DISH Network Corp Valuation – February 2019 $DISH

Company Profile (excerpt from Reuters): DISH Network Corporation, incorporated on April 26, 1995, is a holding company. The Company operates through two segments: Pay-TV and Broadband, and Wireless. The Company offers pay-TV services under the DISH brand and the Sling brand (collectively Pay-TV services).

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of DISH – 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 $14,577,441,883 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.62 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 44.08% Pass
6. Moderate PEmg Ratio PEmg < 20 10.25 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.99 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 0.62 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -7.50 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.04
MG Growth Estimate 7.48%
MG Value $71.35
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $44.11
MG Value based on 0% Growth $25.86
Market Implied Growth Rate 0.87%
Current Price $31.17
% of Intrinsic Value 43.68%

DISH Network Corp 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, poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, 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 Undervalued after growing its EPSmg (normalized earnings) from $2.03 in 2014 to an estimated $3.04 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.87% 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 above the price.

At the time of valuation, further research into DISH Network Corp revealed the company was trading above its Graham Number of $31.04. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 10.25, which was below the industry average of 92.4, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-35.85.

DISH Network Corp receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$35.85
Graham Number $31.04
PEmg 10.25
Current Ratio 0.62
PB Ratio 1.99
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

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Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $3,038,909,000
Total Current Liabilities $4,877,597,000
Long-Term Debt $13,790,114,000
Total Assets $30,137,410,000
Intangible Assets $24,487,077,000
Total Liabilities $21,894,372,000
Shares Outstanding (Diluted Average) 525,995,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.88
Dec2017 $4.07
Dec2016 $3.15
Dec2015 $1.73
Dec2014 $2.04
Dec2013 $1.76
Dec2012 $1.41
Dec2011 $3.39
Dec2010 $2.20
Dec2009 $1.42
Dec2008 $1.98
Dec2007 $1.68
Dec2006 $1.37
Dec2005 $3.22
Dec2004 $0.46
Dec2003 $0.46
Dec2002 -$0.86
Dec2001 -$0.45
Dec2000 -$1.38
Dec1999 -$1.92
Dec1998 -$0.82

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.04
Dec2017 $2.93
Dec2016 $2.25
Dec2015 $1.89
Dec2014 $2.03
Dec2013 $2.03
Dec2012 $2.14
Dec2011 $2.38
Dec2010 $1.82
Dec2009 $1.73
Dec2008 $1.84
Dec2007 $1.66
Dec2006 $1.41
Dec2005 $1.14
Dec2004 -$0.05
Dec2003 -$0.48
Dec2002 -$0.99

Recommended Reading:

Other ModernGraham posts about the company

DISH Network Corp Valuation – Initial Coverage $DISH

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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

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.

DISH Network Corp Valuation – Initial Coverage $DISH

Company Profile (excerpt from Reuters): DISH Network Corporation, incorporated on April 26, 1995, is a holding company. The Company operates through two segments: Pay-TV and Broadband, and Wireless. The Company offers pay-TV services under the DISH brand and the Sling brand (collectively Pay-TV services).

DISH Chart

DISH data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of DISH – April 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 $17,970,869,211 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.68 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 30.67% Fail
6. Moderate PEmg Ratio PEmg < 20 14.11 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.92 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 0.68 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -9.81 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.73
MG Growth Estimate 5.16%
MG Value $51.37
Opinion Undervalued
MG Grade C-
MG Value based on 3% Growth $39.57
MG Value based on 0% Growth $23.19
Market Implied Growth Rate 2.81%
Current Price $38.51
% of Intrinsic Value 74.97%

DISH Network Corp 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 growth over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, 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 Undervalued after growing its EPSmg (normalized earnings) from $2.03 in 2014 to an estimated $2.73 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.81% 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 above the price.

At the time of valuation, further research into DISH Network Corp revealed the company was trading above its Graham Number of $25.48. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 14.11, which was below the industry average of 41.47, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-37.21.

