price more inline with the current market price for no other reason than that I lacked patience.

Two days later and I am still waiting but the stock has already dropped 9%. I'm calling this 9% a reward for being stubborn. I hope all of you are stronger in this regard than I am and find these challenges a breeze, but for those who don't I hope we can all learn to take a little bit more time to read the financials, price the company, and patiently await an investment to come back to where we know it should be.

This article was written by buyingvalue If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Realty Income (O) Stock Dividend Analysis

Realty Income Corporation engages in the acquisition and ownership of commercial retail real estate properties in the United States. The company leases its retail properties primarily to regional and national retail chain store operators. Realty Income is widely known among its investors as the monthly dividend company. The company is a dividend achiever, which has increased its dividend for 15 years in a row by raising its monthly distributions several times per year. The company is one my best dividend stocks for 2010 list.

Over the past decade the stock has delivered a total return of 18% per annum to its shareholders.

Realty Income owned 2348 retail properties at the end of 2008. The company’s properties which are leased by 119 retail chains in 30 industries are located in 49 states. Most new properties acquired are under long term leases (15-20 years) with tenants from a variety of industries and geographic location. The average remaining lease life was 11.9 years in 2008. Tenants are typically responsible for monthly rent and property operating expenses including property taxes, insurance and maintenance. In addition, occupants are also responsible for future rent increases based on increases in the consumer price index, fixed increases or, to a lesser degree, additional rent calculated as a percentage of the tenants’ gross sales above a specified level. Due to the stability of company's revenue streams and above average yield, the company might be a good pick for investors who are seeking current retirement income.

As a Real Estate Investment trust, the company has to distribute almost all of its net income to shareholders. An important metric for evaluating REITs is Funds from operations (FFO), which stood at $1.83/share in 2008. Realty Income distributed $1.66 /share in 2008. FFO is defined as net income available to common stockholders, plus depreciation and amortization of real estate assets, reduced by gains on sales of investment properties and extraordinary items. The company doesn’t have any debt maturing until 2013 and also has an unused credit facility worth $355 million.

Over the past decade FFO has increased by 4.5% on average.


Over the past decade distributions have increased by 5.3% per annum. A 5% annual gowth in distributions translates into dividends doubling every 14 years. In 2009 the company has raised distributions by 1.10%.

The FFO payout ratio has increased to 90.80% in 2008, which is higher than the 86.60% to 81.50% average range over the past decade.

The main risk for the company is if occupancy rate decreases. About 3% - 4% of the company’s properties face lease expirations each year, which is why it has to be able to find new tenants. The company could try to sell properties which are not occupied currently however, which might be problematic in the current market for real estate. Another negative for the company is the fact that it typically expands its operations through additional sales of its common stock, which dilutes the stakes of existing stockholders.

While Realty Income acquired 108 new properties in 2008, so far in 2009 it has only acquired 3 new properties. Without new acquisitions, the company might not be able to increase distributions above the rate of inflation in the future.

The company owns and actively manages a diverse mix of properties, which provide a stable and dependable income stream for the company’s shareholders. Realty Income currently yields and has raised distributions and FFO’s for over 15 years in a row. I believe that Realty Income is a good addition to any dividend growth portfolio, since it provides growing income and also provides diversification into commercial real estate.

Full disclosure: Long O


Relevant Articles:


- Six Dividend Stocks for current income
- 2010’s Top Dividend Plays
- Inflation Proof your income in retirement with Dividend Stocks
- Dividend Grouping for Dividend Income


This article was written by Dividend Growth Investor. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

McCormick and Company - Stock Analysis for Dividend Growth Portfolio

McCormick & Company Inc (MKC) is the world's largest spice company, with operations in the manufacture, marketing and distribution of spices, seasonings, flavorings and other specialty food products. The company markets its products to retail food, foodservice and industrial markets under the McCormick and Schilling brand names.

MKC is member of Mergent’s Broad Dividend Achiever Index and S&P500 Index. The most recent dividend increase was in December 2009.

Trend Analysis Here I am looking at trends for past 9 years of company’s revenue and profitability. These parameters should show consistently growth trends. The trend charts is shown in image below.

