sure dividend · 2019. 10. 13. · 4 sell recommendation: hormel foods (hrl) we first recommended...

Sure Dividend

LONG-TERM INVESTING IN HIGH-QUALITY DIVIDEND STOCKS

January 2019 Edition

By Ben Reynolds, Nick McCullum, & Bob Ciura

Edited by Brad Beams

Published on January 6th, 2019

2

Table of Contents

Opening Thoughts - Announcing The Real Money Portfolio And Other Improvements - ... 3

Sell Recommendation: Hormel Foods (HRL) ........................................................................... 4

Sell Recommendation: Abbott Labs (ABT) ............................................................................... 5

The Sure Dividend Top 10 – January 2019 ................................................................................ 6

Analysis of Top 10 Stocks ............................................................................................................. 7

Eaton Vance Corp. (EV) ............................................................................................................. 7

Walgreens Boots Alliance Inc. (WBA) .................................................................................... 12

Bank OZK (OZK) ..................................................................................................................... 17

Invesco Ltd (IVZ) ..................................................................................................................... 22

Newell Brands Inc. (NWL) ....................................................................................................... 27

Whirlpool Corp. (WHR) ........................................................................................................... 32

AT&T Inc. (T) .......................................................................................................................... 37

Hanesbrands Inc. (HBI) ............................................................................................................ 42

Cardinal Health Inc. (CAH) ...................................................................................................... 47

Cummins Inc. (CMI) ................................................................................................................. 52

Closing Thoughts - To DRIP, or Not to DRIP, That is the Question - ................................... 57

Real Money Portfolio .................................................................................................................. 58

Portfolio Building Guide ............................................................................................................ 59

Examples ................................................................................................................................... 59

Past Recommendations & Sells.................................................................................................. 60

Sell Rules .................................................................................................................................. 60

Current Holds ............................................................................................................................ 60

Pending Sells ............................................................................................................................. 63

Sold Positions............................................................................................................................ 63

List of Stocks by Dividend Risk Score ...................................................................................... 64

3

Opening Thoughts - Announcing The Real Money Portfolio And

Other Improvements -

Market volatility picked up in December of 2018. The S&P 500 generated negative total returns in a

calendar year for the first time since 2008. Our time-tested strategy of investing in high-quality

dividend growth stocks trading at or below fair value will not change, regardless of market movement.

As a reminder, we updated our sell rules last month. We will slowly sell past recommendations with

expected total returns less than those of the S&P 500. To that end, we have two new sells for this

month: Hormel Foods (HRL) and Abbott Labs (ABT). Both are high quality businesses that no

longer offer compelling total returns due to elevated values. The full sell analysis is further in this

newsletter; proceeds of these sells should be invested into stocks with more favorable return profiles

(like those in the Top 10 of this newsletter).

We are excited to announce the opening of our Real Money portfolio! We will systematically build

and maintain a high-quality dividend growth portfolio based on the recommendations in The Sure

Dividend Newsletter. Each month we will invest an additional $1,000 to show the validity of our

approach (Note: this is in addition to our personal investments. All of my (Ben Reynolds) personal

stock investments are in Sure Dividend, Sure Retirement, and high-ranking Sure Analysis securities).

You can see our Real Money Portfolio page in this newsletter for more on this. Our first buy for the

portfolio is Eaton Vance (EV). We will include images from our actual trading account with

Interactive Brokers starting with the next edition of The Sure Dividend Newsletter.

In other Sure Dividend news, the January 2019 edition of The Sure Dividend Newsletter is the first in

which our rankings are made with data from The Sure Analysis Research Database. Our ranking

procedure is as follows:

1. Filter for U.S. stocks with yields equal to or greater than the S&P 500, with Dividend Risk

scores of A or B, and with expected total returns greater than 10%.

2. Rank by expected total return (the higher the rank, the better the stock).

3. No more than 3 securities from any sector in each newsletter.

Relying on Sure Analysis data allows us to significantly improve our ranking procedures. Sure

Analysis information is both quantitative and qualitative. The end result is greater risk controls and

stronger overall recommendations for our readers.

We have made several changes to The Sure Dividend Newsletter over the past 3 months. These

changes are now complete. We are excited to move into 2019 with The Sure Dividend Newsletter

running on Sure Analysis data, with improved sell rules based on dividend risk and expected total

returns, and with a real money portfolio tracking the journey of building a dividend growth portfolio.

What hasn’t changed is our focus on high-quality dividend growth stocks for the long-run. The core of

Sure Dividend is the idea that successful investors invest in businesses, not stock tickers, and that high-

quality businesses which reward shareholders with income through dividends are likely to perform well

over time. Their stocks should be purchased at fair or better prices.

4

Sell Recommendation: Hormel Foods (HRL)

We first recommended Hormel Foods back in the December 2016 edition of The Sure Dividend

Newsletter, where it was ranked 9th out of 10.

Make no mistake, Hormel is a high-quality dividend growth stock. It is a Dividend King with 53

consecutive years of dividend increases. Hormel has an “A” Dividend Risk score and a payout ratio

under 50%. It’s very likely the company continues to pay rising dividends for years to come.

We recommend selling Hormel Foods now because it is set to deliver only mediocre total returns in the

years ahead. Our total return estimates are based on growth, yield, and valuation.

Hormel’s Growth

Back in December of 2016, the company had compounded its earnings-per-share at 12% a year over

the previous decade. But earnings-per-share declined in 2017. Earnings-per-share were 13% higher in

2018 than 2016, but all of that gain was due to the company’s tax rate falling from 34% to 14%. The

company’s earnings before taxes fell 7.6% in fiscal 2018 versus fiscal 2017. Hormel Foods is

struggling to grow meaningfully in a difficult environment for food companies. We now project fiscal

2019 earnings-per-share to be down slightly from 2018 levels, and for earnings-per-share growth

beyond that of around 5% annually.

Hormel’s Yield & Valuation

Hormel is currently yielding 2.0%. Based on its growth and yield alone, we expect total returns of

7.0% annually for Hormel ahead. This in itself is no reason to sell.

Valuation is where Hormel stock lags. The company is currently trading for a price-to-earnings ratio of

22.7 using its current share price of $41.68 and expected fiscal 2019 earnings-per-share of $1.84. The

company’s historical average price-to-earnings ratio over the last decade is 18.4 for comparison. Based

on mediocre recent performance, we feel a fair price-to-earnings ratio of 18.4 (its historical average) is

appropriate, if not a bit generous.

If Hormel reverts to its historical average price-to-earnings ratio over the next 5 years, its total returns

will be reduced by 4.1% annually.

When valuation is factored in, Hormel’s expected total returns over the next 5 years are just 2.9%

annually. This is likely to barely exceed inflation and does not compensate investors for the risks of

holding any stock (even a high-quality stock like Hormel).

Performance, Recommendation, & Review

Despite middling business performance, the company’s stock has generated total returns of 28.5%1

since we first recommended it versus 17.0% for the S&P 500 (using the ETF SPY).

We recommend selling Hormel now and reinvesting into a company with better total return potential.

Any of this month’s Top 10 are certainly candidates.

Since our initial recommendation, Hormel retained its business strength and safety, but has failed to

deliver meaningful growth. Fortunately for us the market bid up the company’s valuation multiple,

giving investors a prime opportunity to take advantage of mispricing and reinvest elsewhere.

1 Return data from before market open, 1/4/19.

5

Sell Recommendation: Abbott Labs (ABT)

We first recommended Abbott Labs back in the July 2014 edition of The Sure Dividend Newsletter (our

4th issue), where it was ranked 3rd out of 10.

Like Hormel, Abbott is truly a high-quality dividend growth stock. Abbott has increased its dividend

for 47 consecutive years (excluding spin-off effects – namely AbbVie). Abbott has an “A” Dividend

Risk score and a payout ratio under 50%. It’s very likely the company continues to pay rising

dividends for years.

We recommend selling Abbott Labs now because it is set to deliver mediocre total returns ahead. Our

total return estimates are based on growth, yield, and valuation.

Abbott’s Growth

When we first recommended Abbott back in 2014, we expected annual adjusted-earnings-per-share

growth of 8%. The company has compounded earnings-per-share at 6.0% annually from 2014 through

2018 (using expected adjusted earnings-per-share of $2.88 in fiscal 2018). Fiscal 2014 was a strong

year for Abbott; using 2015 as the starting base the company has compounded its adjusted earnings-

per-share at 10.2%. Overall, we are happy with the growth the company has exhibited in recent years.

We expect solid-if-unspectacular growth of around 6.5% annually over the next several years.

Abbott’s Yield & Valuation

Abbott is currently yielding 1.8%, a bit below the S&P 500’s yield of 2.1%. Based on its growth and

yield, we expect total returns slightly above 8% annually from Abbott. These are nice expected

returns, but not outstanding.

Valuation is the reason to sell Abbott shares. The company is currently trading for a price-to-earnings

ratio of 23.9 using its current share price of $66.80 and expected fiscal 2019 earnings-per-share of

$2.88. The company’s historical average price-to-earnings ratio since spinning off AbbVie (ABBV) in

2013 is 19.0; we believe that’s a reasonable fair value price-to-earnings ratio for Abbott.

If Abbott reverts to its historical average price-to-earnings ratio over the next 5 years, its total returns

will be reduced by 4.5% annually.

When valuation is factored in, Abbott’s expected total returns over the next 5 years are just 3.8%

annually – not high enough to justify holding Abbott shares.

Performance, Recommendation, & Review

Abbott has returned 75.9%2 since we first recommended it in 2014, trouncing the S&P 500’s (measured

using the ETF SPY) total returns of 37.1% over the same period.

We recommend selling Abbott now and reinvesting into a company with better total return potential.

Its sister company AbbVie (ABBV) is a potential choice for investors looking for a large

pharmaceutical company with (much) better total return potential (not to mention a higher yield).

Alternatively, any of this month’s Top 10 are preferable as well.

Since our initial recommendation, Abbott has grown its intrinsic per share value and seen its valuation

multiple expand. This has resulted in strong, market-beating returns for investors. The stock now

appears significantly overvalued. Now is a good time to harvest gains and reinvest into better

opportunities.

2 Return data from before market open, 1/4/19.

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The Sure Dividend Top 10 – January 2019

Name & Ticker Div. Risk

Score Price

Fair Value

Exp. Value Ret.

Div. Yield

Exp. Growth

ETR

Eaton Vance (EV) A $34 $54 9.7% 4.1% 6.8% 20.6%

Walgreens Boots (WBA) A $68 $98 7.6% 2.6% 8.0% 18.2%

Bank OZK (OZK) B $24 $48 15.2% 3.5% 11.3% 30.0%

Invesco (IVZ) B $16 $33 15.0% 7.3% 6.0% 28.3%

Newell Brands (NWL) B $18 $38 15.8% 5.0% 5.4% 26.2%

Whirlpool (WHR) B $108 $168 9.3% 4.3% 9.1% 22.7%

AT&T (T) B $30 $47 9.4% 6.9% 6.0% 22.3%

Hanesbrands (HBI) B $13 $22 11.9% 4.8% 3.0% 19.7%

Cardinal Health (CAH) B $44 $70 9.7% 4.3% 5.0% 19.0%

Cummins (CMI) B $131 $184 7.1% 3.5% 8.0% 18.6%

Notes: Data for the table above is from The Sure Analysis Research Database, 1/4/19 spreadsheet. ‘Div.’

stands for ‘Dividend.’ ‘Exp. Value Ret.’ means expected returns from valuation. ‘Exp. Growth’ means

expected annualized growth rate over the next 5 years. ‘ETR’ stands for expected total returns and is the sum

of the preceding 3 columns. Data in the table above might be slightly different than individual company

analysis pages due to writing the company reports throughout the week.

This marks the first month that The Sure Dividend Newsletter runs completely off Sure Analysis

Research Database data. The new Top 10 has a strong emphasis on safety, while also focusing

heavily on expected total returns (value, growth, and dividends). Disclosure: Ben Reynolds is

personally long the following from this month’s Top 10: WBA, NWL, WHR, T, CAH, CMI.

The stability of the top 10 list shows the ranking method is consistent, not based on rapid swings.

Securities that fall out of the top 10 are holds, not sells. Selling occurs rarely; only when a security

has expected total returns under the S&P 500, or if it reduces its dividend.

An equally weighted portfolio of the top 10 has the following characteristics:

Dividend Yield: 4.6%

Growth Rate: 6.9%

Valuation Expansion: 11.1%

Expected Annual Total Returns: 22.6%

The return estimates above are just that, estimates. Of the 3 expected total return factors, dividend

yield is the most reliable. Future growth estimates are notoriously unreliable. Undervalued stocks

tend to outperform in aggregate. However, the timing and nature of valuation is not a science but an

art with a high degree of error. Overall, we expect our recommendations to outperform the S&P

500 by 1 to 3 percentage points over full economic cycles.

Note: Data for the newsletter was obtained between market open 12/31/18 and market close 1/4/19.

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Return to Top 10 List

Analysis of Top 10 Stocks Eaton Vance Corp. (EV)

Overview & Current Events

Eaton Vance is an asset management firm based in Boston, Massachusetts. The company was founded

in 1924 and has a market capitalization of $4.0 billion (for context, BlackRock has a market

capitalization of approximately $60 billion). With offices in North America, Europe, Asia, and

Australia, the company serves its clients by providing closed-end funds, mutual funds, term trusts, and

exchange-traded funds (these ETFs trade under the NextShares name). Eaton Vance had $439.3 billion

of assets under management (AUM) on October 31st, 2018.