DISH Network Corp receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$37.21
Graham Number $25.48
PEmg 14.11
Current Ratio 0.68
PB Ratio 2.92
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 $3,285,023,000
Total Current Liabilities $4,828,004,000
Long-Term Debt $15,134,441,000
Total Assets $29,773,766,000
Intangible Assets $23,725,789,000
Total Liabilities $22,836,352,000
Shares Outstanding (Diluted Average) 525,467,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.94
Dec2017 $4.07
Dec2016 $3.15
Dec2015 $1.73
Dec2014 $2.04
Dec2013 $1.76
Dec2012 $1.41
Dec2011 $3.39
Dec2010 $2.20
Dec2009 $1.42
Dec2008 $1.98
Dec2007 $1.68
Dec2006 $1.37
Dec2005 $3.22
Dec2004 $0.46
Dec2003 $0.46
Dec2002 -$0.86
Dec2001 -$0.45
Dec2000 -$1.38
Dec1999 -$1.92
Dec1998 -$0.82

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.73
Dec2017 $2.93
Dec2016 $2.25
Dec2015 $1.89
Dec2014 $2.03
Dec2013 $2.03
Dec2012 $2.14
Dec2011 $2.38
Dec2010 $1.82
Dec2009 $1.73
Dec2008 $1.84
Dec2007 $1.66
Dec2006 $1.41
Dec2005 $1.14
Dec2004 -$0.05
Dec2003 -$0.48
Dec2002 -$0.99

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

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ATN International Inc Valuation – Initial Coverage $ATNI
CenturyLink Inc Valuation – July 2017 $CTL
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Lumos Networks Corp Valuation – Initial Coverage $LMOS

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.

CenturyLink Inc Valuation – April 2019 #CTL

Company Profile (excerpt from Reuters): CenturyLink, Inc., incorporated on May 7, 1968, is an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. The Company’s segments include Enterprise and Consumer . Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CTL – April 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 $13,378,511,740 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.69 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -70.46% Fail
6. Moderate PEmg Ratio PEmg < 20 20.27 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.67 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 0.69 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -20.69 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.61
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $8.85
MG Value based on 0% Growth $5.19
Market Implied Growth Rate 5.88%
Current Price $12.37
% of Intrinsic Value N/A

Centurylink 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 or growth over the last ten years, 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 or growth over the last five years. 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 seeing its EPSmg (normalized earnings) decline from $1.05 in 2015 to an estimated $0.61 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.88% 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 Centurylink Inc revealed the company was trading below its Graham Number of $20.62. The company pays a dividend of $2.16 per share, for a yield of 17.5%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 20.26, which was below the industry average of 97.99, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-43.67.

Centurylink Inc receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$43.67
Graham Number $20.62
PEmg 20.26
Current Ratio 0.69
PB Ratio 0.67
Current Dividend $2.16
Dividend Yield 17.46%
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 12/1/2018
Total Current Assets $3,820,000,000
Total Current Liabilities $5,531,000,000
Long-Term Debt $35,409,000,000
Total Assets $70,256,000,000
Intangible Assets $38,810,000,000
Total Liabilities $50,428,000,000
Shares Outstanding (Diluted Average) 1,067,234,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.03
Dec2018 -$1.63
Dec2017 $2.21
Dec2016 $1.16
Dec2015 $1.58
Dec2014 $1.36
Dec2013 -$0.40
Dec2012 $1.25
Dec2011 $1.07
Dec2010 $3.13
Dec2009 $3.23
Dec2008 $3.52
Dec2007 $3.72
Dec2006 $3.07
Dec2005 $2.49
Dec2004 $2.41
Dec2003 $2.35
Dec2002 $5.61
Dec2001 $1.05
Dec2000 $0.90
Dec1999 $1.70

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.61
Dec2018 $0.58
Dec2017 $1.52
Dec2016 $1.11
Dec2015 $1.05
Dec2014 $0.95
Dec2013 $1.05
Dec2012 $1.99
Dec2011 $2.55
Dec2010 $3.31
Dec2009 $3.33
Dec2008 $3.27
Dec2007 $3.03
Dec2006 $2.86
Dec2005 $2.76
Dec2004 $2.75
Dec2003 $2.72

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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.

American Tower Corp Valuation – March 2019 #AMT

Company Profile (excerpt from Reuters): American Tower Corporation (ATC), incorporated on September 24, 1996, is a holding company. The Company operates as a real estate investment trust (REIT), which owns, operates and develops multitenant communications real estate. Its segments include U.S. property; Asia property; Europe, Middle East and Africa (EMEA) property; Latin America property, and Services. Its primary business is property operations, which include the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities, and tenants in various other industries. Its U.S. property segment includes operations in the United States. Its Asia property segment includes operations in India. The EMEA property segment includes operations in Germany, Ghana, Nigeria, South Africa and Uganda. The Latin America property segment includes operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Its services segment includes tower-related services in the United States, including site acquisition, zoning and permitting and structural analysis, which primarily supports its site leasing business, including the addition of tenants and equipment on its sites.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of AMT – March 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 $83,140,713,988 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.51 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
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 149.29% Pass
6. Moderate PEmg Ratio PEmg < 20 68.93 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 14.20 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 0.51 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -7.99 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.73
MG Growth Estimate 11.31%
MG Value $85.09
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $39.64
MG Value based on 0% Growth $23.24
Market Implied Growth Rate 30.22%
Current Price $188.48
% of Intrinsic Value 221.51%

