Diamondback Energy Inc Valuation – February 2019 $FANG

Company Profile (excerpt from Reuters): Diamondback Energy, Inc., incorporated on December 30, 2011, is an independent oil and natural gas company. The Company focuses on the acquisition, development, exploration and exploitation of unconventional onshore oil and natural gas reserves in the Permian Basin in West Texas. As of December 31, 2016, the Company’s total net acreage position in the Permian Basin was approximately 105,894 net acres. As of December 31, 2016, the Company, through its subsidiary, Viper Energy Partners LP (Viper), owned mineral interests underlying approximately 107,568 gross acres primarily in Midland County, Texas in the Permian Basin. The Permian Basin area covers a portion of western Texas and eastern New Mexico.

FANG Chart

FANG data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FANG – February 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $17,310,967,500 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.10 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 3900.00% Pass
6. Moderate PEmg Ratio PEmg < 20 50.05 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.62 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.10 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 31.56 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.11
MG Growth Estimate 7.74%
MG Value $50.54
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $30.57
MG Value based on 0% Growth $17.92
Market Implied Growth Rate 20.77%
Current Price $105.50
% of Intrinsic Value 208.73%

Diamondback Energy Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.39 in 2014 to an estimated $2.11 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 20.77% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Diamondback Energy Inc revealed the company was trading above its Graham Number of $88.21. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 50.05, which was above the industry average of 43.92. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-26.12.

Diamondback Energy Inc scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$26.12
Graham Number $88.21
PEmg 50.05
Current Ratio 1.10
PB Ratio 1.62
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $795,689,000
Total Current Liabilities $721,787,000
Long-Term Debt $2,332,359,000
Total Assets $9,806,573,000
Intangible Assets $0
Total Liabilities $3,376,776,000
Shares Outstanding (Diluted Average) 98,818,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.46
Dec2017 $4.94
Dec2016 -$2.20
Dec2015 -$8.74
Dec2014 $3.64
Dec2013 $1.29
Dec2012 -$0.99
Dec2011 $0.23

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.11
Dec2017 -$0.12
Dec2016 -$2.23
Dec2015 -$1.80
Dec2014 $1.39
Dec2013 $0.21
Dec2012 -$0.27
Dec2011 $0.08

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Marathon Petroleum Corp Valuation – February 2019 $MPC
Baker Hughes, a GE Co Valuation – February 2019 $BHGE
EOG Resources Inc Valuation – February 2019 $EOG
ConocoPhillips Valuation – February 2019 $COP
Devon Energy Corp Valuation – January 2019 $DVN
Noble Energy Inc Valuation – January 2019 $NBL
ONEOK Inc Valuation – January 2019 $OKE
Marathon Oil Corp Valuation – January 2019 $MRO
HollyFrontier Corp Valuation – January 2019 $HFC
Hess Corp Valuation – January 2019 $HES

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Bank of America Corp Valuation – January 2019 $BAC

Company Profile (excerpt from Reuters): Bank of America Corporation, incorporated on July 31, 1998, is a bank holding company (BHC) and a financial holding company. The Company is a financial institution, serving individual consumers, small- and middle-market businesses, institutional investors, corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. The Company, through its banking and various non-bank subsidiaries, throughout the United States and in international markets, provides a range of banking and non-bank financial services and products through its business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, Global Markets and All Other.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of BAC – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $286,017,419,982 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -6372.73% Fail
5. Moderate PEmg Ratio PEmg < 20 13.42 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.11 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.20
MG Growth Estimate 15.00%
MG Value $84.85
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $31.96
MG Value based on 0% Growth $18.73
Market Implied Growth Rate 2.46%
Current Price $29.58
% of Intrinsic Value 34.86%

Bank of America Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.76 in 2015 to an estimated $2.2 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.46% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Bank of America Corp revealed the company was trading below its Graham Number of $39.29. The company pays a dividend of $0.54 per share, for a yield of 1.8% Its PEmg (price over earnings per share – ModernGraham) was 13.42, which was below the industry average of 14.65, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Bank of America Corp performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Graham Number $39.29
PEmg 13.42
PB Ratio 1.11
Dividend Yield 1.83%
TTM Dividend $0.54
Number of Consecutive Years of Dividend Growth 5