In late November, Eaton Vance reported (11/27/18) financial results for the fourth-quarter of fiscal

2018. In the quarter, the company generated revenues of $436 million, which represents growth of

7.5% over the same period a year ago. This revenue growth was primarily due to increases in the

company’s assets under management, which rose 4% year-on-year. The company’s adjusted earnings-

per-share totaled $0.85 in the quarter (which represents 21.4% growth) and $3.31 for the twelve-month

reporting period (which increased by 29.4% year-on-year). Eaton Vance also repurchased $290 million

of stock in fiscal 2018 and implemented a 12.9% dividend increase in October. The company also

announced a new buyback program on November 1st for about 6.6% of its current float.

Competitive Advantages & Recession Performance

Eaton Vance’s competitive advantage lies in its appealing product offerings and low fees which are

allowing it to compete in an asset management industry experiencing significant fee compression.

While most asset managers are experiencing net outflows due to the trend towards low-cost ETFs,

Eaton Vance actually saw net inflows of $17.3 billion in fiscal 2018.

The asset management industry is not known for its recession resiliency. Stocks in this sector tend to

perform poorly during bear markets as (1) equity markets fall, reducing asset managers’ revenue and

(2) customers withdraw money, further lowering AUM. Still, Eaton Vance performed reasonably well

during the last recession, as earnings-per-share declined by 31% but hit a new high within two years.

Growth Prospects, Valuation, & Catalyst

Eaton Vance is likely to generate earnings-per-share of approximately $3.36 in the current (2019) fiscal

year. Using this estimate, the company is trading at a price-to-earnings ratio of 10.1. Eaton Vance has

traded at an average price-to-earnings ratio of 16 over the last decade. If the company’s stock can

revert to its long-term average over the next 5 years, this will boost its total returns by about 9.6% per

year during this time period. Separately, Eaton Vance is likely to generate 6% annualized earnings

growth and currently pays a dividend that yields 4.1%. Overall, we believe that Eaton Vance could

potentially deliver total returns just under 20% per year from current prices.

Key Statistics, Ratios, & Metrics Maximum Drawdown3: 80.8% 10-Year EPS Growth Rate: 12.0%

Dividend Yield: 4.1% 10-Year Dividend Growth Rate: 8.3%

Most Recent Dividend Increase: 12.9% 10-Year Historical Avg. P/E Ratio: 16.0

Estimated Fair Value: $54 10-Year Annualized Total Return: 7.4%

Dividend History: 38 years of increases Next Ex-Dividend Date: 1/30/19 (est.)

3 Maximum drawdown occurred in October of 1998.

8


Income Statement Metrics Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Revenue 890 1116 1249 1209 1358 1450 1404 1343 1529 1702

Gross Profit 700 873 718 690 776 855 798 738 846 966

Gross Margin 78.6% 78.2% 57.5% 57.0% 57.1% 58.9% 56.9% 54.9% 55.3% 56.7%

SG&A Exp. 315 369 161 161 172 175 234 153 171 141

D&A Exp. 21 25 25 25 25 21 22 20 19 N/A

Operating Profit 233 348 426 393 453 520 400 414 483 555

Operating Margin 26.2% 31.1% 34.1% 32.5% 33.4% 35.8% 28.5% 30.8% 31.6% 32.6%

Net Profit 130 174 215 203 194 304 230 241 282 382

Net Margin 14.6% 15.6% 17.2% 16.8% 14.3% 21.0% 16.4% 18.0% 18.5% 22.4%

Free Cash Flow 118 84 160 174 110 91 208 330 52 N/A

Income Tax 71 126 157 142 144 187 143 154 174 157

Balance Sheet Metrics Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Assets 1075 1259 1831 1979 2407 1860 2116 1730 2331 3599

Cash & Equivalents 311 308 527 499 499 394 628 424 611 817

Accounts Receivable N/A N/A N/A 134 170 186 188 186 200 237

Goodwill & Int. Ass. 217 209 210 214 303 294 293 295 349 341

Total Liabilities 724 781 1269 1366 1736 1203 1495 1026 1319 2491

Accounts Payable 52 61 51 59 59 65 65 60 68 91

Long-Term Debt 514 500 978 947 1100 726 971 572 631 1493

Shareholder’s Equity 307 410 460 612 670 655 620 704 1011 1107

D/E Ratio 1.67 1.22 2.12 1.55 1.64 1.11 1.57 0.81 0.62 1.35

Profitability & Per Share Metrics Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Return on Assets 12.7% 14.9% 13.9% 10.7% 8.8% 14.3% 11.6% 12.5% 13.9% 12.9%

Return on Equity 47.6% 48.6% 49.4% 37.9% 30.2% 45.9% 36.1% 36.5% 32.9% 36.1%

ROIC 16.1% 18.9% 17.1% 13.1% 11.6% 19.3% 15.5% 16.8% 19.3% 18.0%

Shares Out. 117 118 115 116 121 118 116 114 119 121 Revenue/Share 7.38 9.10 10.41 10.50 11.09 11.93 11.88 11.78 13.13 13.85

FCF/Share 0.98 0.68 1.33 1.52 0.90 0.75 1.76 2.89 0.45 N/A Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise

9


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8Eaton Vance Corp. (EV) Dividend Yield History

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Eaton Vance Corp. (EV) Fundamentals

Payout Ratio (TTM) - right axis Dividends (TTM) - left axis Earnings (TTM) - left axis

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22.121.7

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Eaton Vance Corp. (EV) Valuation Analysis

Average Annual PE Ratio Current PE 10-Year Average

12


Walgreens Boots Alliance Inc. (WBA)


Walgreens is the largest retail pharmacy in both the United States and Europe. Through its flagship

Walgreens business and other business ventures (including equity method investments), Walgreens has

a presence in more than 25 countries and employs more than 385,000 people. In its leading retail

pharmacy business, Walgreens operates approximately 13,200 stores in 11 countries.

On December 20th, 2018 Walgreens reported first-quarter fiscal year 2019 results for the period ending

November 30th, 2018. Highlights included a 9.9% increase in sales to $33.8 billion, a 6.1% increase in

operating income to $1.4 billion and an increase of 14.6% in adjusted earnings-per-share. The Retail

Pharmacy USA segment, led by pharmacy sales, increased by 14.4% due to higher prescription

volumes from the acquisition of Rite Aid stores. Meanwhile, the Retail Pharmacy International

segment saw a 5.9% decrease in sales due to negative currency impacts, the divestiture of Boots

Contract Manufacturing and weak UK market conditions. Sales in the Pharmaceutical Wholesale

segment were basically flat due to a significant currency headwind. Walgreens reiterated its guidance

of 7% to 12% growth in fiscal 2019 adjusted EPS at constant currency rates. It is also launching a cost

management program, targeting $1 billion in annual savings by the end of the third year.


Walgreens’ main competitive advantage is scale. The company’s diversified group of distribution

centers allow it to supply its stores at low cost. Walgreens’ robust retail presence gives the company a

number of convenient locations that encourage consumers to use Walgreens instead of its competitors.

Walgreens is very recession-resistant. Consumers are very unlikely to cut spending on prescriptions

and other healthcare products. Walgreens’ adjusted earnings-per-share declined by just 7% during

2009 – the worst of the global financial crisis – and the company actually grew its adjusted earnings-

per-share from 2007 through 2010, following this up with 20%+ earnings growth in 2011.


From 2009 through 2018, Walgreens has compounded its earnings-per-share at a remarkable 12.9% per

year. Given the company’s larger size, we believe that growth will slow from the low double-digits.

Walgreens can reasonably expect to grow its bottom line at 8% per year moving forward.

Given the company’s updated financial guidance, Walgreens is likely to generate earnings-per-share of

$6.50 in fiscal 2019 (currently underway). Using this earnings estimate, the company is trading at a

price-to-earnings ratio of 10.4 today. Our fair value target for Walgreens is a price-to-earnings ratio of

15. If the company’s valuation can expand to this level over the next five years, this will boost its total

returns by around 7.5% per year during this time period. Overall, we believe that Walgreens’ forward

returns lie somewhere in the high teens thanks to its strong earnings growth prospects (8%), valuation

expansion (~7.5%), and its above-average dividend yield (2.6%).






4 Maximum drawdown occurred in December of 1974.

13



Revenue ($B) 63.34 67.42 72.18 71.63 72.22 76.39 103.4 117.3 118.2 131.5

Gross Profit 17613 18976 20492 20342 21119 21569 26753 29874 29162 30792

Gross Margin 27.8% 28.1% 28.4% 28.4% 29.2% 28.2% 25.9% 25.5% 24.7% 23.4%

SG&A Exp. 14366 15518 16561 16878 17543 17992 22400 23910 23740 24569

D&A Exp. 975 1030 1086 1166 1283 1316 1742 1718 1654 1770


Op. Margin 5.1% 5.1% 5.4% 4.8% 5.0% 4.7% 4.2% 5.1% 4.6% 4.7%

Net Profit 2006 2091 2714 2127 2548 1932 4220 4173 4078 5024

Net Margin 3.2% 3.1% 3.8% 3.0% 3.5% 2.5% 4.1% 3.6% 3.4% 3.8%

Free Cash Flow 2184 2730 2430 2881 3089 2787 4413 6522 5900 6898

Income Tax 1158 1282 1580 1249 1499 1526 1056 997 760 998


Total Assets 25142 26275 27454 33462 35481 37250 68782 72688 66009 68124


Acc. Receivable 2496 2450 2497 2167 2632 3218 6849 6260 6528 6573

Inventories 6789 7378 8044 7036 6852 6076 8678 8956 8899 9565

Goodwill & Int. 2158 3001 3229 3447 3717 3539 28723 25829 25788 28697



Long-Term Debt 2351 2401 2409 5392 5047 4490 14383 19028 12935 14397

Total Equity 14376 14400 14847 18236 19454 20513 30861 29880 27466 26007

D/E Ratio 0.16 0.17 0.16 0.30 0.26 0.22 0.47 0.64 0.47 0.55


Return on Assets 8.4% 8.1% 10.1% 7.0% 7.4% 5.3% 8.0% 5.9% 5.9% 7.5%

Return on Equity 14.7% 14.5% 18.6% 12.9% 13.5% 9.7% 16.4% 13.7% 14.2% 18.8%

ROIC 12.9% 12.5% 15.9% 10.4% 10.6% 7.8% 11.9% 8.8% 9.0% 12.2%

Shares Out. 989 939 889 944 947 950 1,090 1,083 1,024 952 Revenue/Share 63.89 68.25 78.08 81.39 75.60 79.15 98.15 107.6 109.6 132.2

FCF/Share 2.20 2.76 2.63 3.27 3.23 2.89 4.19 5.98 5.47 6.93

Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.

14


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8Walgreens Boots Alliance (WBA) Dividend Yield History

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Walgreens Boots Alliance (WBA) Fundamentals


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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Walgreens Boots Alliance (WBA) Valuation Analysis


17


Bank OZK (OZK) Overview & Current Events

Bank OZK – formerly known as Bank of the Ozarks – is a regional bank that offers services such as

checking, business banking, commercial loans, and mortgages to its customers in Arkansas, Florida,

North Carolina, Texas, Alabama, South Carolina, New York, and California. The company was

founded in 1903, is based in Little Rock, Arkansas, and has a market capitalization of $3.0 billion

which makes it a mid-cap stock. Bank OZK has increased its dividend for 22 consecutive years.

In mid-October, Bank OZK reported (10/18/18) financial results for the third-quarter of fiscal 2018. In

the quarter, Bank OZK generated revenues of $245 million, which represents a 1% increase over the

same period a year ago. Earnings-per-share of $0.58 missed consensus estimates by $0.29 and sent the

bank’s shares down sharply. The main culprits were higher-than-expected rebranding costs (related to

the name change to Bank OZK from Bank of the Ozarks) combined with two significant credit charge-

offs. Bank OZK incurred $11 million of expenses related to the name changed and a $46 million write-

off on two real estate credits. The loans in question were made in 2007 and 2008, and Bank OZK had

previously classified them as substandard. Operationally, Bank OZK performed reasonably well in the

quarter, as both total loans and total deposits expanded by 6% over the same period last year. Bank

OZK’s year-to-date performance has been strong despite a poor third-quarter. Net profits through the

first nine months of the fiscal year increased 10% over the same period a year ago.


Despite being a regional bank, Bank OZK benefits from modest scale advantages in the specialized

geographies that it serves. The company is the largest bank in its home state of Arkansas. In addition,

the company operates with slightly less leverage than is common in the financial services industry, and

still reports strong returns on assets and returns on equity. Indeed, Bank OZK has often operated with

a return on assets above 2% in the last decade, which is almost unheard of among large-cap banks.

Bank OZK performed surprisingly well during the last recession. During a period when many of its

competitors were going out of business, Bank OZK’s earnings actually rose each year. Because of this,

we believe that the company is likely to perform reasonably well during future economic contractions

despite its recent poor credit quality controls.


Even after accounting for the aforementioned write-offs, Bank OZK is likely to report earnings-per-

share of $3.45 in fiscal 2018. Based on this estimate, the company is trading at a price-to-earnings

ratio of 6.9. Bank OZK has traded at an average valuation of about 14 times earnings over the last

decade. If the company’s price-to-earnings ratio were to expand to its 10-year average in the next 5

years, this would boost its total returns by more than 15% per year during this time period. After

adding in the company’s 3.6% dividend yield and the possibility for earnings growth, Bank OZK could

deliver returns of around 30% per year from its current irrationally cheap price.