American Tower Corp 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, 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. 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 $1.56 in 2015 to an estimated $2.73 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 30.22% 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 American Tower Corp revealed the company was trading above its Graham Number of $30.04. The company pays a dividend of $3.15 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 68.94, which was below the industry average of 93.05, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-55.63.

American Tower Corp scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$55.63
Graham Number $30.04
PEmg 68.94
Current Ratio 0.51
PB Ratio 14.20
Current Dividend $3.15
Dividend Yield 1.67%
Number of Consecutive Years of Dividend Growth 7

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
Total Current Assets $2,385,100,000
Total Current Liabilities $4,689,900,000
Long-Term Debt $18,405,100,000
Total Assets $33,010,400,000
Intangible Assets $16,676,200,000
Total Liabilities $27,110,800,000
Shares Outstanding (Diluted Average) 444,436,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.31
Dec2018 $2.77
Dec2017 $2.67
Dec2016 $1.98
Dec2015 $1.41
Dec2014 $2.00
Dec2013 $1.38
Dec2012 $1.60
Dec2011 $0.99
Dec2010 $0.92
Dec2009 $0.61
Dec2008 $0.84
Dec2007 $0.13
Dec2006 $0.06
Dec2005 -$0.60
Dec2004 -$1.10
Dec2003 -$1.56
Dec2002 -$5.95
Dec2001 -$2.35
Dec2000 -$1.15
Dec1999 -$0.34

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.73
Dec2018 $2.35
Dec2017 $2.06
Dec2016 $1.73
Dec2015 $1.56
Dec2014 $1.55
Dec2013 $1.25
Dec2012 $1.12
Dec2011 $0.82
Dec2010 $0.66
Dec2009 $0.42
Dec2008 $0.17
Dec2007 -$0.31
Dec2006 -$0.97
Dec2005 -$1.76
Dec2004 -$2.36
Dec2003 -$2.75

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Harris Corp Valuation – December 2018 $HRS
Verizon Communications Inc Valuation – November 2018 $VZ
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Windstream Holdings Inc Valuation – September 2018 $WIN
Sierra Wireless Inc Valuation – September 2018 $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.

General Mills Inc Valuation – February 2019 $GIS

Company Profile (excerpt from Reuters): General Mills, Inc., incorporated on June 20, 1928, is a manufacturer and marketer of branded consumer foods and pet food products sold through retail stores. The Company is a supplier of branded and unbranded consumer food products to the North American foodservice and commercial baking industries. It also provides pet food products through its subsidiary Blue Buffalo Pet Products Inc. The Company has four segments: U.S. Retail, International, Pet operating, and Convenience Stores and Foodservice. The Company offers a range of food products with a focus on categories, including ready-to-eat cereal; convenient meals, including meal kits, ethnic meals, pizza, soup, side dish mixes, frozen breakfast and frozen entrees; snacks, including grain, fruit and savory snacks, nutrition bars and frozen hot snacks; yogurt, and super-premium ice cream. The Company’s other product categories include baking mixes and ingredients, and refrigerated and frozen dough. The Company’s products are marketed under various brands, which include Annie’s, Betty Crocker, Bisquick, Bugles, Cascadian Farm, Cheerios, Chex, Cinnamon Toast Crunch, Cocoa Puffs, Cookie Crisp, Fiber One, Food Should Taste Good, Fruit by the Foot, Fruit Gushers, Fruit Roll-Ups, Gardetto’s, Go-Gurt, Gold Medal, Golden Grahams, Haagen-Dazs, Helpers, Jeno’s, Jus-Rol, Kitano, Kix, La Saltena, Larabar, Latina, Liberte, Lucky Charms, Muir Glen, Nature Valley, Oatmeal Crisp, Old El Paso, Pillsbury, Progresso, Raisin Nut Bran, Total, Totino’s, Trix, Wanchai Ferry, Wheaties, Yoki and Yoplait. It also provides food products for dogs and cats through its subsidiary.

