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The Railroad Industry is a critical part of the world's inter-model transportation infrastructure that moves the millions of individuals and tons of freight around the world each and every day. The entire infrastructure can be divided into three distinct parts - land (road, rail and pipelines), water (shipping) and air. Water is by far the slowest and the cheapest. Air is by far the fastest and most expensive. Rail is by far the most cost effective.

The railroad industry is traditionally linked to the world's heaviest industries because of their ability to move bulk materials at a very low cost. Rail is also by far the land transportation mode of choice because of its ability to transport high capacity loads over long distances. The recent development of containerization has also greatly improved the flexibility of rail transportation to link with other modes of transportation like road and maritime modes.

The biggest challenge facing the railroads today and in the future is their ability to meet the needs of their customers as those needs shift among the diverse industries they serve, their ability to adapt to improving network efficiencies and fluidity, and their ability to continue to operate as the lowest cost and safest mode of transportation. And despite the challenges from a significantly weaker coal market and the carry-over impact of the 2012 drought on their grain shipments, other markets within their diverse portfolio of business, including automotive, base chemicals, shale-related moves, construction-related shipments, and domestic intermodal traffic have actually been increasing.

Going forward an ever increasing US and global population will inevitably put greater demands on the global economy and the world's transportation systems. The railroads are uniquely positioned to benefit from any transportation activity.

Below I have sorted ten companies associated with the railroad industry based on their PEG ratio, their Dividend Yield, their One Year Estimated Capital Gain, and their One Year Total Return. The idea is to get an idea on how well these companies stack up against one another. It's from this information that I determine which companies are candidates for further investigation. Hopefully this will provide executable ideas for others too.

PEG Ratio

ARII 1.08
UNP 1.37
TRN 1.37
CSX 1.66
NSC 1.76
WAB 1.83
KSU 1.84
GBX 1.99
RAIL N/A
PWX N/A

Dividend Yield

ARII 2.35%
CSX 2.06%
NSC 2.00%
UNP 1.79%
RAIL 1.07%
KSU 0.98%
PWX 0.91%
GBX 0.89%
TRN 0.88%
WAB 0.28%

1yr Est Cap Gain

RAIL 16.90%
UNP 9.63%
TRN 7.78%
NSC 6.55%
GBX 6.00%
CSX 4.16%
KSU 3.50%
WAB 1.74%
ARII -14.56%
PWX N/A

1yr Total Return

RAIL 17.97%
UNP 11.42%
TRN 8.66%
NSC 8.55%
GBX 6.89%
CSX 6.22%
KSU 4.48%
WAB 2.02%
ARII -12.21%
PWX N/A

Union Pacific Corporation

Union Pacific Corporation (UNP), through its subsidiary, Union Pacific Railroad Company, provides rail transportation services in the United States. The company offers freight transportation services for agricultural products, including grains, commodities produced from grains, food, and beverage products; automotive products, such as imported and exported shipments, finished vehicles, and automotive parts; and chemicals consisting of industrial chemicals, plastics, crude oil, liquid petroleum gases, fertilizers, soda ash, sodium products, and phosphorus rock and sulfur products. It also provides transportation services for coal and petroleum coke; industrial products comprising construction products, metals, minerals, consumer goods, lumber, paper, and other miscellaneous products, as well as steel, aggregate, cement, and wood products; and intermodal import and export containers and trailers. Its rail network includes 31,838 route miles linking the Pacific Coast and Gulf Coast ports with the Midwest and eastern United States gateways. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska. (Daily Chart)

27 July 2014
Price $101.66
1yr Target $111.45
No. of Brokers 21
1yr Cap Gain 9.63%
Dividend $1.82
Yield 1.79%
1yr Tot Ret 11.42%

3yr RevGR 8.89%
3yr EarnGR 19.28%
3yr DivGR 31.19%
Payout 37.29%
EPS (ttm) $4.88
P/E 20.83
PEG 1.37

Norfolk Southern Corporation

Norfolk Southern Corporation (NSC), together with its subsidiaries, is engaged in the rail transportation of raw materials, intermediate products, and finished goods. As of December 31, 2013, it operated approximately 20,000 miles of road in 22 states and the District of Columbia. The company also operates scheduled passenger trains; transports overseas freight through various Atlantic and Gulf Coast ports; and provides logistics services. In addition, it provides bimodal truckload transportation services primarily utilizing RoadRailer trailers, a hybrid technology that facilitates over-the-road and on-the-rail transportation in the eastern United States, as well as in Ontario and Quebec through a network of terminals. Further, the company is engaged in the acquisition, leasing, and management of coal, oil, gas, and minerals; development of commercial real estate; telecommunications; and leasing or sale of rail property and equipment. The company is founded in 1883 and is based Norfolk, Virginia. (Daily Chart)

27 July 2014
Price $107.50
1yr Target $114.55
No. of Brokers 20
1yr Cap Gain 6.55%
Dividend $2.16
Yield 2.00%
1yr Tot Ret 8.55%

3yr RevGR 5.66%
3yr EarnGR 14.56%
3yr DivGR 12.38%
Payout 37.17%
EPS (ttm) $5.81
P/E 18.50
PEG 1.76

CSX Corporation

CSX Corporation (CSX), together with its subsidiaries, provides rail-based transportation services in the United States and Canada. It offers traditional rail services, and transports intermodal containers and trailers. The company transports crushed stone, sand and gravel, metal, phosphate, fertilizer, food, consumer, agricultural, automotive, paper, and chemical products; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers, industrial plants, and deep-water port facilities. It also provides intermodal transportation services through a network of approximately 50 terminals transporting manufactured consumer goods in containers in the eastern United States, as well as performs drayage services, including pickup and delivery of intermodal shipments; and trucking dispatch services. In addition, the company operates various distribution centers and storage locations; and connects non-rail served customers through transferring products from rail to trucks, such as ethanol and minerals. Further, it is involved in the acquisition, development, sale, lease, and management of real estate properties. The company operates approximately 21,000 route mile rail network, which serves various population centers in 23 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as operates approximately 4,000 locomotives. CSX Corporation also serves production and distribution facilities through track connections. The company was founded in 1978 and is based in Jacksonville, Florida. (Daily Chart)

27 July 2014
Price $31.00
1yr Target $32.29
No. of Brokers 21
1yr Cap Gain 4.16%
Dividend $0.64
Yield 2.06%
1yr Tot Ret 6.22%

3yr RevGR 4.13%
3yr EarnGR 10.56%
3yr DivGR 22.37%
Payout 36.15%
EPS (ttm) $1.77
P/E 17.42
PEG 1.66

Kansas City Southern

Kansas City Southern (KSU), through its subsidiaries, engages in the freight rail transportation business. The company operates north/south rail route between Kansas City, Missouri, and various ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi, and Texas in the midwest and southeast regions of the United States. It also operates direct rail passageway between Mexico City and Laredo, Texas serving various Mexico’s industrial cities and 3 of its seaports; a 157-mile rail line extending from Laredo, Texas to the port city of Corpus Christi, Texas; and KCSR rail line between Meridian, Mississippi and Shreveport, Louisiana, as well as owns the northern half of the rail bridge at Laredo, Texas. In addition, the company operates a bulk materials handling facility with deep-water access to the Gulf of Mexico at Port Arthur, Texas that stores and transfers petroleum coke from rail cars to ships primarily for export; and a railroad wood-tie treatment facility. Its coordinated rail network comprises approximately 6,400 route miles extending from the midwest and southeast portions of the United States and south into Mexico, and connects with various other Class I railroads. The company serves customers conducting business in various industries, including electric-generating utilities, chemical and petroleum products, paper and forest products, agriculture and mineral products, automotive products, and intermodal transportation. Kansas City Southern was founded in 1962 and is headquartered in Kansas City, Missouri. (Daily Chart)

27 July 2014
Price $114.25
1yr Target $118.25
No. of Brokers 16
1yr Cap Gain 3.50%
Dividend $1.12
Yield 0.98%
1yr Tot Ret 4.48%

2yr RevGR 6.26%
2yr EarnGR 2.95%
1yr DivGR 10.25%
Payout 36.24%
EPS (ttm) $3.09
P/E 27.66
PEG 1.84

Westinghouse Air Brake Technologies Corp

Westinghouse Air Brake Technologies Corporation (WAB), doing business as Wabtec Corporation, provides technology-based products and services for the freight rail and passenger transit industries worldwide. It operates in two segments, Freight and Transit. The Freight segment manufactures and services components for new and existing locomotive and freight cars; supplies railway electronics and positive train control equipment; provides signal design and engineering services; builds switcher locomotives; rebuilds freight locomotives; and provides heat exchangers and cooling systems for rail and other industrial markets. This segment serves publicly traded railroads; leasing companies; manufacturers of original equipment, such as locomotives and freight cars; and utilities. The Transit segment manufactures and services components for new and existing passenger transit vehicles, including subway cars and buses; builds commuter locomotives; and refurbishes subway cars. This segment serves public transit authorities and municipalities, leasing companies, and manufacturers of subway cars and buses. The company’s products include positive train control equipment and electronically controlled pneumatic braking products; railway electronics, including event recorders, monitoring equipment, and end of train devices; freight car truck components; draft gears, couplers, and slack adjusters; air compressors and dryers; track and switch products; railway braking equipment and related components; friction products, including brake shoes and pads; door and window assemblies, and accessibility lifts and ramps for buses and subway cars; and traction motors. It also builds, remanufactures, and overhauls commuter and switcher locomotives, and transit cars. Westinghouse Air Brake Technologies Corporation was founded in 1869 and is headquartered in Wilmerding, Pennsylvania. (Daily Chart)

