Buy / Hold Stocks

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Nvidia - >>> Exclusive: Behind the plot to break Nvidia’s grip on AI by targeting software


Reuters

by Max A. Cherney

3-25-24


https://finance.yahoo.com/news/exclusive-behind-plot-break-nvidia-110359868.html


SAN FRANCISCO (Reuters) - Nvidia earned its $2.2 trillion market cap by producing artificial-intelligence chips that have become the lifeblood powering the new era of generative AI developers from startups to Microsoft, OpenAI and Google parent Alphabet.

Almost as important to its hardware is the company’s nearly 20 years' worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia's CUDA software platform to build AI and other apps.

Now a coalition of tech companies that includes Qualcomm, Google and Intel plans to loosen Nvidia’s chokehold by going after the chip giant’s secret weapon: the software that keeps developers tied to Nvidia chips. They are part of an expanding group of financiers and companies hacking away at Nvidia's dominance in AI.

"We're actually showing developers how you migrate out from an Nvidia platform," Vinesh Sukumar, Qualcomm's head of AI and machine learning, said in an interview with Reuters.

Starting with a piece of technology developed by Intel called OneAPI, the UXL Foundation, a consortium of tech companies, plans to build a suite of software and tools that will be able to power multiple types of AI accelerator chips, executives involved with the group told Reuters. The open-source project aims to make computer code run on any machine, regardless of what chip and hardware powers it.

"It's about specifically - in the context of machine learning frameworks - how do we create an open ecosystem, and promote productivity and choice in hardware," Google's director and chief technologist of high-performance computing, Bill Hugo, told Reuters in an interview. Google is one of the founding members of UXL and helps determine the technical direction of the project, Hugo said.

UXL's technical steering committee is preparing to nail down technical specifications in the first half of this year. Engineers plan to refine the technical details to a "mature" state by the end of the year, executives said. These executives stressed the need to build a solid foundation to include contributions from multiple companies that can also be deployed on any chip or hardware.

Beyond the initial companies involved, UXL will court cloud-computing companies such as Amazon.com and Microsoft's Azure, as well as additional chipmakers.

Since its launch in September, UXL has already begun to receive technical contributions from third parties that include foundation members and outsiders keen on using the open-source technology, the executives involved said. Intel's OneAPI is already useable, and the second step is to create a standard programming model of computing designed for AI.

UXL plans to put its resources toward addressing the most pressing computing problems dominated by a few chipmakers, such as the latest AI apps and high-performance computing applications. Those early plans feed in to the organization's longer-term goal of winning over a critical mass of developers to its platform.

UXL eventually aims to support Nvidia hardware and code, in the long run.

When asked about the open source and venture-funded software efforts to break Nvidia’s AI dominance, Nvidia executive Ian Buck said in a statement: "The world is getting accelerated. New ideas in accelerated computing are coming from all across the ecosystem, and that will help advance AI and the scope of what accelerated computing can achieve."

NEARLY 100 STARTUPS

The UXL Foundation's plans are one of many efforts to chip away at Nvidia's hold on the software that powers AI. Venture financiers and corporate dollars have poured more than $4 billion into 93 separate efforts, according to custom data compiled by PitchBook at Reuters’ request.

The interest in unseating Nvidia through a potential weakness in software has ramped up in the last year, and startups aiming to poke holes in the company's leadership gobbled up just over $2 billion in 2023 compared with $580 million from a year ago, according to the data from PitchBook.

Success in the shadow of Nvidia's group on AI data crunching is an achievement that few of the startups will be able to achieve. Nvidia's CUDA is a compelling piece of software on paper, as it is full-featured and is consistently growing both from Nvidia's contributions and the developer community.

"But that's not what really matters," said Jay Goldberg, chief executive of D2D Advisory, a finance and strategy consulting firm. "What matters is the fact that people have been using CUDA for 15 years, they built code around it."

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>>> UnitedHealth unit will start processing $14 billion medical claims backlog after hack


Reuters

by Leroy Leo


https://www.msn.com/en-us/money/companies/unitedhealth-unit-will-start-processing-14-billion-medical-claims-backlog-after-hack/ar-BB1kntGE?OCID=ansmsnnews11


(Reuters) - UnitedHealth Group said on Friday its Change Healthcare unit will start to process the medical claims backlog of more than $14 billion as it resumes some software services disrupted by a cyberattack last month.

The company has been scrambling to resume services at the technology unit that was hit by a cyberattack on Feb. 21, disrupting payments to U.S. doctors and healthcare facilities and forcing the U.S. government to launch a probe.

Community health centers that serve more than 30 million poor and uninsured patients have been especially hit.

The company has advanced payments of more than $2.5 billion so far to provide assistance to healthcare providers financially affected by the disruption, an increase from the over $2 billion it had disclosed on Monday. UnitedHealth also extended the repayment period for providers, who will now have 45 business days to return the relief funds.

Change Healthcare is a key player in the U.S. healthcare system that depends heavily on insurance, processing about 50% of medical claims for around 900,000 physicians, 33,000 pharmacies, 5,500 hospitals and 600 laboratories.

The unit was breached by a hacking group called ALPHV, also known as "BlackCat", creating a knock-on effect that the largest U.S. health insurer is expected to take several months from which to fully recover.

The health insurer said its software for preparing medical claims Assurance went online on Monday, while its largest clearinghouse Relay Exchange will resume on the weekend of March 23.

A clearinghouse acts as a middleman between a healthcare provider and a health plan that checks claims to ensure they do not contain errors before forwarding them for payment.

The insurer said it will work with payers to ensure there are a maximum number of available locations for claims and is actively coordinating with other clearinghouses to make sure there are no capacity issues.

UnitedHealth had suspended paperwork required to get approval for insurance coverage for most outpatient services, as well as review of inpatient admissions for government-backed Medicare Advantage plans to help those impacted.

UnitedHealth also expects to engage all those who submitted claims during the week of March 25.

The company's other products that handle eligibility of claims such as Clearance and Coverage Insight as well as pharmacy claims submission software MedRx and Reimbursement Manager are expected to go online next week.

Several more products are likely to go online over the weeks of April 1 and April 8, the company said.

Some products, however, were not listed in Friday's update as it does not yet have clarity of when they will be restored, the company said, adding it will provide updated information as those timelines become clear.

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Resmed - >>> Introducing the AirFit F40: Experience Unprecedented Freedom with the Comfort and Optimized Seal Performance of ResMed’s Smallest Full-Face CPAP Mask


GlobeNewswire

ResMed Inc.

March 6, 2024


https://finance.yahoo.com/news/introducing-airfit-f40-experience-unprecedented-140500242.html


Enhances sleep apnea therapy by combining the ease and comfort of an ultra-compact, under-the-nose full-face design with the effectiveness of a traditional over-the-nose full-face mask.

Featuring the AdaptiSeal™ cushion made of 100% soft silicone to adapt to various facial contours, allowing for a secure and comfortable seal throughout the night.

96% of patients using the AirFit F40 said they have the freedom to sleep in their preferred position and change positions through the night.1


SAN DIEGO, March 06, 2024 (GLOBE NEWSWIRE) -- ResMed (NYSE: RMD, ASX: RMD), a global leader in digital health and cloud-connected medical devices that transform care for people with sleep apnea and other chronic respiratory diseases, today announced the U.S. launch of the AirFit F40, an ultra-compact, full-face mask offering the comfort of smaller masks without sacrificing performance in order to help improve sleep apnea therapy compliance.2

Finding the right mask with the right fit and comfort can be daunting, especially for individuals requiring high-pressure CPAP treatment. The AirFit F40 addresses this problem by providing the necessary pressure support in a more comfortable, lower-profile full-face mask. The mask is ideal for people who sleep on their side, are claustrophobic, and want the stability and seal of a universal fit mask in a minimalist design. In a ResMed clinical study, 88% of patients rated AirFit F40's mask cushion as soft and comfortable and 100% found AirFit F40 easy to use.3

"Most users prefer smaller and more streamlined masks, but traditional under-the-nose full-face masks can be challenging to fit properly, maintain a seal, and handle higher pressures. Our new AirFit F40 addresses this problem by offering the best of both worlds: an ultra-compact full-face mask with the high seal performance of an over-the-nose mask – bridging the gap between compactness and effectiveness in full-face masks,” said Justin Leong, ResMed chief product officer.

A key feature of the AirFit F40 is the AdaptiSeal™ cushion, a 100% soft silicone cushion designed to maintain a facial seal, even when moving around during sleep. Additional features include:

A fully flexible frame that keeps the assembly away from patients’ eyes and ears.

A full-face mask with a quick-release short tube, reducing tube drag and offering a convenient way to detach and reattach the mask to the device during the night.

Headgear without top strap adjustment, which makes for an easier setup and adjustment process.

A new textile material and a dark grey color, offering a more modern look.

AirFit F40 is the latest in ResMed’s family of innovative CPAP masks, connected devices, and digital health technologies for helping millions with sleep apnea, COPD, and other chronic diseases sleep, breathe, and live better.

AirFit F40 masks are available in the U.S., with plans to launch in Canada, followed by EMEA, Latin America, and APAC. For more information, visit ResMed.com/AirFitF40.

About ResMed

At ResMed (NYSE: RMD, ASX: RMD) we pioneer innovative solutions that treat and keep people out of the hospital, empowering them to live healthier, higher-quality lives. Our digital health technologies and cloud-connected medical devices transform care for people with sleep apnea, COPD, and other chronic diseases. Our comprehensive out-of-hospital software platforms support the professionals and caregivers who help people stay healthy in the home or care setting of their choice. By enabling better care, we help improve quality of life, reduce the impact of chronic disease, and lower costs for consumers and healthcare systems in more than 140 countries.

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XOM, NEE, ADM, DE - >>> 4 Magnificent Stocks to Buy That Are Near 52-Week Lows


by Justin Pope

Motley Fool

February 27, 2024


https://finance.yahoo.com/news/4-magnificent-stocks-buy-near-130200860.html


Industrial and energy companies can be challenging to follow because their businesses can have big ups and downs based on the economy, interest rates, or commodity prices.

Sometimes, it's best to buy these companies on weakness when things aren't going well, anticipating that another upswing will eventually come. Importantly, these companies must be financially built for the tough times.

Here are four fantastic industrial and energy stocks with rock-solid fundamentals, all trading near their 52-week lows today.