Downloadable PDF version of this valuation:

ModernGraham Valuation of GIS – 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 $27,927,852,744 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.58 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 24.28% Fail
6. Moderate PEmg Ratio PEmg < 20 16.09 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.05 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 0.58 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -3.98 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.91
MG Growth Estimate 2.72%
MG Value $40.53
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $42.18
MG Value based on 0% Growth $24.72
Market Implied Growth Rate 3.79%
Current Price $46.80
% of Intrinsic Value 115.48%

General Mills, 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 growth over the last ten years, and the high PB ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. 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 $2.46 in 2015 to an estimated $2.91 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 3.79% 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 General Mills, Inc. revealed the company was trading above its Graham Number of $24.85. The company pays a dividend of $1.96 per share, for a yield of 4.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 16.09, which was below the industry average of 26.71, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-31.71.

General Mills, Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$31.71
Graham Number $24.85
PEmg 16.09
Current Ratio 0.58
PB Ratio 4.05
Current Dividend $1.96
Dividend Yield 4.19%
Number of Consecutive Years of Dividend Growth 14

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 11/1/2018
Total Current Assets $4,233,800,000
Total Current Liabilities $7,298,100,000
Long-Term Debt $12,208,600,000
Total Assets $30,384,000,000
Intangible Assets $21,221,000,000
Total Liabilities $23,404,600,000
Shares Outstanding (Diluted Average) 604,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.65
May2018 $3.64
May2017 $2.77
May2016 $2.77
May2015 $1.97
May2014 $2.83
May2013 $2.79
May2012 $2.35
May2011 $2.70
May2010 $2.24
May2009 $1.90
May2008 $1.86
May2007 $1.59
May2006 $1.45
May2005 $1.54
May2004 $1.30
May2003 $1.22
May2002 $0.67
May2001 $1.14
May2000 $1.00
May1999 $0.85

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.91
May2018 $2.96
May2017 $2.62
May2016 $2.54
May2015 $2.46
May2014 $2.67
May2013 $2.52
May2012 $2.33
May2011 $2.23
May2010 $1.93
May2009 $1.74
May2008 $1.62
May2007 $1.48
May2006 $1.36
May2005 $1.27
May2004 $1.11
May2003 $1.00

Recommended Reading:

Other ModernGraham posts about the company

General Mills Inc Valuation – May 2018 $GIS
General Mills Inc Valuation – January 2017 $GIS
General Mills Inc Valuation – August 2016 $GIS
27 Companies in the Spotlight This Week – 4/4/15
General Mills Inc. Annual Valuation – 2015 $GIS

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Kellogg Co Valuation – January 2019 $K
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Coca-Cola Co Valuation – November 2018 $KO
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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.

Charter Communications Inc Valuation – February 2019 $CHTR

Company Profile (excerpt from Reuters): Charter Communications, Inc., incorporated on July 9, 2003, is a holding company. The Company is a cable operator in the United States and a broadband communications services company. The Company operates in cable services segment. As of December 31, 2016, the Company was engaged in providing video, Internet and voice services to approximately 26.2 million residential and business customers. In addition, it sells video and online advertising inventory to local, regional and national advertising customers and fiber-delivered communications and managed information technology (IT) solutions to enterprise customers. The Company also owns and operates regional sports networks and local sports, news and lifestyle channels and sells security and home management services to the residential marketplace.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CHTR – 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 $78,923,408,111 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.23 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 -562.00% Fail
6. Moderate PEmg Ratio PEmg < 20 30.26 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.82 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 0.23 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -7.43 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 $11.58
MG Growth Estimate 15.00%
MG Value $445.83
Opinion Fairly Valued
MG Grade D+
MG Value based on 3% Growth $167.91
MG Value based on 0% Growth $98.43
Market Implied Growth Rate 10.88%
Current Price $350.44
% of Intrinsic Value 78.60%

Charter Communications 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 or growth 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 Fairly Valued after growing its EPSmg (normalized earnings) from $-2.46 in 2015 to an estimated $11.58 for 2019. This level of demonstrated earnings growth supports the market’s implied estimate of 10.88% 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 within a margin of safety relative to the price.

At the time of valuation, further research into Charter Communications Inc revealed the company was trading above its Graham Number of $124.38. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 30.26, which was below the industry average of 92.4, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-430.86.