• Revenue: In general, a growing trend since 2000. The average revenue growth for last 9 years has been approximately 5% (std dev of 4.8%). It is expected to be flat in year 2009.
• Cash Flows: Seems to be cyclic. In general, operating cash flow is more than net income. The free cash flow also seems to be cyclic.
• EPS from continuing operation: Overall, an increasing trend. Expecting to be flat-to-negative in 2009.
• Dividends per share: Growing trend.

Risk Parameter Calculation

Here I use the corporation’s financial health to assign a risk number for measuring risk-to-dividends. The risk number for risk-to-dividends is 1.9. This is a medium risk category as per my 3-point risk scale. The negative EPS growth and historically high payout factor makes in medium risk to dividend.

Quality of Dividends

This section measures the dividend growth rate, duration of growth, consistency over a period of past five years.

• Dividend growth rate: The average dividend growth of 11.2% (stdev. 4.7%) is more than average EPS growth rate of 7.7% (stdev. 7%).
• Duration of dividend growth: Consecutive dividends growth for more than 10 years.
  
• 4 year rolling dividend growth rate for past ten years: Less than 10%.
  
• Payout factor: It has been less than 50% since 2000.
  
• Dividend cash flow vs. income from MMA: Here, I analyze how the dividend cash flow stacks up against the income from FDIC insured money market account. The baseline assumption is (a) stock is yielding 2.5%; and (b) MMA yield is 2.3%. With my projected dividend growth of 8.2%, the dividend cash flow is 1.91 times the MMA income in 10 years time period. For dividend cash flow to be twice the MMA income, the pricing has to be $27.0 (i.e. yield 3.6%)
  

Fair Value Calculation

This section determines what price I should pay to buy a given stock

• Net present value (NPV) price based on 15 year DCF: $28.9
  
• Average high yield price calculated based on past 10 years: $34.5
  
• Pricing based on past 10 year relative price-to-earnings ratio. $36.4
  
• Pricing based on price-to-earnings ratio of 12: $20.7
  
• Graham number: $19.1
  

The range of fair value is calculated as $23.9 to $27.9.

Qualitative Analysis

MKC is a founded in 1889 and is worlds largest spice company. Its growth model consists of growing by acquisition, focusing on higher-margin products, and cost reducing efforts.

• Its revenue sources are geographical diverse with 55% from US, while the rest from other developed countries. much focused in US markets (with some presence in Canada and Mexico).
  
• It also have two major business segments, consumer (58% revenue, 81% operating profit), and industrial (42% revenue, 19%).
• It continues to have stable gross and operating margins. It continues to generate operating cash flows.
  
• The risk factor is the liabilities, particularly if its revenue does not grow.
  

Conclusion

MKC is a slow growing company. I expect MKC to continue to have a sustainable cash flow and dividend growth over next few years. I like its geographical diversification and strong brand in spice consumer market. MKC is trading at $37.7 which is approximately 35% higher than what I would be willing to pay. I would be open to add MKC when in my buy range.

Full Disclosure: No positions at the time of writing.

This article was written by Dividend Tree. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Show The Buybacks, Ignore The Options

Hartco (HCI) is an IT solutions company servicing the private and public sectors. The company appears to offer some value potential at its current price, with a market cap of $50 million, which is not much more than its net current asset value, and earnings of almost $2 million in its last quarter.

The company is up to some interesting tricks, however. Two days before its 3rd quarter began, the company announced that it may buy back up to 5% of its common stock in the coming year. But this appeared to be nothing more than a public relations move: in the third quarter, the company ended up buying back just 22,000 shares. At the same time, it issued 987,668 options to executives and directors!

Issuing options is nothing new of course, but what is worrisome is that the company only has 13.6 million shares outstanding, yet in a single quarter it issued 7% of that number in stock options! Equally worrisome is how the company talks up its buybacks in the headlines, while quietly issuing this egregious number of options in the background. The company used this line in its top paragraph on "business priorities" to talk up its paltry purchase of 22,000 shares, while it made no effort to explain the unusually large issuance of options:

"At September 30, 2009 the Company had repurchased 22,000 shares at an average price of $ 2.18 per share for a total of $ 48,000. The Board of directors of Hartco considers that the [buyback] is an appropriate use of financial resources and will be beneficial to Hartco."