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $229,340,000,000
Total Assets $2,354,507,000,000
Intangible Assets $68,951,000,000
Total Liabilities $2,089,182,000,000
Shares Outstanding (Diluted Average) 9,996,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.73
Dec2018 $2.61
Dec2017 $1.56
Dec2016 $1.49
Dec2015 $1.31
Dec2014 $0.42
Dec2013 $0.90
Dec2012 $0.25
Dec2011 $0.01
Dec2010 -$0.37
Dec2009 -$0.29
Dec2008 $0.54
Dec2007 $3.29
Dec2006 $4.59
Dec2005 $4.04
Dec2004 $3.69
Dec2003 $3.57
Dec2002 $2.96
Dec2001 $2.09
Dec2000 $2.26
Dec1999 $2.24

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.20
Dec2018 $1.79
Dec2017 $1.30
Dec2016 $1.07
Dec2015 $0.76
Dec2014 $0.41
Dec2013 $0.30
Dec2012 $0.01
Dec2011 $0.14
Dec2010 $0.65
Dec2009 $1.59
Dec2008 $2.76
Dec2007 $3.86
Dec2006 $4.02
Dec2005 $3.58
Dec2004 $3.20
Dec2003 $2.85

Recommended Reading:

Other ModernGraham posts about the company

10 Undervalued Stocks for the Enterprising Investor – April 2018
Best Stocks Below Their Graham Number – April 2018
Bank of America Corp Valuation – March 2018 $BAC
Best Stocks Below Their Graham Number – August 2016
Best Stocks to Invest In: the Bank Industry – August 2016

Other ModernGraham posts about related companies

Fifth Third Bancorp Valuation – January 2019 $FITB
Zions Bancorp Valuation – January 2019 $ZION
Regions Financial Corp Valuation – January 2019 $RF
Huntington Bancshares Inc Valuation – January 2019 $HBAN
PNC Financial Services Group Inc Valuation – January 2019 $PNC
KeyCorp Valuation – January 2019 $KEY
Citigroup Inc Valuation – January 2019 $C
People’s United Financial Inc Valuation – January 2019 $PBCT
JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

SBA Communications Corp Valuation – January 2019 $SBAC

Company Profile (excerpt from Reuters): SBA Communications Corporation, incorporated on December 23, 1996, is an independent owner and operator of wireless communications tower structures, rooftops and other structures that support antennas used for wireless communications. The Company’s operating segments include site leasing and site development. The site leasing business includes segments, domestic site leasing and international site leasing. The Company’s primary business line is its site leasing business. In its site leasing business, the Company leases antenna space to wireless service providers on towers that it owns or operates, and manages rooftop and tower sites for property owners under various contractual arrangements. The Company owns approximately 25,460 towers. The Company also manages or leases approximately 5,500 actual or potential towers. The Company’s other business line is its site development business, through which it assists wireless service providers in developing and maintaining their own wireless service networks. The Company’s principal operations are in the United States and its territories. In addition, it owns and operates towers in Canada, Central America and South America.

Downloadable PDF version of this valuation:

ModernGraham Valuation of SBAC – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,326,242,846 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.23 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -138.56% Fail
6. Moderate PEmg Ratio PEmg < 20 895.24 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -6.04 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.23 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 156.23 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.18
MG Growth Estimate 15.00%
MG Value $7.03
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $2.65
MG Value based on 0% Growth $1.55
Market Implied Growth Rate 443.37%
Current Price $163.53
% of Intrinsic Value 2325.29%

SBA Communications Corporation does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $-0.75 in 2014 to an estimated $0.18 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 443.37% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into SBA Communications Corporation revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 895.24, which was above the industry average of 25.67. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-86.39.