Charter Communications Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$430.86
Graham Number $124.38
PEmg 30.26
Current Ratio 0.23
PB Ratio 1.82
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 12/1/2018
Total Current Assets $2,730,000,000
Total Current Liabilities $12,095,000,000
Long-Term Debt $69,537,000,000
Total Assets $146,130,000,000
Intangible Assets $106,914,000,000
Total Liabilities $101,858,000,000
Shares Outstanding (Diluted Average) 230,069,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.27
Dec2018 $5.22
Dec2017 $34.09
Dec2016 $15.94
Dec2015 -$2.68
Dec2014 -$1.88
Dec2013 -$1.83
Dec2012 -$3.37
Dec2011 -$3.75
Dec2010 -$2.31
Dec2009 $0.00
Dec2008 -$7.26
Dec2007 -$4.61
Dec2006 -$4.57
Dec2005 -$3.46
Dec2004 -$16.00
Dec2003 -$0.91
Dec2002 -$9.46
Dec2001 -$4.79
Dec2000 -$4.20
Dec1999 -$2.46

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $11.58
Dec2018 $13.54
Dec2017 $14.71
Dec2016 $3.75
Dec2015 -$2.46
Dec2014 -$2.44
Dec2013 -$2.57
Dec2012 -$3.07
Dec2011 -$3.14
Dec2010 -$3.14
Dec2009 -$3.70
Dec2008 -$6.09
Dec2007 -$5.64
Dec2006 -$6.40
Dec2005 -$7.18
Dec2004 -$8.39
Dec2003 -$4.51

Recommended Reading:

Other ModernGraham posts about the company

Charter Communications Inc Valuation – May 2018 $CHTR
Charter Communications Inc Valuation – Initial Coverage $CHTR

Other ModernGraham posts about related companies

DISH Network Corp Valuation – February 2019 $DISH
AT&T Inc Valuation – January 2019 $T
Juniper Networks Inc Valuation – January 2019 $JNPR
SBA Communications Corp Valuation – January 2019 $SBAC
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

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.

Church & Dwight Co Inc Valuation – February 2019 $CHD

Company Profile (excerpt from Reuters): Church & Dwight Co., Inc., incorporated on December 14, 1925, develops, manufactures and markets a range of household, personal care and specialty products. The Company’s segments include Consumer Domestic, Consumer International and Specialty Products Division (SPD). The Company sells its consumer products under a range of brands through a distribution platform that includes supermarkets, mass merchandisers, wholesale clubs, drugstores, convenience stores, home stores, dollar, pet, and other specialty stores and Websites. The Company also sells specialty products to industrial customers and distributors. The Company’s brands include ARM & HAMMER, which is used in multiple product categories, such as baking soda, cat litter, carpet deodorization and laundry detergent; TROJAN condoms, lubricants and vibrators; OXICLEAN stain removers, cleaning solutions, laundry detergents, dishwashing detergent and bleach alternatives; SPINBRUSH battery-operated and manual toothbrushes; FIRST RESPONSE home pregnancy and ovulation test kits; NAIR depilatories; ORAJEL oral analgesics; XTRA laundry detergent, and BATISTE dry shampoo. It also offers the combination of the L’IL CRITTERS and VITAFUSION brand names for the Company’s gummy dietary supplement business.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CHD – 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 $16,335,096,318 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.81 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 136.02% Pass
6. Moderate PEmg Ratio PEmg < 20 28.46 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.83 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 0.81 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -6.08 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.33
MG Growth Estimate 9.47%
MG Value $63.98
Opinion Fairly Valued
MG Grade D+
MG Value based on 3% Growth $33.80
MG Value based on 0% Growth $19.82
Market Implied Growth Rate 9.98%
Current Price $66.34
% of Intrinsic Value 103.69%

Church & Dwight Co., 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, high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. 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 Fairly Valued after growing its EPSmg (normalized earnings) from $1.43 in 2015 to an estimated $2.33 for 2019. This level of demonstrated earnings growth supports the market’s implied estimate of 9.98% 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 within a margin of safety relative to the price.

At the time of valuation, further research into Church & Dwight Co., Inc. revealed the company was trading above its Graham Number of $23.34. The company pays a dividend of $0.87 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 28.46, which was below the industry average of 50.15, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-10.05.

