Posts by Building Benjamins
Citigroup’s Big Dividend Finally Set to Grow
• 4.2% dividend yield.
• Repositioning toward a consumer-centric model, investing money into digital banking and improving customer experience.
• Divesting from most legacy banking outside of North America, ICG (Institutional Clients Group) will stay international.
• Strong labor markets drove fewer credit losses.
• Investment banking losses offset by strength in commercial/customer banking.
Video: Bank Stocks with Over 4% Yield: Us Bank (USB) and Citigroup (C)
US Bank (USB):
• 4.2% Dividend Yield.
• Higher interest rate environment increased interest income by 21%.
• Expanding payments business through the acquisition of Talech.
• West-coast expansion with Union Bank acquisition.
• Strategic Partnership with State Farm to expand customer base.
Citigroup (C):
• 4.2% dividend yield.
• Repositioning toward consumer-centric model, investing money into digital banking and improving customer experience.
• Divesting from most legacy banking outside of North America, ICG will stay international.
• Strong labor markets and high rates have allowed for fewer credit losses.
• Investment banking losses offset by strength in commercial/customer banking.
Video: 5.6% Dividend for Lincoln National’s (LNC). Stock Poised to Recover After COVID Expense Shock.
Lincoln National Corp (LNC):
• 5.6% Dividend Yield. Stock pullback is an attractive entry at E23 PE of 3.3.
• COVID-19 claims are decreasing, and earnings hit now behind the company.
• Record of steady growth in earnings and dividends. Secure $1.80 dividend payment is easily covered by E23 EPS of $9.10.
• Portfolio yield increases will have a positive impact on earned interest and allow for more favorable product pricing.
• New CEO, renewed management direction.
USB: Strong Acquisitions and Partnerships Grow Core Business
• 4.2% Dividend Yield.
• Higher interest rate environment increased interest income by 21%.
• Expanding payments business through the acquisition of Talech.
• West-coast expansion with Union Bank acquisition.
• Strategic Partnership with State Farm to expand customer base.
Economic and Market Review December
Economic and Market Review December 31, 2022 Monthly Summary Global equity and fixed-income markets navigated through a volatile environment as 2022 unfolded to be a challenging year. The Russian invasion of Ukraine, rising interest rates, inflationary pressures, and a slowing economy all weighed on financial markets. The three major equity indices saw their largest declines…
Read MoreVideo: QT accelerates. Stay Cautious. Fed Funds likely to be at 5% or higher into 2024.
QT Quantitative Tightening accelerates. Stay Cautious. Fed Governors are indicating that the Fed Funds are likely to be at 5% or higher into 2024. No near term pivot or pause. QT accelerated into $43.7 Billion for the week ending Wednesday. Fed Holdings of Treasuries maturing in less than 15 days makes QT implementation on or above schedule likely for the next couple of weeks. QT has really just started to scratch the Fed’s bloated Balance Sheet which got to $8.9 Trillion in April of 2022.
Read MoreBDN: 12% Yield and Steep Discount to $9.48 BV
• 12.2% Distribution Yield from Brandywine Realty Trust (REIT).
• 61% Funds from Operations Distribution Coverage for
• Occupancy is improving with a 1.2% quarter-over-quarter increase to 90.8%.
• 8.1-year average lease term assures rent durability.
• 9.4% average increase in cash rents since 1Q22.
• 70% tenant retention for FY22 10% higher than expected.
• Risk is persistent softness in commercial real estate market that cannot be offset by superior execution.
LPI: Midland Basin Pure Play Prints Free Cash
• Low valuation should expand.
• Estimated Fair Value of $150 per share at a 5.0x PE.
• Free cash being used to delever and derisk the balance sheet.
• The roll off of lower priced hedges will boost earnings.
• Growing production.
• SPR (Strategic Petroleum Reserve) depletion cessation and a recovery in Chinese demand will in our opinion drive oil prices higher into 2023.
• High free cash being returned to shareholders with stock repurchase.
ROCC: Growth Consolidator Prints Free Cash
• Company is expected to get an FY22 EPS of $10, which could increase to $15 by FY24.
• Eagle Ford consolidator has a history of a high rate of return (60% ROE) by streamlining small operators.
• Growth Company in exploration and production.
• Growth Characteristics should demand at least a 10x PE.
• Oil pricing is expected to get a boost in 2023 from post COVID lockdown recovery in China and SPR (Strategic Petroleum Reserve) ending its release and possibly reversing to refilling.
Video: Laredo (LPI): Cheap Earnings with High Guidance Could Skyrocket With Oil Demand Increases
• Exiting cheap hedges, should see earnings boost as low price hedges roll off
• Increased production targets, oil prices are poised to reset higher as SPR repurchases lost reserves and Chinese demand increases.
• High earnings for the price, we estimated around 5.0x PE, delevering balance sheet quickly.