Management will often headline the items that are likely to appease shareholders. However, the onus is on investors to dig deeper in order to figure out what the company is really up to.

Disclosure: None

This article was written by Saj Karsan of Barel Karsan. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Stock Analysis: AT&T Inc. (T)

Linked here is a detailed quantitative analysis of AT&T Inc. (T). Below are some highlights from the above linked analysis:

Company Description: AT&T Inc. (formerly SBC Communications) provides telephone and broadband service, and the company holds full ownership of AT&T Mobility (formerly Cingular Wireless).

Fair Value: I consider four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
   
2. 20-Year DCF Price
   
3. Avg. P/E Price
   
4. Graham Number
   

T is trading at a discount to 1.) and 3.) above. Since T's tangible book value is not meaningful, a Graham number can not be calculated. The stock is trading at a 28.1% premium to its calculated fair value of $21.16. T did not earn any Stars in this section.

Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
   
2. Debt To Total Capital
   
3. Key Metrics
   
4. Dividend Growth Rate
   
5. Years of Div. Growth
   
6. Rolling 4-yr Div. > 15%
   

T earned three Stars in this section for 1.), 2.) and 3.) above. A Star was earned since the Free Cash Flow payout ratio was less than 60% and there were no negative Free Cash Flows over the last 10 years. The stock earned a Star as a result of its most recent Debt to Total Capital being less than 45%. T earned a Star for having an acceptable score in at least two of the four Key Metrics measured. The company has paid a cash dividend to shareholders every year since 1984 and has increased its dividend payments for 26 consecutive years.

Dividend Income vs. MMA: Why would you assume the equity risk and invest in a dividend stock if you could earn a better return in a much less risky money market account (MMA)? This section compares the earning ability of this stock with a high yield MMA. Two items are considered in this section, see page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
   
2. Years to > MMA
   

T earned a Star in this section for its NPV MMA Diff. of the $1,408. This amount is in excess of the $900 target I look for in a stock that has increased dividends as long as T has. The stock's current yield of 6.05% exceeds the 3.72% estimated 20-year average MMA rate.

Other: T is a member of the S&P 500 and a member of the Broad Dividend Achievers™ Index.

Conclusion: T did not earn any Stars in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned one Star in the Dividend Income vs. MMA section for a total of four Stars. This quantitatively ranks T as a 4 Star-Buy.

Using my D4L-PreScreen.xls model, I determined the share price would need to increase to $31.80 before T's NPV MMA Differential decreased to the $900 minimum that I look for in a stock with 26 years of consecutive dividend increases. At that price the stock would yield 5.16%.

Resetting the D4L-PreScreen.xls model and solving for the dividend growth rate needed to generate the target $900 NPV MMA Differential, the calculated rate is 0.8%. This dividend growth rate is less than the 2.5% used in this analysis, thus providing a margin of safety. T has a risk rating of 1.75 which classifies it as a medium risk stock.

The weak economy will have a minimal impact on T, but it will see revenue pressure as customers cut back spending, especially on older, highly profitable services, like long-distance voice. Customer migration to wireless is likely to occur faster than expected, thus, near-term margins will likely contract. Long-term, T's scale, customer relationships, and network reach give it an advantage over most of its rivals. Its strong balance sheet and its power over suppliers should help the company generate cash and maintain its dividend. Though T is trading above my buy price of $21.16, it is one I will give strong consideration to initiate a position in in the coming weeks, based on its quality as my allocation and its dividend fundamentals allow. For additional information, including the stock's dividend history, please refer to its data page.

Disclaimer: Material presented here is for informational purposes only. The above quantitative stock analysis, including the Star rating, is mechanically calculated and is based on historical information. The analysis assumes the stock will perform in the future as it has in the past. This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer for more information.