1. ExxonMobil

Energy giant ExxonMobil (NYSE: XOM) is a fixture in fossil fuels. The company explores for, extracts, refines, and sells oil and gas products. ExxonMobil enjoyed banner years in 2022 and 2023, but the stock is near its 52-week lows due to weakness in commodity prices. The price of oil has retreated from triple-digits to between $70 and $80 per barrel. While refining margins improve when oil prices drop, the exploration business is too big to offset falling oil prices.

The good news is that ExxonMobil is financially sound. The company has $31 billion in cash on its balance sheet against $41 billion in total debt, resulting in just $10 billion net debt. Investors can enjoy a solid 3.6% dividend yield at the current share price, and the company has raised its dividend for 41 consecutive years, showing it's endured multiple industry ups and downs.

2. NextEra Energy

Renewable energy company and electric utility NextEra Energy (NYSE: NEE) is the opposite of Exxon, playing a massive role in renewable energy sources like wind and solar power. Its renewable energy subsidiary is the world's largest, with projects across North America, and its utility business, Florida Power & Light, services over 12 million people in Florida. The company is also an outstanding dividend stock, with a 28-year streak of raises and a solid 3.6% yield today.

NextEra Energy's stock is struggling due to high interest rates. The company relies on borrowing money to fund investments in its business, and the higher rates make debt more expensive and potentially inhibit growth. However, rates tend to be cyclical, and the market expects rate cuts to come sometime this summer. Don't lose sight of NextEra's leading position in a growing renewable energy industry. Embrace the stock's valuation dropping from over 30 times earnings to 16 times.

3. Archer-Daniels-Midland

Food is a core need of society, and Archer-Daniels-Midland (NYSE: ADM) plays a crucial role in feeding the world. The company processes and trades grains, seeds, oils, and other agricultural products worldwide. Its giant footprint spans 750 facilities and 42,000 employees, packing size and scale that make competing with Archer-Daniels-Midland no easy task. The stock is nearing Dividend King status, with 48 consecutive years of dividend increases.

The company is currently under investigation by the Department of Justice for account practices related to how it priced commodities traded within its business. Shares fell sharply after the news, putting the stock near its 52-week low. Investors should follow developments closely and respect the severity of potential violations. At the same time, Archer-Daniels-Midland has such a long track record that it seems unlikely that the severity of any alleged violations would ruin a long-term investment thesis. That makes this black-eye situation a potential buy-the-dip opportunity.

4. Deere & Company

There is no food without farming, and Deere & Company (NYSE: DE) is arguably the flagship brand of machines used for commercial agriculture, construction, and forestry. The company's famous green paint marks every machine in service. Deere isn't just a machinery company, though. It's become a technology company, too. It provides farmers with machinery and software solutions to maximize efficiency and crop yields.

Right now, Deere is in a slump. Higher interest rates make machinery more expensive for farmers, who often rely on financing to afford the large tractors and other machines they use. Deere's net sales fell 8% year over year in the first quarter of Deere's fiscal year 2024, ended Jan. 28, 2024, and earnings per share fell 5%. Consider buying the stock on weakness. Analysts believe the business will compound earnings at nearly 10% annually over the long term. Deere is a classic example of an excellent business going through a cyclical phase, as many do.

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MSFT, CNI, CAT - >>> Billionaire Bill Gates Has Over Half of His $42 Billion Portfolio Invested in These 3 Dividend Stocks


by Keith Speights

Motley Fool

March 10, 2024


https://finance.yahoo.com/news/billionaire-bill-gates-over-half-185000568.html


Do billionaires like dividend stocks? Absolutely. Just take a look at the holdings of famous billionaire investors such as Warren Buffett and Ken Griffin. They're loaded with dividend stocks.

Bill Gates stands out as another great example. Although he doesn't manage a public company or hedge fund like Buffett and Griffin do, he's donated a boatload of money to the Bill & Melinda Gates Foundation Trust. And over half of this charitable foundation's $42 billion portfolio is invested in these three dividend stocks.


1. Microsoft

It should come as no surprise that Microsoft (NASDAQ: MSFT) remains Gates' favorite stock. After all, he co-founded the technology company along with Paul Allen and led it for years. Microsoft ranks as the top holding for the Gates Foundation Trust by far, making up 33.98% of its total portfolio at the end of 2023.

Many tech companies don't pay dividends, but Microsoft is an exception. The company initiated a dividend program in 2003. Over the last 10 years, Microsoft has increased its dividend payout by nearly 168%. Its dividend yield, though, is still only 0.74%.

One key reason why the yield is so low is that Microsoft's share price has soared. The stock has been a 10-bagger over the last 10 years and is up almost 60% over the last 12 months.


2. Canadian National Railway

The Gates Foundation isn't just betting on tech stocks such as Microsoft. Canadian National Railway (NYSE: CNI) ranks as its third-largest holding, making up nearly 16.3% of the total portfolio.

Canadian National Railway isn't limited to just Canada. It has 20,000 or so miles of rail that transport products in the middle part of the U.S. as well. The company also offers transportation and logistics services in addition to rail operations.

The transportation company has increased its dividend for 28 consecutive years, most recently boosting its dividend payout by 7% in the first quarter of 2024. Its dividend yield currently stands at 1.94%.


3. Caterpillar

Caterpillar (NYSE: CAT) is the fifth-largest position for the Gates Foundation. It makes up 5.14% of the total portfolio. That brings the combined weight of these three dividend stocks to 55.41%.

The Gates Foundation has owned Caterpillar since the fourth quarter of 2005. However, the last time it added shares of the equipment manufacturer was back in the fourth quarter of 2013. The most recent transaction involving Caterpillar came in 2022 Q1, with the sale of roughly 24% of the foundation's stake in the company.

Caterpillar has generated nice dividend income for the Gates Foundation through the years. The company has paid a dividend every quarter since 1933 and has increased its payout for 29 consecutive years. Its dividend now yields 1.55%.

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>>> Intuit (NASDAQ:INTU) has many business software products under its umbrella. However, the company’s most famous software is TurboTax. People use the product to file their taxes every year, and it results in steady revenue for the company. Quickbooks is another popular tool that Intuit owns.

https://finance.yahoo.com/news/market-mavericks-7-growth-stocks-154037454.html

The company’s Q2 FY24 results indicate more growth is ahead. Revenue increased by 11% year-over-year while net income more than doubled year-over-year. Intuit reiterated guidance for the fiscal year which projects 11%-12% year-over-year revenue growth. Expanding profit margins will make the company’s valuation more appealing for long-term investors. All in all, it’s one of those growth stocks to consider.

Intuit has been a winning stock for patient investors. Shares are up by 61% over the past year and have gained 165% over the past five years. The company’s vast array of business software gives it many opportunities to gain market share for the benefit of long-term investors. The stock offers a low 0.55% dividend yield, but growth rates have been solid. The company hiked its dividend by 15.4% year-over-year in 2023.

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>>> Axon 2023 Revenue Grows 31% to $1.56 Billion


PR Newswire

Feb 27, 2024


https://finance.yahoo.com/news/axon-2023-revenue-grows-31-210100362.html


SCOTTSDALE, Ariz., Feb. 27, 2024 /PRNewswire/ --

Axon Cloud and Services revenue grows 52% to $561 million

Annual recurring revenue grows 47% to $697 million

Annual net income of $174 million supports Adjusted EBITDA of $329 million

Company projects Full Year 2024 revenue of $1.88 billion to $1.94 billion, representing 20% to 24% annual growth


Fellow shareholders,

Axon is delighted to deliver another year of record company performance, fueled by product innovation, partnership with our customers and strong industry trends. Demand for our mission-driven product ecosystem continued to grow in the fourth quarter of 2023, and we recorded our fifth consecutive year of 25% or greater revenue growth, growing 31% year over year. We achieved this growth with a full year net income margin of 11% and Adjusted EBITDA margin of 21%.

Our core measure of success as a company is progress on our mission to protect life. Our mission aligns our people, our customers and our communities. Together, we focus on solving problems with modern technology, pioneering new ways of thinking and taking new approaches to complex social dynamics, driving toward our moonshot goal to cut gun-related deaths between police and the public in half by 2033. In this first year after announcing our moonshot, we introduced new technology, new modern training capabilities and new sources of improved data and analytics. We've laid the groundwork for the next nine years, and we are just getting started.

Our mission and products have resonated with our customers and afford us a growing pipeline across our business. In 2024, Axon expects to deliver annual revenue in a range of $1.88 billion to $1.94 billion, and Adjusted EBITDA of $410 million to $430 million, reflecting more than 20% annual growth and continued Adjusted EBITDA margin expansion from the prior year. We are propelling our growth through innovation and diversification while realizing efficiencies and leverage on our business as it scales. We are humbled to enter a new year with robust expectations for each of our product categories and customer verticals. In this letter, we recap a historic 2023 for our company and provide an update on the opportunities we see ahead, our roadmap and our progress.

2023 Key Takeaways

Commitment to being a Force for Good

Axon's mission is embodied in our moonshot goal to cut gun-related deaths between police and the public by 50% over 10 years. 2023 was the first year in our moonshot journey, and we progressed significant advancements to help us achieve this goal, including introducing technology, new ways of training, and optimized data collection and reporting with the Axon Public Safety Gun Fatality Database. We also published our Force For Good report in November, a bi-annual update on our progress in the areas of Corporate Social Responsibility. In addition, we summarize 5 Giant Leaps we made over the last year, here.

Strong financial results

Axon delivered annual revenue of $1.56 billion and net income of $174 million in 2023. This represents 31% annual revenue growth and an 11.1% net income margin, supporting Adjusted EBITDA of $329 million (21.1% margin). We are delivering profitable growth at scale and improvement in our operating expenses as a percentage of revenue was primarily driven by leverage on sales, general and administrative ("SG&A") expenses. Axon continues to grow our research and development ("R&D") footprint to invest in several multi-year growth opportunities, and our R&D expenses grew roughly in-line with revenue. 2023 revenue and Adjusted EBITDA margin exceeded our expectations and reflect record performance for our company.

Product innovation

We power our business through relentless product innovation. In 2023, years of investments materialized in two major new product launches — TASER 10 and Axon Body 4 — and a number of advancements in our ecosystem, including groundbreaking real-time communications features such as two-way voice communications and WatchMe, as well as an expanded virtual reality ("VR") training suite including all-new bespoke TASER VR controllers alongside expanded training content and more. We also reached key adoption milestones, including new deployments bringing us to over 100 agencies live on one or more modules of Axon Records.

