Automatic Data Processing Stock Analysis – Too Expensive

Summary

  • This Automatic Data Processing stock analysis is based on Q2 2017 results and outlook for the remainder of fiscal 2017 which were released February 1, 2017.
  • Revenues increased 6% to $3.0B, 7% on a constant dollar basis.
  • Adjusted diluted EPS from continuing operations increased 20% to $0.87, 19% on a constant dollar basis.
  • Fiscal 2017 share repurchases of $1.2B – $1.4B to be funded by existing balance sheet cash vs. prior forecast of $1.0B – to $1.4B.
  • ADP’s stock price is still too rich for my liking. I will wait for ADP to drop to $92ish.

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CDK Global Stock Analysis – Too Expensive Now. Put it on your Radar.

Summary

  • This CDK Global stock analysis is based on Q2 2017 results and its outlook for the remainder of fiscal 2017.
  • CDK’s stock price has doubled to almost $64 since it was spun-off from ADP in 2014.
  • CDK’s sub 1% dividend yield will not appeal to investors seeking income from their investments.
  • CDK is expensive and I am of the opinion a $17 drop in price to approximately $46 – $47 is required before I purchase more shares.

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MasterCard Stock Analysis – Expensive But Worth The Price

Summary

  • This MasterCard (NYSE: MA) stock analysis is based on Q4 and FY 2016 results reported January 31, 2017.
  • MA continues to perform well but lofty expectations resulted in a small pullback in the stock price.
  • While MA’s PE is just shy of 30, I am willing to pay up for high growth and will acquire additional shares.
  • Should MA’s stock price experience a significant correction at a later date (not due to the deterioration of the business), I would buy more shares to lower my average cost.

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United Parcel Service Stock Analysis – It is now in my “Buy Zone”

Summary

  • This United Parcel Service stock analysis is based on Q4 and FY2016 results reported on January 31, 2017.
  • UPS reported its results and the stock dropped roughly 8%.
  • Results were impacted by a Mark-to-Market Pension Charge which resulted in EPS falling short of expectations.
  • UPS continues to grow its business and FCF is still strong.
  • UPS’ shares are now at the upper end of my “buy zone” and I acquired more shares on January 31, 2017.

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Colgate-Palmolive Stock Analysis – A Little Patience

Summary

  • This Colgate-Palmolive stock analysis is based on Q4 and FY2016 results and outlook for fiscal 2017 reported on January 27, 2017.
  • Colgate reported its third year in a row of declining global sales.
  • Diluted EPS, FCF, and NI increased relative to FY2015. Positive results are attributed to company initiatives and because FY2015 results were negatively impacted by the write-off of Venezuelan operations.
  • Colgate is a Dividend King. I anticipate a $0.01/quarter dividend increase to be announced within 2 months to keep this string of increases intact.

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Canadian National Railway Stock Analysis – Riding the Rails

Summary

  • This Canadian National Railway stock analysis is based on Q4 and FY2016 results and outlook for 2017 reported January 24, 2017.
  • Revenue dropped but net income, operating income, and diluted EPS increased.
  • Record Free Cash Flow (FCF) of $2.520B was reported which permitted the repurchase C$2B of shares vs. C$1.75B in 2015.
  • The annual dividend has been increased 10% to C$1.65. The C$0.4125/share dividend will be paid on March 31, 2017.
  • Management has forecast mid-single-digit EPS growth in 2017 from the adjusted diluted EPS of C$4.59 recorded in 2016.

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3M Stock Analysis – This Behemoth Belongs in Everyone’s Portfolio

Summary

  • This 3M stock analysis is based on Q4 and FY 2016 results and outlook for fiscal 2017 released January 24, 2017.
  • 3M reported strong result in FY2016 thus enabling it to return $6.431B to shareholders via share repurchases or dividends.
  • 3M has been taking advantage of favorable interest rates and has increased LTD from $4.3B in FY2013 to over $11B as at end of Q3 2016.
  • 2017 projections include EPS range of $8.45 to $8.80 (a 4% – 8% increase) and FCF conversion range of 95% to 105%.
  • I would be prepared to acquire additional 3M shares below $164.

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