27 July 2014
Price $85.46
1yr Target $86.95
No. of Brokers 11
1yr Cap Gain 1.74%
Dividend $0.24
Yield 0.28%
1yr Tot Ret 2.02%

3yr RevGR 19.20%
3yr EarnGR 32.60%
3yr DivGR 90.05%
Payout 7.69%
EPS (ttm) $3.12
P/E 27.39
PEG 1.83

Trinity Industries

Trinity Industries, Inc. (TRN) provides various products and services for the energy, transportation, chemical, and construction sectors in the United States, Canada, Mexico, the United Kingdom, Singapore, and Sweden. The company’s Rail group offers railcars, including auto carrier, box, gondola, hopper, intermodal, specialty, and tank cars; and railcar parts and components comprising couplers, axles, and other equipment. This group serves railroads, leasing companies, and industrial shippers of various products. The company’s Railcar Leasing and Management Services group leases tank and freight railcars to industrial shippers and railroads in chemical, agricultural, energy, and other industries; provides management, maintenance, and administrative services; and manages railcar fleets on behalf of third parties. As of December 31, 2013, this group had a fleet of 75,685 owned or leased railcars. Its Construction Products group manufactures highway products, such as guardrail, crash cushions, and other protective barriers; provides hot-dip galvanizing services to fabricated steel materials manufacturers; and manufactures construction equipment for the mining industry, as well as trench shields and shoring products for the construction industry. This group also provides aggregates, such as expanded shale and clay, crushed stone, sand and gravel, asphalt rock, and other products, as well as other steel products for infrastructure-related projects. The company’s Energy Equipment group offers structural wind towers; utility, traffic, and lighting structures; storage containers; and tank heads for pressure and non-pressure vessels. Its Inland Barge group provides deck barges, and open or covered hopper barges to transport grain, coal, and aggregates; and tank barges to transport crude oil, chemicals, and petroleum products, as well as fiberglass reinforced lift covers for grain barges. The company was founded in 1933 and is headquartered in Dallas, Texas. (Daily Chart)

27 July 2014
Price $45.35
1yr Target $48.88
No. of Brokers 8
1yr Cap Gain 7.78%
Dividend $0.40
Yield 0.88%
1yr Tot Ret 8.66%

3yr RevGR 30.90%
3yr EarnGR 77.00%
3yr DivGR 18.84%
Payout 6.05%
EPS (ttm) $6.61
P/E 13.70
PEG 1.37

The Greenbrier Companies, Inc

The Greenbrier Companies, Inc. (GBX) designs, manufactures, and markets railroad freight car equipment in North America and Europe. Its Manufacturing Segment offers double-stack intermodal railcars; tanks cars; auto-max railcar, multi-max auto rack, and flat cars for automotive transportation; conventional railcars, such as boxcars, covered hopper cars, flats cars, center partition cars, bulkhead flat cars, and solid waste service flat cars; and pressurized tank cars, non-pressurized tank cars, gondolas and coil cars, coal cars, sliding wall cars, and automobile transporter cars; and marine vessels, including conventional deck barges, double-hull tank barges, railcar/deck barges, barges for aggregates, and other heavy industrial products and dump barges. The company’s Wheels, Repair & Parts segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and axle downsizing; heavy railcar repair and refurbishment, as well as routine railcar maintenance; and repair and refurbishment of railcars for third parties. This segment also reconditions railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts, as well as produces roofs, doors, and associated parts for boxcars. Its Leasing & Services segment offers operating leases and ‘by the mile’ leases for a fleet of approximately 8,600 railcars; and management services, including railcar maintenance management, railcar accounting services, fleet management, administration, and railcar remarketing. This segment owns or provides management services to a fleet of approximately 232,000 railcars. The company’s customers include railroads, leasing companies, financial institutions, shippers, carriers, and transportation companies. The Greenbrier Companies, Inc. was founded in 1974 and is headquartered in Lake Oswego, Oregon. (Daily Chart)

27 July 2014
Price $66.98
1yr Target $71.00
No. of Brokers 9
1yr Cap Gain 6.00%
Dividend $0.60
Yield 0.89%
1yr Tot Ret 6.89%

3yr RevGR 32.06%
3yr EarnGR N/A
3yr DivGR N/A
Payout 21.97%
EPS (ttm) $2.73
P/E 24.53
PEG 1.99

American Railcar Industries, Inc

American Railcar Industries, Inc. (ARII) designs and manufactures hopper and tank railcars in North America. It operates through three segments: Manufacturing, Railcar Leasing, and Railcar Services. The company manufactures hopper railcars for shipping various dry bulk products; non-pressure and pressure tank railcars; and other railcars. It also manufactures railcar components, such as tank railcar components and valves, tank heads, discharge outlets for hopper railcars, manway covers and valve body castings, outlet components and running boards for industrial and railroad customers, and hitches for the intermodal market; and aluminum and special alloy steel castings for the trucking, construction, mining, and oil and gas exploration markets, as well as finished, machined castings, and other custom machined products. In addition, the company leases hopper and tank rail cars. As of December 31, 2013, it leased 4,450 railcars. Further, the company offers railcar services primarily to leasing companies and shippers of tank and specialty hopper railcars. Its railcar services consist of repair services; engineering and field services, such as failure analysis, retrofit drawings, procedure preparation, regulatory compliance assistance, trouble shooting, and railcar inspections; and fleet management services, including maintenance and shop planning, project management, tracking and tracing, regulatory compliance, mileage audit, rolling stock taxes, and online service access. The company was founded in 1988 and is headquartered in St. Charles, Missouri. (Daily Chart)

27 July 2014
Price $67.88
1yr Target $58.00
No. of Brokers 3
1yr CapGain -14.56%
Dividend $1.60
Yield 2.35%
1yr Tot Ret -12.21%

3yr RevGR 39.58%
3yr EarnGR N/A
3yr DivGR N/A
Payout 38.09%
EPS (ttm) $4.20
P/E 16.16
PEG 1.08

FreightCar America, Inc

FreightCar America, Inc. (RAIL), through its subsidiaries, designs, manufactures, and sells aluminum-bodied and steel-bodied railcars that transport various non-liquid products in North America, Latin America, and the Middle East. It operates in two segments, Manufacturing and Services. The company offers coal cars, bulk commodity cars, flat cars, mill gondola cars, intermodal cars, coil steel cars, and motor vehicle carriers. It also refurbishes and rebuilds railcars; and sells forged, cast, and fabricated parts for various railcars. In addition, the company provides general railcar repair and maintenance, inspections, and railcar fleet management services for various types of freight-carrying railcars; and leases freight cars. The company also exports its manufactured railcars to Latin America and the Middle East. Its customers primarily include railroads, financial institutions, and shippers. The company was founded in 1901 and is headquartered in Chicago, Illinois. (Daily Chart)

27 July 2014
Price $22.36
1yr Target $26.14
No. of Brokers 7
1yr Cap Gain 16.90%
Dividend $0.24
Yield 1.07%
1yr Tot Ret 17.97%

3yr RevGR 26.57%
3yr EarnGR N/A
3yr DivGR 58.00%
Payout N/A
EPS (ttm) -$1.97
P/E N/A
PEG N/A

Providence and Worcester Railroad Company

Providence and Worcester Railroad Company (PWX), a short-line freight railroad, provides interstate freight carrier services in Massachusetts, Rhode Island, Connecticut, and New York. It transports various commodities, including automobiles; construction aggregates; iron and steel products; chemicals and plastics; lumber; scrap metals; plastic resins; cement; coal; construction and demolition debris; and processed foods and edible foodstuffs, such as corn syrup and vegetable oils. The company also sells and leases properties and tracks; grants permanent and temporary easements to government agencies, utility companies, and other parties for the installation of overhead or underground cables, pipelines, and transmission wires, as well as recreational uses, such as bike paths; and services a double-stack intermodal terminal facility in New England. Its rail freight system comprises approximately 516 miles of track, of which it owns approximately 163 miles. The company was founded in 1969 and is based in Worcester, Massachusetts. (Daily Chart)

27 July 2014
Price $17.57
1yr Target N/A
No. of Brokers -
1yr Cap Gain N/A
Dividend $0.16
Yield 0.91%
1yr Tot Ret N/A

3yr RevGR 3.67%
3yr EarnGR N/A
3yr DivGR 0.00%
Payout 44.44%
EPS (ttm) $0.36
P/E 48.79
PEG N/A

Additional Related Articles of Interest.

Norfolk Southern Corp

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It's Monday Morning Again

7/28/2014

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It's Monday morning again.