New customer vertical expansion

Axon has diversified beyond U.S. state and local law enforcement. In 2023, we achieved significant growth in emerging customer verticals, including U.S. federal, international, justice, corrections and enterprise. A few examples of our progress include the successful deployment of Axon Records with the U.S. Department of Veterans Affairs, two of our largest TASER 10 orders coming from international and corrections customers, and our partnership with the Government of Scotland to power its digital evidence management system across courts, lawyers, government and police. We also have several trials kicking off with our newly launched product for enterprise, including Fairview Health, where they are trialing Body Workforce with nurses as part of their commitment to patient and staff safety.

Strategic investments to further enhance our ecosystem and expand our TAM

Axon's investment and partner strategy is geared to accelerate our product roadmap and enhance our ecosystem while building our talent base in product categories accretive to our long-term growth. In 2023, we acquired Sky-Hero and earlier this month we announced our acquisition of Fusus. Sky-Hero is an example of an acquisition supporting Axon in building next-generation technology in public safety that will leverage enhanced robotic security capabilities to improve situational awareness, power more effective means of response and protect life. With Fusus, Axon advances mission control, the future of real-time operations for public safety, enabling customers to aggregate live video, data and sensor feeds from virtually any source. Even without updating our core total addressable market ("TAM"), which we updated last year and update on a bi-annual basis, these acquisitions expand Axon's TAM from $50 billion to more than $63 billion...

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>>> Stryker Corporation (NYSE:SYK) - Number of Hedge Fund Holders: 47

https://finance.yahoo.com/news/14-best-robotics-stocks-buy-194148400.html

Stryker Corporation (NYSE:SYK) is a medical technology company operating in two segments – MedSurg and Neurotechnology, and Orthopaedics and Spine. The Orthopaedics and Spine segment specializes in implants for hip and knee joint replacements, trauma, and extremities surgeries, as well as spinal implant products. The MedSurg and Neurotechnology segment provides a range of medical devices and products for various medical specialties, including surgical equipment, navigation systems, emergency medical equipment, and neurotechnology products for minimally invasive endovascular techniques and brain surgeries. Stryker Corporation (NYSE:SYK) is one of the best robotics stocks to invest in.

On January 30, Stryker Corporation (NYSE:SYK) reported a Q4 non-GAAP EPS of $3.46 and a revenue of $5.8 billion, outperforming $0.19 and $200 million, respectively. Terry Smith’s Fundsmith LLP is the leading stakeholder of the company, with 5.5 million shares worth $1.5 billion.

Baron Health Care Fund stated the following regarding Stryker Corporation (NYSE:SYK) in its fourth quarter 2023 investor letter:

“We initiated a position in Stryker Corporation (NYSE:SYK) during the quarter. Stryker is a large diversified medical device company with two business segments: (1) MedSurg and Neurotechnology, and (2) Orthopedics and Spine. The stock sold off during the quarter along with many other medical device stocks because of concerns about the impact of GLP-1 weight loss medicines on their business (lol). Specific to Stryker, the concern was that weight loss would reduce demand for hip and knee implant procedures because obesity is one factor that drives osteoarthritis. We think this concern was overstated and saw the sell-off as an opportunity to buy a high-quality growth company at a reasonable valuation. We think Stryker is well positioned with its broad product portfolio to benefit from the trend of more orthopedic and other medical procedures moving from the hospital to ambulatory surgery centers. The company also has several new product launches coming up that should drive growth. At its recent Investor Day, management provided long-term financial goals including organic sales growth at the high end of the medical technology industry and double-digit EPS growth.”

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>>> Here's What Will Make Caterpillar Stock a Buy


Motley Fool

By Lee Samaha

Feb 10, 2024


https://www.fool.com/investing/2024/02/10/heres-what-will-make-caterpillar-stock-a-buy/


KEY POINTS

The cyclicality of Caterpillar's earnings means investors should be careful about what they assume for the company's earnings growth.

The company displayed impressive pricing power in 2023 as its product lineup fell into favor.

Weakening end markets, notably in construction industries in China and Europe, are creating near-term headwinds, but lower interest rates will boost growth.

The company's valuation is looking stretched, but there are pathways to value for the industrial stock.

Caterpillar (CAT) just delivered one of the best earnings reports in the industrial sector this earnings season. As the chart below demonstrates, its stock price continues to rise. However, the question now is what will make the stock a buy for investors. Here's what you need to know.

Three things to make Caterpillar a buy

There are three key answers to this question, and I will flesh them out below:

A lower stock price because Caterpillar's valuation is starting to look stretched.

An improvement in earnings from better operational execution.

An upside catalyst to earnings from an improvement in its end markets.

Caterpillar's valuation

The stock is an excellent value based on its trailing earnings and free cash flow (FCF). For example, earnings per share (EPS) of $21.21 puts it on just 15.2 times earnings, and machine, energy & transportation (ME&T) FCF of $10 billion puts it on 16.4 times FCF.

However, there's something else to consider: Caterpillar is, and always will be, a cyclical company (more on that later), and its earnings and FCF history reflect that.

Take FCF, for example. Management previously guided toward $4 billion to $8 billion through the cycle. The good news is that the guidance was raised to $5 billion to $10 billion through the cycle. For 2024, CFO Andrew Bonfield expects "to be within the top half of our updated ME&T free cash flow target range of $5 billion to $10 billion."

In summary, Caterpillar's guidance implies that its FCF may have peaked in 2024, so investors shouldn't consider the $10 billion reported in 2023 as a base level.

A conservative way to value a cyclical like Caterpillar is to take the midpoint of its FCF range through the cycle. Using the updated guidance of $5 billion to $10 billion and the midpoint of $7.5 billion and applying a 20 times FCF multiple to it (reasonable for a mature industrial), Caterpillar is better valued at $150 billion -- an 8.5% discount to the current price.

Operational improvement

Caterpillar is doing an excellent job operationally, and investors can be confident that the company can potentially improve its profitability, FCF, or earnings quality. There's no better way to tell if a company has a strong product lineup than by looking at its pricing power, specifically comparing the profit change due to sales volumes vs. price realization.

As the table below shows, sales volumes declined in the fourth quarter but were more than offset by powerful price realization. Clearly, Caterpillar has pricing power, and it might be able to increase profits even as volumes decline.

In addition, management can improve the quality of its earnings by continuing to grow its less cyclical services revenue. Indeed, it aims to hit $28 billion in services revenue by 2026, given that it increased services revenue from $14 billion in 2016 to $23 billion in 2023. It's reasonable to expect Caterpillar to hit its target, which might lead investors to value the company on higher earnings and FCF multiples.

Improving end markets

There's little doubt Caterpillar's growth is slowing, and Bonfield's full-year guidance calls for sales to "be broadly similar to 2023." Moreover, a look at Caterpillar's retail-sales data (Caterpillar primarily sells its machines and power systems to independent dealers, who then sell to end users) shows the slowdown graphically. The data below is retail sales to end users.

Strength in U.S. infrastructure spending will support construction sales in 2024, but China is softening, and Caterpillar sees Europe declining in 2024. Bonfield expects "lower sales versus 2023, impacted by lower machine volume primarily in off-highway and articulated trucks" in resource industries. Finally, Bonfield thinks energy and transportation sales will only be "slightly higher" in 2024.

Lower interest rates will support construction activity and possibly lead to higher commodity prices, encouraging investment in oil and gas and mining industries.

Is Caterpillar a buy?

Based on the idea that its earnings have hit a local peak, the stock looks overvalued. On the other hand, this is a high-quality company with strong pricing power, so don't be surprised if its earnings surpass estimates if the global growth outlook improves. Caterpillar is the kind of company investors should look to pick up should the market present a better opportunity, though.

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Thomson Reuters - >>> Blue-Chip Stocks to Buy and Hold Forever: January 2024


Investor Place

by Joel Baglole

January 25, 2024


https://finance.yahoo.com/news/3-blue-chip-stocks-buy-223000190.html


Thomson Reuters (TRI)

It’s a challenging time for media companies, especially newspapers. The industry is awash in layoffs and red ink. Yet Thomson Reuters (NYSE:TRI) continues to buck the trend and its stock is now trading near an all-time high. The company’s bread-and-butter continues to be its international newswire, which media outlets are relying on more than ever as they cut back their own newsrooms. However, Thomson Reuters continues to make strategic investments in new areas, including artificial intelligence (AI).

Most recently, Thomson Reuters has increased an offer it made to buy Swedish tax preparation firm Pagero by 25% to $789 million. Thomson Reuters already controls 54% of Pagero and is seeking to gain 100% control of the company, which it hopes to add to its other accounting services that include digital firms such as Checkpoint. Thomson Reuters has a strategy to grow through mergers and acquisitions and has a $10 billion M&A budget through 2025.

TRI stock has gained 22% in the last 12 months and is up 181% over five years.

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>>> Cencora, Inc. (COR) sources and distributes pharmaceutical products. The company's U.S. Healthcare Solutions segment distributes pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, and related services to acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and alternate site pharmacies, and other customers; provides pharmacy management, staffing, and other consulting services; supply management software to retail and institutional healthcare providers; packaging solutions to various institutional and retail healthcare providers; clinical trial support, product post-approval, and commercialization support services; data analytics, outcomes research, and additional services for biotechnology and pharmaceutical manufacturers; pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, and other products to the companion animal and production animal markets; and sales force services to manufacturers. This segment also distributes plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products; and provides other services to physicians who specialize in various disease states, such as oncology, as well as to other healthcare providers, including hospitals and dialysis clinics.

Its International Healthcare Solutions segment offers international pharmaceutical wholesale and related service, and global commercialization services; distributes pharmaceuticals, other healthcare products, and related services to pharmacies, doctors, health centers, and hospitals primarily in Europe; and provides specialty transportation and logistics services for the biopharmaceutical industry.

The company was formerly known as AmerisourceBergen Corporation and changed its name to Cencora, Inc. in August 2023. Cencora, Inc. was incorporated in 2001 and is headquartered in Conshohocken, Pennsylvania.

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https://finance.yahoo.com/quote/COR/profile?p=COR


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>>> PepsiCo Is Known for Sodas Such as Pepsi and Mountain Dew. But Almost 50% of Its Profits Comes From Something Else Entirely.


by Jon Quast

The Motley Fool

December 31, 2023


https://finance.yahoo.com/news/pepsico-known-sodas-pepsi-mountain-165723426.html


The granddaddy of the colas is The Coca-Cola Company, with the Coca-Cola brand launching in 1886. The Pepsi-Cola Company, now PepsiCo (NASDAQ: PEP), wasn't far behind with its own Pepsi-Cola drink in 1898. And the two have locked horns for cola supremacy ever since.