Dividend History: 22 years of increases Next Ex-Dividend Date: 1/14/19


18



Revenue 118.1 169.4 154.1 211.2 227.8 258.5 345.9 479.3 693.8 929.4

SG&A Exp. 30.1 58.9 54.6 75.4 77.9 84.0 100.1 111.4 162.6 211.6

D&A Exp. 3.8 4.3 4.9 7.0 8.8 10.0 13.0 17.5 25.0 34.1

Net Profit 34.2 43.1 64.0 101.3 77.0 91.2 118.6 182.3 270.0 421.9

Net Margin 29.0% 25.4% 41.5% 48.0% 33.8% 35.3% 34.3% 38.0% 38.9% 45.4%

Free Cash Flow 18.2 38.8 24.0 -0.6 -61.8 49.2 78.7 184.4 196.8 345.6

Income Tax 9.926 12.86 26.61 50.21 33.94 40.15 53.86 94.45 154.3 158.6


Total Assets 3233 2771 3274 3842 4040 4791 6766 9879 18890 21276

Cash & Equivalents 40.98 78.29 49.03 58.93 208.0 196.0 150.2 91.0 866.4 440.4

Accounts Receivable 18.88 14.76 13.90 12.87 13.20 14.36 20.19 25.50 51.92 64.61

Goodwill & Int. Ass. 5.66 5.55 7.93 12.00 11.83 19.16 105.6 152.3 720.9 709.0


Accounts Payable N/A N/A N/A 45.51 27.61 16.77 36.89 52.17 72.62 186.2

Long-Term Debt 489.9 407.5 347.1 366.8 345.7 345.8 255.8 322.2 382.7 364.0

Shareholder’s Equity 252.3 269.0 320.4 424.6 507.7 629.1 908.5 1465 2792 3461

D/E Ratio 1.51 1.51 1.08 0.86 0.68 0.55 0.28 0.22 0.14 0.11


Return on Assets 1.2% 1.4% 2.1% 2.8% 2.0% 2.1% 2.1% 2.2% 1.9% 2.1%

Return on Equity 15.5% 16.5% 21.7% 27.2% 16.5% 16.1% 15.4% 15.4% 12.7% 13.5%

ROIC 4.8% 5.8% 9.5% 13.8% 9.3% 9.9% 11.1% 12.3% 10.9% 12.0%

Shares Out. 58.34 57.83 60.82 61.65 59.00 57.72 56.93 55.53 49.92 47.68 Revenue/Share 67 68 68 69 71 74 80 90 121 128

FCF/Share 0.27 0.57 0.35 -0.01 -0.89 0.68 1.01 2.11 1.88 2.75 Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.

19


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Bank OZK (OZK) Dividend Yield History

20


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Bank OZK (OZK) Fundamentals


21


11.211

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Bank OZK (OZK) Valuation Analysis


22


Invesco Ltd (IVZ) Overview & Current Events

Invesco is an investment management firm serving retail, institutional, and wealth management clients

around the world. The current environment is difficult for Invesco, due to heightened competitive

activity in the asset management industry. The onset of low-cost exchange traded funds (ETFs) has

caused large asset managers to engage in a price war to retain clients. In addition, market volatility and

poor recent performance of equity markets are challenges for the asset management industry.

Invesco’s November AUM declined slightly from October, extending a pattern of declining AUM

throughout 2018. Fortunately, Invesco continues to report strong overall results. Operating revenue

increased 0.3% in the most recent quarter and increased 7.2% over the first three quarters of 2018.

Service, distribution, and investment management fees continue to rise at a steady rate. Invesco’s

earnings-per-share increased 5.7% for the first 9 months of fiscal 2018 versus 2017.

Competitive Advantage & Recession Performance

Invesco’s top competitive advantage is its brand reputation and position within the asset management

industry. As one of the largest asset managers, Invesco can recruit top portfolio managers and analysts

to generate fund performance above its peer group. Its scale is also a competitive advantage, thanks to

its recent acquisition activity. However, Invesco is not a recession-resistant company. When the

global economy enters a recession, markets typically decline, which causes AUM to decline in tandem.

This is why Invesco’s earnings-per-share declined 37% in 2009 and should be expected to decline if

another global recession occurs.


Invesco’s growth will be fueled by acquisitions. In 2018 Invesco acquired the ETF business from

Guggenheim Investments for $1.2 billion. This acquisition enhanced Invesco’s product offerings in

exchange-traded funds, a major growth category. In addition, Invesco recently announced it will

acquire MassMutual’s asset management affiliate, Oppenheimer Funds. After completion, the deal will

make Invesco the 13th largest global investment manager, with over $1.2 trillion in AUM. Invesco

also made a significant investment in financial technology with its acquisition of Intelliflo, a leading

U.K. technology platform for financial advisors. Growth investments in ETFs and financial technology

should help fuel 6% annual earnings growth for Invesco over the next five years.

Invesco stock trades for a price-to-earnings ratio of 6.0 based on expected earnings-per-share of $2.80

for 2018. We believe a fair valuation for Invesco is a price-to-earnings ratio of 12.0, which means a

rising valuation multiple could add approximately 14.9% to the annual returns of the stock over the

next five years. This indicates a significant discount to fair value. Returns will be boosted by 6%

expected earnings growth, as well as the 7.1% dividend yield. In total, expected returns for Invesco

stock are north of 25% per year over the next five years, barring a recession.





Dividend History: Increasing since 2009 Next Ex-Dividend Date: 2/14/19 (est.)


23



Revenue 3307.6 2627 3488 3982 4050 4645 5147 5123 4734 5160

Gross Profit N/A N/A 1319 1522 1514 1826 2122 2148 1948 2136.4

Gross Margin N/A N/A 37.8% 38.2% 37.4% 39.3% 41.2% 41.9% 41.2% 41.4%

SG&A Exp. 2559.8 2143 670 610.7 663.4 702.7 845 789.1 772 859.3

D&A Exp. 67.6 77.6 96.7 117.4 95 88.4 89.4 93.6 101.2 116.8

Operating Profit 747.8 484.3 595.6 911.5 850.8 1123 1277 1358 1176 1277.1

Op. Margin 22.6% 18.4% 17.1% 22.9% 21.0% 24.2% 24.8% 26.5% 24.8% 24.7%

Net Profit 481.7 322.5 465.7 729.7 677.1 940.3 988.1 968.1 854.2 1127.3

Net Margin 14.6% 12.3% 13.4% 18.3% 16.7% 20.2% 19.2% 18.9% 18.0% 21.8%

Free Cash Flow 441.4 323.2 289.6 857.8 720 692 1067 1004 23.6 1259

Income Tax 236 148.2 197 280 261.4 336.9 390.6 398 338.3 268.2


Total Assets 9757 10910 20444 19347 17492 19271 20450 25073 25734 31669


Accounts Receivable 239 289 584 523 534 559 707 702 650 754

Goodwill & Int. Ass. 6110 6607 8317 8231 8336 8131 7826 7530 7529 8149



Long-Term Debt 1159 746 7181 6798 5085 5806 6726 7510 6506 6876


D/E Ratio 0.20 0.11 0.87 0.84 0.61 0.69 0.81 0.95 0.87 0.79

Profitability & Per Share Metrics

Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Return on Assets 4.2% 3.1% 3.0% 3.7% 3.7% 5.1% 5.0% 4.3% 3.4% 3.9%

Return on Equity 7.8% 5.1% 6.1% 8.9% 8.2% 11.3% 11.8% 11.9% 11.1% 13.9%

ROIC 5.8% 4.0% 3.7% 4.5% 4.5% 6.5% 6.5% 6.0% 5.6% 7.5%


FCF/Share 1.11 0.76 0.63 1.85 1.59 1.60 2.52 2.40 0.06 3.17 Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.

24


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Invesco Ltd. (IVZ) Dividend Yield History

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Invesco Ltd. (IVZ) Fundamentals


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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Invesco Ltd. (IVZ) Valuation Analysis


27


Newell Brands Inc. (NWL)


Newell Brands is a consumer products company in the middle of a major restructuring. The company

is selling off under-performing brands that are not a part of its future growth strategy. For example,

Newell has already sold the Waddington and Rawlings brands, as well as the Goody Products line.

More recently, Newell struck a deal to sell its Pure Fishing and Jostens brands, which will contribute a

combined $2.5 billion of after-tax proceeds. In addition, Newell is currently soliciting bids for the

United States Playing Card Co., maker of Bicycle playing cards, which could bring in ~$200 million.

In early November (11/2/18) Newell reported third-quarter earnings that showed it is making progress

in its key strategic goals, namely deleveraging and share repurchases. Sales fell 7.7% from the same

quarter a year ago, influenced primarily by its various divestments. Adjusted earnings-per-share

declined 5.8% year-over-year. That said, Newell reduced its debt by $2.5 billion and has reduced its

share count by 4%. Newell also raised revenue and earnings estimates for the full-year.


Newell Brands’ core competitive advantage is its strong brand portfolio. A high level of brand loyalty

is paramount in the consumer products industry, as it helps set a company apart from the competition,

and also provides pricing power. Some of its core brands include Rubbermaid, Oster, Sunbeam, Mr.

Coffee, Ball, Sharpie, Paper Mate, Elmer’s, Yankee Candle, and Coleman. Newell owns a number of

category-leading brands that most consumers are familiar with.

One of the attractive features of Newell’s business model is that it is fairly resistant to recessions. For

example, the company grew its earnings-per-share by 23% in 2009, during the Great Recession. An

explanation for this could be that consumers tend to seek at-home entertainment with a greater

frequency during difficult economic climates, rather than spending more money going out.


The transformation is clearly working for Newell as management meaningfully boosted estimates for

this year after the third-quarter report. Once the product portfolio transformation is complete, the

company’s new assortment of brands should provide long-term revenue and margin expansion. We see

annual earnings-per-share growth averaging 5.4% for the next five years, comprised mainly of margin

improvements and share repurchases offsetting lost revenue from divestitures.

Based on expected earnings-per-share of $2.70 for 2018, Newell shares trade for a low price-to-

earnings ratio of 6.9. This is well below our fair value estimate, which is a price-to-earnings ratio of

14, a more reasonable valuation for a profitable company with strong brands. Reversion to the fair

value estimate would yield annual returns of 15% per year, just from multiple expansion. In addition,

the stock has a 5.0% dividend yield, and is expected to produce 5.4% annual earnings growth. As a

result, total returns are expected to significantly exceed 20% annually over the next five years.



Most Recent Dividend Increase: 21% 10-Year Historical Avg. P/E Ratio: 21.1


Dividend History: Steady or increasing since 2009 Next Ex-Dividend Date: 2/24/19 (est.)

7 Maximum drawdown occurred in November of 1974.

28



Revenue 6471 5578 5658 5512 5509 5607 5727 5916 13264 14742

Gross Profit 2123 2050 2149 2101 2094 2125 2203 2305 4399 5089

Gross Margin 32.8% 36.7% 38.0% 38.1% 38.0% 37.9% 38.5% 39.0% 33.2% 34.5%

SG&A Exp. 1503 1375 1448 1422 1404 1400 1546 1626 3224 3667

D&A Exp. 183 175 172 162 164 159 156 172 437 636



Net Profit -52 286 293 125 401 475 378 350 528 2749

Net Margin -0.8% 5.1% 5.2% 2.3% 7.3% 8.5% 6.6% 5.9% 4.0% 18.6%

Free Cash Flow 297 450 418 338 441 467 472 382 1399 526

Income Tax 54 143 6 21 162 120 89 78 286 -1320


Total Assets 6793 6424 6405 6161 6222 6070 6564 7260 33838 33136



Inventories 912 688 702 700 696 684 709 722 2116 2499

Goodwill & Int. Ass. 3339 3401 3398 3032 3024 2976 3433 3855 24331 24796



Long-Term Debt 2879 2509 2369 2177 1918 1836 2482 3058 11893 10552


D/E Ratio 1.82 1.41 1.25 1.18 0.96 0.89 1.34 1.68 1.05 0.75


Return on Assets -0.8% 4.3% 4.6% 2.0% 6.5% 7.7% 6.0% 5.1% 2.6% 8.2%

Return on Equity -2.7% 17.0% 15.9% 6.7% 20.9% 23.3% 19.3% 19.1% 8.0% 21.6%

ROIC -1.2% 6.5% 6.8% 3.0% 10.1% 12.1% 9.2% 7.6% 3.7% 11.5%



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Newell Brands Inc. (NWL) Fundamentals


31


23.5

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Newell Brands (NWL) Valuation Analysis


32


Whirlpool Corp. (WHR) Overview & Current Events

Whirlpool generates approximately $21 billion in annual sales. It has a large portfolio of category-

leading brands; such as Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, Jenn-

Air, and Indesit. The current environment is challenged for Whirlpool, as the company is caught up in

the escalating trade concerns between the U.S. and other nations such as China. Furthermore, raw

materials cost inflation has impacted the company’s profit margins.

Despite these risks, fundamentally Whirlpool continues to perform well. In late October (10/25/18)

Whirlpool reported strong third-quarter earnings results. Organic revenue (excluding the impact of

currency fluctuations) increased 1.5% for the quarter. Whirlpool also reported 19% growth in adjusted

earnings-per-share last quarter, due to organic revenue growth, share repurchases, and the benefit of tax

reform. In addition, the company raised its earnings guidance for the full-year. Whirlpool now expects

adjusted earnings-per-share of $14.50 to $14.80, versus prior guidance of $14.20 to $14.80 per share,

which indicates 5.5% to 7.7% earnings growth in 2018.