Full Disclosure: At the time of this writing, I held no position in T (0.0% of my Income Portfolio). See a list of all my income holdings

Recent Stock Analyses:

• Stock Analysis: SYSCO Corporation [SYY]
  
• Stock Analysis: Harleysville Group Inc. [HGIC]
  
• Stock Analysis: Emerson Electric Co. [EMR]
  
• Stock Analysis: Nucor Corporation [NUE]
  
• More Stock Analyses

This article was written by Dividends4Life. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

Weekend Reading Links - January 10, 2010

For your weekend reading pleasure, the articles listed below contain some of the best dividend and value investing insights found on the web. They were written by various members of the Dividend Investing and Value Network over the past week:

Articles From DIV-Net Members

• Dividends Value presented 8 Dividend Stocks Covering Their Dividend
  
• The Dividend Guy presented The Good, The Bad and The Ugly of Dividend Stocks
  
• Dividend Growth Investor presented Five Consumer Stocks for 2010
  
• Barel Karsan presented Common Stocks And Uncommon Profits: Chapter 4
  
• Dividend Tree presented Dividend Portfolio: 2009 Year End Update
  
• Stock Market Prognosticator presented Lympho-Maniac Charity Event
  
• The Div Guy presented Top 20 Dividend Stocks
  
• Disciplined Approach to Investing presented Dividend Actions Largely Negative In 2009, Dividend Growth To Resume In 2010
  
• Living Off Dividends & Passive Income presented Back In Action
  
• Old School Value presented Value Screen Results for an Explosive 2010
  
• Everyday Finance presented 10 High Yield Mega-Caps in Diverse Sectors
  
• BuyLikeBuffett.com presented What a Difference a Year Or Two Makes
  
• 40percent 20years presented Long Term Capital - The history of financial hubris

There are some really good articles here, please take time and read a few of them.

If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...

CenturyLink Stock Review

CenturyTel, Inc., together with its subsidiaries, is an integrated communications company engaged primarily in providing an array of communications services, including local and long distance voice, Internet access and broadband services. The Company operates in 25 states located within the continental United States.

Why We Are Reviewing

• is currently sporting an 8% dividend.
• CenturyLink is a dividend aristocrat.
• is soon to be a member of the fortune 500.

What I like about their story

CTL is a telco, most investors tune out at that point as the overwhelming consensus is that VOIP has, or will kill, the traditional phone. Centurylink appears aware of this reality and has taken a few steps to remain a healthy business:

• Use great service and an preexisting relationship as a means of turning their existing phone customers into package consumers of phone, high speed internet, and television services.
• Building a substantial backbone network to support data traffic allowing them to profit by delivering an end to end solution to customers.
• Use the revenues from phone to build a warchests that has been used to purchase companies in vulnerable positions.

The Ratios

P/E: ideal less than 10, current 12.15
Book Value: ideal greater than 0, current greater than 0
Price/Book Ratio: ideal less than 1.5, current 1.12
Current Ratio: ideal more than 2, current .68
EPS Growth rate: ideal greater than 15% over 5yrs, current 8.62
Earnings: Positive in the past 10yrs, current yes

Comments

P/E is solid as is price to book, EPS is low, Current is likely low as a result of most recent acquisition.

The Fundementals

Positives

Negatives

has over the last ten years kept a historically high cash position. historically has kept both short term and long term debt consistent and under control. Accounts payable average 1.6% of total liabilities and equity. Total Liabilities have decreased year on year in 6 of the previous 10 years showing an conservative approach to management. There has been an active stock buyback indicating a concern for shareholder equity. COGS is decreasing as an overall percentage indicating a push towards cost savings and systematic improvements. Gross Profit has increased as an overall percentage of revenue.

Balance sheet is heavy with intangibles. Other long Term liabilities have steadily grown. Net income has decreased year on year in 6 of the previous 10.

Insider Trading

Healthy insider trading can indicate the executive's belief in the health of the business and can indicate an undervalued stock.

In this case we see nothing but a history of selling, it appears that as soon as any of the exec get bonus stock they sell shortly there after.

Consumer Perception

CTL is well regarded in the industry receiving a number of awards for customer service and satisfaction. CTL makes an effort to be socially aware at the local level involving itself in community fund raising, food drives and a united way partner program. All of this ultimately helps to increase its perception as a local business.

Stock Expectations

This company is not going to bust out and show massive stock appreciation. Based on some fundementals and a good story it may be undervalued. Simply put I expect that over the course of the next few years CTL will continue to grow its TV and internet business and with an ongoing focus on its shareholders will continue to pay a solid dividend.

Disclosure
At the time of writing stock has not yet been purchased in this business.

This article was written by buyingvalue. If you enjoyed this article, please vote for it by clicking the Buzz Up! button below.

Read More...

Summary only...