Church & Dwight Co., Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$10.05
Graham Number $23.34
PEmg 28.46
Current Ratio 0.81
PB Ratio 6.83
Current Dividend $0.87
Dividend Yield 1.31%
Number of Consecutive Years of Dividend Growth 14

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
Total Current Assets $1,078,200,000
Total Current Liabilities $1,326,300,000
Long-Term Debt $1,508,800,000
Total Assets $6,069,200,000
Intangible Assets $4,266,900,000
Total Liabilities $3,615,400,000
Shares Outstanding (Diluted Average) 252,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.43
Dec2018 $2.27
Dec2017 $2.90
Dec2016 $1.75
Dec2015 $1.54
Dec2014 $1.51
Dec2013 $1.40
Dec2012 $1.23
Dec2011 $1.06
Dec2010 $0.94
Dec2009 $0.85
Dec2008 $0.70
Dec2007 $0.62
Dec2006 $0.52
Dec2005 $0.46
Dec2004 $0.34
Dec2003 $0.32
Dec2002 $0.27
Dec2001 $0.19
Dec2000 $0.14
Dec1999 $0.19

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.33
Dec2018 $2.19
Dec2017 $2.04
Dec2016 $1.56
Dec2015 $1.43
Dec2014 $1.32
Dec2013 $1.19
Dec2012 $1.04
Dec2011 $0.91
Dec2010 $0.79
Dec2009 $0.69
Dec2008 $0.58
Dec2007 $0.50
Dec2006 $0.42
Dec2005 $0.36
Dec2004 $0.29
Dec2003 $0.25

Recommended Reading:

Other ModernGraham posts about the company

Church & Dwight Co Inc Valuation – April 2018 $CHD
Church & Dwight Co Inc Valuation – Initial Coverage $CHD

Other ModernGraham posts about related companies

International Flavors & Fragrances Inc Valuation – January 2019 $IFF
Estee Lauder Companies Inc Valuation – December 2018 $EL
Proctor & Gamble Co Valuation – November 2018 $PG
Johnson & Johnson Valuation – November 2018 $JNJ
Inter Parfums Inc Valuation – July 2018 $IPAR
Service Corp International Valuation – July 2018 $SCI
Avon Products Inc Valuation – June 2018 $AVP
Colgate-Palmolive Co Valuation – June 2018 $CL
Coty Inc Valuation – May 2018 $COTY
Church & Dwight Co Inc Valuation – April 2018 $CHD

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.

Whirlpool Corp Valuation – February 2019 $WHR

Company Profile (excerpt from Reuters): Whirlpool Corporation, incorporated on August 10, 1955, is a manufacturer and marketer of home appliances. As of December 31, 2016, the Company manufactured products in 14 countries and markets products throughout the world under brand names, such as Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, Jenn-Air and Indesit. The Company’s segments include North America; Europe, Middle East and Africa (EMEA); Latin America, and Asia. The Company manufactures and markets a line of home appliances and related products. Its principal products are laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers and other small domestic appliances. It also produces hermetic compressors for refrigeration systems.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of WHR – 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 $9,071,438,805 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.82 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -9.60% Fail
6. Moderate PEmg Ratio PEmg < 20 19.89 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.86 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 0.82 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -2.27 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.17
MG Growth Estimate -2.36%
MG Value $27.16
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $104.01
MG Value based on 0% Growth $60.97
Market Implied Growth Rate 5.70%
Current Price $142.70
% of Intrinsic Value 525.45%

Whirlpool 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 high PB ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings stability or growth over the last five years. 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 seeing its EPSmg (normalized earnings) decline from $8.51 in 2015 to an estimated $7.17 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 5.7% 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 Whirlpool Corporation revealed the company was trading above its Graham Number of $107.36. The company pays a dividend of $4.55 per share, for a yield of 3.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 19.89, which was below the industry average of 24.63, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-112.83.

Whirlpool Corporation scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$112.83
Graham Number $107.36
PEmg 19.89
Current Ratio 0.82
PB Ratio 2.86
Current Dividend $4.55
Dividend Yield 3.19%
Number of Consecutive Years of Dividend Growth 8

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
Total Current Assets $7,898,000,000
Total Current Liabilities $9,678,000,000
Long-Term Debt $4,046,000,000
Total Assets $18,347,000,000
Intangible Assets $4,747,000,000
Total Liabilities $15,142,000,000
Shares Outstanding (Diluted Average) 64,200,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $14.31
Dec2018 -$2.72
Dec2017 $4.70
Dec2016 $11.50
Dec2015 $9.83
Dec2014 $8.17
Dec2013 $10.24
Dec2012 $5.06
Dec2011 $4.99
Dec2010 $7.97
Dec2009 $4.34
Dec2008 $5.50
Dec2007 $8.01
Dec2006 $5.67
Dec2005 $6.19
Dec2004 $5.90
Dec2003 $5.91
Dec2002 -$5.79
Dec2001 $0.31
Dec2000 $5.20
Dec1999 $4.56