Whirlpool’s biggest competitive advantage is global scale. It has 70 manufacturing and technology

research centers around the world. This gives the company a cost advantage, and also allows it to

invest in research and development to innovate new products. For example, Whirlpool launched more

than 100 products in 2017 alone. Its global R&D and manufacturing presence also gives the company

exposure to high-growth emerging markets such as China and India. With that said, Whirlpool

struggles during recessions. Earnings-per-share declined 46% off annual highs through The Great

Recession. Even with a Great Recession level event, the company’s dividend will still be covered by

earnings thanks to Whirlpool’s low payout ratio of 31% of expected fiscal 2018 earnings.


Whirlpool’s future growth will be centered on new products. For example, connectivity is a major

growth theme for appliance manufacturers. The onset of the Internet of Things means a much wider

range of devices other than smartphones and tablets will connect to the Internet to store and transmit

data. To that end, Whirlpool will extend the mobile watch functionality of its connected appliances to

include Wear OS by Google in 2019. This will give Android users the ability to remotely

communicate with their kitchen and laundry appliances while away from home.

Whirlpool stock has declined 36% in the past year. As a result, shares appear to be significantly

undervalued. Whirlpool stock trades for a price-to-earnings ratio of 7.4, compared with our fair value

estimate of 11.5. If the stock valuation rises to the fair value estimate, annual returns would be

increased by approximately 9.2% per year over the next five years. In addition, we expect 9.1% annual

earnings growth, and the stock has a 4.3% dividend yield. Altogether, the combination of earnings

growth, dividends, and valuation changes, results in total expected returns of more than 20% per year.





Dividend History: Steady or increasing since 1972 Next Ex-Dividend Date: 3/1/19 (est.)

8 Maximum drawdown occurred in March of 2009.

33



Revenue 18907 17099 18366 18666 18143 18769 19872 20891 20718 21253

Gross Profit 2524 2386 2714 2577 2893 3298 3395 3660 3692 3602

Gross Margin 13.3% 14.0% 14.8% 13.8% 15.9% 17.6% 17.1% 17.5% 17.8% 16.9%

SG&A Exp. 1798 1544 1604 1621 1757 1828 2038 2143 2080 2112

D&A Exp. 597 525 555 558 551 540 560 668 655 654


Op. Margin 3.7% 4.8% 5.9% 5.0% 6.1% 7.7% 6.7% 6.9% 7.4% 6.6%

Net Profit 418 328 619 390 401 827 650 783 888 350

Net Margin 2.2% 1.9% 3.4% 2.1% 2.2% 4.4% 3.3% 3.7% 4.3% 1.6%

Free Cash Flow -220 1009 458 -78 220 684 759 536 543 580

Income Tax -201 -61 -64 -436 133 68 189 209 186 550


Total Assets 13532 15094 15584 15181 15396 15544 20002 19010 19153 20038


Acc. Receivable 2103 2500 2278 2105 2038 2005 2768 2530 2711 2665

Inventories 2591 2197 2792 2354 2354 2408 2740 2619 2623 2988

Goodwill & Int. 3549 3525 3520 3484 3449 3426 5610 5684 5508 5709



Long-Term Debt 2597 2903 2509 2491 2461 2463 4347 3998 4470 5218

Total Equity 3006 3664 4226 4181 4260 4924 4885 4743 4773 4198

D/E Ratio 0.86 0.79 0.59 0.60 0.58 0.50 0.89 0.84 0.94 1.24


Return on Assets 3.0% 2.3% 4.0% 2.5% 2.6% 5.3% 3.7% 4.0% 4.7% 1.8%

Return on Equity 12.1% 9.8% 15.7% 9.3% 9.5% 18.0% 13.3% 16.3% 18.7% 7.8%

ROIC 7.1% 5.3% 9.2% 5.7% 5.9% 11.5% 7.4% 7.9% 8.9% 3.4%


FCF/Share -2.89 13.35 5.90 -1.00 2.77 8.47 9.54 6.73 7.03 7.80 Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.

34


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8Whirlpool Corp. (WHR) Dividend Yield History

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Whirlpool Corp. (WHR) Fundamentals


36


12.8

12

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Whirlpool Corp. (WHR) Valuation Analysis


37


AT&T Inc. (T) Overview & Current Events

AT&T is a telecommunications giant with over 100 million customers in the U.S. and a significant

presence in Latin America. The company provides a wide range of telecom services, including

wireless, broadband, and television through its cable operations and its satellite brand DirecTV. AT&T

generates more than $170 billion in annual revenue, and the company has increased its dividend for

over 30 consecutive years, which places it on the exclusive list of Dividend Aristocrats.

AT&T reported (10/24/18) financial results for the third-quarter of fiscal 2018 in late October.

Revenue increased 15%, largely due to the Time Warner acquisition, partially offset by weakness in the

Latin American and Entertainment Group segments. Adjusted operating margins rose 310 basis points

to 21.9% in the third-quarter; excellent margin expansion from the same quarter last year. On the

bottom line, AT&T’s adjusted earnings-per-share increased 22% to $0.90 while the company’s free

cash flow of $6.5 billion increased by 16% over the same period a year ago. These were excellent

growth rates for a massive telecom company, which is typically expected to generate slower growth.

Competitive Advantage & Recession Performance

AT&T’s primary competitive advantage is its scale. The U.S. telecom industry is dominated by two

major players, AT&T and rival Verizon. It is extremely difficult for a new telecom company to build a

network with the necessary scale to compete with the established industry giants. This gives AT&T a

wide economic moat, and a durable competitive advantage. AT&T’s strong business model served it

well during the Great Recession. The company remained highly profitable each year of the recession

and experienced only a minor dip in earnings-per-share in 2009.


AT&T’s major growth catalyst going forward is media content. The company made a huge splash in

content with the $81 billion acquisition of Time Warner Inc., owner of multiple media brands including

TNT, TBS, CNN, and HBO. Time Warner also has a movie studio, and sports rights across the NFL,

NBA, MLB, and NCAA. Time Warner was a huge contributor to AT&T’s excellent third-quarter

earnings report. AT&T made additional acquisitions to boost its growing content businesses as well. It

is moving quickly to maximize the advertising potential from all its content. AT&T recently

announced it will acquire AppNexus for approximately $1.6 billion. It will also acquire Otter Media,

which has a large online subscription video service.

AT&T expects to generate adjusted earnings-per-share of $3.50 in fiscal 2018. Based on this, the stock

has a price-to-earnings ratio of just 8.4. AT&T has traded at an average price-to-earnings ratio of 13.4

over the last decade. If AT&T’s price-to-earnings ratio expands to fair value, this will boost its total

returns by around 9.8% per year over the next five years. In addition to the 6.9% dividend and 6%

expected earnings growth, total expected returns could exceed 20% over the next five years.





Dividend History: 33 years of increases Next Ex-Dividend Date: 1/9/19

9 Maximum drawdown occurred in March of 2003.

38



Revenue ($B) 124.03 122.5 124.3 126.7 127.4 128.7 132.5 146.8 163.8 160.5

Gross Profit 74472 71942 74023 71819 72206 77561 72302 79755 86902 83167

Gross Margin 60.0% 58.7% 59.6% 56.7% 56.7% 60.2% 54.6% 54.3% 53.1% 51.8%

SG&A Exp. 31526 31427 34986 41314 41066 28414 39697 32919 36347 34917

D&A Exp. 19883 19379 18377 18143 18395 18273 22016 25847 24387


Op. Margin 18.6% 17.1% 15.8% 9.6% 10.2% 23.9% 10.8% 16.9% 15.1% 14.9%

Net Profit 12867 12138 19864 3944 7264 18418 6442 13345 12976 29450

Net Margin 10.4% 9.9% 16.0% 3.1% 5.7% 14.3% 4.9% 9.1% 7.9% 18.3%

Free Cash Flow 13321 17111 15692 14633 19711 13852 10139 16662 17828 18504

Income Tax 7036 6091 -1162 2532 2900 9328 3619 7005 6479 N/A


Total Assets ($B) 265.25 268.3 269.4 270.4 272.3 277.8 296.8 402.7 403.8 444.1


Acc. Receivable 16047 14845 13610 13231 12657 12918 14527 16532 16794 16522

Goodwill ($B) 135.54 134.4 134.1 130.2 128.6 131.5 136.7 225.3 222.1 219.7

Total Liab. ($B) 168.50 166.3 157.4 164.6 179.6 186.3 206.6 279.0 279.7 302.1


LT Debt ($B) 78.84 76.25 66.17 64.75 69.84 74.79 81.83 126.2 123.5 164.3

Total Equity ($B) 96.35 101.6 111.7 105.5 92.36 90.99 89.72 122.7 123.1 140.9

D/E Ratio 0.82 0.75 0.59 0.61 0.76 0.82 0.91 1.03 1.00 1.17


Return on Assets 4.8% 4.5% 7.4% 1.5% 2.7% 6.7% 2.2% 3.8% 3.2% 6.9%

Return on Equity 12.2% 12.3% 18.6% 3.6% 7.3% 20.1% 7.1% 12.6% 10.6% 22.3%

ROIC 7.2% 6.9% 11.1% 2.3% 4.4% 11.2% 3.8% 6.3% 5.2% 10.6%

Shares Out. 5,893 5,902 5,911 5,927 5,581 5,226 5,187 6,145 6,139 6,139 Revenue/Share 20.82 20.68 20.93 21.30 21.89 23.91 25.37 26.00 26.46 25.97


39


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AT&T Inc. (T) Dividend Yield History

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AT&T Inc. (T) Fundamentals


41


14.2

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

AT&T Inc. (T) Valuation Analysis


42


Hanesbrands Inc. (HBI) Overview & Current Events

Hanesbrands is a leading marketer of everyday basic innerwear and activewear apparel. It sells its

products under well-known brands such as Hanes and Champion in America, Europe, Australia, and

the Asia-Pacific regions. Hanesbrands has a market capitalization of $4.5 billion.

In early November, Hanesbrands reported (11/1/18) financial results for the third-quarter of fiscal

2018. In the quarter, the company increased its sales by 7% in activewear and 11% in the international

markets, thanks primarily to strong momentum among Champion products. Separately, innerwear

sales decreased by 7% due to intense competition and high raw material costs. In addition,

Hanesbrands incurred a $14 million charge due to the bankruptcy of Sears Holding Corp. Overall, the

company’s adjusted earnings-per-share were in-line with consensus analyst expectations at $0.55.

While management expects the strong momentum in Champion to continue in the fourth-quarter, it

lowered its guidance for adjusted earnings-per-share to $1.69-$1.73 from a previous midpoint of $1.75.

The company’s stock currently sits more than 20% lower than its pre-earnings level.


Hanesbrands benefits from strong brand recognition in the discount apparel space. This is particularly

true for the company’s flagship Champion brand, which has been performing very well recently.

Hanesbrands’ management team expects to achieve $2 billion in Champion brand sales by 2022,

primarily through opening new stores and expanding its product lineup globally.

Hanesbrands’ earnings-per-share declined by 19% in the last recession (2008-2009) and its balance

sheet’s quality has deteriorated in recent years. More specifically, Hanesbrands has spent $2.9 billion

on acquisitions in the last seven years, and these acquisitions were primarily funded through debt. The

company’s interest expense consumes 25% of its operating income currently. This is an important

trend that current or prospective investors should watch closely moving forward. Hanesbrands began

paying down its debt in the 3rd quarter of fiscal 2018. We expect more deleveraging ahead.


Hanesbrands has compounded its earnings-per-share at an impressive 12.7% rate over the last decade,

but at just 4.9% annually over the last 4 years. Due to heightened competition and direct-to-consumer

sales channels, we are conservatively forecasting 3% annual growth for Hanesbrands moving forward.

Using the midpoint of Hanesbrands’ guidance ($1.71), the company is trading at a price-to-earnings

ratio of 7.3. For context, Hanesbrands has traded at an average P/E of 13.0 over the last decade. If the

company’s price-to-earnings ratio reverts to its historical levels over the next 5 years, this will boost its

total returns by a remarkable 12% per year during this time period. Through a combination of earnings

growth (3%), dividend payments (4.8%), and valuation expansion (12%), we believe that Hanesbrands

could potentially deliver total returns of up to 20% per year over the next 5 years.


Dividend Yield: 4.8% 10-Year Dividend Growth Rate: N/A




10 Maximum drawdown occurred in February of 2009.

43



Revenue 4249 3891 4146 4434 4526 4628 5325 5732 6028 6471

Gross Profit 1377 1265 1376 1493 1420 1612 1904 2136 2276 2491

Gross Margin 32.4% 32.5% 33.2% 33.7% 31.4% 34.8% 35.8% 37.3% 37.8% 38.5%

SG&A Exp. 1010 941 995 1046 980 1097 1340 1541 1500 1740

D&A Exp. 115 97 87 91 93 91 98 104 103 122



Net Profit 127 51 211 267 165 330 405 429 539 62

Net Margin 3.0% 1.3% 5.1% 6.0% 3.6% 7.1% 7.6% 7.5% 8.9% 1.0%

Free Cash Flow -10 288 27 83 513 548 444 128 522 569

Income Tax 36 7 18 42 31 65 60 45 34 473


Total Assets 3534 3327 3790 4035 3632 4090 5208 5598 6930 6895



Inventories 1291 1049 1323 1608 1253 1283 1537 1815 1841 1875

Goodwill & Int. Ass. 469 458 609 603 553 1004 1414 1535 2384 2570



Long-Term Debt 2238 1959 2131 2038 1518 1685 1984 2603 3742 3964


D/E Ratio 12.09 5.85 3.79 2.99 1.71 1.37 1.43 2.04 3.06 5.78


Return on Assets 3.6% 1.5% 5.9% 6.8% 4.3% 8.6% 8.7% 7.9% 8.6% 0.9%

Return on Equity 53.7% 19.7% 47.1% 42.9% 21.0% 31.2% 30.9% 32.2% 43.2% 6.5%

ROIC 5.0% 2.2% 8.5% 9.9% 6.4% 12.4% 12.9% 11.8% 12.2% 1.3%

Shares Out. 374.1 381.6 384.8 390.1 393.1 397.8 400.8 391.7 378.7 360.1 Revenue/Share 11.16 10.17 10.60 11.17 11.28 11.36 13.05 14.20 15.68 17.52

FCF/Share -0.03 0.75 0.07 0.21 1.28 1.34 1.09 0.32 1.36 1.54 Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.