SBA Communications Corporation scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$86.39
Graham Number $0.00
PEmg 895.24
Current Ratio 1.23
PB Ratio -6.04
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $327,663,000
Total Current Liabilities $265,512,000
Long-Term Debt $9,710,145,000
Total Assets $7,213,823,000
Intangible Assets $3,387,955,000
Total Liabilities $10,358,906,000
Shares Outstanding (Diluted Average) 116,114,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.08
Dec2017 $0.86
Dec2016 $0.61
Dec2015 -$1.37
Dec2014 -$0.19
Dec2013 -$0.44
Dec2012 -$1.51
Dec2011 -$1.14
Dec2010 -$1.68
Dec2009 -$1.20
Dec2008 -$0.61
Dec2007 -$0.74
Dec2006 -$1.36
Dec2005 -$1.28
Dec2004 -$2.52
Dec2003 -$3.36
Dec2002 -$5.29
Dec2001 -$2.99
Dec2000 -$0.70
Dec1999 -$1.77
Dec1998 -$2.64

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.18
Dec2017 $0.12
Dec2016 -$0.36
Dec2015 -$0.87
Dec2014 -$0.75
Dec2013 -$1.08
Dec2012 -$1.34
Dec2011 -$1.20
Dec2010 -$1.19
Dec2009 -$0.98
Dec2008 -$1.01
Dec2007 -$1.43
Dec2006 -$2.10
Dec2005 -$2.68
Dec2004 -$3.24
Dec2003 -$3.34
Dec2002 -$3.11

Recommended Reading:

Other ModernGraham posts about the company

SBA Communications Corp Valuation – Initial Coverage $SBAC

Other ModernGraham posts about related companies

Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
Lumentum Holdings Inc Valuation – October 2018 $LITE
Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $TSE:SW
Frontier Communications Corp Valuation – August 2018 $FTR
Consolidated Communications Holdings Inc Valuation – August 2018 $CNSL
Comtech Telecommunications Corp Valuation – August 2018 $CMTL
Shaw Communications Inc Valuation – July 2018 $TSE:SJR.B
ARRIS International PLC Valuation – July 2018 $ARRS

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Bank of America Corp Valuation – March 2018 $BAC

Company Profile (excerpt from Reuters): Bank of America Corporation, incorporated on July 31, 1998, is a bank holding company (BHC) and a financial holding company. The Company is a financial institution, serving individual consumers, small- and middle-market businesses, institutional investors, corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. The Company, through its banking and various non-bank subsidiaries, throughout the United States and in international markets, provides a range of banking and non-bank financial services and products through its business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, Global Markets and All Other.

BAC Chart

BAC data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of BAC – March 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $301,062,014,163 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -938.46% Fail
5. Moderate PEmg Ratio PEmg < 20 17.12 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.17 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.72
MG Growth Estimate 15.00%
MG Value $66.09
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $24.89
MG Value based on 0% Growth $14.59
Market Implied Growth Rate 4.31%
Current Price $29.39
% of Intrinsic Value 44.47%

Bank of America Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.41 in 2014 to an estimated $1.72 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 4.31% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Bank of America Corp revealed the company was trading below its Graham Number of $35.85. The company pays a dividend of $0.39 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 17.12, which was below the industry average of 24.17, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Bank of America Corp performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Graham Number $35.85
PEmg 17.12
PB Ratio 1.17
Dividend Yield 1.33%
TTM Dividend $0.39
Number of Consecutive Years of Dividend Growth 4

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Long-Term Debt & Capital Lease Obligation $227,402,000,000
Total Assets $2,281,234,000,000
Intangible Assets $71,253,000,000
Total Liabilities $2,014,088,000,000
Shares Outstanding (Diluted Average) 10,652,437,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.40
Dec2017 $1.56
Dec2016 $1.49
Dec2015 $1.31
Dec2014 $0.42
Dec2013 $0.90
Dec2012 $0.25
Dec2011 $0.01
Dec2010 -$0.37
Dec2009 -$0.29
Dec2008 $0.54
Dec2007 $3.29
Dec2006 $4.59
Dec2005 $4.04
Dec2004 $3.69
Dec2003 $3.57
Dec2002 $2.96
Dec2001 $2.09
Dec2000 $2.26
Dec1999 $2.24
Dec1998 $1.45

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.72
Dec2017 $1.30
Dec2016 $1.07
Dec2015 $0.76
Dec2014 $0.41
Dec2013 $0.30
Dec2012 $0.01
Dec2011 $0.14
Dec2010 $0.65
Dec2009 $1.59
Dec2008 $2.76
Dec2007 $3.86
Dec2006 $4.02
Dec2005 $3.58
Dec2004 $3.20
Dec2003 $2.85
Dec2002 $2.39

Recommended Reading:

