Tag Archives: Free Cash Flow

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Turnaround-bet: Is Vodafone’s 10% dividend yield a no-brainer?

The British red telecom giant announced not only a CEO-change, but also a strategic shift (both often come as one). Meanwhile, the share price is advancing its year-long decline, reaching even a fresh quarter-century low (!), as investors seem totally unimpressed. In the past, Vodafone has been a reliable dividend payer, although the payout was cut in 2019 and not raised again since then. The 10.7% yield seems tempting. Can it get worse or is it worth a shot?

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Deep Dive into Offshore Energy Drilling – coming back from the near-dead + new research report

Not only being one of the most cyclical, but also most hated energy sub-sectors, offshore drilling has been a secure investment grave for the last nearly 15 years. There is barely any investment topic where you could have sunk money more reliably. However, there are really interesting developments that make it worthwhile to risk a look into it, again. Especially, as along as it is perceived a no-go area for ESG-promoters – although offshore drilling tends to be the best choice in this regard.

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Earnings quality the worst in three decades – look at free cash flow!

Operating or net income, adjusted operating or net income, earnings per share (EPS), adjusted EPS and the price to earnings (PE) ratio are commonly used to assess a company’s business results and to value it. They are also often used as headline numbers and proof of performance by the companies themselves. However, there is a rising trend of decreasing “earnings quality” – an indicator that neither the economy is doing pretty well, nor many companies.

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Why “buy and hold” is nonsense and not the key to successful investing

One of the first major “mindset tips” new investors either directly receive from someone more experienced or stumble upon by themselves is to “buy and hold” stocks. The reasoning seems to make sense, as a longer holding period should level out short term fluctuations and enable a positive investing outcome. However, this concept does not take into account a key component, misleading many investors, often causing avoidable disappointments.

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Will Philip Morris split itself, soon?

Company transformations and separations are not an uncommon occurrence. The goal of so-called spin-offs is to grow by shrinking first. Such special situations can create shareholder value that is uncorrelated to broader markets. Over the past days, I started to think through possible coming spin-offs. The iconic Marlboro maker Philip Morris came to my mind, as it could slowly start to make sense for them to start a divorce to focus on their growing business unit, throwing off ballast and cashing out, soon.

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Suffered losses or missed opportunities – what’s hurting more?

Over the last days, I was thinking about some personal stock investments that I either sold too early or even never managend to initiate at all – because I was waiting for a correction which never came. To the contrary, I have to really think longer and more intense about realized losses, just to name a few – not because there were none (there were), but because I threw them out of my mind.

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US shale production is peaking – what it means for oil and gas prices

You can read everywhere that due to the “coming recession” in Western countries, energy demand is going to take a hit and push prices down. Likewise, you also find headlines that Chinese recovery demand might come in below expectations. It is a foregone conclusion that prices of energy will go down – everything circles around demand. But is this the big picture? What would happen if a massive supply shock took market participants by surprise? You won’t be surprised, but prepared, with this latest Weekly.

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Commodity stocks and recessions – clearing up a common misconception

As many commodity prices – being economically sensitive resources – have dropped massively over the last months (and even more so over the last weeks) as well as a recession being expected by the consensus, the question is whether equities of commodity producers in general are about to crash. At least this was the procedure during the last Great Recession of 2008–2009. However, this is too simplified, completely ignoring history.

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Megatrend of this decade: Dividend cuts + an update to my most popular article so far

Even though I know that I certainly won’t make many new friends with this article, especially not from the ranks of dividend investors, it is a duty for me to address this topic. I also think, it’s no coincidence that my most popular article to date has been about looming dividend cuts. Simply put, it’s too important to be ignored.

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A king is falling – why Altria’s butt is burnt down

Altria is a stock from the illustrious circle of the “dividend kings”. It is even so special that it has actually raised its dividend more than once a year over the past half century – 57 increases over 53 consecutive years. However, the last few years have been disappointing in operational terms. Recent results, in particular, have shown the direction this company is likely to take. There are still a few puffs left, but don’t be surprised by the impending dividend cut at this darling of many dividend investors.

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