44


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Hanesbrands Inc. (HBI) Dividend Yield History

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8Hanesbrands Inc. (HBI) Fundamentals


46


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Hanesbrands Inc. (HBI) Valuation Analysis


47


Cardinal Health Inc. (CAH) Overview & Current Events

Cardinal Health is one of the largest healthcare product distributors in the U.S., along with McKesson

(MCK) and AmerisourceBergen (ABC). Cardinal Health’s core business is pharmaceutical

distribution. It also has a medical products distribution segment. With 32 years of consecutive

dividend increases, Cardinal Health is a member of the Dividend Aristocrats Index.

In early November (11/8/18) Cardinal Health reported first-quarter 2019 fiscal year earnings. The

company reported $35.2 billion in revenue, an 8% increase as compared to the first-quarter of fiscal

year 2018. On the bottom line, adjusted earnings-per-share came in at $1.29 versus $1.09 in the year

ago period for a growth rate of 18%. Pharmaceutical segment profit declined 12% from the previous

quarter, partially offset by 5% profit growth in the smaller Medical segment. Cardinal Health

reaffirmed its 2019 outlook for earnings between $4.90 and $5.15 per share. It also approved a new $1

billion share repurchase program and declared a $0.4763 common stock dividend.


The pharmaceutical distribution industry is challenged right now, but we still view Cardinal Health

positively. Our bullish view is based on the company’s entrenched position in the industry, as well as

the expected growth of the U.S. healthcare industry. Cardinal Health serves over 24,000 pharmacies

and more than 85% of hospitals in the U.S. The company generated $137 billion of revenue in the

most recent fiscal year. This kind of scale is very hard to replicate.

Another benefit of Cardinal Health’s business model is that it is exceptionally resistant to recessions.

Pharmaceutical and medical product distribution enjoys steady demand from year-to-year. Adjusting

for the CareFusion spin-off, Cardinal Health managed to grow revenue, operating profits, and

dividends during the Great Recession. People will always need to take their medications, even when

the economy enters a downturn.


Cardinal Health’s primary growth catalyst is the aging U.S. population. Rising life expectancies and a

very large population of seniors mean demand for healthcare distribution should only grow in the U.S.

going forward. Acquisitions have helped Cardinal Health pursue these growth opportunities. For

example, in 2017 Cardinal Health acquired the Patient Recovery business from Medtronic (MDT) for

$6.1 billion, which is expected to add $0.55 to Cardinal Health’s earnings-per-share in fiscal 2019.

Cardinal Health stock trades for a price-to-earnings ratio of 9.0, based on expected earnings-per-share

of $5.02 for fiscal 2019. Our fair value estimate for the stock is a price-to-earnings ratio of 14.0,

meaning valuation changes could add 9.2% per year to shareholder returns. In addition, we expect

Cardinal Health to grow earnings-per-share by 5.0% per year. Adding in the 4.3% dividend yield, total

expected returns could exceed 18.0% per year for Cardinal Health stock over the next five years.

Key Statistics, Ratios, & Metrics Maximum Drawdown11: 64% 10-Year EPS Growth Rate: N/A (CareFusion spin-off)






48



Revenue ($B) 95.99 98.50 102.6 107.6 101.1 91.08 102.5 121.5 130.0 136.8

Gross Profit 3748 3781 4162 4541 4921 5161 5712 6543 6544 7181

Gross Margin 3.9% 3.8% 4.1% 4.2% 4.9% 5.7% 5.6% 5.4% 5.0% 5.2%

SG&A Exp. 2334 2397 2528 2677 2875 3028 3240 3648 3775 4596

D&A Exp. 226 254 313 325 397 459 451 641 717 1032



Net Profit 1152 642 959 1069 334 1166 1215 1427 1288 256

Net Margin 1.2% 0.7% 0.9% 1.0% 0.3% 1.3% 1.2% 1.2% 1.0% 0.2%

Free Cash Flow 1016 1874 1104 916 1532 2275 2240 2506 797 2384

Income Tax 402 625 552 628 553 635 755 845 630 -487


Total Assets 25119 19990 22846 24260 25819 26033 30142 34122 40112 39951


Acc. Receivable 5215 5171 6156 6355 6304 5380 6523 7405 8048 7800

Inventories 6833 6356 7334 7864 8373 8266 9211 10615 11301 12308

Goodwill & Int. 2267 2253 4259 4392 5574 5870 6018 9426 9207 12229



Long-Term Debt 366 2129 2502 2894 3854 3972 5492 5539 10395 9013

Total Equity 8725 5276 5849 6244 5975 6401 6256 6554 6808 6059

D/E Ratio 0.04 0.40 0.43 0.46 0.65 0.62 0.88 0.85 1.53 1.49


Return on Assets 4.7% 2.8% 4.5% 4.5% 1.3% 4.5% 4.3% 4.4% 3.5% 0.6%

Return on Equity 14.0% 9.2% 17.2% 17.7% 5.5% 18.8% 19.2% 22.3% 19.3% 4.0%

ROIC 11.1% 7.8% 12.2% 12.2% 3.5% 11.5% 11.0% 12.0% 8.8% 1.6%



49


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Cardinal Health Inc. (CAH) Dividend Yield History

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Cardinal Health Inc. (CAH) Fundamentals


51


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Cardinal Health Inc. (CAH) Valuation Analysis


52


Cummins Inc. (CMI) Overview & Current Events

Cummins designs, manufactures, distributes and services engines for heavy, medium and light-duty

trucks. The company’s product line includes diesel and natural gas engines as well as hybrid and

electric platforms. The company was founded in 1919 and has a current market capitalization of $21

billion. Cummins generated more than $21 billion in sales in the most recent fiscal year (2017).

Today, the company employs more than 58,000 people across 160 countries.

In late October, Cummins reported (10/30/18) financial results for the third-quarter of fiscal 2018. In

the quarter, the company earned $4.05 per share, an increase of 49% versus the same period a year ago.

Revenue grew 12.3% to $5.94 billion. Remarkably, last quarter represented six consecutive quarters of

12%+ revenue growth for Cummins. Strength was broad-based, with North American sales growing

17% and international sales growing 6% (led by robust performances in both China and India).

Importantly, each division of Cummins saw sales growth. The Engine division saw sales expand by

17%, driven by strong truck production in North America. The Distribution segment increased

revenues by 10% due to higher demand for power generation equipment and growth in the parts and

service businesses. Component sales grew 14%, while Power System sales grew 5%. Cummins also

estimates tariffs will cost the company $80 million in 2018 versus previous estimates of $100 million.


Cummins has important advantages over each of its three main competitors – which are Navistar

(NAV), Detroit Diesel, and Caterpillar (CAT). Relative to Navistar and Detroit Diesel (which is a

private company), Cummins has strong scale advantages as the two competitors are much smaller than

Cummins. Separately, Cummins has technical advantages over Caterpillar as it is focused entirely on

diesel engine manufacturing while the latter also builds construction and forestry equipment. Cummins

has a deserved reputation for designing and manufacturing better diesel engines than its competitors.

Cummins is not the most recession-resistant stock that we have recommended in this newsletter.

Earnings-per-share fell by 40% during the Great Recession. Still, the company remained profitable and

its low payout ratio gives it flexibility to continue increasing its dividend during future downturns. 6


Cummins is likely to generate earnings-per-share of $13.28 in the current fiscal year. Using this

estimate, Cummins is trading at a current price-to-earnings ratio of just 9.8. For context, the

company’s average price-to-earnings ratio over the last decade is 13.9. If Cummins’ valuation expands

to its long-term average over the next 5 years, this will boost its total returns by about 7% per year

during this time period. Separately, we believe Cummins is likely to generate earnings-per-share

growth of about 8% per year, and the stock currently pays a dividend that yields 3.5%. Overall, we

believe that Cummins is capable of total returns of nearly 20% per year moving forward.







53



Revenue 14342 10800 13226 18048 17334 17301 19221 19110 17509 20428

Gross Profit 2940 2169 3168 4589 4416 4280 4861 4947 4452 5090

Gross Margin 20.5% 20.1% 24.0% 25.4% 25.5% 24.7% 25.3% 25.9% 25.4% 24.9%

SG&A Exp. 1450 1239 1487 1837 1808 1817 2095 2092 2046 2390

D&A Exp. 314 326 320 325 361 407 455 514 530 583


Op. Margin 7.4% 5.3% 9.5% 11.9% 10.8% 10.1% 10.4% 11.0% 10.2% 9.8%

Net Profit 755 428 1040 1848 1645 1483 1651 1399 1394 999

Net Margin 5.3% 4.0% 7.9% 10.2% 9.5% 8.6% 8.6% 7.3% 8.0% 4.9%

Free Cash Flow 362 792 599 1391 755 1349 1468 1266 1345 1690

Income Tax 360 156 477 725 533 531 698 555 474 1371


Total Assets 8519 8816 10402 11668 12548 14728 15764 15134 15011 18075



Inventories 1783 1341 1977 2141 2221 2381 2866 2707 2675 3166

Goodwill & Int. Ass. 585 592 589 566 814 818 822 810 812 2055



Long-Term Debt 698 674 791 783 775 1740 1686 1639 1856 2006


D/E Ratio 0.22 0.18 0.17 0.14 0.12 0.23 0.22 0.22 0.27 0.28

Profitability & Per Share Metrics

Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Return on Assets 9.0% 4.9% 10.8% 16.7% 13.6% 10.9% 10.8% 9.1% 9.2% 6.0%

Return on Equity 22.7% 12.2% 24.6% 36.4% 27.2% 21.0% 21.6% 18.5% 19.5% 14.1%

ROIC 17.7% 9.6% 19.8% 29.8% 22.9% 17.1% 17.0% 14.6% 15.1% 10.4%

Shares Out. 201.4 201.4 197.8 192.9 189.8 186.7 182.2 175.2 168.2 164 Revenue/Share 72.98 54.63 67.09 93.22 91.39 92.31 104.99 107.1 103.4 122.1


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8Cummins Inc. (CMI) Dividend Yield History

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8

Cummins Inc. (CMI) Fundamentals


56


12.5

14.8

14.5

11.1

11.9

15.3

15.8

14 14.1

14.9

0

2

4

6

8

10

12

14

16

18

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cummins Inc. (CMI) Valuation Analysis


57

Disclaimer

Nothing presented herein is, or is intended to constitute, specific investment advice. Nothing in this newsletter should be construed as a recommendation to follow any investment strategy or allocation. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements

or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While Sure Dividend has used reasonable efforts to

obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein. No guarantee of investment performance is being provided and no inference to the contrary should be made. There is a risk of loss from an investment in securities.

Past performance is not a guarantee of future performance.

Closing Thoughts - To DRIP, or Not to DRIP, That is the Question -

By Nick McCullum

DRIP stands for Dividend Reinvestment Plan. With the announcement and implementation of our Real

Money Portfolio this month, we thought it would be beneficial to discuss the pros and cons to DRIPs

and explain whether or not we will engage in a DRIP in our live brokerage account.

A DRIP is an investment program where dividends are reinvested into the company that paid them.

Over time, the number of shares that are purchased under a DRIP tend to rise significantly as (1) the

company continues its organic dividend increases and (2) the investors accumulate more shares.

There are generally two types of DRIPs – those provided by the company itself (which are usually

called Treasury DRIPs) and those provided by your brokerage account provider (usually called

Brokerage DRIPs or Synthetic DRIPs). In a Treasury DRIP, the company is actually issuing new stock

to satisfy the requirements of the plan. That means whenever you buy stock from the company using

their DRIP, you are slightly diluting the shareholders who are not engaged in the DRIP. Treasury

DRIPs are used as a tool by companies to slowly raise additional capital from their shareholder base

over time. Conversely, a Synthetic DRIP occurs when the brokerage company buys stock on the open

market to satisfy the demands of the plan. Both DRIP types generally have no fees.

The main benefit to a DRIP is that it automates an additional step in the investing process. Dividends

no longer need to be manually reinvested. For those who prefer to take a hands-off approach to

investing, this can be quite appealing. On the downside, DRIPs can cause investors to automatically

reinvest dividends back into the securities that paid them when those securities are overvalued.

For an example, look at past newsletter recommendation Hormel Foods (HRL). As we explained in the

sell recommendation on that company contained in this newsletter, Hormel Foods has expected total

returns in the low single-digits at current prices. Recent dividends paid by Hormel would have been

reinvested into the stock at high prices, which would reduce the forward-looking return potential of

your investment portfolio – especially when this occurs over not just one holding, but several

overvalued dividend stocks. Importantly, holding dividend stocks that are slightly overvalued can still

make sense as it allows you to defer capital gains taxes and continue collecting dividend payments.

At Sure Dividend, we do not recommend that investors engage in DRIPs, and we are following our

own advice with the launch of the Real Money Portfolio this month. We will be pooling dividends

received from our portfolio holdings and selectively reinvesting them into our best opportunity.