Other ModernGraham posts about the company

5 Best Stocks For Value Investors This Week – 7/16/16
Bank of America Corp Valuation – July 2016 $BAC
58 Companies in the Spotlight This Week – 1/31/15
Bank of America Corporation Annual Valuation – 2015 $BAC
14 Companies in the Spotlight This Week – 1/11/14

Other ModernGraham posts about related companies

Fifth Third Bancorp Valuation – March 2018 $FITB
Regions Financial Corp Valuation – March 2018 $RF
Huntington Bancshares Inc Valuation – March 2018 $HBAN
Zions Bancorp Valuation – March 2018 $ZION
State Street Corp Valuation – March 2018 $STT
PNC Financial Services Group Inc Valuation – March 2018 $PNC
KeyCorp Valuation – March 2018 $KEY
Canadian Western Bank Valuation – March 2018 $TSE-CWB
Simmons First National Corp Valuation – March 2018 $SFNC
Citigroup Inc Valuation – March 2018 $C

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

SBA Communications Corp Valuation – Initial Coverage $SBAC

 

SBAC Chart

SBAC data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of SBAC – March 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,497,954,000 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.93 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -159.15% Fail
6. Moderate PEmg Ratio PEmg < 20 357.50 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -7.51 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.93 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -479.59 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.46
MG Growth Estimate 15.00%
MG Value $17.68
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $6.66
MG Value based on 0% Growth $3.90
Market Implied Growth Rate 174.50%
Current Price $164.21
% of Intrinsic Value 928.56%

SBA Communications Corporation does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $-0.75 in 2014 to an estimated $0.46 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 174.5% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into SBA Communications Corporation revealed the company was trading above its Graham Number of $0. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 357.5, which was above the industry average of 37.61. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-81.24.

SBA Communications Corporation scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$81.24
Graham Number $0.00
PEmg 357.50
Current Ratio 0.93
PB Ratio -7.51
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $259,533,000
Total Current Liabilities $278,905,000
Long-Term Debt $9,290,686,000
Total Assets $7,320,205,000
Intangible Assets $3,598,131,000
Total Liabilities $9,919,319,000
Shares Outstanding (Diluted Average) 118,907,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.91
Dec2017 $0.86
Dec2016 $0.61
Dec2015 -$1.37
Dec2014 -$0.19
Dec2013 -$0.44
Dec2012 -$1.51
Dec2011 -$1.14
Dec2010 -$1.68
Dec2009 -$1.20
Dec2008 -$0.61
Dec2007 -$0.74
Dec2006 -$1.36
Dec2005 -$1.28
Dec2004 -$2.52
Dec2003 -$3.36
Dec2002 -$5.29
Dec2001 -$2.99
Dec2000 -$0.70
Dec1999 -$1.77
Dec1998 -$2.64

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.46
Dec2017 $0.12
Dec2016 -$0.36
Dec2015 -$0.87
Dec2014 -$0.75
Dec2013 -$1.08
Dec2012 -$1.34
Dec2011 -$1.20
Dec2010 -$1.19
Dec2009 -$0.98
Dec2008 -$1.01
Dec2007 -$1.43
Dec2006 -$2.10
Dec2005 -$2.68
Dec2004 -$3.24
Dec2003 -$3.34
Dec2002 -$3.11

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Harris Corporation Valuation – February 2018 $HRS
Verizon Communications Inc Valuation – February 2018 $VZ
Mitel Networks Corp Valuation – Initial Coverage $TSE:MNW
ATN International Inc Valuation – Initial Coverage $ATNI
CenturyLink Inc Valuation – July 2017 $CTL
Telephone & Data Systems Inc Valuation – Initial Coverage $TDS
Lumos Networks Corp Valuation – Initial Coverage $LMOS
Lumentum Holdings Inc Valuation – Initial Coverage $LITE
Windstream Holdings Inc Valuation – March 2017 $WIN
Sierra Wireless Inc Valuation – Initial Coverage $TSE:SW

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Bank of America Corp Valuation – July 2016 $BAC