I've mentioned this before and it's a routine I repeat almost every morning. I like to wake before the markets open, start the coffee pot and check the market updates on Yahoo! Finance. The news lets me know what's happened in the financial markets overnight and the futures let me know which direction the market is poised for the opening.

I like to check the 24 hour news channels to see if anything catastrophic has occurred that may interrupt the orderly flow of orders as the market opening approaches. I also like to check the balance in my accounts to see if any unexpected dividends came in that weren’t on my radar. That account balance is my ammunition for the day.

From there I start to cruise the net for information and data. I have several sites I look at and most of them are listed on the right side of this web page under the title of “Additional Resources”. One of my favorites is StockCharts Voyeur. It’s a stream of stock charts that people all over the country are currently viewing. It just gives me a idea of what others are interested in and allows me to see charts of companies that I probably wouldn’t have looked at on my own. It’s a fascinating and entertaining website and often provides me with some new ideas.

The first 30 minutes of the trading day are the most dangerous for me. I generally don’t like to trade during that time. I live in the Central Time Zone so for me that’s from 8:30 until 9:00 am. During this time there’s usually a rush of buy and sell orders that have been stacked up all night by part time investors that spent the whole weekend doing research. During the first 30 minutes there’s often a disorderly push and pull among traders due to trade imbalances as trades come tumbling through in a disorderly manner. Usually within 15-20 minutes the markets rebalance and real traders start pushing the market up or down.

I’m not necessarily worried about those long term traders that are putting in limit orders. I’m concerned with those traders that are reacting to last night’s news events. The ones that have been in the chat rooms the night before and found a false consensus with other traders. They’re dangerous.

Once I begin to feel that the market has found an equilibrium in its order flow I start to look for trend breakouts. These are literally intraday highs or lows and they signal which way the market or an individual stock is probably heading for the day. This literally tells me if I should execute a trade or wait for a better entry.

I have used this strategy more times than I can remember. It’s simply waiting for a trend to form before jumping into one side of a trade or the other. It has saved me over the years from making thousands and thousands of mistakes. Perhaps this little idea can save someone else from jumping in too soon and regretting it.

Good Luck and Good Trading.

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The Entertainment Industry

7/27/2014

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The Entertainment Industry is a vast and an extremely diverse industry. It's composed of large corporations that have grown, expanded and specialized in very specific and distinct areas of entertainment. It makes analyzing these companies and this industry almost impossible because each company is made up of difference aspects of this huge and growing entertainment industry.

This industry includes all of the following areas of entertainment: Cable Communications, Cable Networks, News and Sports Programming, Media Networks, Broadcast Television, Filmed Entertainment, Theme Parks and Resorts, Television Stations, Radio Stations, Music, DVDs, Video Games, Character Licensing Rights and Branding Products, and a multitude of Magazines. None of the companies listed below could possibly do all of these things successfully and each one is organized uniquely. At some point I'm simply going to have to dig a little deeper into the fundamentals to get at a truer understanding of the value inherent in each of the companies listed. For this article I just wanted to summarize a few of the fundamentals that I tend to initially review. This will allow me to determine if any of the companies merit a more detailed look at their fundamentals.

Each of the companies below pay a dividend and have a market capitalization of at least $1 Billion. This is the initial sort I make with any initial screen. Others will disagree with me but I'm not interested in any company that doesn't pay a dividend (of course there's always exceptions). I also have to make a cut somewhere to limit the number of companies to look at and $1 Billion is where I normally make that cut. I next sort on and rank the PEG ratio, the Dividend Yield, the One Year Estimated Capital Gain, and the One Year Total Return to get a pretty good idea on how the companies stack up against one another. From this information I can then determine which companies are candidates for further investigation.

PEG Ratio

CMCSA 1.15
FOXA 1.17
VIAB 1.23
CBS 1.30
DIS 1.37
TWX 1.46

Dividend Yield

CMCSA 1.65%
VIAB 1.53%
TWX 1.49%
DIS 1.00%
CBS 0.85%
FOXA 0.76%

1yr Est Gap Gain

FOXA 20.45%
CMCSA 14.76%
VIAB 10.51%
CBS 9.12%
DIS 4.11%
TWX -5.38%

1yr Total Return

FOXA 21.21%
CMCSA 16.41%
VIAB 12.04%
CBS 9.97%
DIS 5.11%
TWX -3.89%

The Walt Disney Company

The Walt Disney Company (DIS) operates as an entertainment company worldwide. The company operates in five segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products, and Interactive. The Media Networks segment operates broadcast and cable television networks, domestic television stations, and radio networks and stations; and is involved in the television production and television distribution operations. Its cable networks include ESPN, Disney Channels Worldwide, ABC Family, and SOAPnet, as well as UTV/Bindass. This segment owns eight domestic television stations. The Parks and Resorts segment owns and operates the Walt Disney World Resort in Florida that includes theme parks; hotels; vacation club properties; a retail, dining, and entertainment complex; a sports complex; conference centers; campgrounds; golf courses; water parks; and other recreational facilities. This segment also operates Disneyland Resort in California; Disney Resort& Spa in Hawaii; Disney Vacation Club, Disney Cruise Line, and Adventures by Disney; and Disneyland Paris, Hong Kong Disneyland Resort, and Shanghai Disney Resort, as well as licenses the operations of Tokyo Disneyland Resort. The Studio Entertainment segment produces and acquires live-action and animated motion pictures, direct-to-video content, musical recordings, and live stage plays. The Consumer Products segment licenses trade names, characters, and visual and literary properties to retailers, show promoters, and publishers; publishes entertainment and educational books, magazines, comic books; and operates English language learning centers. This segment is involved in the retail and online distribution of products through the Disney Store and DisneyStore.com. The Interactive segment creates and delivers entertainment and lifestyle content across interactive media platforms. The company was founded in 1923 and is based in Burbank, California. (Daily Chart)

27 July 2014
Price $86.23
1yr Target $89.78
No. of Brokers 27
1yr Cap Gain 4.11%
Dividend $0.86
Yield 1.00%
1yr Tot Ret 5.11%

3yr RevGR 5.71%
3yr EarnGR 18.32%
3yr DivGR 28.59%
Payout 22.05%
EPS (ttm) $3.90
P/E 22.11
PEG 1.37

Comcast Corporation

Comcast Corporation (CMCSA) operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks segments. The Cable Communications segment offers video, high-speed Internet, and voice services to residential and business customers under the XFINITY brand name. This segment also provides business services, such as cellular backhaul services to mobile network operators; Ethernet network services; and online advertising services. The Cable Networks segment operates national cable networks, which provide entertainment, news and information, and sports content; regional sports and news networks; international channels; and cable television production operations, as well as owns digital media properties. The Broadcast Television segment operates NBC and Telemundo broadcast networks, NBC and Telemundo owned local broadcast television stations, and broadcast television production operations, as well as owns digital media properties. The Filmed Entertainment segment produces, acquires, markets, and distributes live-action and animated filmed entertainment under the Universal Pictures, Focus Features, and Illumination names. This segment also develops, produces, and licenses stage plays, as well as owns digital media properties. The Theme Parks segment operates theme parks; studios; Island of adventures; and a dining, retail, and entertainment complex. Comcast Corporation was founded in 1963 and is headquartered in Philadelphia, Pennsylvania. (Daily Chart)

27 July 2014
Price $54.39
1yr Target $62.42
No. of Brokers 24
1yr Cap Gain 14.76%
Dividend $0.90
Yield 1.65%
1yr Tot Ret 16.41%

3yr RevGR 19.23%
3yr EarnGR 25.37%
3yr DivGR 27.90%
Payout 32.96%
EPS (ttm) $2.73
P/E 19.92
PEG 1.15

Time Warner Inc.