Thanks for reading,

Ben Reynolds

The next newsletter publishes on Sunday, February 3rd, 2019

58

Real Money Portfolio

The Sure Dividend Real Money Portfolio tracks our actual investment decisions in real time,

with real money.

Each month we will save and invest $1,000 to show the actual progress of building and

maintaining a dividend growth portfolio.

Our buy decisions will be the highest ranked stock in the Top 10 that we either do not own or

own the least in our portfolio. We will not place buys that push the portfolio over 30% in any

one sector (after the portfolio reaches a reasonable number of positions) to prevent over-

concentration in any sector. The portfolio will hold up to 30 stocks. Once 30 stocks are

reached, it will buy the highest ranked stock already in the portfolio up to 10% of the portfolio’s

value. Sell decisions are based on the same sell criteria used in The Sure Dividend Newsletter.

We are using Interactive Brokers as our brokerage for this portfolio. Limit buy orders for our

trades will be placed the second trading day after The Sure Dividend Newsletter goes live. This

gives our readers who are following the real money portfolio a full trading day to make the

same trade we would in advance of us.

Our first buy recommendation is Eaton Vance (EV). Eaton Vance has an “A” Dividend Risk

score, a ~4% dividend yield, and expected total returns of just under 20% annually due

primarily to it being deeply undervalued. Overall, we expect Eaton Vance to significantly

outperform over a full market cycle and during a bull market. As an asset manager, it will

likely experience sharp drawdowns during the next recession (whenever that may be). For more

information on Eaton Vance, see it analyzed in this newsletter here.

Future editions of The Sure Dividend Newsletter will include brokerage screenshots showing

holdings and performance. As we have not made a trade yet, we have not included them in this

edition.

59

Portfolio Building Guide

The process of building a high-quality dividend growth portfolio is not complex: Each month invest in the

top-ranked security in which you own the smallest dollar amount out of the Top 10. Over time, you will

build a well-diversified portfolio of great businesses purchased at attractive prices. Alternatively, the Top 10

list is also useful as an idea generation tool for those with a different portfolio allocation plan. If you are

looking to add additional yield to your portfolio, The Sure Retirement Newsletter offers a Top 10 list with 4%+

dividend yields. The Sure Dividend International Newsletter provides additional geographic diversification.

Examples Portfolio 1 Portfolio 2

Ticker Name Amount Ticker Name Amount

EV Eaton Vance $ 1,002 EV Eaton Vance $ 4,374

WBA Walgreens Boots $ - WBA Walgreens Boots $ 4,878

OZK Bank OZK $ - OZK Bank OZK $ 4,353

IVZ Invesco $ - IVZ Invesco $ 7,428

NWL Newell Brands $ - NWL Newell Brands $ 3,309

WHR Whirlpool $ - WHR Whirlpool $ 8,099

T AT&T $ - T AT&T $ 5,629

HBI Hanesbrands $ - HBI Hanesbrands $ 2,176

CAH Cardinal Health $ - CAH Cardinal Health $ 1,079

CMI Cummins $ - CMI Cummins $ 4,864

- If you had portfolio 1, you would buy WBA, the top-ranked security you own least.

- If you had portfolio 2, you would buy CAH, the top-ranked security you own least.

If you have an existing portfolio or a large lump sum to invest, you may wish to switch over to the Sure

Dividend Strategy over a 20-month period. Each month take 1/20 of your initial portfolio value and buy the

top-ranked security you own the least out of the Top 10. When you sell a security, use the proceeds to purchase

the top-ranked security you own the least. Reinvest dividends in the same manner.

This simple investing process will build a diversified portfolio of high-quality dividend securities over a period

of less than 2 years. Further, higher ranked securities will receive proportionately more investment dollars as

they will stay in the Top 10 rankings longer. You will build up large positions in the highest-quality securities

over your investing career.

If your portfolio grows too large to manage comfortably (for example, you are not comfortable holding 40+

securities – which would happen after around 4 years of using the Sure Dividend System), you will need to sell

holdings. I recommend eliminating positions that have the lowest yields if you are in or near retirement. If you

are not near retirement, eliminate positions that rank the lowest in the newsletter until you are comfortable with

the number of positions in your portfolio. Reinvest the proceeds into the highest-ranked securities you currently

own, until your highest-ranked holding makes up 10% of your portfolio’s total value. Then add to the next

highest-ranked holding, and so on.

https://www.suredividend.com/retirement-subscribe/

https://www.suredividend.com/international-subscribe/

60

Past Recommendations & Sells

Every past Sure Dividend Newsletter recommendation from the Top 10 is shown in this section13. The sell rules

that govern this newsletter are below.

Sell Rules Sell Rule #1, Dividend-Based Sell Rules: Any past recommendation that reduces or eliminates its dividend is

automatically a pending sell. We review and analyze these stocks to determine when to initiate the final sale.

Secondly, any past recommendation that has an “F” Dividend Risk Score is reviewed as a potential sell.

Sell Rule #2, Valuation-Based Sell Rules: Sell past recommendations with expected total returns below the

expected total returns of the S&P 500 over the next several years. This sell rule replaces our previous

valuation-based sell rule of selling stocks with an adjusted P/E ratio of 40 or higher. We calculate our estimate

of the long-term returns of the S&P 500 as the S&P 500’s dividend yield plus nominal (not inflation adjusted)

GDP growth, less valuation multiple mean reversion over 10 years. We currently estimate long-term U.S.

nominal GDP growth at 5.5%, the S&P 500’s dividend yield at 2.1%, and valuation multiple mean reversion at

-2.0% (S&P 500 fair value P/E of 15.7 versus current P/E of 19.3) for an expected total return sell threshold of

5.6%. Past recommendations at or below this sell threshold are bolded and in green in the table below.

We will only recommend up to 2 valuation based sells a month so that the reinvestment of sale proceeds is not

concentrated in a short time frame.

Current Holds Name Ticker 1st Rec. Date DR Score

Performance (Total Return)

5 Year Forward Expected Tot. Ret.

Wal-Mart WMT 4/7/2014 A 35% 2.64%

Clorox CLX 4/7/2014 B 95% 3.07%

McDonald's MCD 4/7/2014 B 111% 5.73%

Coca-Cola KO 4/7/2014 B 42% 5.88%

PepsiCo PEP 4/7/2014 B 50% 7.01%

Kimberly-Clark KMB 4/7/2014 A 23% 9.59%

AFLAC AFL 4/7/2014 A 63% 12.34%

ExxonMobil XOM 4/7/2014 C -14% 12.60%

Target TGT 4/7/2014 A 28% 14.06%

3M MMM 5/5/2014 A 52% 7.64%

Genuine Parts Company GPC 5/5/2014 A 27% 9.98%

Becton, Dickinson BDX 6/2/2014 A 98% 12.55%

General Mills GIS 6/2/2014 C -17% 13.93%

Philip Morris PM 6/2/2014 D -4% 17.10%

AT&T T 6/2/2014 B 8% 22.29%

J.M. Smucker SJM 8/4/2014 C 5% 11.09%

13 This does not include our past “special recommendations” or international recommendations from years ago because they are

outside the scope of the regular Sure Dividend Newsletter strategy and Top 10. We are not tracking when to sell or performance of

those recommendations.

61

EcoLab ECL 10/6/2014 A 35% 4.50%

Kellogg K 12/8/2014 C -2% 14.03%

Deere & Company DE 1/5/2015 B 91% 9.98%

Altria MO 4/6/2015 C 13% 18.64%

W.W. Grainger GWW 7/6/2015 A 28% 9.91%

United Technology UTX 8/3/2015 C 16% 7.24%

BCE BCE 8/3/2015 D 16% 9.81%

Caterpillar CAT 8/3/2015 B 81% 16.57%

Eaton ETN 9/8/2015 C 34% 9.90%

Johnson & Johnson JNJ 11/2/2015 A 37% 9.30%

Computer Services CSVI 11/2/2015 A 44% 10.04%

Cummins CMI 11/2/2015 B 38% 18.56%

Procter & Gamble PG 12/7/2015 A 29% 6.48%

Verizon VZ 12/7/2015 C 41% 10.83%

Johnson Controls JCI 12/7/2015 D 6% 16.42%

Archer-Daniels-Midland ADM 2/8/2016 A 37% 9.78%

General Dynamics GD 3/7/2016 A 24% 9.82%

Flowers Foods FLO 3/7/2016 D 15% 9.85%

Cardinal Health CAH 5/2/2016 B -40% 18.96%

Disney DIS 6/6/2016 C 16% 11.80%

Phillips 66 PSX 7/5/2016 B 25% 13.99%

Walgreens Boots Alliance WBA 9/6/2016 A -11% 18.19%

Boeing BA 10/3/2016 C 157% 11.56%

AbbVie ABBV 10/3/2016 A 51% 17.89%

VF Corp. VFC 11/7/2016 A 37% 9.05%

Medtronic MDT 12/5/2016 A 29% 6.28%

Mondelez MDLZ 4/3/2017 C -2% 12.88%

Nike NKE 5/8/2017 B 40% 7.19%

Lowe's LOW 5/8/2017 A 12% 9.38%

Macy's M 5/8/2017 D 13% 15.06%

IBM IBM 5/8/2017 B -19% 17.83%

Qualcomm QCOM 6/5/2017 C 1% 11.95%

Occidental Petroleum OXY 6/5/2017 C 13% 13.09%

CVS Health CVS 6/5/2017 B -11% 13.26%

Ameriprise Financial AMP 6/5/2017 B -7% 18.80%

Royal Dutch Shell RDS.B 7/3/2017 D 23% 11.92%

62

Kohl's KSS 9/5/2017 C 71% 7.98%

HNI Corporation HNI 12/4/2017 C 8% 14.66%

Axis Capital AXS 1/8/2018 B 10% 6.95%

ONEOK OKE 1/8/2018 D 4% 13.52%

Leggett & Platt LEG 1/8/2018 B -21% 14.71%

Universal Corporation UVV 2/5/2018 B 23% 9.32%

Southwest Airlines LUV 2/5/2018 A -16% 13.46%

Invesco IVZ 3/5/2018 B -46% 28.27%

Church & Dwight CHD 4/2/2018 B 34% 5.06%

Franklin Resources BEN 4/2/2018 A -8% 14.82%

Illinois Tool Works ITW 11/5/2018 A -3% 12.12%

Northrop Grumman NOC 11/5/2018 B -12% 16.71%

United Parcel Service UPS 11/5/2018 C -8% 17.65%

S&P Global SPGI 12/3/2018 B -9% 12.83%

Hanesbrands HBI 1/7/2019 B N/A 19.72%

Eaton Vance EV 1/7/2019 A N/A 20.57%

Whirlpool WHR 1/7/2019 B N/A 22.71%

Newell Brands NWL 1/7/2019 B N/A 26.21%

Bank OZK OZK 1/7/2019 B N/A 30.00%

63

Pending Sells Owens & Minor (OMI): We first recommended Owens & Minor to be purchased on January 8th, 2018. The

company announced a dividend reduction on October 31st, 2018, triggering an automatic pending sell

recommendation. Upon review, we believe Owens & Minor should be sold when it reaches our estimate of a

fair valuation; a price-to-earnings ratio of 15 (~$18/share at current EPS). It has generated total returns of

-67.2% at current prices.

Hormel Foods (HRL): We first recommended Hormel Foods to be purchased on December 5th, 2016. Due to

low expected total returns, we recommend selling Hormel Foods on January 7th, 2019. Hormel has generated

total returns of 28.5% since we first recommended it, versus returns of 17.0% for the S&P 500.

Abbott Labs (ABT): We first recommended Abbott Labs to be purchased on July 7th, 2014. Due to low

expected total returns, we recommend selling Abbott Labs on January 7th, 2019. Abbott has generated total

returns of 75.9% since we first recommended it, versus 37.1% for the S&P 500.

Sold Positions Chubb (pre-merger CB, not current CB): We first recommended Chubb on April 7th, 2014. We

recommended selling Chubb on July 6th, 2015, due to its merger with ACE which was announced on July 1st,

2015. It generated total returns of 32.1%, versus 14.9% for the S&P 500 (SPY).

Baxalta (BXLT, no longer publicly traded): We first recommended Baxalta on July 6th, 2015. We

recommended selling Baxalta on February 8th, 2016, due to its proposed merger with Shire plc which was

announced on January 11th, 2016. It generated total returns of 15.4%, versus -9.3% for the S&P 500 (SPY).

ConocoPhillips (COP): We first recommended ConocoPhillips on December 8th, 2014. We issued a pending

sell recommendation for the company on February 8th, 2016, due to its dividend reduction announcement on

February 4th, 2016. We issued our final sell recommendation on October 8th, 2018, when the price of oil was

around its 10-year historical average price. It generated total returns of 34.4%, versus 50.8% for the S&P

500 (SPY).

Vector Group (VGR): We first recommended Vector Group on August 7th, 2017. We recommended selling

Vector Group on December 3rd, 2018 due to an “F” Dividend Risk Score. It generated total returns of

-28.7%, versus 15.3% for the S&P 500 (SPY).

Helmerich & Payne (HP): We first recommended Helmerich & Payne on February 2nd, 2015. We

recommended selling Helmerich & Payne on December 3rd, 2018 due to an “F” Dividend Risk Score. It

generated total returns of 17.5%, versus 48.9% for the S&P 500 (SPY).