Neither Coke nor Pepsi was able to take down its cola competitor. So it wasn't long before these two companies upped the ante by developing comprehensive soda-brand portfolios. Nowadays, PepsiCo sells well-known sodas such as Mountain Dew, Pepsi Wild Cherry, Mug Root Beer, Crush, and Starry in addition to its eponymous Pepsi.

PepsiCo built its portfolio by making several key acquisitions. Its 1964 acquisition of Mountain Dew was especially crucial to its present-day success. In the U.S. carbonated soft-drink market, Mountain Dew had 6.6% market share in 2022, according to Statista. I'd say that buyout worked out quite well.

Pepsi's Mountain Dew acquisition was huge. But a merger the following year was even more significant for the company and its shareholders.

It has nothing to do with carbonated soft drinks. But almost half of Pepsi's profits today are derived from a source that would have shocked the beverage company's founders.

When a beverage company dreamed bigger

In 1965, Pepsi-Cola merged with Frito-Lay -- a snack company with a portfolio that today includes Lay's, Fritos, Doritos, Cheetos, Funyuns, Spitz, Cracker Jack, and more. This was a strong departure for a business formerly focused entirely on carbonated soft drinks. But it was a good move.

Through the first three quarters of 2023, PepsiCo's Frito-Lay North America business segment has generated revenue of $17.4 billion. That's nearly as big as its Beverages North America segment's revenue of $19.7 billion.

In North America, Pepsi's snack revenue nearly matches the revenue from beverages. But these snack foods actually have better profit margins. Frito-Lay's operating income of $4.9 billion is better than operating income of just $2.2 billion for beverages.

Not only is Frito-Lay's operating income higher than beverages, it's also accounted for 48% of PepsiCo's total operating income year to date. In short, if Pepsi hadn't pivoted to snacks nearly 60 years ago, it would be half the company that it is today.

Why it matters for investors

There are so many potential takeaways with an observation like this for PepsiCo. For starters, as one of the largest beverage companies in the world both then and now, Pepsi's growth would have been more limited if it had stayed completely within its core competency. Expanding outside of it into an adjacent market with robust cross-promotion opportunities made a lot of sense.

It's similar to what Hershey is doing now, extending beyond candy and into snack items such as pretzels and popcorn.

More broadly, companies that can expand beyond core competencies often make good investments; this trait is known as optionality. Many companies attempt to branch out and few do it well. But PepsiCo is one of the grand success stories.

PepsiCo's blend of beverage revenue and snack sales has an additional benefit for shareholders: It's a potentially more reliable business because it has greater diversity.

All other things being equal, I would choose PepsiCo stock over a pure-play beverage company because of this stabilizing quality. If headwinds blow in the carbonated soft-drink industry for whatever reason, PepsiCo has another part of the business that can help carry it through the challenges.

That's particularly good news for dividend investors. PepsiCo has raised its dividend for 51 consecutive years, making it a Dividend King. Many investors choose to invest in these companies for their predictable dividend payments. Having a diverse business makes it more likely that PepsiCo won't get knocked off the list by a sudden shock to its business.

And it's all possible because the management team for The Pepsi-Cola Company -- a beverage business -- had the foresight to branch into an entirely different arena when it merged with snacking company Frito-Lay.

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Procter + Gamble, J+J - >>> Warren Buffett Dumped These 2 Top Dividend Stocks. Should You Follow His Lead?


by Cory Renauer

The Motley Fool

December 28, 2023


https://finance.yahoo.com/news/warren-buffett-dumped-2-top-103900862.html


If you want to develop a skill like investing, it's usually a good idea to follow in the footsteps of folks who already know what they're doing. With a successful track record that spans nearly six decades, it's hard to find a better role model to emulate than Warren Buffett.

Buffett acquired Berkshire Hathaway for $14.86 per share in 1965, and since then shares of the holding company have increased by an average rate of 19.8% annually. Some money managers have outperformed Buffett over shorter time frames but nobody has been able to put up these kinds of numbers decade after decade.

Noticing his decades of success, many everyday investors are eager to know what he's buying and selling. According to disclosures that all large money managers must make to the U.S. Securities and Exchange Commission, we can see that Buffett completely closed out positions in Johnson & Johnson (NYSE: JNJ) and Proctor & Gamble (NYSE: PG) during the third quarter.

Both companies attract income-seeking investors with their legendary dividend programs. Let's look at the road ahead to see if dropping these stocks from your portfolio the way Buffett did makes sense right now.

Johnson & Johnson

Buffett closed out seven positions in the third quarter, and one of the most surprising was Johnson & Johnson. The healthcare conglomerate's dividend program is legendary with 61 consecutive years of annual dividend raises. At recent prices, it offers a 3% yield.

Despite a record of consistent dividend raises, Berkshire closed its J&J position in the third quarter by selling 327,100 shares. Buffett hasn't explained why, but I'd wager the recent spinoff of Kenvue was the deal breaker.

Kenvue was formed from J&J's old consumer goods segment. This August, J&J finalized Kenvue's separation and I wouldn't be surprised if Berkshire dropped its shares shortly after. Now that it no longer sells well-recognized brands like Listerine, Tylenol, and Band-Aid, an investment in this stock relies more heavily on its pharmaceutical and medical technology segments.

Buffett and Berkshire famously avoid investing in companies they don't understand well. There are a lot of ins and outs when it comes to medical technology, and the biopharmaceutical industry can be even more complicated. With this in mind, I wouldn't consider Berkshire's exit as a sign of a deeper problem at J&J.

If we ignore the effects of currency exchange, medtech sales jumped 10.4% year over year. Pharmaceuticals, which make up 65% of total revenue, had a rough quarter due to rapidly declining COVID-19 sales. Despite the challenge, J&J reported pharma sales that grew 4.4% year over year.

J&J recently submitted applications seeking approval for an experimental lung cancer therapy called lazertinib that could push pharma sales much higher in 2024. In a pivotal trial, patients treated with lazertinib in combination with Rybrevant, another J&J drug, were significantly less likely to experience disease progression compared to treatment with Tagrisso.

With $5.9 billion in annualized sales, Tagrisso is AstraZeneca's top-selling drug at the moment. Investors holding shares of J&J probably want to hold on at least long enough to see if lazertinib plus Rybrevant can take Tagrisso's place.

Proctor & Gamble

In the third quarter, Berkshire sold 315,400 Proctor & Gamble shares to close its position in the legendary consumer goods company. The sale was surprising because this company's dividend track record is even longer than J&J's.

Proctor & Gamble has paid a dividend every year since 1890, and this April it announced its 67th consecutive annual payout increase. At recent prices, it offers a 2.6% yield. This might not inspire anyone to buy the stock now but I wouldn't be in a hurry to let go either.

Proctor & Gamble recorded a very healthy $14.6 billion in free cash flow over the past year. It needed 62% of this sum to meet its dividend commitment. In other words, profits are more than sufficient to service its debt load and support future dividend raises in line with the company's overall growth rate.

Proctor & Gamble probably isn't going to be your portfolio's top performer, but steady gains seem likely. With a lineup of well-established brands that include Crest, Tide, and Pampers, the company was able to raise prices by 7% during its fiscal first quarter ended on Sept. 30. Sales volume over the same time frame came in just 1% lower.

Proctor & Gamble's brands gave the company enough pricing power to raise its dividend payout by 31% over the past five years. That isn't too bad, but rising interest expenses could make the next five years of dividend growth even less exciting.

Older investors who can't afford losses or declining dividends will want to hold on to this stock. For investors with a higher tolerance for risk, though, following Buffett's lead is probably the right move.

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>>> Cintas Corporation Announces Fiscal 2024 Second Quarter Results


Business Wire

December 21, 2023


https://finance.yahoo.com/news/cintas-corporation-announces-fiscal-2024-133000783.html


CINCINNATI, December 21, 2023--(BUSINESS WIRE)--Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2024 second quarter ended November 30, 2023. Revenue for the second quarter of fiscal 2024 was $2.38 billion compared to $2.17 billion in last year’s second quarter, an increase of 9.3%. The organic revenue growth rate for the second quarter of fiscal 2024, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was 9.0%.

Gross margin for the second quarter of fiscal 2024 was $1.14 billion compared to $1.02 billion in last year’s second quarter, an increase of 11.6%. Gross margin as a percentage of revenue was 48.0% for the second quarter of fiscal 2024 compared to 47.0% in last year's second quarter, an increase of 100 basis points. Energy expenses comprised of gasoline, natural gas and electricity were 40 basis points lower for the second quarter of fiscal 2024 compared to last year's second quarter.

Selling and administrative expenses increased $64.4 million, or 11.1%, in the second quarter of fiscal 2024 compared to the same period of the prior fiscal year. The increase reflects investments in selling resources, technology and our management trainee program.

Operating income for the second quarter of fiscal 2024 increased 12.3% to $499.7 million compared to $444.9 million in last year's second quarter. Operating income as a percentage of revenue was 21.0% in the second quarter of fiscal 2024 compared to 20.5% in last year's second quarter.

Net income was $374.6 million for the second quarter of fiscal 2024 compared to $324.3 million in last year's second quarter. The second quarter of fiscal 2024 effective tax rate was 20.9% compared to 22.1% in last year's second quarter. The tax rates in both quarters were impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation. Second quarter of fiscal 2024 diluted earnings per share (EPS) was $3.61 compared to $3.12 in last year's second quarter, an increase of 15.7%.

On December 15, 2023, Cintas paid an aggregate quarterly cash dividend of $137.5 million to shareholders, an increase of 17.1% from the amount paid last December. In addition, we continue to be opportunistic with our share buyback program. During the second quarter, Cintas purchased 658,202 shares of Cintas common stock at an average price of $486.58 per share, for a total purchase price of $320.3 million.

Todd M. Schneider, Cintas' President and Chief Executive Officer, stated, "We are pleased with our second quarter fiscal 2024 financial results. Each of our operating segments continue to execute at a high level, leading to robust revenue growth of 9.3%, high operating margin of 21.0% and diluted EPS growth of 15.7%. This strong execution is the result of the exceptional dedication of our employee-partners. Whether it's image, safety, cleanliness or compliance, we have innovative products and services to help businesses across North America stay focused on the work that matters most."