Time Warner Inc. (TWX) operates as a media and entertainment company in the United States and internationally. The company operates in four segments: Turner, Home Box Office, Warner Bros., and Time Inc. The Turner segment operates cable networks; digital media properties; free-to-air networks; and entertainment and news networks that offer sports, movies, classic films, reality programming, and news, as well as produces its own programs and acquires rights from third-parties to air programs on its networks. This segment serves cable system operators, satellite service distributors, telephone companies, Internet protocol television system operators, mobile device operators, broadcasters, and other distributors. The Home Box Office segment provides premium pay and basic tier television services comprising HBO and Cinemax; and sells its original programming via DVDs, Blu-ray Discs, and electronic sell-through, as well as licenses its original programming primarily to international television networks. As of December 31, 2013, this segment had approximately 127 million subscribers worldwide. The Warner Bros. segment produces and distributes feature films, television programming, videogames, and other programming; distribute home video products; and licenses rights to its feature films, television programming, and characters. The Time Inc. segment publishes magazines, including People, Sports Illustrated, InStyle, Time, Real Simple, Southern Living, Entertainment Weekly, and Fortune, as well as titles and books; licenses its magazines for print or digital publication to publishers; operates Websites, such as People.com, SI.com, and Time.com.; and offers content marketing, targeted local print and digital advertising programs, and marketing and support services. Time Warner Inc. was founded in 1985 and is headquartered in New York, New York. (Daily Chart)

27 July 2014
Price $84.89
1yr Target $80.33
No. of Brokers 24
1yr Cap Gain -5.38%
Dividend $1.27
Yield 1.49%
1yr Tot Ret -3.89%

3yr RevGR 3.44%
3yr EarnGR 20.10%
3yr DivGR 10.62%
Payout 28.79%
EPS (ttm) $4.41
P/E 19.27
PEG 1.46

Twenty-First Century Fox

Twenty-First Century Fox, Inc. (FOXA) operates as a diversified media and entertainment company worldwide. The company’s Cable Network Programming segment produces and licenses news, business news, sports, general entertainment, and movie programming for distribution through cable television systems, direct broadcast satellite operators, and telecommunications companies primarily in the United States, Latin America, Europe, and Asia. Its Television segment is involved in the broadcasting of network programming in the United States; and the operation of 28 broadcast television stations, including 10 duopolies in the United States, which consist of 18 stations affiliated with the FOX Broadcasting Company and 10 stations affiliated with Master Distribution Service, Inc. The company’s Filmed Entertainment segment produces and acquires live-action and animated motion pictures for distribution and licensing in various formats and entertainment media, as well as produces and licenses television programming worldwide. Its Direct Broadcast Satellite Television segment distributes basic, premium, and pay-per-view programming services via satellite, cable, and broadband directly to subscribers in Italy, Germany, and Austria. The company was formerly known as News Corporation. Twenty-First Century Fox, Inc. is headquartered in New York, New York. (Daily Chart)

27 July 2014
Price $32.81
1yr Target $39.52
No. of Brokers 22
1yr Cap Gain 20.45%
Dividend $0.25
Yield 0.76%
1yr Tot Ret 21.21%

3yr RevGR -5.44%
3yr EarnGR 45.62%
3yr DivGR N/A
Payout 15.06%
EPS (ttm) $1.66
P/E 19.77
PEG 1.17

Viacom Inc.

Viacom Inc. (VIAB) operates as an entertainment content company in the United States and internationally. The company creates television programs, motion pictures, short-form video, apps, consumer products, social media, and other entertainment content. It operates in two segments, Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content and related branded products through approximately 200 TV channels, including MTV, VH1, CMT, Logo, BET, CENTRIC, Nickelodeon, Nick Jr., TeenNick, Nicktoons, Nick at Nite, COMEDY CENTRAL, TV Land, SPIKE, Tr3s, Paramount Channel, and VIVA, as well as through hundreds of online, mobile, and app experiences. The Filmed Entertainment segment produces, finances, acquires, and distributes motion pictures and other entertainment content under the Paramount Pictures, Paramount Vantage, Paramount Classics, Insurge Pictures, MTV Films, and Nickelodeon Movies brands. It exhibits the motion pictures theatrically, and through download-to-own, download-to-rent, DVDs and Blu-ray discs, video-on-demand, pay television and subscription video-on-demand, broadcast television, basic cable television, and syndicated television. The company is headquartered in New York, New York. Viacom, Inc. operates independently of CBS Corporation as of December 31, 2005. (Daily Chart)

27 July 2014
Price $86.14
1yr Target $95.20
No. of Brokers 30
1yr Cap Gain 10.51%
Dividend $1.32
Yield 1.53%
1yr Tot Ret 12.04%

2yr RevGR -3.83%
2yr EarnGR 16.11%
2yr DivGR 19.89%
Payout 24.71%
EPS (ttm) $5.34
P/E 16.13
PEG 1.23

CBS Corporation

CBS Corporation (CBS) operates as a mass media company in the United States and internationally. It operates through Entertainment, Cable Networks, Publishing, Local Broadcasting segments. The Entertainment segment distributes a schedule of news and public affairs broadcasts, and sports and entertainment programming; produces, acquires, and distributes programming, including series, specials, news, and public affairs; produces and distributes theatrical motion pictures; and operates online content networks for information and entertainment. The Cable Networks segment owns and operates multiplexed channels; offers subscription program services comprising theatrical feature films, original series, documentaries, boxing and other sports-related programming, and special events; and CBS Sports Network, a 24-hour cable program service that provides college sports and related content. This segment also owns and manages Smithsonian Networks, which operates a channel featuring cultural, historical, scientific, and educational programs. The Publishing segment publishes and distributes adult and children's consumer books in printed, digital, and audio formats. The Local Broadcasting segment owns 30 broadcast television stations; owns and operates 126 radio stations in 27 U.S. markets and related online properties; and operates local Websites in various U.S. markets, which combine the company's television and radio local media brands online to provide the latest news, traffic, weather, and sports information, as well as local discounts, directories, and reviews. CBS Corporation was founded in 1986 and is headquartered in New York, New York. (Daily Chart)

27 July 2014
Price $57.73
1yr Target $63.00
No. of Brokers 1
1yr Cap Gain 9.12%
Dividend $0.48
Yield 0.85%
1yr Tot Ret 9.97%

3yr RevGR 4.26%
3yr EarnGR 42.00%
3yr DivGR 33.49%
Payout 15.53%
EPS (ttm) $3.09
P/E 18.87
PEG 1.30

Additional Related Articles of Interest.

Comcast Corporation

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The Restaurant Industry

7/24/2014

0 Comments

The Restaurant Industry includes a variety of eating establishments from "fast food" to "casual dining" and includes both inexpensive and moderately priced meals. I believe I've visited most of these restaurants and, like everyone else, I have my favorites and recommendations, but for now I'm not interested in their food but in their fundamentals.

When researching any industry I generally have a few minimum requirements that the companies must meet before I begin to rack and stack them. For most searches I begin by eliminating any company not based in the United States. This may seem unfair to my international readers but I do it because accounting standards are different for different countries, and I like to compare apples to apples. The second thing I do is eliminate any company that doesn't pay a dividend. I like to get paid while I wait for any gains to materialize and I believe that managements that distribute dividends are more concerned with, and responsive to, their shareholders (the owers). Finally, I restrict the number of companies included in the database to companies that have a market capitalization of at least $1 Billion. For the restaurant industry, this resulted in the 14 companies listed below.

From there I can sort on any number of available fundamentals. For a quick evaluation of the restaurant stocks, I sorted on the PEG ratio, the Dividend Yield, the One Year Estimated Capital Gain, and the One Year Total Return. From this information I can determine which companies are appropriate for further investigation.

It'll also give me a reason to do some field research tonight by going out to dinner!

PEG Ratio

EAT 1.40
CAKE 1.53
JACK 1.64
TXRH 1.76
YUM 1.87
CBRL 1.87
DPZ 1.98
DIN 1.99
DNKN 2.08
BKW 2.34
MCD 2.44
WEN 2.63
BOBE 3.95
DRI 322.77

Dividend Yield

DRI 4.94%
CBRL 4.09%
DIN 3.93%
MCD 3.39%
BOBE 2.69%
WEN 2.43%
TXRH 2.42%
EAT 2.14%
DNKN 2.09%
YUM 1.98%
CAKE 1.50%
JACK 1.39%
DPZ 1.32%
BKW 1.06%

1yr Est Cap Gain

TXRH 19.95%
EAT 19.70%
YUM 17.64%
DNKN 17.40%
CAKE 15.46%
DIN 15.05%
WEN 12.89%
DRI 12.16%
MCD 11.89%
CBRL 10.90%
JACK 9.81%
DPZ 6.28%
BOBE 5.91%
BKW 5.11%

1yr Total Return

TXRH 22.37%
EAT 21.84%
YUM 19.62%
DNKN 19.49%
DIN 18.98%
DRI 17.10%
CAKE 16.96%
WEN 15.32%
MCD 15.28%
CBRL 14.99%
JACK 11.20%
BOBE 8.60%
DPZ 7.60%
BKW 6.17%

McDonald's

McDonald’s Corporation (MCD) franchises and operates McDonald's restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. The company’s restaurants offer various food items, soft drinks, coffee, and other beverages, as well as breakfast menus. As of December 31, 2013, it operated 35,429 restaurants, including 28,691 franchised and 6,738 company-operated restaurants. The company was founded in 1940 and is based in Oak Brook, Illinois. (Daily Chart)

23 July 2014
Price $95.35
1yr Target $106.69
1yr Cap Gain 11.89%
Dividend $3.24
Yield 3.39%
1yr Tot Return 15.28%

3yr EarnGR 6.54%
3yr DivGR 11.22%
Payout Ratio 58.80%
EPS (ttm) $5.51
P/E 17.47
PEG 2.44

Taco Bell
Kentucky Fried Chicken
Pizza Hut

YUM! Brands, Inc. (YUM), together with its subsidiaries, operates quick service restaurants in the United States and internationally. It operates in six segments: YUM Restaurants China, YUM Restaurants International, Taco Bell U.S., KFC U.S., Pizza Hut U.S., and YUM Restaurants India. The company develops, operates, franchises, and licenses a system of restaurants, which prepare, package, and sell various food items, as well as operates casual dining concept restaurants. It operates approximately 40,000 restaurants in 125 countries and territories primarily under the KFC, Pizza Hut, and Taco Bell brands, which specialize in chicken, pizza, and Mexican-style food categories. The company was formerly known as TRICON Global Restaurants, Inc. and changed its name to YUM! Brands, Inc. in May 2002. YUM! Brands, Inc. was founded in 1997 and is based in Louisville, Kentucky. (Daily Chart)