64

List of Stocks by Dividend Risk Score

Each of the securities in The Sure Analysis Research Database are grouped according to Dividend

Risk Score and sorted (from highest to lowest) by Expected Total Returns. Dividend or distribution

yield is included next to each security’s ticker symbol. The Dividend Risk Score uses payout ratio,

dividend history, and recession resiliency to measure a company’s dividend safety. You can learn

more about how the score is calculated at The Sure Analysis Glossary.

A-Rated Dividend Risk Stocks 1. Eaton Vance Corp. (EV) - 4.1%

2. NVIDIA Corp. (NVDA) - 0.5%

3. Walgreens Boots Alliance Inc. (WBA) - 2.6%

4. Perrigo Co. plc (PRGO) - 1.9%

5. AbbVie Inc. (ABBV) - 5%

6. T. Rowe Price Group Inc. (TROW) - 3.2%

7. AmerisourceBergen Corp. (ABC) - 2.2%

8. FedEx Corp. (FDX) - 1.7%

9. Imperial Oil Ltd (IMO) - 2.2%

10. The Goldman Sachs Grp. Inc. (GS) - 1.9%

11. Donaldson Co. Inc. (DCI) - 1.8%

12. A. O. Smith Corp. (AOS) - 2.1%

13. Franklin Resources Inc. (BEN) - 3.6%

14. Parker-Hannifin Corp. (PH) - 2.1%

15. 1st Source Corp. (SRCE) - 2.4%

16. United Bankshares Inc. (UBSI) - 4.3%

17. Target Corp. (TGT) - 3.9%

18. Textron Inc. (TXT) - 0.2%

19. Southwest Airlines Co. (LUV) - 1.4%

20. International Paper (IP) - 5%

21. Becton, Dickinson & Co. (BDX) - 1.5%

22. Visa Inc. (V) - 0.8%

23. Aflac Inc. (AFL) - 2.3%

24. Illinois Tool Works Inc. (ITW) - 3.2%

25. Carlisle Companies Inc. (CSL) - 1.6%

26. Stanley Black & Decker Inc. (SWK) - 2.3%

27. PPG Industries Inc. (PPG) - 2%

28. Methanex Corp. (MEOH) - 2.7%

29. Pentair plc (PNR) - 2%

30. Sysco Corp. (SYY) - 2.5%

31. H.B. Fuller Co. (FUL) - 1.5%

32. Host Hotels & Resorts (HST) - 4.9%

33. Emerson Electric Co. (EMR) - 3.4%

34. Dillard's Inc. (DDS) - 0.6%

35. ABM Industries Inc. (ABM) - 2.3%

36. The Sherwin-Williams Co. (SHW) - 0.9%

37. Aon plc (AON) - 1.1%

38. Mastercard Inc. (MA) - 0.7%

39. Colgate-Palmolive Co. (CL) - 2.9%

40. Community Trust Bancorp Inc. (CTBI) - 3.6%

41. Computer Services Inc. (CSVI) - 2.8%

42. Dover Corp. (DOV) - 2.8%

43. Nordson Corp. (NDSN) - 1.2%

44. Genuine Parts Co. (GPC) - 3.1%

45. W.W. Grainger Inc. (GWW) - 2%

46. General Dynamics Corp. (GD) - 2.4%

47. Archer-Daniels-Midland Co. (ADM) - 3.3%

48. Kimberly-Clark Corp. (KMB) - 3.6%

49. UMB Financial Corp. (UMBF) - 2%

50. Lowe's Companies Inc. (LOW) - 2.1%

51. Johnson & Johnson (JNJ) - 2.9%

52. Farmers & Merchants Bancorp (FMCB) - 2%

53. Tompkins Financial Corp. (TMP) - 2.7%

54. V. F. Corp. (VFC) - 3%

55. RPM Intl. Inc. (RPM) - 2.6%

56. The Gorman-Rupp Co. (GRC) - 1.7%

57. Black Hills Corp. (BKH) - 3.3%

58. 3M Co. (MMM) - 3%

59. Franklin Electric Co. Inc. (FELE) - 1.1%

60. Bemis Co. Inc. (BMS) - 2.7%

61. MSA Safety Inc. (MSA) - 1.7%

62. Commerce Bancshares Inc. (CBSH) - 1.6%

63. The TJX Companies Inc. (TJX) - 1.8%

64. Ross Stores Inc. (ROST) - 1.1%

65. Brady Corp. (BRC) - 2%

66. The Procter & Gamble Co. (PG) - 3.2%

67. Medtronic plc (MDT) - 2.3%

68. SJW Grp. (SJW) - 2%

69. Sonoco Products Co. (SON) - 3.2%

70. UGI Corp. (UGI) - 2%

71. Brown-Forman Corp. (BF.B) - 1.5%

72. Abbott Laboratories (ABT) - 1.9%

73. Roper Technologies Inc. (ROP) - 0.7%

74. Ecolab Inc. (ECL) - 1.3%

75. Tennant Co. (TNC) - 1.7%

76. McCormick & Co. Inc. (MKC) - 1.7%

77. Cintas Corp. (CTAS) - 1.2%

78. Stepan Co. (SCL) - 1.4%

79. Atmos Energy Corp. (ATO) - 2.3%

80. Hormel Foods Corp. (HRL) - 2%

81. Walmart Inc. (WMT) - 2.2%

82. Tootsie Roll Industries Inc. (TR) - 1.1%

83. Vectron Corp. (VVC) - 2.7%

84. Connecticut Water Service Inc. (CTWS) - 1.8%

85. Cincinnati Financial Corp. (CINF) - 2.9%

86. Advance Auto Parts Inc. (AAP) - 0.2%

87. Middlesex Water Co. (MSEX) - 1.8%

88. California Water Service Grp. (CWT) - 1.6%

89. Lancaster Colony Corp. (LANC) - 1.5%

90. West Pharmaceutical Srvcs. Inc. (WST) - 0.6%

91. American States Water Co. (AWR) - 1.7%

https://www.suredividend.com/sure-analysis-research-database/

https://www.suredividend.com/procedures-glossary-definitions/

65

B-Rated Dividend Risk Stocks 1. Bank OZK (OZK) - 3.5%

2. Invesco Ltd (IVZ) - 7.3%

3. Newell Brands Inc. (NWL) - 5%

4. Whirlpool Corp. (WHR) - 4.3%

5. AT&T Inc. (T) - 6.9%

6. Hanesbrands Inc. (HBI) - 4.8%

7. Cardinal Health Inc. (CAH) - 4.3%

8. Ameriprise Financial Inc. (AMP) - 3.4%

9. Cummins Inc. (CMI) - 3.5%

10. Apple Inc. (AAPL) - 2.1%

11. SEI Investments Co. (SEIC) - 1.5%

12. International Business Machines Corp. (IBM) - 5.6%

13. Canadian Natural Resources Ltd (CNQ.TO) - 4%

14. Cognizant Technology Solutions Corp. (CTSH) - 1.3%

15. Vermilion Energy Inc. (VET) - 9.1%

16. Northrop Grumman Corp. (NOC) - 2%

17. Caterpillar Inc. (CAT) - 2.8%

18. Halliburton Co. (HAL) - 2.7%

19. Fresenius Medical Care AG & Co. KGaA (FMS) - 2%

20. Kansas City Southern (KSU) - 1.6%

21. The Toro Co. (TTC) - 1.7%

22. Intel Corp. (INTC) - 2.7%

23. Snap-on Inc. (SNA) - 2.6%

24. Leggett & Platt Inc. (LEG) - 4.3%

25. U.S. Bancorp (USB) - 3.2%

26. Brookfield Asset Mgmt. Inc. (BAM) - 1.6%

27. M&T Bank Corp. (MTB) - 2.8%

28. Phillips 66 (PSX) - 3.7%

29. Molson Coors Brewing Co. (TAP) - 2.8%

30. Ingersoll-Rand plc (IR) - 2.4%

31. Foot Locker Inc. (FL) - 2.6%

32. American Express Co. (AXP) - 1.7%

33. CVS Health Corp. (CVS) - 3.1%

34. Constellation Brands Inc. (STZ) - 1.8%

35. Eagle Financial Srvcs. Inc. (EFSI) - 3.2%

36. S&P Global Inc. (SPGI) - 1.2%

37. Federal Realty Inv. Trust (FRT) - 3.5%

38. Stryker Corp. (SYK) - 1.4%

39. Canadian Pacific Railway Ltd (CP) - 1.1%

40. Fortis Inc. (FTS.TO) - 4%

41. HollyFrontier Corp. (HFC) - 2.7%

42. Tractor Supply Co. (TSCO) - 1.5%

43. Chevron Corp. (CVX) - 4.1%

44. Bed Bath & Beyond Inc. (BBBY) - 5.6%

45. Amgen Inc. (AMGN) - 3.1%

46. Infosys Ltd (INFY) - 3.5%

47. NACCO Industries Inc. (NC) - 2%

48. Microsoft Corp. (MSFT) - 1.9%

49. Dollar General Corp. (DG) - 1.1%

50. Oracle Corp. (ORCL) - 1.7%

51. Gilead Sciences Inc. (GILD) - 3.5%

52. Deere & Co. (DE) - 2.1%

53. Chubb Ltd (CB) - 2.3%

54. Comcast Corp. (CMCSA) - 2.2%

55. Universal Corp. (UVV) - 5.5%

56. Honeywell Intl. Inc. (HON) - 2.5%

57. UnitedHealth Group Inc. (UNH) - 1.5%

58. Moody's Corp. (MCO) - 1.3%

59. Morningstar Inc. (MORN) - 1%

60. Everest Re Grp. Ltd (RE) - 2.7%

61. Raytheon Co. (RTN) - 2.3%

62. CSX Corp. (CSX) - 1.4%

63. The Kroger Co. (KR) - 2.1%

64. Costco Wholesale Corp. (COST) - 1.1%

65. WEYCO Grp. Inc. (WEYS) - 3.2%

66. Norfolk Southern Corp. (NSC) - 2.2%

67. Domino's Pizza Inc. (DPZ) - 0.9%

68. The Travelers Companies Inc. (TRV) - 2.7%

69. Air Products & Chemicals Inc. (APD) - 2.8%

70. Canadian National Railway Co. (CNI) - 1.8%

71. Xylem Inc. (XYL) - 1.3%

72. Assurant Inc. (AIZ) - 2.7%

73. Nike Inc. (NKE) - 1.2%

74. PepsiCo Inc. (PEP) - 3.4%

75. AXIS Capital Holdings Ltd (AXS) - 3.1%

76. Nucor Corp. (NUE) - 3.1%

77. Automatic Data Processing Inc. (ADP) - 2.5%

78. First Financial Corp. (THFF) - 2.5%

79. The Coca-Cola Co. (KO) - 3.3%

80. McDonald's Corp. (MCD) - 2.7%

81. Chesapeake Financial Shares Inc. (CPKF) - 2.2%

82. Jack Henry & Associates Inc. (JKHY) - 1.2%

83. McGrath RentCorp (MGRC) - 2.8%

84. Waste Mgmt. Inc. (WM) - 2.1%

85. Church & Dwight Co. Inc. (CHD) - 1.4%

86. Consolidated Edison Inc. (ED) - 3.8%

87. The Clorox Co. (CLX) - 2.5%

88. CAE Inc. (CAE.TO) - 1.6%

89. Badger Meter Inc. (BMI) - 1.3%

90. Northwest Natural Holding Co. (NWN) - 3.3%

91. Twenty-First Century Fox Inc. (FOXA) - 0.8%

92. MGE Energy Inc. (MGEE) - 2.3%

C-Rated Dividend Risk Stocks 1. AmeriGas Partners LP (APU) - 15.3%

2. ArcelorMittal (MT) - 0.5%

3. Mckesson Corp. (MCK) - 1.4%

4. Altria Grp. Inc. (MO) - 6.5%

5. The Bank of Nova Scotia (BNS.TO) - 5%

6. Texas Instruments Inc. (TXN) - 3.5%

7. Energy Transfer LP (ET) - 9.2%

8. United Parcel Service Inc. (UPS) - 3.9%

9. Canadian Imperial Bank of Commerce (CM) - 5.3%

10. Enbridge Inc. (ENB) - 7%

11. Domtar Corp. (UFS) - 5%

12. Royal Bank of Canada (RY.TO) - 4.2%

13. Total SA (TOT) - 5.5%

14. The Western Union Co. (WU) - 4.5%

15. BlackRock Inc. (BLK) - 3.3%

16. Hospitality Properties Trust (HPT) - 9.1%

17. The Toronto-Dominion Bank (TD.TO) - 4%

18. HNI Corp. (HNI) - 3.4%

19. ABB Ltd (ABB) - 4.4%

66

20. Kellogg Co. (K) - 4%

21. General Mills Inc. (GIS) - 5%

22. Siemens AG (SIEGY) - 3.9%

23. Sony Corp. (SNE) - 0.6%

24. Old Republic Intl. Corp. (ORI) - 3.9%

25. Enterprise Products Partners LP (EPD) - 6.8%

26. Bank of Montreal (BMO.TO) - 4.5%

27. Petróleo Brasileiro SA - Petrobras (PBR) - 0.7%

28. The Home Depot Inc. (HD) - 2.4%

29. Occidental Petroleum Corp. (OXY) - 5.1%

30. People's United Financial Inc. (PBCT) - 4.8%

31. Mondelez Intl. Inc. (MDLZ) - 2.6%

32. Exxon Mobil Corp. (XOM) - 4.8%

