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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McDonald’s Stock Analysis – I Need Those Dividends to Service My McDonald’s Coffee Consumption

Summary

  • This McDonald’s stock analysis is based on Q4 and FY 2016 results and outlook for fiscal 2017 released January 23, 2017.
  • McDonald’s FY2016 results reflect a drop in revenue but a corresponding larger drop in expenses.
  • It has been repurchasing its share at a torrid pace using LTD under attractive terms.
  • I am prepared to acquire additional shares under $117.

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Union Pacific Stock Analysis – I Continue to Patiently Wait for a Pullback

Summary

  • This Union Pacific stock analysis is based on Q4 and FY 2016 results and the outlook for fiscal 2017 released January 19, 2017.
  • Union Pacific, North America’s largest railroad, reported a substantial full-year decline in volumes vs. FY2015 but declines moderated in Q4 FY2016.
  • Union Pacific’s operating ratio increased to 63.5 percent but UNP is committed to its G55 + 0 initiatives which it initiated in FY2015.
  • Dividend and share repurchases amounted to roughly $5B or 118% of net income in FY2016.
  • Since 2007, Union Pacific has repurchased just over 29% of outstanding shares.
  • I view Union Pacific as being a bit too expensive at the moment and will patiently wait for it to retrace to the low $90s.

Introduction

We currently own shares in only one railroad, the TSX listed shares of Canadian National Railway (NYSE: CNI) in the FFJ Portfolio and no other shares within the Transportation sector. I would like to beef up our exposure to this sector and after a quick review of certain financial metrics for various North American Rail Freight Transport companies, decided to analyze Union Pacific Railroad (NYSE: UNP).

I have been monitoring UNP with the hope of a pullback to a more reasonable valuation level so I can add it to our investment portfolio. Today’s earnings release and the subsequent jump in price has not helped my cause. I am cautiously optimistic, however, of a correction in UNP’s valuation at some stage in 2017. Continue reading “Union Pacific Stock Analysis – I Continue to Patiently Wait for a Pullback”

VISA Stock Analysis – I Will NEVER Sell This Holding

 Summary

  • VISA appears expensive at current levels but this is a result of several sizable one-time charges.
  • The legal issue as it relates to interchange fees has still not been resolved.
  • Even if VISA ends up having to pay a multi-billion dollar fine the interchange fee legal case should not dissuade investors from initiating / increasing a position in VISA with a long-term investment time horizon.
  • VISA continues to operate on a business as usual basis and is investing heavily to address the ever evolving needs in the payment industry.

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SmartREIT Stock Analysis: Owning it could be a smart move

Summary

SmartREIT:

  • is a well-managed Real Estate Investment Trust with great growth potential.
  • boasts Walmart as one of its major tenants which anchors 107 (or 72%) of SmartREIT’s shopping centres.
  • is developing the massive 400-acre Vaughan Metropolitan Centre 400 with key anchor tenants such as KPMG and PWC.
  • has several other projects of significance in some stage of development.

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Paychex Stock Analysis: Love the company, not the price.

Summary

  • This Paychex stock analysis is based on Q2 2017 results and forecast for the remainder of fiscal 2017 released December 21, 2016.
  • Paychex, Inc. reported total service revenue of $760 Million (7% inc) for Q2 2017 and $1,533.5 Million (8% inc) for 6 months ending November 30, 2016.
  • It reported adjusted diluted EPS of $0.56 (8% inc) for Q2 2017 and $1.12 (8% inc) for 6 months ending November 30, 2016.
  • While investors have been aptly rewarded over the years, Paychex is expensive with a forward P/E of just under 28.
  • Recommend “Hold” if currently long and patience if you’re interested in adding Paychex to your portfolio.

Continue reading “Paychex Stock Analysis: Love the company, not the price.”

Automatic Data Processing Stock Analysis: A Wonderful Company. Less Than Wonderful Valuation

 

Summary

  • This Automatic Data Processing stock analysis is based on Q1 2017 results and forecast for the remainder of fiscal 2017 released November 2, 2016.
  • ADP has increased its dividend each year for 42 years making the company a dividend aristocrat.
  • While ADP has aptly rewarded shareholders over the years it is expensive at current levels.
  • I would be prepared to add to my existing ADP holdings if the price drops below $92.

Continue reading “Automatic Data Processing Stock Analysis: A Wonderful Company. Less Than Wonderful Valuation”