23 July 2014
Price $74.71
1yr Target $87.89
1yr Cap Gain 17.64%
Dividend $1.48
Yield 1.98%
1yr Tot Return 19.62%

3yr EarnGR 0.00%
3yr DivGR 15.13%
Payout Ratio 56.06%
EPS (ttm) $2.64
P/E 28.35
PEG 1.87

Burger King

Burger King Worldwide, Inc. (BKW), together with its subsidiaries, operates and franchises fast food hamburger restaurants under the Burger King brand name. Its restaurants offer flame-grilled hamburgers, chicken and other specialty sandwiches, French fries, soft drinks, and other food products. As of December 31, 2013, the company operated 7,384 franchise restaurants and 52 company restaurants in the United States and Canada; 3,450 franchise restaurants in Europe, the Middle East, and Africa; 1,550 franchise restaurants in Latin America and the Caribbean; and 1,231 franchise restaurants in the Asia Pacific. It also franchises and operates its restaurants under the Hungry Jack’s brand in Australia. The company was founded in 1954 and is headquartered in Miami, Florida. (Daily Chart)

23 July 2014
Price $26.40
1yr Target $27.75
1yr Cap Gain 5.11%
Dividend $0.28
Yield 1.06%
1yr Tot Return 6.17%

3yr EarnGR N/A
3yr DivGR N/A
Payout Ratio 38.88%
EPS (ttm) $0.72
P/E 36.81
PEG 2.34

Olive Garden
LongHorn Steakhouse
The Capital Grille
Yard House
Seasons 52
Bahama Breeze
Eddie V's Prime Seafood
Wildfish Seafood Grille

Darden Restaurants, Inc. (DRI) owns and operates full service restaurants in the United States and Canada. It operates restaurants under the Olive Garden, LongHorn Steakhouse, The Capital Grille, Yard House, Seasons 52, Bahama Breeze, Eddie V's Prime Seafood, and Wildfish Seafood Grille brand names. As of May 25, 2014, it owned and operated 2,207 restaurants. The company was founded in 1968 and is headquartered in Orlando, Florida. (Daily Chart)

23 July 2014
Price $44.49
1yr Target $49.90
1yr Cap Gain 12.16%
Dividend $2.20
Yield 4.94%
1yr Tot Return 17.10%

3yr EarnGR -9.20%
3yr DivGR 11.79%
Payout Ratio 160.58%
EPS (ttm) $1.37
P/E 32.28
PEG 322.77

Dunkin’ Donuts
Baskin-Robbins

Dunkin' Brands Group, Inc. (DNKN), together with its subsidiaries, owns, operates, and franchises quick service restaurants under the Dunkin’ Donuts and Baskin-Robbins brands worldwide. The company operates in four segments: Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin-Robbins International, and Baskin-Robbins U.S. Its restaurants offer hot and cold coffee, donuts, bagels, muffins and sandwiches, hard-serve ice cream, frozen beverages, baked goods, and other products. As of February 10, 2014, the company had approximately 11,000 Dunkin' Donuts restaurants and 7,300 Baskin-Robbins restaurants, which are primarily owned and operated by approximately 2,000 franchisees, licensees, and joint venture partners. It also leases restaurant properties in Canada, as well as office space in Australia, China, Dubai, and the United Kingdom. Dunkin' Brands Group, Inc. is headquartered in Canton, Massachusetts. (Daily Chart)

23 July 2014
Price $43.96
1yr Target $51.61
1yr Cap Gain 17.40%
Dividend $0.92
Yield 2.09%
1yr Tot Return 19.49%

3yr EarnGR N/A
3yr DivGR N/A
Payout Ratio 68.14%
EPS (ttm) $1.35
P/E 32.40
PEG 2.08

Domino's Pizza

Domino’s Pizza, Inc. (DPZ), through its subsidiaries, operates as a pizza delivery company in the United States and internationally. The company operates in three segments: Domestic Stores, Domestic Supply Chain, and International. It offers pizzas under the Domino’s Pizza brand name through company-owned and franchised Domino’s Pizza stores. As of May 5, 2014, the company operated approximately 10,900 stores in approximately 70 international markets. Domino’s Pizza, Inc. was founded in 1960 and is based in Ann Arbor, Michigan. (Daily Chart)

23 July 2014
Price $75.43
1yr Target $80.17
1yr Cap Gain 6.28%
Dividend $1.00
Yield 1.32%
1yr Tot Return 7.60%

3yr EarnGR 19.37%
3yr DivGR N/A
Payout Ratio 38.61%
EPS (ttm) $2.59
P/E 29.39
PEG 1.98

Wendy's

The Wendy’s Company (WEN), through its subsidiaries, owns and franchises Wendy’s restaurant system. The company is involved in operating, developing, and franchising a system of quick-service restaurants. As of March 25, 2014, its restaurant system included approximately 6,500 restaurants, of which approximately 1,000 were company-operated restaurants in the United States and 28 countries. The company was formerly known as Wendy’s/Arby’s Group, Inc. and changed its name to The Wendy’s Company in July 2011. The Wendy’s Company was founded in 1969 and is headquartered in Dublin, Ohio. (Daily Chart)

23 July 2014
Price $8.22
1yr Target $9.28
1yr Cap Gain 12.89%
Dividend $0.20
Yield 2.43%
1yr Tot Return 15.32%

3yr EarnGR N/A
3yr DivGR N/A
Payout Ratio 86.95%
EPS (ttm) $0.23
P/E 36.09
PEG 2.63

Chili’s Grill & Bar
Maggiano’s Little Italy

Brinker International, Inc. (EAT) owns, develops, operates, and franchises full-service casual dining restaurants under the Chili’s Grill & Bar and Maggiano’s Little Italy brands primarily in the United States. As of December 25, 2013, it owned, operated, or franchised 1,557 restaurants under the Chili's Grill & Bar name; and 45 restaurants under the Maggiano's Little Italy name. The company was founded in 1975 and is based in Dallas, Texas. (Daily Chart)

23 July 2014
Price $44.75
1yr Target $53.57
1yr Cap Gain 19.70%
Dividend $0.96
Yield 2.14%
1yr Tot Return 21.84%

3yr EarnGR 17.77%
3yr DivGR 19.18%
Payout Ratio 38.86%
EPS (ttm) $2.47
P/E 18.28
PEG 1.40

Cracker Barrel Old Country Store

Cracker Barrel Old Country Store, Inc. (CBRL) develops and operates the Cracker Barrel Old Country Store concept in the United States. It operates full-service restaurants, which provide breakfast, lunch, and dinner. The company also operates gift shops that offer various decorative and functional items, such as rocking chairs, holiday and seasonal gifts and toys, apparel, music CD’s, cookware, old-fashioned-looking ceramics, figurines, a book-on-audio sale-and-exchange program, and various other gift items, as well as candies, preserves, pies, cornbread mixes, coffee, syrups, pancake mixes, and other food items. As of May 28, 2014, the company operated 627 company-owned locations in 42 states. The company was founded in 1969 and is headquartered in Lebanon, Tennessee. (Daily Chart)

23 July 2014
Price $97.68
1yr Target $108.33
1yr Cap Gain 10.90%
Dividend $4.00
Yield 4.09%
1yr Tot Return 14.99%

3yr EarnGR 10.50%
3yr DivGR 40.56%
Payout Ratio 75.32%
EPS (ttm) $5.31
P/E 18.36
PEG 1.87

Jack in the Box
Qdoba Mexican Grill

Jack in the Box Inc. (JACK), a restaurant company, operates and franchises Jack in the Box quick-service restaurants and Qdoba Mexican Grill fast-casual restaurants in the United States. As of May 14, 2014, it had approximately 2,250 Jack in the Box restaurants in 21 states, as well as operated and franchised approximately 600 Qdoba restaurants in 46 states. The company was founded in 1951 and is headquartered in San Diego, California. (Daily Chart)

23 July 2014
Price $57.37
1yr Target $63.00
1yr Cap Gain 9.81%
Dividend $0.80
Yield 1.39%
1yr Tot Return 11.20%

3yr EarnGR -9.53%
3yr DivGR N/A
Payout Ratio 38.09%
EPS (ttm) $2.10
P/E 27.28
PEG 1.64

The Cheesecake Factory
Grand Lux Cafe
RockSugar Pan Asian Kitchen

The Cheesecake Factory Incorporated (CAKE) owns and operates casual dining and full-service restaurants. As of July 17, 2014, it operated 182 full-service casual dining restaurants, including 170 restaurants under The Cheesecake Factory mark, 11 restaurants under the Grand Lux Café mark, and 1 restaurant under the RockSugar Pan Asian Kitchen mark in the United States and Puerto Rico; and 4 The Cheesecake Factory restaurants under a licensing agreement internationally. It also produces cheesecakes and other baked products for its restaurants, as well as for other foodservice operators, retailers, and distributors. The company was founded in 1972 and is based in Calabasas Hills, California. (Daily Chart)