33. Tiffany & Co. (TIF) - 2.8%

34. Nordstrom Inc. (JWN) - 3.2%

35. Digital Realty Trust Inc. (DLR) - 3.9%

36. QUALCOMM Inc. (QCOM) - 4.5%

37. John Wiley & Sons Inc. (JW.A) - 2.8%

38. The Walt Disney Co. (DIS) - 1.7%

39. Arthur J. Gallagher & Co. (AJG) - 2.3%

40. H&R Block Inc. (HRB) - 4.1%

41. The Boeing Co. (BA) - 2.6%

42. Omnicom Grp. Inc. (OMC) - 3.4%

43. Taiwan Semiconductor Mfg. Co. Ltd (TSM) - 3.9%

44. Suncor Energy Inc. (SU.TO) - 3.8%

45. Rockwell Automation Inc. (ROK) - 2.7%

46. The J. M. Smucker Co. (SJM) - 3.6%

47. Lockheed Martin Corp. (LMT) - 3.4%

48. Starbucks Corp. (SBUX) - 2.3%

49. Verizon Communications Inc. (VZ) - 4.3%

50. Cisco Systems Inc. (CSCO) - 3.2%

51. Campbell Soup Co. (CPB) - 4.3%

52. Urstadt Biddle Properties Inc. (UBA) - 5.9%

53. Eaton Corp. plc (ETN) - 4%

54. General Electric Co. (GE) - 0.5%

55. MDU Resources Grp. Inc. (MDU) - 3.4%

56. Hasbro Inc. (HAS) - 3.2%

57. National Fuel Gas Co. (NFG) - 3.3%

58. SAP SE (SAP) - 1.8%

59. ResMed Inc. (RMD) - 1.4%

60. Novartis AG (NVS) - 3.5%

61. Diageo plc (DEO) - 3%

62. Jack in the Box Inc. (JACK) - 2%

63. Kohl's Corp. (KSS) - 3.7%

64. The Hershey Co. (HSY) - 2.7%

65. Community Bank System Inc. (CBU) - 2.6%

66. Yum! Brands Inc. (YUM) - 1.6%

67. United Technologies Corp. (UTX) - 2.8%

68. Cracker Barrel Old Country Store Inc. (CBRL) - 3.1%

69. Union Pacific Corp. (UNP) - 2.4%

70. Universal Health Realty Income Trust (UHT) - 4.5%

71. Linde plc (LIN) - 2.2%

72. Aqua America Inc. (WTR) - 2.6%

73. Rogers Communications Inc. (RCI.B.TO) - 2.7%

74. NextEra Energy Inc. (NEE) - 2.6%

75. América Móvil SAB de CV (AMX) - 2.2%

76. Erie Indemnity Co. (ERIE) - 2.7%

77. Eli Lilly & Co. (LLY) - 2%

78. Merck & Co. Inc. (MRK) - 3%

D-Rated Dividend Risk Stocks 1. Owens & Minor Inc. (OMI) - 4.6%

2. Micro Focus Intl. plc (MFGP) - 6.9%

3. British American Tobacco plc (BTI) - 8.6%

4. Delphi Technologies plc (DLPH) - 4.9%

5. Applied Materials Inc. (AMAT) - 2.5%

6. Lazard Ltd (LAZ) - 4.9%

7. Xerox Corp. (XRX) - 5.1%

8. Carnival Corp. (CCL) - 4.2%

9. Seagate Technologies (STX) - 6.9%

10. WPP plc (WPP) - 7.6%

11. Principal Financial Grp. Inc. (PFG) - 5%

12. Hawaiian Holdings Inc. (HA) - 1.9%

13. Broadcom Inc. (AVGO) - 4.6%

14. Manulife Financial Corp. (MFC) - 5.2%

15. TechnipFMC plc (FTI) - 2.6%

16. Aptiv plc (APTV) - 1.5%

17. Ryder System Inc. (R) - 4.4%

18. POSCO (PKX) - 3.4%

19. Autoliv Inc. (ALV) - 3.7%

20. Sun Life Financial Inc. (SLF) - 4.5%

21. KLA-Tencor Corp. (KLAC) - 3.5%

22. Philip Morris Intl. Inc. (PM) - 6.9%

23. Royal Caribbean Cruises Ltd (RCL) - 3%

24. Bank of America Corp. (BAC) - 2.4%

25. Citigroup Inc. (C) - 3.4%

26. Johnson Controls Intl. plc (JCI) - 3.5%

27. Vodafone Grp. Plc (VOD) - 8.9%

28. LyondellBasell Industries NV (LYB) - 4.9%

29. Navient Corporation (NAVI) - 6.8%

30. Legg Mason Inc. (LM) - 5.3%

31. Logitech Intl. SA (LOGI) - 2.4%

32. Kinder Morgan Inc. (KMI) - 5.1%

33. Sanofi (SNY) - 4.4%

34. The Kraft Heinz Co. (KHC) - 5.8%

35. Wynn Resorts Ltd (WYNN) - 2.9%

36. The Bank of New York Mellon Corp. (BK) - 2.4%

37. Macy's Inc. (M) - 5.1%

38. Williams-Sonoma Inc. (WSM) - 3.5%

39. BP plc (BP) - 6.3%

40. BT Group plc (BT) - 3.9%

41. Tenaris SA (TS) - 2.4%

42. Ping An Insurance Grp. Co. of China Ltd (PNGAY) - 2.1%

43. DowDuPont Inc. (DWDP) - 2.9%

44. Bristol-Myers Squibb Co. (BMY) - 3.6%

45. Omega Healthcare Investors Inc. (OHI) - 7.7%

46. ONEOK Inc. (OKE) - 6.3%

47. Marathon Petroleum Corp. (MPC) - 3.1%

48. Royal Dutch Shell plc (RDS.B) - 6.2%

49. Simon Property Grp. Inc. (SPG) - 4.9%

50. Iron Mountain Inc. (IRM) - 7.5%

51. Wells Fargo & Co. (WFC) - 3.7%

52. General Motors Co. (GM) - 4.7%

53. Patterson Companies Inc. (PDCO) - 5.2%

54. ConocoPhillips (COP) - 2%

55. American Airlines Grp. Inc. (AAL) - 1.3%

56. Scholastic Corp. (SCHL) - 1.5%

57. Novo Nordisk A/S (NVO) - 2.7%

67

58. W. P. Carey Inc. (WPC) - 6.4%

59. Popular Inc. (BPOP) - 2.1%

60. Flowers Foods Inc. (FLO) - 3.9%

61. Yamana Gold Inc. (AUY) - 0.8%

62. BCE Inc. (BCE) - 5.7%

63. The Southern Co. (SO) - 5.4%

64. Dominion Energy Inc. (D) - 4.7%

65. JPMorgan Chase & Co. (JPM) - 3.3%

66. Accenture plc (ACN) - 2.2%

67. Honda Motor Co. Ltd (HMC) - 3.8%

68. Restaurant Brands Intl. Inc. (QSR) - 3.5%

69. Pearson plc (PSO) - 2%

70. Ferrari NV (RACE) - 0.9%

71. ARMOUR Residential REIT Inc. (ARR) - 11%

72. Public Storage (PSA) - 4%

73. Delta Air Lines Inc. (DAL) - 3.1%

74. Ventas Inc. (VTR) - 5.5%

75. Unilever plc (UL) - 3.5%

76. Duke Energy Corp. (DUK) - 4.4%

77. Valero Energy Corp. (VLO) - 4.3%

78. Pfizer Inc. (PFE) - 3.4%

79. Realty Income Corp. (O) - 4.2%

80. TELUS Corp. (T.TO) - 4.9%

81. PPL Corp. (PPL) - 5.9%

82. Otter Tail Corp. (OTTR) - 2.8%

83. Alaska Air Grp. Inc. (ALK) - 2.2%

84. HCP Inc. (HCP) - 5.3%

85. Paychex Inc. (PAYX) - 3.5%

86. MGM Resorts Intl. (MGM) - 1.9%

87. Welltower Inc. (WELL) - 5.1%

88. R.R. Donnelley & Sons Co. (RRD) - 3%

89. Telephone & Data Systems Inc. (TDS) - 1.9%

90. Nestlé SA (NSRGY) - 2.9%

91. Kulicke & Soffa Industries Inc. (KLIC) - 2.5%

F-Rated Dividend Risk Stocks 1. Nabors Industries Ltd (NBR) - 10.3%

2. Aegon NV (AEG) - 7.1%

3. Vector Grp. Ltd (VGR) - 16.1%

4. Stage Stores Inc. (SSI) - 24.2%

5. Artisan Partners Asset Mgmt. Inc. (APAM) - 11%

6. Genesis Energy LP (GEL) - 11.5%

7. Compass Diversified Holdings (CODI) - 11%

8. Buckeye Partners LP (BPL) - 10%

9. Senior Housing Properties Trust (SNH) - 13.2%

10. Suburban Propane Partners LP (SPH) - 12.2%

11. Apollo Global Mgmt. LLC (APO) - 8.1%

12. Daimler AG (DDAIF) - 8.8%

13. Schlumberger Ltd/NV (SLB) - 5.3%

14. Ford Motor Co. (F) - 7.7%

15. Brookfield Property Partners LP (BPY) - 7.6%

16. Spark Energy Inc. (SPKE) - 9.6%

17. Sunoco LP (SUN) - 12.1%

18. CenturyLink Inc. (CTL) - 13.9%

19. Summit Hotel Properties Inc. (INN) - 7.5%

20. New Residential Inv. Corp. (NRZ) - 13.9%

21. Macquarie Infra. Corp. (MIC) - 10.7%

22. Waddell & Reed Financial Inc. (WDR) - 5.6%

23. Magellan Midstream Partners LP (MMP) - 6.9%

24. National Oilwell Varco Inc. (NOV) - 0.8%

25. Imperial Brands plc (IMBBY) - 7.9%

26. Brookfield Infra. Partners LP (BIP) - 5.3%

27. Anheuser-Busch InBev NV (BUD) - 5%

28. Canon Inc. (CAJ) - 5.6%

29. Apollo Comml. Real Estate Finance Inc. (ARI) - 11%

30. L Brands Inc. (LB) - 4.5%

31. GameStop Corp. (GME) - 11.7%

32. OUTFRONT Media Inc. (OUT) - 7.9%

33. Baker Hughes, a GE Co. (BHGE) - 3.4%

34. Macerich Co. (MAC) - 6.9%

35. Holly Energy Partners LP (HEP) - 9.2%

36. Six Flags Entertainment Corp. (SIX) - 5.9%

37. Las Vegas Sands Corp. (LVS) - 5.7%

38. Brookfield Renewable Partners LP (BEP) - 7.3%

39. Kimco Realty Corp. (KIM) - 7.7%

40. Weyerhaeuser Co. (WY) - 6.1%

41. Patterson-UTI Energy Inc. (PTEN) - 1.5%

42. Eni SpA (E) - 6%

43. TC PipeLines LP (TCP) - 8.3%

44. STAG Industrial Inc. (STAG) - 5.9%

45. Lamar Advertising Co. (LAMR) - 5.5%

46. Toyota Motor Corp. (TM) - 3.1%

47. Dine Brands Global Inc. (DIN) - 3.7%

48. Orchid Island Capital Inc. (ORC) - 14.8%

49. Helmerich & Payne Inc. (HP) - 5.9%

50. Vale SA (VALE) - 4%

51. China Mobile Ltd (CHL) - 4.6%

52. Starwood Property Trust Inc. (STWD) - 9.8%

53. Crown Castle Intl. Corp. (CCI) - 4.2%

54. Gladstone Inv. Corp. (GAIN) - 8.7%

55. BHP Billiton Ltd (BHP) - 8.8%

56. GlaxoSmithKline plc (GSK) - 5.2%

57. Consolidated Water Co. Ltd (CWCO) - 3%

58. TransCanada Corp. (TRP) - 5.4%

59. Seaspan Corp. (SSW) - 6.1%

60. Telefónica SA (TEF) - 5.3%

61. HSBC Holdings plc (HSBC) - 5%

62. Rio Tinto plc (RIO) - 5.4%

63. Williams Companies (WMB) - 6%

64. Copa Holdings SA (CPA) - 4.4%

65. CF Industries Holdings Inc. (CF) - 3%

66. Nielsen Holdings plc (NLSN) - 6%

67. Ambev SA (ABEV) - 5.7%

68. Shaw Communications Inc. (SJR.A.V) - 4.3%

69. Calvin B. Taylor Bankshares Inc. (TYCB) - 3%

70. Luxottica Grp. SpA (LUXTY) - 2.1%

71. Abercrombie & Fitch Co. (ANF) - 4.1%

72. Deutsche Telekom AG (DTEGY) - 4.5%

73. B&G Foods Inc. (BGS) - 6.6%

74. Thomson Reuters Corp. (TRI) - 3.3%

75. Melco Resorts & Entertainment Ltd (MLCO) - 3.2%

76. Garmin Ltd (GRMN) - 3.5%

77. The Wendy's Co. (WEN) - 2.2%

78. Koninklijke Philips NV (PHG) - 3%

79. Mercury General Corp. (MCY) - 5%

80. Nokia Corp. (NOK) - 4.2%

68

81. Meredith Corp. (MDP) - 4.2%

82. National Retail Properties Inc. (NNN) - 4.2%

83. AstraZeneca plc (AZN) - 3.7%

84. Wheaton Precious Metals Corp. (WPM) - 1.8%

85. Telefonaktiebolaget LM Ericsson (ERIC) - 1.5%

86. Newmont Mining Corp. (NEM) - 1.6%

87. Westamerica Bancorporation (WABC) - 2.8%

88. RLI Corp. (RLI) - 1.3%

sure dividend · 2019. 10. 13. · 4 sell recommendation: hormel foods (hrl) we first recommended...

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