Morningstar Runs the Numbers
We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended Oct. 26.
Inspired by Harper's Index (with a tip of the hat to FiveThirtyEight's Significant Digits blog), Morningstar Runs the Numbers uses a numbers-based approach to highlight recent Morningstar research, along with some outside news stories.
Anheuser-Busch InBev (BUD) slashed its dividend in half when it reported earnings that fell short of our expectations. Shares dropped, capping off a tough year for the firm with shares down over 30% year to date. Analyst Phil Gorham believes this has opened up a buying opportunity. He writes:
With the dividend cut in the rearview mirror, we hope that investors will now look more closely at the fundamentals of the core beer business. If they do, they will find a wide-moat business with powerful market shares in markets primed for long-term growth--some through growing consumption (Africa) and others through a multiyear premiumization tailwind (Latin America).
Tesla (TSLA) generated $881 million in free cash flow in the third quarter, a $2.2 billion swing from the cash burn it had in the year-ago quarter. Dave Whiston is planning on boosting his fair value estimate, but still shares look pricey. He thinks investors need to look to the long term:
Let's just keep in mind there's good momentum now, there remains to be seen how this will all carry into 2019 and a recession. Mitigating that somewhat is that the Model 3 deliveries will be moved and expanded into Europe and Asia. But at the same time if consumers really start to get truly panicked and scared their going to be very hesitant to buy what can be a $40,000, $50,000, $60,000 car.
Christine Benz shared the six steps in determining how much money you need to set aside for long-term care in retirement. It's a tricky, but critical, piece of the puzzle in figuring out retirement readiness.
We continue to view 3M as a high-quality, well-run company with about a 3% dividend yield. However, it's also a firm with more reserved growth opportunities across its addressable markets.
Shares of Amazon (AMZN) slipped after earnings as worries about revenue growth were top of mind. Analyst R.J. Hottovy sees the pullback as an opportunity, and his five-year assumptions calling for 23% top-line growth and operating margins of 7%-8% remain in place.
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