23 July 2014
Price $43.96
1yr Target $50.76
1yr Cap Gain 15.46%
Dividend $0.56
Yield 1.50%
1yr Tot Return 16.96%

3yr EarnGR 15.69%
3yr DivGR N/A
Payout Ratio 27.18%
EPS (ttm) $2.06
P/E 21.51
PEG 1.53

Texas Roadhouse

Texas Roadhouse, Inc. (TXRH), together with its subsidiaries, operates a full-service casual dining restaurant chain. The company operates its restaurants primarily under the Texas Roadhouse name, as well as grants franchise rights for restaurants. It also provides supervisory and administrative services for other franchise Texas Roadhouse restaurants. As of May 5, 2014, the company operated approximately 425 restaurants in 48 states, as well as in 3 countries internationally. Texas Roadhouse, Inc. was founded in 1993 and is based in Louisville, Kentucky. (Daily Chart)

23 July 2014
Price $24.75
1yr Target $29.69
1yr Cap Gain 19.95%
Dividend $0.60
Yield 2.42%
1yr Tot Return 22.37%

3yr EarnGR 12.07%
3yr DivGR N/A
Payout Ratio 53.09%
EPS (ttm) $1.13
P/E 22.21
PEG 1.76

Applebee's Neighborhood Grill and Bar
International House of Pancakes (IHOP)

DineEquity, Inc. (DIN), together with its subsidiaries, owns, franchises, and operates full-service restaurant chains in the United States and internationally. It owns and operates two restaurant concepts, including Applebee's Neighborhood Grill and Bar (Applebee's) in the bar and grill segment of the casual dining category of the restaurant industry; and International House of Pancakes (IHOP) in the family dining category of the restaurant industry. The company’s Applebee's restaurants offer food, alcoholic and non-alcoholic beverage items, and table service. Its IHOP restaurants provide full table service, and food and beverage offerings. As of March 17, 2014, it operated approximately 3,600 restaurants in 19 countries under the Applebee's and IHOP brands, as well as approximately 400 franchisees. The company was formerly known as IHOP Corp. and changed its name to DineEquity, Inc. in June 2008. DineEquity, Inc. was founded in 1958 and is headquartered in Glendale, California. (Daily Chart)

23 July 2014
Price $76.20
1yr Target $87.67
1yr Cap Gain 15.05%
Dividend $3.00
Yield 3.93%
1yr Tot Return 18.98%

3yr EarnGR N/A
3yr DivGR N/A
Payout Ratio 77.92%
EPS (ttm) $3.85
P/E 19.87
PEG 1.99

Bob Evans

Bob Evans Farms, Inc. (BOBE) operates as a full-service restaurant company in the United States. The company conducts its operations through Bob Evans Restaurants and BEF Foods segments. As of April 25, 2014, it owned and operated 561 Bob Evans Restaurants and licensed 2 Bob Evans Express locations. The company’s restaurants offers breakfast, lunch, and dinner items in family-friendly settings. It also produces and distributes fresh, smoked, and fully cooked pork sausage, ham, and hickory-smoked bacon products; ready-to-eat products, such as sandwiches, soups, and gravies; home-style refrigerated side dishes; and frozen food items primarily under the Bob Evans, Owens, and Country Creek brands. In addition, the company manufactures and sells products to foodservice accounts, including Bob Evans Restaurants, and other restaurants and food sellers. Bob Evans Farms, Inc. was founded in 1948 and is headquartered in New Albany, Ohio. (Daily Chart)

23 July 2014
Price $45.98
1yr Target $48.70
1yr Cap Gain 5.91%
Dividend $1.24
Yield 2.69%
1yr Tot Return 8.60%

3yr EarnGR N/A
3yr DivGR 57.14%
Payout Ratio 105.98%
EPS (ttm) $1.17
P/E 39.50
PEG 3.95

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Stocks of Interest - Comcast

7/21/2014

0 Comments

For those readers that have bookmarked this site and visit on a regular basis, you may have noticed a list of stocks in the right hand column titled "Stocks of Interest". It's there that I list the stocks that I'm interested in and in most cases, currently accumulating. This weekend I noticed a video posted on the web site Option Market Mentor discussing one of those companies - Comcast. I Just thought I'd post this video here to share with anyone who may be thinking about accumulating stock in Comcast. The video provides some nice insight.

Good Luck and Good Trading.

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Mattel Inc

7/20/2014

0 Comments

Every kid in the world owns at least one of the many toy products designed and manufactured by Mattel Inc. Most kids probably have a lot more than just one of these toys in their homes. That's because the products and brands included within the Mattel corporate umbrella Fisher-Price, Barbie dolls, Monsters of the Universe, American Girl dolls, various board games, and WWE toys. Most of these products have been around for decades and they'll probably be around for decades more.

Mattel has a great dividend yield, great earnings and dividend growth rates, and a P/E ratio in the mid teens.
Mattel’s business is highly seasonal, with consumers making a large percentage of all toy purchases during the traditional holiday season.
Mattel’s principal manufacturing facilities are located in China, Indonesia, Malaysia, Mexico, and Thailand and unrest in those countries can disrupt the supply chain.
Mattel’s three largest customers (Wal-Mart at $1.2 billion, Toys “R” Us at $0.7 billion, and Target at $0.5 billion) accounted for approximately 36% of worldwide consolidated net sales.

The Company

Mattel, Inc. (MAT) designs, manufactures, and markets a range of toy products worldwide. The company operates in three segments: North America, International, and American Girl. It also publishes Advice and Activity books and the American Girl magazine. The company offers dolls and accessories, vehicles and play sets, and games and puzzles under the Mattel Girls & Boys brands, including Barbie, Monster High, Disney Classics, Ever After High, Little Mommy, Polly Pocket, Hot Wheels, Matchbox, Tyco R/C, CARS, Disney Planes, Radica, Toy Story, Max Steel, WWE Wrestling, and Batman. Mattel also provides its products under the Fisher-Price brands, such as Fisher-Price, Little People, BabyGear, Laugh & Learn, Imaginext, Thomas & Friends, Dora the Explorer, Mickey Mouse Clubhouse, Disney Jake, the Never Land Pirates, and Power Wheels. The company offers its products under the American Girl brands comprising My American Girl and Bitty Baby directly to consumers via its catalog, Website, and proprietary retail stores. Mattel also sells its products directly to retailers, including discount and free-standing toy stores, chain stores, department stores, and other retail outlets; to wholesalers; and through agents and distributors. The company was founded in 1945 and is headquartered in El Segundo, California. (Daily Chart) (Weekly Chart)

20 July 2014
Price $36.20
1yr Target $39.63
Analysts 8
1yr Cap Gain 9.48%
Dividend $1.52
Yield 4.20%
1yr Tot Return 13.68%

Market Cap $12.28 Bil
3yr EarnGR 11.40%
5yr EarnGR 19.69%
3yr DivGR 20.48%
5yr DivGR 14.25%
Payout Ratio 62.04%
Beta 0.68
EPS (ttm) $2.45
EPS next yr $2.80
P/E 14.78
PEG 1.86
Debt/Equity 0.52
ROA 14.00%
ROE 28.80%

The toy industry is an extremely competitive industry and Mattel has survived and grown in this environment since 1945 to become the largest toy designer and manufacturer in the world. Competition in this industry occurs in the manufacturing, marketing, and sale of toys and it's primarily based on quality, play value, and price. Mattel offers a diverse range of products for children of all ages and families that include toys for infants and preschoolers, girls’ toys, boys’ toys, youth electronics, hand-held and other games, puzzles, educational toys, media-driven products, and fashion-related toys.

Mattell competes with several other large toy companies, including Bandai, Hasbro, Jakks Pacific, Leap Frog, Lego, MGA Entertainment, Spin Master, Tomy, VTech, and many smaller toy companies. It also competes with several manufacturers of video games and consumer electronics. Competition among these toy companies is continually intensifying because of the recent trends toward shorter product life cycles for individual toys and an increasing use of high technology in those toys.

Revenues from the sale of toy products at the retail level are highly seasonal. The majority of retail sales occur during the period from September through December in anticipation of the Christmas Season. Any disruption during this period would significantly affect the earnings of the company for the entire year. In addition, Mattel is also highly dependent upon the creation of relevant and timely advertising to produce those seasonal sales.

The toy business can also be affected by any bad decision leading to the underproduction of popular toys or the overproduction of toys that are less popular with consumers. Such decisions can and have been disastrous for toy companies.

Finally, but highly significant, a small number of Mattel's customers account for a large share of Mattel’s net sales. In 2013, the company’s three largest customers (Wal-Mart, Toys “R” Us, and Target) accounted for approximately 36% of net sales. Also its ten largest customers accounted for approximately half of net sales. Any disruption or dispute with any of these customers would significantly affect sales.