Mr. Schneider concluded, "We are increasing our full fiscal year financial guidance. We are raising our annual revenue expectations from a range of $9.40 billion to $9.52 billion to a range of $9.48 billion to $9.56 billion and our diluted EPS from a range of $14.00 to $14.45 to a range of $14.35 to $14.65." Please note the following regarding guidance:

Fiscal year 2024 interest expense is expected to be approximately $100.0 million compared to $109.5 million in fiscal year 2023, predominately as a result of less variable rate debt. This may change as a result of future share buybacks or acquisition activity.

Fiscal year 2024 effective tax rate is expected to be 21.3% compared to a rate of 20.4% in fiscal year 2023. The higher effective tax rate negatively impacts fiscal 2024 diluted EPS guidance by approximately $0.16 and diluted EPS growth by approximately 120 basis points.

Our diluted EPS guidance includes no future share buybacks.

Guidance includes the impact of having one more workday in fiscal year 2024 compared to fiscal year 2023.

Cintas

Cintas Corporation helps more than one million businesses of all types and sizes get Ready™ to open their doors with confidence every day by providing products and services that help keep their customers’ facilities and employees clean, safe and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and Nasdaq-100 Index.

Cintas will host a live webcast to review the fiscal 2024 second quarter results today at 10:00 a.m., Eastern Time. The webcast will be available to the public on Cintas' website at www.Cintas.com. A replay of the webcast will be available approximately two hours after the completion of the live call and will remain available for two weeks.

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>>> Republic Services, Inc. (RSG)


https://finance.yahoo.com/news/10-best-mario-gabelli-stocks-163023754.html


Number of Billionaire Investors In Q3 2023: 14

Republic Services, Inc. (NYSE:RSG) is a waste management company with hundreds of collection points all over America. Trash is king, it seems, as the firm has beaten analyst EPS estimates in all four of its latest quarters and consecutively sequentially grown its EPS in all of them.

After digging through 910 hedge funds for their Q3 2023 holdings, Insider Monkey found 37 Republic Services, Inc. (NYSE:RSG) investors. Ian Simm's Impax Asset Management was the biggest investor as it owned $310 million worth of shares.

Honeywell International Inc. (NASDAQ:HON), Lands' End, Inc. (NASDAQ:LE), Republic Services, Inc. (NYSE:RSG), and American Express Company (NYSE:AXP) are some stocks that Mario Gabelli and billionaires can't get enough of.

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>>> Costco to Pay Special Dividend of $15 Per Share: What You Need to Know


Motley Fool

by Daniel Sparks

December 14, 2023


https://finance.yahoo.com/news/costco-pay-special-dividend-15-230100685.html


We knew it was coming. We just didn't know when.

Costco (NASDAQ: COST) Chief Financial Officer Richard Galanti's rhetoric in recent earnings calls, when asked about whether the company would pay out another special dividend, has been that it's "probably a question of when, not if." The day has finally come.

Costco announced on Thursday it would pay a special cash dividend of $15 per share on Jan. 12, 2024 to shareholders of record as of the close of business on Dec. 28. This, of course, is on top of the quarterly dividend the company has already committed to.

The news of Costco's special dividend builds on an upbeat quarterly financial update released on Thursday. The report, which featured double-digit year-over-year earnings-per-share growth, highlighted the membership-based wholesale warehouse's resilience, even in a challenging macroeconomic environment.

Costco's dividend history

This will be Costco's fifth-ever special dividend. Previous special dividends were paid in 2012, 2015, 2017, and 2020 in the amounts of $7, $5, $7, and $10, respectively. This makes the company's 2024 special dividend of $15 its largest, by far.

To fund this dividend, Costco will pay an aggregate amount of $6.7 billion to shareholders.

Unlike many of its peers, Costco operates its business with a significant net cash position. This means its interest expense is extremely low, which helps the company keep its cost structure low to pass those savings onto members. At the end of its just-reported fiscal first quarter, Costco had about $7 billion of debt and nearly $18 billion of cash, cash equivalents, and short-term investments. So there's plenty of cash to spare.

Costco also notably pays a meaningful, growing quarterly dividend of $1.02. The company's most recent hike came in at a double-digit rate of 12%.

Support for a high stock price

A robust special dividend comes at a good time for shareholders. The stock has soared nearly 40% year to date, giving the stock a somewhat pricey valuation. The stock's price-to-earnings ratio is now in the forties. Fortunately, a special dividend and double-digit growth in earnings per share help support this high valuation.

Speaking of Costco's earnings, the company's fiscal first-quarter revenue and earnings per share both came in higher than analysts' estimates. Total revenue of $57.8 billion was up from $54.4 billion in the year-ago quarter, beating analysts' average forecast for revenue of $57.7 billion. Earnings per share of $3.58 (up 17% year over year) was also higher than a consensus estimate of $3.42.

Sales in the quarter were helped by growing demand for the company's groceries and essentials. But strong growth in membership fees also helped. Membership fee revenue rose more than 8%, outpacing net sales growth by 2 percentage points.

Altogether, Costco's results offer a strong reminder of why the company's shares are worth a high premium. This is especially true ahead of a likely membership fee increase in the near future.

Just as management has hinted at a special dividend, it's also hinted that a membership fee increase is up for consideration. Indeed, it wouldn't be surprising to see Costco raise the prices of its memberships in 2024.

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>>> Better Buy: Coca-Cola vs. PepsiCo


Motley Fool

By Stefon Walters

Sep 28, 2023


https://www.fool.com/investing/2023/09/28/better-buy-coca-cola-vs-pepsico/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

Coca-Cola's higher margins are a testament to its efficiency and pricing power.

PepsiCo's broad portfolio helps hedge against declining demand in the beverage market.

Both have increased their dividend annually for decades -- making them Dividend Kings.


Investors can't go wrong with either choice, but one stands out as the better long-term option.

When it comes to non-alcoholic beverage companies, there's Coca-Cola (KO) and PepsiCo (PEP) -- and then there's everyone else. In the U.S., the two account for around 71% of the carbonated soft drink market. The dominance of that duopoly makes them attractive investment opportunities.

For investors looking to invest in one of these companies, there's no "wrong" option to go with here. However, each company has its own unique strengths and focus areas. Let's see which offers a more compelling case for investors looking to choose one to add to their portfolio.

Coca-Cola's financials seem to be stronger

Coca-Cola is the market leader in non-alcoholic beverages, but one thing that may surprise people is just how much more revenue PepsiCo brings in. In Q2 2023, Coca-Cola made around $12 billion in revenue, more than $10 billion less than PepsiCo made.

Despite the gap in revenue, both companies are similar in net incomes, which is a testament to Coca-Cola's profit margins.

Higher profit margins are important because they give companies more financial flexibility. Higher margins generally come with more cash flow, which companies use for things like research and development, acquisitions, and paying dividends.

Coca-Cola can operate at higher margins largely because of its focus on beverages, operational efficiency, and the pricing power it has thanks to its strong brands. PepsiCo's margins aren't shabby by any means, but its broader business means it has more complexities to deal with, which can lower efficiency.

There's a difference in portfolio diversification

PepsiCo's revenue gap over Coca-Cola can be attributed to its larger portfolio that includes beverages, snacks, and nutrition products. Coca-Cola's portfolio only consists of beverages. Both have iconic brands, including, but not limited to, the following:

Coca-Cola: Coca-Cola, Sprite, Powerade, Dasani, and Minute Maid.

PepsiCo: Pepsi, Gatorade, Lay's, Doritos, and Aquafina.

PepsiCo's vast portfolio can help provide a cushion during times when beverage sales may lag or consumer preferences shift. Coca-Cola dominates the beverage segment, but PepsiCo's diverse portfolio allows it to take advantage of consumer trends across multiple categories.

A good example would be PepsiCo's introduction of products tailored to health-conscious consumers, among them Naked Juice for vegetable and fruit-based smoothies, whole grain breakfast options, and sugar-free, zero-calorie alternatives to traditional sodas.

Both companies have admirable dividends

Regarding dividends, Coca-Cola leads PepsiCo slightly. At their current share prices, Coca-Cola has a 3.2% yield compared to PepsiCo's 2.8%.

Coca-Cola has increased its dividend annually for 61 straight years while PepsiCo has a 50-year streak, so both are Dividend Kings. However, PepsiCo has been increasing its dividend by larger percentages in recent years. PepsiCo has boosted its payouts by 36% in the past five years compared to Coca-Cola's 18%.

Dividend yields fluctuate with stock price, so you don't want yield to be a determining factor in your investment thesis, but it's important nonetheless. Maybe more important, though, is the sustainability of the dividend.

Neither Coca-Cola nor PepsiCo is in danger of needing to cut their dividends, but it's worth noting how much lower Coca-Cola's 56% dividend payout ratio is than PepsiCo's 81%. Coca-Cola's lower payout ratio gives it more flexibility to reinvest in the business or potentially accelerate its dividend increases.

Which should investors go with?

For long-term investors, the better choice now seems to be Coca-Cola. The stock is more expensive, with a price-to-sales ratio of 5.6 compared to PepsiCo's 2.7, but it has the foundation to be a stable and high-yielding stock for the long haul.

Between its top-tier brand equity, impressive margins, and lucrative dividend, Coca-Cola seems to be the more appealing choice for investors looking for reliability and a shareholder-friendly company. It also passes the Warren Buffett test as it is one of his top holdings.

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>>> Gartner: Research Powerhouse Continues to Roar


Guru Focus

by Ben Alaimo

September 8, 2023


https://finance.yahoo.com/news/gartner-research-powerhouse-continues-roar-171406053.html


Gartner Inc. (NYSE:IT) is one of the worlds most renowned research and advisory companies. It is most famous for its Magic Quadrant, in which Gartner assesses companies in order to identify leaders across a variety of industries, from supply chain management software to artificial intelligence.

The company reported strong financial results for the second quarter in August, beating both revenue and earnings forecasts.

What makes Gartner special?

Gartner has a strong brand and sits at a key point in the market. The business gives buyers an independent review point which can help them pick software and choose business partners.

The company is a thought leader across a variety of topics and provides independent research reports to business customers.

Gartner is known for its range of conferences, which sponsor various industry sectors. This acts as a great top of the funnel process to entice new customers and offer more value to existing customers.

The business also operates a strong consulting service covering a variety of areas, from digital transformation to technology strategy evaluation, IT cost optimization and Big Data.