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – June 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Bank of America Corp (BAC) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Bank of America Corporation is a bank holding and financial holding company. The Company is a financial institution, serving individual consumers, small- and middle-market businesses, institutional investors, corporations and governments with various banking, investing, asset management and other financial and risk management products and services. Its segments include Consumer Banking, which provides credit, banking and investment products and services to consumers and small businesses; Global Wealth & Investment Management, which offers solutions, such as investment management, brokerage, banking and retirement products; Global Banking, which provides lending-related products and services, integrated working capital management and treasury solutions; Global Markets, which offers sales and trading services; Legacy Assets & Servicing, which provides mortgage servicing activities, and All Other, which consists of asset and liability management activities, equity investments and others.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of BAC – July 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $141,503,254,331 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -22.19% Fail
5. Moderate PEmg Ratio PEmg < 20 14.53 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.57 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

BAC value chart July 2016

EPSmg $0.92
MG Growth Estimate 15.00%
MG Value $35.60
Opinion Undervalued
MG Grade C+
MG Value based on 3% Growth $13.41
MG Value based on 0% Growth $7.86
Market Implied Growth Rate 3.02%
Current Price $13.44
% of Intrinsic Value 37.75%

Bank of America Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.01 in 2012 to an estimated $0.92 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.02% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

Bank of America Corp receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

BAC charts July 2016

Graham Number $23.92
PEmg 14.53
PB Ratio 0.57
Dividend Yield 1.49%
TTM Dividend $0.20
Number of Consecutive Years of Dividend Growth 3

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2016
Long-Term Debt $232,849,000,000
Total Assets $2,185,498,000,000
Intangible Assets $75,970,000,000
Total Liabilities $1,922,722,000,000
Shares Outstanding (Diluted Average) 11,100,067,000

Earnings Per Share History

Next Fiscal Year Estimate $1.10
Dec2015 $1.31
Dec2014 $0.36
Dec2013 $0.90
Dec2012 $0.25
Dec2011 $0.01
Dec2010 -$0.37
Dec2009 -$0.29
Dec2008 $0.55
Dec2007 $3.30
Dec2006 $4.59
Dec2005 $4.04
Dec2004 $3.69
Dec2003 $3.57
Dec2002 $2.96
Dec2001 $2.09
Dec2000 $2.26
Dec1999 $2.24
Dec1998 $1.45
Dec1997 $2.09
Dec1996 $1.96

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $0.92
Dec2015 $0.75
Dec2014 $0.39
Dec2013 $0.30
Dec2012 $0.01
Dec2011 $0.14
Dec2010 $0.66
Dec2009 $1.59
Dec2008 $2.77
Dec2007 $3.86
Dec2006 $4.02
Dec2005 $3.58
Dec2004 $3.20
Dec2003 $2.85
Dec2002 $2.39
Dec2001 $2.08
Dec2000 $2.05

Recommended Reading:

Other ModernGraham posts about the company

58 Companies in the Spotlight This Week – 1/31/15
Bank of America Corporation Annual Valuation – 2015 $BAC
14 Companies in the Spotlight This Week – 1/11/14
ModernGraham Valuation: Bank of America Corp (BAC)

Other ModernGraham posts about related companies

Fifth Third Bancorp Valuation – July 2016 $FITB
Zions Bancorp Valuation – June 2016 $ZION
Regions Financial Corp – June 2016 $RF
Wells Fargo & Co Valuation – June 2016 $WFC
Huntington Bancshares Inc Valuation – June 2016 $HBAN
State Street Corp Valuation – June 2016 $STT
KeyCorp Valuation – June 2016 $KEY
PNC Financial Services Group Inc Valuation – June 2016 $PNC
People’s United Financial Inc Valuation – June 2016 $PBCT
BB&T Corporation Valuation – May 2016 $BBT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

ModernGraham Announcements, News, and Feedback Survey

image (8)

Introducing Amy Hunt, Social Media Consultant

Amy (2)

I am excited to announce that ModernGraham has hired Amy Hunt as a Social Media Consultant.  Amy will be leading all social media campaigns for the site, and providing solid input regarding how to improve the site’s social media marketing efforts.  I am very hopeful that this will allow me to spend more time on improving features, adding premium content, and increasing the number of companies covered by ModernGraham.  In addition, this should result in an overall increase in the level of engagement between you, our valued readers, and me.  If you’re not already following ModernGraham on social media, you can do so on StockTwitsTwitter, Facebook, Pinterest, or Instagram.