The Fundamentals

I was actually a little surprised to see that revenues for a toy company like Mattel had retreated during the recent recession in 2009-2010. After thinking about it for a while, I realized that recessions affect every aspect of the economy, including toys. Revenue growth rates during the 3, 5, and 10 year period were meager at best (see below). Earnings, in contrast were more erratic but maintained a higher level of growth.

Dividends generally moved higher during the 10 year period (2003-2013) with selective periods of increases (2003-2007 and 2009-2013) and a brief period of stagnation (2007-2009). Despite this, the dividend growth rates resulting from some generous increases resulted in a rate higher than the earnings growth rate. This was possible because the payout ratio was allowed to rise from the low 30% to the mid 50% level. Going forward I expect that dividend increases will fall in line with future earnings increases.

Year
2015 Est
2014 Est
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003

Revenues
$7.05 Bil
$6.76 Bil
$6.48 Bil
$6.42 Bil
$6.26 Bil
$5.85 Bil
$5.43 Bil
$5.91 Bil
$5.97 Bil
$5.65 Bil
$5.17 Bil
$5.10 Bil
$4.96 Bil

Earnings
$2.75
$2.49
$2.58
$2.22
$2.18
$1.86
$1.45
$1.05
$1.54
$1.53
$1.01
$1.35
$1.22

Dividends
$1.51
$1.46
$1.46
$1.22
$0.92
$0.83
$0.75
$0.75
$0.75
$0.65
$0.50
$0.45
$0.40

Payout Ratio
54.90%
58.63%
56.58%
54.95%
42.20%
44.62%
51.72%
71.42%
48.70%
42.48%
49.50%
33.33%
32.78%

Revenues Growth Rates
3yr = 3.43%
5yr = 1.85%
10yr = 2.70%

Earnings Growth Rates
3yr = 11.40%
5yr = 19.69%
10yr = 7.77%

Dividend Growth Rates
3yr = 20.48%
5yr = 14.25%
10yr = 13.82%

Barbie

The Technicals

Mattel's recent quarterly announcement that revenues and earnings met expectations but guidance going forward was being reduced obviously spooked the stock price. The chart now reflects a price that is extremely oversold based on all three of the indicators I follow - the RSI, the MACD, and the ADX. This is the second fall to the $36 level since February and this would constitute a double bottom. Looking at a longer term chart shows that there's considerable support between $34.50 and $36.50. Knowing that support exists at that level, this could be a nice area to start accumulating a position. Also, the presence of such a drop in price will build fear and hesitation into buyers. Contrarian investors should be getting excited.

Daily Chart

Weekly Chart

The Competition

Mattel Inc is part of the Toys and Games Industry which is part of the Consumer Goods Sector of the economy. Below are a few of the major corporations included in this industry. They are listed in the order of their market capitalization.

Mattel Inc.
Hasbro Inc. (HAS)
LeapFrog Enterprises Inc.* (LF)
JAKKS Pacific, Inc* (JAKK)
Gaming Partners International Corp* (GPIC)

*Company does not pay a dividend

Conclusion

A week ago I would have walked away from this stock. While the dividend yield would have been desirable at 3.8%, the estimated one year capital gain of close to zero would be highly undesirable. This recent pullback in the price increases the yield 4.20% but more importantly it increases the estimated one year capital gain to 9.48%. The resultant total one year return on my investment would be 13.68% which is a very nice return.

I have no exposure to the toy industry and I believe that at this point in time Mattel is a better investment than its rival Hasbro. Mattel's dividend yield of 4.20%, its 3 year earnings growth rate of 11.40%, its 3 year dividend growth rate of 20.48%, and its one year expected return of 9,48% fits in very well with my investing style. With investors supporting the stock near the $35-$36 level, this could be a good point to start a position.

I expect to spend the next few days to see if the stock bottoms out here. If it does and then begins to turn up, I'd really like to be long on this stock. I believe the brands and the products sold by Mattel are literally cash cows and that the company will be selling these toys for decades to come.

Additional Articles of Interest

Comparing Hasbro to Mattel
Hasbro Inc

The Live Interactive Chart

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Hasbro Inc

7/19/2014

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My generation grew up playing lots of board games. The most enjoyable and everyone's favorite was Monopoly. Over the years it's been redesigned many times but it's remained one of the best selling board games ever. Everyone in my neighborhood owned it and everyone played it. Another great favorite, then and now, is Play-Doh. Once again, everyone had Play-Doh and everyone used it to make copies of the funny pages. Years later my own kids grew up playing with other Hasbro toys like the Little Pet Shop, the Little Pony and anything Nerf. Today every kid owns some form of Hasbro's Transformer toys.

Hasbro has been around making and designing toys for a very, very long time. They've been able to do this by making the toys that kids want to both buy and play with. They have huge franchise brands and those brands have excellent brand loyalty. I believe that as long as there are kids, as well as adults like me that are kids at heart, Hasbro will be around to make the toys that all of us want to buy and play with.

Hasbro’s Franchise Brands include the Little Pet Shop, Magic: The Gathering, Monopoly, My Little Pony, Nerf, Play-Doh, and Transformers.
Hasbro Studios have produced over 1000 programs that are aired in over 180 territories around the globe.
The company recently authorized a $500M share repurchase program.
Hasbro has a great dividend but the payout ratio has risen from the mid 30% level to above the 70% level this year.

The Company

Hasbro, Inc. (HAS), together with its subsidiaries, provides children’s and family leisure time products and services worldwide. The company’s product offerings include various toys comprising boys’ action figures, vehicles and playsets, girls’ toys, electronic toys, plush products, preschool toys and infant products, electronic interactive products, creative play, and toy-related specialty products. It also offers games comprising action battling, board, off-the-board, digital, card, electronic, trading card, and role-playing games. The company’s franchise brands include LITTLEST PET SHOP, MAGIC: THE GATHERING, MONOPOLY, MY LITTLE PONY, NERF, PLAY-DOH, and TRANSFORMERS; and challenger brands comprise BABY ALIVE, FURBY, FURREAL FRIENDS, and PLAYSKOOL. Its gaming brands consists of BOP IT!, CONNECT 4, ELEFUN & FRIENDS, JENGA, LIFE, OPERATION, and TWISTER. In addition, the company produces television programming primarily based on its brands, as well as distributes such programming. Further, it distributes television programming to broadcasters and cable networks, as well as on various digital platforms, such as iTunes and Netflix. Additionally, the company develops mobile games comprising DRAGONVALE, NINJUMP, and PAPER TOSS; and is involved in the lifestyle licensing activities, digital gaming, and movie entertainment operations. It sells its products to wholesalers, distributors, chain stores, discount stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as Internet-based e-tailers. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island.
(Daily Chart) (Weekly Chart)

July 2014
Price $53.21
1yr Target $58.38
Analysts 8
1yr Cap Gain 9.72%
Dividend $1.72
Yield 3.23%
1yr Tot Return 12.95%

Market Cap $6.87 Bil
3yr EarnGR -7.41%
5yr EarnGR 1.64%
3yr DivGR 16.77%
5yr DivGR 14.86%
Payout Ratio 69.91%
Beta 0.97
EPS (ttm) $2.46
EPS next yr $3.57
P/E 21.51
PEG 2.11
Debt/Equity 0.88
ROA 7.60%
ROE 20.80%

The Fundamentals

Revenues have struggled over the last ten years with the ten year revenue growth rate of 2.68% slowing to only 0.65% during the last three years. While the good news is that it's still positive, the bad news is that it's barely above zero. Revenue estimates, however, expect an increasing revenue stream in 2014 of 6.61% and in 2015 of 3.90%. While better than in the past, these numbers are still small.

Earnings, as opposed to revenues, were expanding at a fairly brisk pace a decade ago but in the last couple of years they have actually declined. This has caused the earnings growth rate to fall from a ten year growth rate of 9.44% to a more recent 3 year growth rate of -7.41%. This is not how a great company should act. Earnings estimates, similar to those revenue estimates, are estimated to increase in 2014 to 49.30% and in 2015 to another 10.18%. While these are excellent numbers, they are estimates and not actuals. I like to base my investing decision on actuals.

Dividends are unique in that they have continued to increase during each of the past ten years. Dividend growth investors like myself like to see this statistic but if it's not supported by an equal increase in earnings, the numbers are suspect. In this case dividends were allowed to increase because of the company's decision to allow the payout ratio to increase. This can't go on forever and any further increases in the dividends are obviously dependent upon the successful realization of the analyst's earnings estimates going forward. These are not guaranteed numbers.