Solid financials

Gartner reported solid financial results for the second quarter. Its revenue was $1.5 billion, which beat analyst forecasts by $1.5 billion and rose by 9.2% year over year.

The top line also beat analyst forecasts by $23.65 million, driven by strong Research revenue, which increased by 6% year over year or 7% on a constant currency basis. This segment is also its largest and most profitable with a 73% contribution margin, higher than the company's average of 68%.

This was further benefited by a range of growing topics, such as artificial Intelligence, cybersecurity, data analytics and even remote work.

Gartner's overall contract value rose by 9% year over year to $4.6 billion. This was driven by double-digit growth of enterprise leaders such as chief financial officer and chief information security officer customers. Tech vendor contract value was a little slower with single-digit growth, which was lower than the mid-teens growth reported in the prior year.

Overall contract value growth was diverse across industries. This was led by strong growth in the transportation sector, followed by retail and the public sector.

Breaking down by segment, global technology sales reached $3.5 billion, up 7% year over year.

GTS wallet retention was a solid 102%, which was down slightly from the 107% in the prior year. However, this is still solid as it means customers are sticking with Gartner specifically.

Moving on to global business sales, its contract value was $1 billion, which rose by 15% year over year. This was led by the supply chain industry. Upon the reopening of the economy in 2021, many companies suffered with supply chain disruption and thus, this has made it a critical issue for businesses to address.

Human resources was also a strong area of growth. This was driven by the rise of remote working, which has created an entirely new setup that is required for organizations.

Overall GBS retention was a solid 109%. Again, this was down from the 115% in the prior year, but still positive overall.

Consulting revenue continues with strong growth as it rose by 5% year over year to $126 million, at a 37% contribution margin.

There was a solid backlog reported for this segment, with $172 million in revenue up 17% year over year.

Conferences have had a resurgence now that in-person events are back in vogue. In the second quarter, Gartner reported $169 million in revenue, which beat internal expectations. This was driven by a roadshow of 17 conferences during the quarter. The contribution margin for this product type was also stable at 58%,

Finally, contract optimization, a small business segment, reported $22 million in revenue.

Profitability and balance sheet

Moving on to profitability, Gartner reported operating income of $299 million, which declined by 3.87% year over year. This was driven by a 12.95% increase in selling, general and administrative expenses to $670 million.

GBS quota-bearing headcount was up 15% year over year, while the overall company headcount rose to 20,104 associates, up 12%. In consultancies, the people are the product and thus, it can be more challenging to cut costs in this area.

Valuation

Gartner trades with a price-sales ratio of 4.85, which is higher than its five-year average, but lower than its ratio over 6 in 2021.

Based on historical ratios, past financial performance and analysts' future earnings projections, the GF Value Line also indicates a fair value of $345 per share. Thus, the stock is fairly valued at the time of writing.

Final thoughts

Gartner is a leading consultancy company that has a unique place in the market. Vendors rely on the company to assess the quality of their product relative to competitors. This effectively gives it a stranglehold on this market and a competitive advantage. Its competitors do offer similar services, but Gartner has the highest focus on enterprises (the most lucrative customer base).

This article first appeared on GuruFocus.

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>>> Arthur J. Gallagher & Co. Acquires Ace Commercial Insurance Center


PR Newswire

September 21, 2023


https://finance.yahoo.com/news/arthur-j-gallagher-co-acquires-130000585.html


Arthur J. Gallagher & Co. Acquires Hartley Cylke Pacific Insurance Services, Inc.

ROLLING MEADOWS, Ill., Sept. 21, 2023 /PRNewswire/ -- Arthur J. Gallagher & Co. today announced the acquisition of Corona, California-based Ace Commercial Insurance Center (Ace). Terms of the transaction were not disclosed.

Ace is a specialist insurance broker serving the trucking industry primarily in Southern California. Jackie Hoang, Anhdy Nguyen and their team will remain in their current location under the direction of Scott Firestone, head of Gallagher's Southwest region retail property/casualty brokerage operations.

"Ace is a well-regarded agency that expands our transportation market expertise in the Southwest," said J. Patrick Gallagher, Jr., Chairman, President and CEO. "I am very pleased to welcome Jackie, Anhdy and their associates to Gallagher."

Arthur J. Gallagher & Co. (NYSE:AJG), a global insurance brokerage, risk management and consulting services firm, is headquartered in Rolling Meadows, Illinois. Gallagher provides these services in approximately 130 countries around the world through its owned operations and a network of correspondent brokers and consultants.

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Marsh & McClennan - >>> Warren Buffett Just Sold the Rest of His Stake in This Dividend Stock. Should You Follow His Lead?


Motley Fool

By Courtney Carlsen

Sep 1, 2023


https://www.fool.com/investing/2023/09/01/warren-buffett-just-sold-the-rest-of-his-stake-in/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

Berkshire Hathaway's most recent 13-F form showed the company closed its position in insurance broker Marsh & McLennan.

Berkshire first bought shares of the company in Q4 2020.

Marsh & McLennan stock rose 60% during the period that Berkshire Hathaway held it.

This stock was one of three that Berkshire Hathaway completely liquidated in the second quarter.

Warren Buffett has proven to be one of the best investors ever. Since taking over as chief executive officer of Berkshire Hathaway in 1965, Buffett has delivered returns of 20% compounded annually. Put differently, if you had invested $1,000 in the company when Buffett took over, that investment would be worth $3,787,564 at the end of last year!

This track record of long-term success is why investors eagerly await Berkshire Hathaway's quarterly form 13-F. The Securities and Exchange Commission requires institutional investors to file a form 13-F, which discloses their quarterly securities trading activity.

Berkshire Hathaway completely closed out of three of its holdings in the second quarter, and one stock in that group was Marsh & McLennan (MMC -1.60%). Berkshire first bought the insurance broker in the fourth quarter of 2020. Here we'll explore why Buffett sold and whether investors should follow his lead.

Marsh & McLennan's insurance brokerage business has performed quite well

Marsh & McLennan's former CEO Dan Glaser perfectly summed up the business last year when he said, "When the world is unsettled, demand for our services rises." Marsh & McLennan advises companies on managing risks and connects them with insurers to help mitigate them. It also advises companies on corporate strategy, investments, and workplace issues.

Marsh & McLennan's insurance brokerage business is its bread and butter, and has been a key source of growth for the company. Although insurance may seem boring, insurance products will always be in demand, and these businesses can grow well during economic expansions and inflationary periods. In fact, this demand, which brings steady cash flows, is a big reason Buffett loves owning insurance businesses.

The past few years have been great for Marsh & McLennan's brokerage business, which earns commissions when it refers customers to an insurer. According to its Marsh Global Market Index, global insurance prices have risen for 23 consecutive quarters. As insurance prices rise, so do Marsh's earnings. So far this year the company's risk and insurance services revenue has increased 11% from the same period last year, and was the key to the company's 8% total revenue growth.

It was an excellent holding for Berkshire Hathaway

Berkshire Hathaway first acquired shares of Marsh & McLennan in the fourth quarter of 2020 and began trimming its position throughout 2021, but continued to hold a portion of it until the most recent quarter. From the end of 2020 to the end of this year's second quarter, Marsh & McLennan's stock rose 60% and proved to be another solid Buffett investment.

Marsh & McLennan was an excellent performer for Berkshire Hathaway, so I was a little surprised to see Buffett and his team completely close out the position. While Berkshire tends to hold its largest positions for a long time, it's not unusual for Buffett to open and close its smaller holdings more frequently.

Marsh & McLennan trades at a high valuation

While I can't say for sure why Berkshire sold Marsh & McLennan, one possible explanation is its valuation. Marsh & McLennan has become slightly more expensive since Buffett's first purchase. At the end of 2020, the company traded at about 3.5 times sales. Today it's valued at more than 4.5 times sales, its highest valuation during the past decade.

Perhaps Buffett doesn't believe the insurance brokerage business will continue to perform as strongly as it has. Maybe Buffett and his team anticipate a slowing economy ahead, and they believe Marsh's lofty valuation isn't justifiable in that type of environment.

Should you follow Buffett's lead?

Berkshire made a nice profit on its Marsh & McLennan holdings. While we can't know exactly why Buffett and his team sold their position, it's not due to anything wrong with the business, which is still humming. The sale did free up more money for Berkshire, which is currently sitting on $147 billion in cash and short-term securities.

As far as Marsh & McLennan goes, the company has posted steady growth for years, currently has a 1.4% dividend yield, and has raised its payout for 14 years. So while Berkshire trimmed its stake in the company, Marsh & McLennan remains a solid stock to hold in the long term.

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>>> Old Dominion Freight Line, Inc. (NASDAQ:ODFL)

https://www.insidermonkey.com/blog/5-best-sp-500-stocks-for-dividend-growth-1193160/3/

5-Year Average Dividend Growth: 35.6%

Number of Hedge Fund Holders: 43

Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is an American transportation and logistics company that specializes in less-than-truckload (LTL) freight services. The company currently pays a quarterly dividend of $0.40 per share and has a dividend yield of 0.38%, as of September 11. With a 5-year dividend growth of 35.6%, ODFL is one of the best dividend stocks on our list.

At the end of Q2 2023, 25 hedge funds in Insider Monkey’s database reported having stakes in Old Dominion Freight Line, Inc. (NASDAQ:ODFL), worth collectively over $265 million. Among these hedge funds, AQR Capital Management was the company’s leading stakeholder in Q2.

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>>> Zoetis Inc. (NYSE:ZTS)

https://finance.yahoo.com/news/15-best-p-500-stocks-211112359.html

5-Year Average Dividend Growth: 24.5%

Number of Hedge Fund Holders: 65

Zoetis Inc. (NYSE:ZTS) is a global animal health company that specializes in the discovery, development, manufacturing, and marketing of a wide range of veterinary medicines and vaccines. The company currently pays a quarterly dividend of $0.375 per share and has a dividend yield of 0.81%, as recorded on September 11. In the past five years, it raised its dividends at an annual average rate of 24.5%, which makes it one of the best dividend stocks on our list.

The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some other dividend stocks to consider for growth.

Zoetis Inc. (NYSE:ZTS) was a popular buy among elite funds with 65 hedge fund positions at the end of Q2 2023, up from 55 in the previous quarter, as per Insider Monkey's database. The consolidated value of stakes owned by these hedge funds is over $1.1 billion.