After earning her Bachelor’s degree from Michigan State University with a major in Family Community Services, Amy Hunt worked with The Salvation Army, helping families plan for their financial futures. Her life adventure led her to serve overseas, as a teacher in South Korea. Her experiences give her unique insight into diverse family needs. She is specially equipped to help families find the exact right home, whether buying or selling. Her investment in the lives of others sets her apart from other realtors and makes her a joy to work with. In her free-time, Amy builds legos with her husband, Ian, and spends time with her cat, Gatsby.

Premium Content Changes

In the near future, ModernGraham will be transitioning all newly published individual company valuations to premium content.  This means that you will soon need to be logged in as a premium member in order to access individual valuations.  This is a necessary step as at this point in the site’s history, it has been a one-man show which has become more and more work.  In order to continue to grow the site and provide solid content, it must be monetized further.  By having more premium members, I will be able to expand the number of companies covered, so be sure to help spread the word about ModernGraham if you enjoy the valuations.

The good news is that a premium membership only costs $4.99/month, and I have no intention of increasing that price point for the foreseeable future.  With a premium membership, you will have access to all individual company valuations, and the popular ModernGraham Stocks & Screens monthly report.

Call for Feedback

It is always important to have feedback from our readers regarding how we can improve the site.  For that reason, please take a moment to complete the following short survey.
Create your own user feedback survey

Bank of America Corporation Annual Valuation – 2015 $BAC

bank-of-americaIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Bank of America Corporation (BAC) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Bank of America Corporation (Bank of America) is a bank holding company and a financial holding company. The Company is a financial institution, serving individual consumers, small and middle market businesses, institutional investors, large corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. Through its banking and various nonbanking subsidiaries throughout the United States and in international markets, Bank of America provides a range of banking and nonbanking financial services and products through five business segments: Consumer & Business Banking (CBB), Consumer Real Estate Services (CRES), Global Wealth & Investment Management (GWIM), Global Banking and Global Markets and remaining operations are included in All Others. The Company’s franchise network includes approximately 5,100 banking centers, 16,300 ATMs, nationwide call centers, and online and mobile platforms.

Defensive Investor – must pass all 6 of the following tests: Score = 3/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 1/3

  1. Earnings Stability – positive earnings per share for at least 5 years – FAIL
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – FAIL

Valuation Summary

Key Data:

Recent Price $15.73
MG Value $0.00
MG Opinion Overvalued
Value Based on 3% Growth $5.61
Value Based on 0% Growth $3.29
Market Implied Growth Rate 16.09%
PEmg 40.68
PB Ratio 0.68

Balance Sheet – December 2014

Total Debt $243,139,000,000
Total Assets $2,104,530,000,000
Intangible Assets $77,919,000,000
Total Liabilities $1,861,060,000,000
Outstanding Shares 10,574,600,000

Earnings Per Share

2014 $0.36
2013 $0.90
2012 $0.25
2011 $0.01
2010 -$0.37
2009 -$0.29
2008 $0.55
2007 $3.30
2006 $4.59
2005 $4.04
2004 $3.69

Earnings Per Share – ModernGraham 

2014 $0.39
2013 $0.30
2012 $0.01
2011 $0.14
2010 $0.66
2009 $1.59

Dividend History

Conclusion:

Bank of America Corporation qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the lack of earnings stability or growth over the last ten years and the high PEmg ratio, while the Enterprising Investor is concerned by the lack of earnings stability or growth over the last five years.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears overvalued after seeing its EPSmg (normalized earnings) drop from $0.66 in 2010 to an estimated $0.39 for 2014.  This level of demonstrated growth does not support the market’s implied estimate of 16.09% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value below the market price.

Be sure to check out previous ModernGraham valuations of Bank of America Corporation (BAC) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Bank of America Corporation (BAC)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Bank of America Corporation (BAC) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Most Popular Posts of the Last Six Months – Throwback Thursday

image (11)image (11)For Throwback Thursday this month, I thought it would be fun to put together a list of the most popular posts on ModernGraham from the last six months, and include some excerpts.  Without further ado, here they are!

1.  5 Undervalued Companies for the Defensive Investor – January 2014

This post screened the ModernGraham valuation database for the 5 most undervalued companies suitable for Defensive Investors, and the result was INTC, DE, AFL, JPM, and WFC.  Since then, INTC is up 5.9%, DE is up 3.93%, AFL is down 1.63%, JPM is down 3.36%, and WFC is up 7.86%.