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.17
Dec2018 $4.50
Dec2017 $8.37
Dec2016 $9.79
Dec2015 $8.51
Dec2014 $7.66
Dec2013 $7.11
Dec2012 $5.56
Dec2011 $5.92
Dec2010 $6.36
Dec2009 $5.68
Dec2008 $6.32
Dec2007 $6.60
Dec2006 $5.12
Dec2005 $4.07
Dec2004 $2.77
Dec2003 $1.49

Recommended Reading:

Other ModernGraham posts about the company

Whirlpool Corporation Valuation – April 2018 $WHR
5 Undervalued Stocks for Value Investors with a High Beta – February 2017
10 Undervalued Companies for the Defensive Investor – February 2017
5 Undervalued Stocks for Value Investors with a High Beta – January 2017
10 Undervalued Companies for the Defensive Investor – January 2017

Other ModernGraham posts about related companies

Whirlpool Corporation Valuation – December 2016 $WHR
Whirlpool Corporation Analysis – 2015 Update $WHR
Whirlpool Corporation Annual Valuation – 2014 $WHR
Whirlpool Corp (WHR) Quarterly Valuation – May 2014

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.

Sierra Wireless Inc Valuation – September 2018 $TSE:SW

Company Profile (excerpt from Reuters): Sierra Wireless, Inc., incorporated on May 31, 1993, is engaged in building the Internet of Things (IoT) with wireless solutions for organizations. The Company’s segments include OEM Solutions, Enterprise Solutions, and Cloud and Connectivity Services. The Company offers a portfolio of second generation (2G), third generation (3G), and fourth generation (4G) cellular embedded wireless modules and gateways, integrated with its secure cloud and connectivity services. The Company offers its products to original equipment manufacturers (OEMs) and enterprises. The markets for its products are North America, Europe and Asia Pacific. Its OEM Solution segment is engaged in cellular embedded wireless modules for IoT connectivity, including an embedded application framework to support customer applications. Its Enterprise Solution segment is engaged in intelligent routers and gateways, including management tools and applications that enable cellular connectivity. Its Cloud and Connectivity Services segment is engaged in a cloud based platform for deploying and managing IoT applications, Smart SIM supported by mobile core networks, and managed wireless broadband services to enable customer IoT deployments.

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-SW – September 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 $687,068,923 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.61 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 -172.13% Fail
6. Moderate PEmg Ratio PEmg < 20 47.31 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.51 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 1.61 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.33 Pass
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 $0.52
MG Growth Estimate 9.51%
MG Value $14.31
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $7.54
MG Value based on 0% Growth $4.42
Market Implied Growth Rate 19.40%
Current Price $24.61
% of Intrinsic Value 171.95%

Sierra Wireless, Inc. (USA) does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg ratio. The Enterprising Investor has concerns regarding 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 $0.32 in 2014 to an estimated $0.52 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 19.4% 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 Sierra Wireless, Inc. (USA) revealed the company was trading above its Graham Number of $21.29. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 47.31, which was above the industry average of 43.01. Finally, the company was trading above its Net Current Asset Value (NCAV) of $2.63.

Sierra Wireless, Inc. (USA) 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) $2.63
Graham Number $21.29
PEmg 47.31
Current Ratio 1.61
PB Ratio 1.51
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 6/1/2018
Total Current Assets $408,261,000
Total Current Liabilities $253,760,000
Long-Term Debt $50,659,000
Total Assets $900,606,000
Intangible Assets $406,206,000
Total Liabilities $313,381,000
Shares Outstanding (Diluted Average) 36,021,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.21
Dec2017 $0.17
Dec2016 $0.64
Dec2015 -$0.11
Dec2014 -$0.61
Dec2013 $1.90
Dec2012 $0.87
Dec2011 -$0.96
Dec2010 -$0.47
Dec2009 -$1.36
Dec2008 $2.47
Dec2007 $1.16
Dec2006 $0.44
Dec2005 -$1.67
Dec2004 $1.17
Dec2003 $0.16
Dec2002 -$3.99
Dec2001 -$2.37
Dec2000 -$0.30
Dec1999 $0.34
Dec1998 $0.15

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.52
Dec2017 $0.25
Dec2016 $0.37
Dec2015 $0.23
Dec2014 $0.32
Dec2013 $0.52
Dec2012 -$0.08
Dec2011 -$0.31
Dec2010 $0.16
Dec2009 $0.38
Dec2008 $1.07
Dec2007 $0.34
Dec2006 -$0.31
Dec2005 -$0.90
Dec2004 -$0.70
Dec2003 -$1.50
Dec2002 -$1.97

Recommended Reading:

Other ModernGraham posts about the company

Sierra Wireless Inc Valuation – Initial Coverage $TSE:SW

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DISH Network Corp Valuation – Initial Coverage $DISH
AT&T Inc Valuation – April 2018 $T

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.