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>>> Cintas Corporation (NASDAQ:CTAS)

https://finance.yahoo.com/news/15-best-p-500-stocks-211112359.html

5-Year Average Dividend Growth: 24.2%

Number of Hedge Fund Holders: 40

Cintas Corporation (NASDAQ:CTAS) is an American business services company that provides a wide range of products and services related to corporate uniforms, workplace safety, and facility services. In the past five years, the company has raised its dividends by 24.2% on average and maintains a 40-year streak of consistent dividend growth. The company's current quarterly dividend stands at $1.35 per share which offers a dividend yield of 1.08%, as of September 11.

Of the 910 hedge funds tracked by Insider Monkey at the end of Q2 2023, 40 funds owned stakes in Cintas Corporation (NASDAQ:CTAS), up from 39 in the previous quarter. The overall value of these stakes is over $1.36 billion. Among these hedge funds, Impax Asset Management was the company's largest stakeholder in Q2.

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>>> Cadence to Acquire Intrinsix Corporation from CEVA


Business Wire

September 20, 2023


https://finance.yahoo.com/news/cadence-acquire-intrinsix-corporation-ceva-110000968.html


Transaction will bring Cadence a highly skilled team of engineers to expand company’s reach in the aerospace and defense industry, and strengthen CEVA’s focus on IP for high-growth technologies addressing wireless communications, sensing and edge AI


SAN JOSE, Calif. & ROCKVILLE, Md., September 20, 2023--(BUSINESS WIRE)--Cadence Design Systems, Inc. (Nasdaq: CDNS) and CEVA, Inc. (Nasdaq: CEVA), a leading licensor of wireless connectivity and smart sensing technologies, today announced that they have entered into a definitive agreement for Cadence to acquire Intrinsix Corporation, a wholly owned subsidiary of CEVA and a provider of design engineering solutions focused on the U.S. aerospace and defense industry. The purchase will bring Cadence a highly skilled engineering team that has expertise in advanced nodes, radio frequency, mixed-signal and security algorithms.

"CEVA’s strength over the years has been in developing and licensing semiconductor IP and software, which has powered more than 16 billion devices to date," said Amir Panush, CEO of CEVA. "With the sale of Intrinsix, we are focusing our efforts on this core expertise, which will allow us to reinforce our leadership position in wireless communications, sensing and edge AI technologies and support our long-term growth strategy."

"Cadence and Intrinsix are well-aligned in their missions to enable customers to achieve design excellence," said Neil Zaman, Senior Vice President and Chief Revenue Officer at Cadence. "Through the acquisition of Intrinsix, we will scale our system and IC design services team to support customers in key high-growth verticals like the aerospace and defense industry who are faced with meeting tight time-to-market deadlines and ever-increasing chip and system-level complexity."

The acquisition is expected to be immaterial to revenue and earnings this year for Cadence and is subject to certain closing conditions.

About Cadence

Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design™ strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence® customers are the world’s most innovative companies, delivering extraordinary products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For nine years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.

About CEVA

CEVA is the leading licensor of wireless connectivity and smart sensing technologies for a smarter, safer, connected world. We provide Digital Signal Processors, AI engines, wireless platforms, cryptography cores and complementary embedded software for sensor fusion, image enhancement, computer vision, spatial audio, voice input and artificial intelligence. Leveraging our technologies, many of the world’s leading semiconductors, system companies and OEMs create power-efficient, intelligent, secure and connected devices for a range of end markets, including mobile, consumer, automotive, robotics, industrial and IoT.

Our DSP and edge AI based solutions include platforms for 5G baseband processing in mobile, IoT and infrastructure, advanced imaging and computer vision for any camera-enabled device, audio/voice/speech and ultra-low-power always-on/sensing applications for multiple IoT markets. For motion sensing solutions, our Hillcrest Labs sensor processing technologies provide a broad range of sensor fusion software and inertial measurement unit ("IMU") solutions for markets including hearables, wearables, AR/VR, PC, robotics, remote controls and IoT. For wireless IoT, our platforms for Bluetooth connectivity (low energy and dual mode), Wi-Fi 4/5/6 (802.11n/ac/ax), Ultra-wideband (UWB), NB-IoT and GNSS are the most broadly licensed connectivity platforms in the industry.

CEVA is a sustainable and environmentally conscious company, adhering to our Code of Business Conduct and Ethics. As such, we emphasize and focus on environmental preservation, recycling, the welfare of our employees and privacy – which we promote on a corporate level. At CEVA, we are committed to social responsibility, values of preservation and consciousness towards these purposes.

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Accenture - >>> In-house lawyers buy into need for change


Financial Times

by Yasmin Lambert

September 22, 2023


https://finance.yahoo.com/m/08a5fbdb-aab4-35bd-ae79-43ffaab07227/in-house-lawyers-buy-into.html


Accenture legal team wins FT award for its work on taking risks with confidence

Over the past year, the in-house legal team at Accenture has rolled out a programme to improve how the consulting firm contracts with many of its clients that number in excess of 9,000 and include government departments and hundreds of the largest companies in the world.

In doing so, team members have changed how they think about risk and their purpose within the business. “Time kills deals,” explains Christina Demetriades, Accenture’s European general counsel.

“Of course, we have to be stewards of the business,” she adds. “But our role is to help our clients be successful and, in that way, help Accenture be successful.”

In any business transformation, changing how people think and behave is difficult. And changing the mindset of lawyers has its own particular challenges. “Ultimately, clients only ever buy services from [Accenture] because they want a project to succeed,” says Demetriades. But “as lawyers and legal professionals generally, we like to see the downsides”.

The FT Innovative Lawyers 2023 in-house legal teams listed in the table have advised their businesses on complex billion-dollar deals — such as the spinout of Haleon from GSK in the largest London listing in more than a decade — helped launch new products, and enabled acquisitions and rapid growth. Others have made operational changes, introduced new technologies, and trained their people in generative AI and sustainability. All are bringing in new ways to engage their teams.

Top 10 in-house legal teams

Winner: Accenture*

Anheuser-Busch InBev
Bupa
Chanel
Diageo
GSK
Iberdrola
Nasdaq
Octopus Energy
World Bank

* Winner of the FT Innovative Lawyers 2023 award for ‘Innovative in-house legal team in Europe’. Other organisations are listed alphabetically

Accenture is the winner of the award for most innovative legal team in Europe for 2023. Its programme to adopt a more client-centred approach to contracting includes bold ideas and has delivered results after its first year.

At Accenture, a ‘buddy’ system provides team members someone to check their thinking with.

Boldness came when the contracting team moved from creating a perfect or “watertight” contract before handing it over to the business for approval to, instead, making pragmatic decisions themselves about the impact and likelihood of risks. The starting point was ensuring that those dealing with contracts felt empowered to take decisions to improve revenue growth, and were not driven by fear of being blamed if something went wrong.

Approval steps were cut out where not essential and a “buddy” system was introduced that provides team members someone to check their thinking with, other than the line manager.

“We then went to the data to see what we could learn about what really goes wrong,” says Demetriades. “And then we [could] look at where we’re spending our time in the contracting process and ask: ‘Are we spending time on the things that actually matter?’”

The GSK legal team features in the top 10 list for leading the spin-off of the company’s consumer healthcare business as Haleon in 2022, and for new approaches to managing contracting. Lawyers worked for three years on hundreds of complex agreements in more than 70 countries to complete the largest demerger in Europe for 20 years.

The people that stayed with GSK?.?.?. were effectively employees of a new company, with a new purpose, strategy and culture

James Ford, GSK

However, GSK’s general counsel James Ford points out that the remaining part of the company also needed a reinvention. “The people that stayed with GSK after the separation from Haleon were effectively employees of a new company, with a new purpose, strategy and culture,” he notes.

For the GSK legal team, this meant recasting itself to support a smaller, more focused pharmaceutical business.

The team established a new global contracting centre in Bangalore, India, and used AI to review and redesign its contract templates. The business now handles more than half its legal contracts without needing support from the legal team.

Iberdrola, the Spanish energy company, has reinvented itself in the 20 years since its general counsel, Santiago Martínez Garrido, has been there.

But the past two years have seen a further acceleration in its ambition to become a world-leading investor in renewable energy, with plans to plough €47bn into areas such as renewables and energy networks between 2023 and the end of 2025.

The legal team has invested in its own operations and expertise to support the business. The company has launched a legal innovation centre and academy that trains lawyers and business colleagues on a range of topics, including legal technology, legal operations, sustainability and innovation.

“We don’t consider the transformation process within the legal services as a one-off,” says Martínez Garrido. “It should be a continued process in order to be aware of and ready for the transformation of the company?.?.?.?and the transformation of technology.”

While Accenture, GSK and Iberdrola are trying to shift culture and develop new skills within teams that number in the hundreds, at the other end of the size spectrum, Octopus Energy also makes the top ten list.

With a central legal team of just four lawyers, general counsel Amanda Gerrity supports the fast-growing business — now the UK’s third-largest energy retailer — with “a mentality where everyone is pragmatic, efficient and does a bit of everything”. And yet the team is unlikely to grow significantly, she says, as AI tools take care of more and more of the work.

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KO, AAPL, PG - >>> 3 Warren Buffett Stocks You Can Buy in September and Hold Forever


Motley Fool

By Stefon Walters

Sep 23, 2023


https://www.fool.com/investing/2023/09/23/3-warren-buffett-stocks-you-can-buy-in-september/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

Coca-Cola's dividend yield is more than double the S&P 500 average.

Apple's services segment is becoming a larger part of its revenue.

Procter & Gamble has increased its dividend for 67 straight years.


These blue-chip companies have a history of growth and stability that investors can feel comfortable with.

Warren Buffett is one of the most famous investors of all time. His success -- both personally and through his company, Berkshire Hathaway -- speaks for itself. Much of Buffett's success owes to just how clear and simple his investing philosophy is. One thing he constantly preaches is the importance of keeping a long-term mindset when investing. He's the poster child for the buy-and-hold strategy.

For investors looking to mimic Buffett's long-term investing approach, here are three Buffett stocks you can buy and feel comfortable holding on to forever.

1. Coca-Cola

Coca-Cola (KO) is Berkshire Hathaway's fourth-largest holding, making up 6.5% of its stock portfolio. Berkshire Hathaway first started buying Coca-Cola in 1988 and has since accumulated 400 million shares of the beverage giant.

Thanks to its flagship soda, Coca-Cola may be the most recognizable brand worldwide. One of its greatest accomplishments is how much distribution it's managed to achieve globally (and profitably). It has more than a 43% market share for non-alcoholic beverage sales globally.