2.  5 Undervalued Companies for the Enterprising Investor – February 2014

This one screened the database for the 5 most undervalued companies suitable for Enterprising Investors, with the result of AAPL, BBBY, COF, F, and GCI.  Since then, AAPL is up 11.37%, BBBY is down 6.02%, COF is up 5.94%, F is up 5.5%, and GCI is down 2.06%.

3.  5 Low PEmg Companies for the Enterprising Investor – February 2014

The screen in this post was for the 5 Lowest PEmg ratios among the companies suitable for Enterprising Investors, and it turned up COF, COH, F, GCI, and UNM.  Since then, COF is up 5.58%, COH is down 15.12%, F is up 3.38%, GCI is down 5.83%, and UNM is down 3.29%.

4.  Apple Inc. December 2013 Quarterly Valuation

Apple was found to be suitable for Enterprising Investors and significantly undervalued.  Since the date of the post, the company has gained 7.04% in share price and returned an additional 1.2% in dividends.

5.  5 Low PEmg Companies for the Defensive Investor – February 2014

From this screen, we found the 5 lowest PEmg ratios among companies suitable for Defensive Investors.  The results were AFL, CVX, ESV, INTC, XOM.  Since then, AFL is down 1.19%, CVX is up 8.34%, ESV is down 2.31%, INTC is up 5.9%, and XOM is up 6.98%.

Other Popular Content

 

Throwback Thursday – One Share Challenge

image (11)While popular culture often portrays the stock market as filled with extremely wealthy people who have millions to throw around, the reality is that anyone can make money in the stock market. For this week’s Throwback Thursday, I thought I’d take a look at what just ONE little share could have done for you over the past 20 years.

This post was inspired by my grandparents who bought me a single share of The Walt Disney Company in the early 1990s as a present. I think they thought they could inspire a life-long love of investing by showing me that there were other ways to be engaged in things that I already liked. I mean, why go to Disney World when you can OWN Disney? Of course, in all honestly, I just really liked the fact that the stock certificate had all my favorite characters printed on it. Regardless of why the stock intrigued me at the time, my one share did get me interested in stock ownership and I can’t thank my grandparents enough for that.

Beyond the emotional attachments to my share, I wanted to know how good of an investment it was. I decided to analyze the stock on the basis of long term investment, short term investment, dividend payout, and the cost of buying and selling one share.

DIS Chart

Long term, this stock has done extremely well. Over a 20 year period Disney stock rose from $14.50 per share in April 1994 to $78.23 in April 2014. This is a growth rate of 440%, with much of that growth occurring in the last 10 years. While multiple shares certainly would have yielded more, my $68.73 gain is much more than $14.50 would be today if it had been sitting for 20 years in a bank.

Short term is tricky and it makes me glad that I am a value investor. Throughout this time period The Walt Disney Company had significant gains as well as losses. The largest gain was from 2009-10 when shares went from $19.74 to $36.32, a gain of 84%. However, preceding this gain, was a loss of 56% when shares went from $41.63 in 2000 to $18.16 in 2003. As we have been discussing in the MG Book Club, emotional selling is something that you want to avoid. By holding onto my share during this time, I have more than made up for this loss.

DIS Dividend Chart

From 1994-2014, dividends totaled $7.29, which is just shy of half the purchase price. This makes the one share an even better value and is a great illustration of why the Modern Graham method includes dividends in our analysis.

Shares in The Walt Disney Company can be directly purchased through The Walt Disney Investment Plan for as little as $50 per month. In addition, there are plenty of other companies that also allow you to buy and sell directly from them at a low transaction cost.

Overall, this one share has been a good investment on the basis of stock gain and dividend return. While one share certainly would not have yielded the gain of 10, which earned $63.73 after only 13 months, for someone with limited means investing in one share is always going to be better than not investing at all. I do need to point out though, that as much as I am pleased with how this stock has done in the past, Modern Graham currently rates it as speculative. I’d recommend if you are considering a one share purchase of your own to check out ModernGraham’s Valuation of Intel Corporation (INTC), Wells Fargo & Co. (WFC), or Deere & CO. (DE).

Back To Top