Frontier Communications Corp Valuation – August 2018 $FTR

Company Profile (excerpt from Reuters): Frontier Communications Corporation (Frontier), incorporated on November 12, 1935, is a provider of communications services in the United States. The Company offers a portfolio of communications services for residential and business customers. Its products and services include data and Internet services, video services, voice services, access services and customer premise equipment (CPE). The Company offers a range of broadband services. The principal residential service it provides is broadband Internet service. Its commercial services include Ethernet, Dedicated Internet, Multiprotocol Label Switching (MPLS), Time Division Multiplexing (TDM) data transport services and optical transport services. It also offers wireless broadband services (using unlicensed spectrum) in various markets utilizing networks that it owns or operates. In addition, the Company offers its Frontier Secure suite of products, including computer security, cloud backup and sharing, identity protection and equipment insurance.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of FTR – August 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 $601,000,782 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.47 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -422.72% Fail
6. Moderate PEmg Ratio PEmg < 20 -0.57 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.18 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 0.47 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -9.96 Fail
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg -$9.97
MG Growth Estimate -4.25%
MG Value $0.00
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth -$144.62
MG Value based on 0% Growth -$84.78
Market Implied Growth Rate -4.53%
Current Price $5.68
% of Intrinsic Value N/A

Frontier Communications Corp does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, insufficient earnings stability or growth over the last ten years, 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 or growth over the last five years. 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 seeing its EPSmg (normalized earnings) decline from $2.01 in 2014 to an estimated $-9.97 for 2018. This level of negative earnings does not support a positive valuation.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 Frontier Communications Corp revealed the company was trading above its Graham Number of $0. The company pays a dividend of $3.38 per share, for a yield of 59.4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was -0.57, which was below the industry average of 37.58, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-267.87.

Frontier Communications Corp scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$267.87
Graham Number $0.00
PEmg -0.57
Current Ratio 0.47
PB Ratio 0.18
Current Dividend $3.38
Dividend Yield 59.42%
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 6/1/2018
Total Current Assets $1,428,000,000
Total Current Liabilities $3,056,000,000
Long-Term Debt $16,209,000,000
Total Assets $24,730,000,000
Intangible Assets $8,784,000,000
Total Liabilities $22,329,000,000
Shares Outstanding (Diluted Average) 78,026,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate -$3.19
Dec2017 -$25.99
Dec2016 -$7.61
Dec2015 -$4.41
Dec2014 $1.95
Dec2013 $1.65
Dec2012 $1.95
Dec2011 $2.25
Dec2010 $3.45
Dec2009 $5.70
Dec2008 $8.55
Dec2007 $9.75
Dec2006 $15.90
Dec2005 $9.00
Dec2004 $3.45
Dec2003 $9.60
Dec2002 -$36.45
Dec2001 -$5.70
Dec2000 -$1.65
Dec1999 $8.25
Dec1998 $3.30

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate -$9.97
Dec2017 -$11.20
Dec2016 -$2.97
Dec2015 -$0.21
Dec2014 $2.01
Dec2013 $2.36
Dec2012 $3.27
Dec2011 $4.60
Dec2010 $6.74
Dec2009 $8.85
Dec2008 $10.06
Dec2007 $10.39
Dec2006 $7.24
Dec2005 $0.60
Dec2004 -$4.45
Dec2003 -$7.33
Dec2002 -$12.68

Recommended Reading:

Other ModernGraham posts about the company

Most Overvalued Stocks of the S&P 500 – March 2017
Frontier Communications Corp Valuation – February 2017 $FTR
Frontier Communications Corp Valuation – November 2015 Update $FTR
Frontier Communications Corp Annual Valuation – 2014 $FTR

Other ModernGraham posts about related companies

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
Iridium Communications Inc Valuation – July 2018 $IRDM
CenturyLink Inc Valuation – June 2018 $CTL
American Tower Corp Valuation – June 2018 $AMT
Charter Communications Inc Valuation – May 2018 $CHTR
DISH Network Corp Valuation – Initial Coverage $DISH
AT&T Inc Valuation – April 2018 $T

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.

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