Year
2015 Est
2014 Est
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003

Revenues
$4.52 Bil
$4.35 Bil
$4.08 Bil
$4.08 Bil
$4.28 Bil
$4.00 Bil
$4.06 Bil
$4.02 Bil
$3.83 Bil
$3.15 Bil
$3.08 Bil
$2.99 Bil
$3.13 Bil

Earnings
$3.57
$3.24
$2.17
$2.55
$2.82
$2.74
$2.48
$2.00
$1.97
$1.29
$1.09
$0.96
$0.88

Dividends
$2.00
$1.80
$1.60
$1.44
$1.20
$1.00
$0.80
$0.80
$0.64
$0.48
$0.36
$0.24
$0.12

Payout Ratio
56.02%
55.55%
73.73%
56.47%
42.55%
36.49%
32.25%
40.00%
32.48%
37.20%
33.02%
25.00%
13.63%

Revenues Growth Rates
3yr = 0.65%
5yr = 0.29%
10yr = 2.68%

Earnings Growth Rates
3yr = -7.41%
5yr = 1.64%
10yr = 9.44%

Dividend Growth Rates
3yr = 16.77%
5yr = 14.86%
10yr = 29.56%

The Technicals

The daily chart shows a stock drifting slowly downward with lower highs and lower lows. While short term swing traders might find this interesting, investors get the mental picture of a boat slowly listing. This type of chart pattern is more conducive to an investor waiting to buy rather than actually buying.

The weekly chart gives a little longer view of the company's stock price action. It also gives a more comprehensive view of the situation. In this chart we see a company that has risen nicely during 2013 but most likely peaked in April of this year at around 56 as it formed a topping pattern. With Christmas still 6 months away and no new tie-ins with any upcoming movies, this stock may fall under its own weight over the next few months. This is echoed in the MACD and the ADX indicators.

Daily Chart

Weekly Chart

The Competition

Hasbro Inc is part of the Toys and Games Industry which is part of the Consumer Goods Sector of the economy. Below are a few of the major corporations included in this industry. They are listed in the order of their market capitalization.

Mattel Inc. (MAT)
Hasbro Inc.
LeapFrog Enterprises Inc.* (LF)
JAKKS Pacific, Inc* (JAKK)
Gaming Partners International Corp* (GPIC)

*Company does not pay dividends.

Conclusion

At first glance, a company paying a dividend that yields 3.23% and has a one year estimated capital gain of 9.72% would most likely be an excellent candidate for any investor. But looking deeper into the fundamentals it's obvious that the growth rates of the company's revenues and earnings cause concern. Without a serious turnaround in these fundamentals the future continual growth rate of the dividend will probably be in doubt. Estimates point in the right directions but estimates are only estimates. I prefer to see actuals when evaluating companies.

At this point I'm taking a wait and see on this stock. I like the toy and game industry, and I love that 3.23% dividend, but this may not be the best time to accumulate shares of this stock. I will continue to monitor this company and take a look at the fundamentals and technicals again in a couple of months.

Additional Articles of Interst

Comparing Hasbro to Mattel
Mattel Inc

The Interactive Live Chart

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Comparing Hasbro to Mattel

7/18/2014

0 Comments

There are two giants in the toy business and they dominate the industry. They're Mattel and Hasbro. They're the two largest competitors in the Toys and Games Industry and they overshadow every other toy company. Hasbro has been around a lot longer than Mattel but Mattel is by far the larger company. Together they manufacture and sell the vast majority of all the toys found in today's toy stores.

So I started to wonder just how well Hasbro and Mattel stack up against each other from an investor's point of view. And the only way I know how to compare any two companies is to lay out their fundamentals side by side and take a look and see what I can see.

When I make these comparisons, I push away all the unwanted opinions and simply look at the fundamental data I'm interested in. It's the fundamental data that tells me which company is the most desirable to own and which one fits the best with my personal investing style.

Finally I look at the price chart of each company and see what information I can gather from the price action and all the momentum indicators I follow (see the hot spots in the company descriptions below for links to the daily and weekly charts). This process provides me with a simple and clear comparison between the companies and I get to see just how accurately they stack up against one another.

In the past I've found this to be a very useful and lucrative exercise. Hopefully this data, laid out in this manner, will help other investors too.

20 July 2014
Price $53.21
1yr Target $58.38
Analysts 8
1yr Cap Gain 9.72%
Dividend $1.72
Yield 3.23%
1yr Tot Return 12.95%

Market Cap $6.91 Bil
3yr EarnGR -7.41%
5yr EarnGR 1.64%
3yr DivGR 16.77%
5yr DivGR 14.86%
Payout Ratio 69.91%
Beta 0.97
EPS (ttm) $2.46
EPS next yr $3.57
P/E 21.63
PEG 2.12
Debt/Equity 0.88
ROA 7.60%
ROE 20.80%

20 July 2014
Price $36.20
1yr Target $39.63
Analysts 8
1yr Cap Gain 9.48%
Dividend $1.52
Yield 4.20%
1yr Tot Return 13.68%

Market Cap $12.28 Bil
3yr EarnGR 11.40%
5yr EarnGR 19.69%
3yr DivGR 20.40%
5yr DivGR 14.25%
Payout Ratio 62.04%
Beta 0.68
EPS (ttm) $2.45
EPS next yr $2.80
P/E 14.78
PEG 1.86
Debt/Equity 0.52
ROA 14.00%
ROE 28.80%

Additional Articles of Interest

Hasbro Inc
Mattel Inc

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One Year Later and Still No Ads

7/17/2014

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When I laid out this website almost a year ago, I set it up for my two passions - investing and photography. At the time I made the conscious decision to resist advertising on the investing portion of the site. Perhaps one day I may put very limited advertisements on the photography side of this site if I can find what I consider appropriate support from camera equipment companies. But I will resist ads on the investing side for as long as possible. For now, and for the most part, there aren't any advertisements on either side of the site. I'd like to keep it that way for a very long time.

"Advertising is the art of convincing people to spend money they don't have for something they don't need."
-- Will Rogers, Humorist

Now I’m not adverse to making money (you'll notice I do write articles about investing) but I’ve been perplexed by all those advertisements I see on all those investing websites. I understand the idea behind all that advertising. Bloggers sell space on their websites so that naive investors who visit those investing websites looking to read the interesting investing content are bombarded with advertisements. At times those advertisements may even look like content. Readers are then expected to click on those ads and the site owner, in return, makes money. It's a "pay-per-click" moneymaker. This is a fairly simple concept to understand, but it makes me wonder why any investing sites would have any ads at all. Think about it. Is the purpose of the site to sell ads? Or is the purpose of the site to provide information on investing? Do the ads make more money for the website author than simply executing the advice that’s being provided? Why doesn't the author just use his own advice and invest accordingly? Surely there's a hundred times more money to be made by buying and selling stock based upon the websites advice (if the advice is any good) than there would be in the few dollars made from all those annoying advertisements.

"The public doesn't particularly care for advertisements."
-- John C. Malone, Chairman of Liberty Media

I find advertisements annoying or down right irritating on those other investing sites. I assume others would find them annoying on mine. Fortunately for those who read these articles I have the luxury of not having to pay for this site (so far) because it is so graciously hosted by Weebly.com for free.

I’ve had other websites in the past and I can honestly say this is the best development site I have ever used. Weebly.com makes putting websites up on the net easy and simple. If anyone wishes to create a website for just about any purpose, I highly recommend you at least visit their site and spend a little time reading their literature. You’ll be surprised at just how user friendly it is. It’ll allow you to quickly get past the mechanics of putting a website together and allow you to concentrate on the content you want to include on your site. And that should be what your website is all about, right?

If you've read any of my articles you've come to understand that I write about my investing style and the stocks that I am or am not investing in at the moment. I also include many of my investing ideas and the reasoning and rationale behind my buys and sells. I do not charge to visit my site and I don't sell advertising. I put it all out there and with both quantitative data and enough hot links that I can be checked and criticized.

I have a relatively simple investing philosophy and only a few guidelines and processes. To tell the truth, I sometimes think I’m just repeating that philosophy and those guidelines and processes from article to article to article. But I may be wrong. In the end only the readers of these articles can really decide if these articles are repetitive or redundant. I’ll eventually find out when the statistics of this website start to falter.

Hopefully each article articulates or explains a slightly new or different approach to the way I invest. And hopefully I can spark a new idea in the minds of those who read these articles. It’s just one of the reasons I continue to write. But most important of all, I’m not just writing about the topic of investing, I’m writing about the strategies and methods I use when I’m investing with my own money.

So how do I make money with this website?

At this point you may be asking yourself exactly how can I afford to write all these articles. Or how do I make money writing these articles? Well, I don’t. Not a dime. These articles are truly a labor of love. But before you start to feel sorry for me, I must tell you that I do make money from these articles in a round about way. The way I make money from this site is by taking my own investing advice. I actually research, write and then do the things I discuss in my articles. The result is that I'm able to make some very profitable trades by taking my own advice. Writing these articles ends up being my way of clarifying my ideas about the investing I do. They end up being a catharsis for me. They’re my epiphany.

If no one ever reads these articles they’ve still been worth creating just for the fact that they have improved my understanding of the markets and my trading. Every day my trading strategy becomes clearer and clearer to me. If I ever begin to second guess my decisions, I simply refer to my earlier articles. These articles continue to reassure me on a daily basis that my investing philosophy, guidelines and processes remains on track. And if any of this has helped anyone else, then all the better.

Hopefully someday my kids will become interested in beginning their own journey of building wealth and securing that financial freedom and security that seems to have eluded me so far, but always seems to be just around the corner. It's an exciting journey but it takes years to complete. Luckily I have many years left!

Good Luck and Good Trading.