Coca-Cola has always been a cash cow, but it's seen a significant improvement in its financials in the past three years. Revenue and net income are up over 38% and 46%, respectively, and it's managed to increase its dividend while lowering its payout ratio consistently.

Coca-Cola's dividend is a selling point for investors. It's as reliable as it comes, having been increased for 61 consecutive years. Coca-Cola's trailing-12-month dividend yield of around 3.2% is more than double the S&P 500 average.

One thing you don't have to question about Coca-Cola is its commitment to innovation and adjusting to consumer preferences. It has continuously shown a willingness to expand its product line and adapt to market trends. That's a recipe for sustained success.

2. Apple

You don't get the esteemed title of the world's most valuable public company by accident. It takes decades of innovation, vision, and execution -- and that's exactly what Apple (AAPL) has done.

Berkshire Hathaway owns over 50 stocks, but none carry as much weight as Apple. It accounts for over 46% of the portfolio. While that's not a strategy recommended for the typical investor, it's worked well for Berkshire Hathaway, especially considering Apple stock is up around 600% since Berkshire's first investment in Q1 2016.

People may point to slowing and inconsistent iPhone sales as a cause for caution, but Apple has been taking steps to be less reliant on it. The iPhone still accounts for 48% of Apple's revenue, but its services segment has steadily become a more significant revenue stream. That helps with diversification and Apple's margins because services typically have much higher margins than hardware products.

Apple's entrance into different services, like financial (Apple Card) and health (Health app), should be encouraging because those are industries with large total addressable markets due for disruption. And who better to do it than Apple, which has more resources than arguably any other company?

3. Procter & Gamble

Procter & Gamble (PG) (P&G) may not be the most recognizable name, but its collections of brands are sure to be. P&G is a conglomerate that owns household products like Tide, Old Spice, Gain, Crest, Pampers, and plenty more. It's one of Berkshire Hathaway's smaller holdings, representing just over $48.5 million worth of shares.

P&G is in a great position because it sells products that consumers buy regardless of the economy. When money is tight, it's relatively easy to choose generic-brand soda over name-brand soda or delay getting the new iPhone model. With P&G's countless brands covering baby care, feminine care, home care, and personal healthcare, it's much harder to eliminate these products from the budget.

Investors shouldn't buy P&G expecting double-digit percentage growth each year (organic sales increased 7% from its fiscal 2022 to 2023), but they can be sure the dividend won't be going anywhere. P&G has 67 straight years of dividend increases and 133 years of dividend payments in general. There's a reason it's a blue-chip stock.

P&G isn't quite "cheap" by many metrics, but if you're buying and holding on to the company for the long term, you shouldn't give much thought to it.

Sometimes, it's as simple as asking yourself, "Is this company selling something that people will always buy?" If that answer is yes and the company has a track record of growth and stability -- like P&G does -- then rarely can you go wrong.

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>>> Cintas Corporation Announces Fiscal 2024 First Quarter Results


Business Wire

September 26, 2023


https://finance.yahoo.com/news/cintas-corporation-announces-fiscal-2024-123000301.html


CINCINNATI, September 26, 2023--(BUSINESS WIRE)--Cintas Corporation (Nasdaq: CTAS) today reported results for its fiscal 2024 first quarter ended August 31, 2023. Revenue for the first quarter of fiscal 2024 was $2.34 billion compared to $2.17 billion in last year’s first quarter, an increase of 8.1%. The organic revenue growth rate for the first quarter of fiscal 2024, which adjusts for the impacts of acquisitions and foreign currency exchange rate fluctuations, was also 8.1%.

Gross margin for the first quarter of fiscal 2024 was $1.14 billion compared to $1.03 billion in last year’s first quarter, an increase of 11.0%. Gross margin as a percentage of revenue was 48.7% for the first quarter of fiscal 2024 compared to 47.5% in last year's first quarter, an increase of 120 basis points. Energy expenses comprised of gasoline, natural gas and electricity were 50 basis points lower for the first quarter of fiscal 2024 compared to last year's first quarter.

Operating income for the first quarter of fiscal 2024 increased 13.7% to $500.6 million compared to $440.1 million in last year's first quarter. Operating income as a percentage of revenue was 21.4% in the first quarter of fiscal 2024 compared to 20.3% in last year's first quarter.

Net income was $385.1 million for the first quarter of fiscal 2024 compared to $351.7 million in last year's first quarter. The first quarter of fiscal 2024 effective tax rate was 19.2% compared to 14.8% in last year's first quarter. The tax rates in both quarters were impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation. First quarter of fiscal 2024 diluted earnings per share (EPS) was $3.70 compared to $3.39 in last year's first quarter.

On September 15, 2023, Cintas paid an aggregate quarterly cash dividend of $138.3 million to shareholders, an increase of 17.8% from the amount paid last September.

Todd M. Schneider, Cintas' President and Chief Executive Officer, stated, "We are pleased with our first quarter fiscal 2024 financial results. Our operating segments continue to execute at a high level, leading to robust volume growth and a record high operating margin of 21.4%. These financial results are the product of the exceptional dedication of our employee-partners in helping businesses across North America stay focused on the work that matters most through innovative products and services. I look forward to another successful fiscal year."

Mr. Schneider concluded, "We are increasing our full fiscal year financial guidance. We are raising our annual revenue expectations from a range of $9.35 billion to $9.50 billion to a range of $9.40 billion to $9.52 billion and our diluted EPS from a range of $13.85 to $14.35 to a range of $14.00 to $14.45." Please note the following regarding guidance:

Fiscal year 2024 interest expense is expected to be approximately $98.0 million compared to $109.5 million in fiscal year 2023, predominately as a result of lower variable rate debt. This may change as a result of future share buybacks or acquisition activity.

Fiscal year 2024 effective tax rate is expected to be 21.3% compared to a rate of 20.4% in fiscal year 2023. The higher effective tax rate negatively impacts fiscal 2024 diluted EPS guidance by approximately $0.16 and diluted EPS growth by approximately 120 basis points.

Our diluted EPS guidance includes no future share buybacks.

Guidance includes the impact of having one more workday in fiscal year 2024 compared to fiscal year 2023.

Cintas Corporation helps more than one million businesses of all types and sizes get Ready™ to open their doors with confidence every day by providing products and services that help keep their customers’ facilities and employees clean, safe and looking their best. With offerings including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. Headquartered in Cincinnati, Cintas is a publicly held Fortune 500 company traded over the Nasdaq Global Select Market under the symbol CTAS and is a component of both the Standard & Poor’s 500 Index and Nasdaq-100 Index.

Cintas will host a live webcast to review the fiscal 2024 first quarter results today at 10:00 a.m., Eastern Time. The webcast will be available to the public on Cintas' website at www.Cintas.com. A replay of the webcast will be available approximately two hours after the completion of the live call and will remain available for two weeks.

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>>> Old Dominion Freight Line -- Less-than-truckload (LTL) specialist Old Dominion Freight Line makes up for its small 0.3% yield with a blistering 35% annualized dividend growth rate over the last five years and a minuscule 12% payout ratio.


https://www.fool.com/investing/2023/09/07/4-top-dividend-payers-of-the-sp-500/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Despite being the second-largest LTL shipper in the U.S., it is the most efficient operator in its industry, with an ROIC of 34% and a net profit margin of 21%.

However, in its most recent quarter, revenue and EPS dropped a nerve-racking 15% and 20% amid softness in the U.S. trucking industry as it continued to rightsize from a pandemic-aided boom. Still, management believes it maintained its 12% market share in the quarter, highlighting that it is not a company-specific slowdown.

Furthermore, the third-largest LTL shipper, Yellow, recently filed for Chapter 11 bankruptcy protection, which could boost Old Dominion as it picks up incremental sales growth from its beleaguered peer. However, after posting total returns of over 1,400% over the last decade, the company trades at a lofty 38 times earnings -- making this another dividend-grower to consider dollar-cost averaging into over time.

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>>> Zoetis -- Animal health specialist Zoetis has hit the ground running, more than quintupling its payouts since initiating its dividend in 2013. Zoetis is the largest business of its kind, creating vaccines, medicines, and diagnostics for pets and livestock, and generating $8.2 billion in sales and $2.2 billion in net income over the last year.


https://www.fool.com/investing/2023/09/07/4-top-dividend-payers-of-the-sp-500/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


The company is incredibly well-balanced with its products ranging from dermatology and osteoarthritis pain treatments to parasitic medicines and medicated feed additives. Zoetis generates 64% of its revenue from pets and 36% from livestock. Meanwhile, U.S. sales account for 54% of total revenue, while international markets comprise 46%.

Best yet for investors, Zoetis has 15 drugs that each earn over $100 million in annual revenue, highlighting the depth of its product offering and the strength of its research and development (R&D) capabilities. With 11% of its 13,800 employees working in R&D, this innovation is well-funded and should maintain a robust pipeline for decades ahead.

With Zoetis' rising ROIC of 19% and small payout ratio of 29%, look for it to provide above-average dividend growth. But with the shares trading at 40 times earnings and offering a 0.8% dividend, it may be best to buy on drops or though dollar cost averaging.

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>>> Cintas -- provides companies with uniforms, garments, first aid and safety products, and other ancillary business services. Despite its incredible 39-year run of dividend increases, Cintas has grown its dividend by 24% annually since 2018 and still has a slim payout ratio of 35%.


https://www.fool.com/investing/2023/09/07/4-top-dividend-payers-of-the-sp-500/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


With 1 million of the 16 million North American businesses as clients, the company is a market leader with over 11,000 distribution routes in a highly fragmented industry. Capitalizing on its larger size amid this fragmented market, Cintas has been a masterful serial acquirer, leading to a total return of over 77,000% since its initial public offering (IPO) in 1983.

Over this time, the company has averaged an ROIC of 14%, steadily increasing to 21% over the last few years. This high and rising ROIC highlights Cintas' ability to successfully integrate acquisitions and generate outsize profits over the longer term.

The company's track record of growth in an industry less susceptible to behemoths like Amazon, along with its leadership position, make it a brilliant holding for investors looking for stability. However, the stock trades at a premium valuation of 39 times earnings, so investors may want to build a position on short-term dips using dollar-cost averaging (DCA).

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>>> Tractor Supply -- Paying a 1.8% dividend, rural lifestyle retailer Tractor Supply has the largest yield of this group. Over the last five years, Tractor Supply has seen annualized dividend growth of 28% and maintained a payout ratio of 39%. A company's payout ratio measures the percentage of net income used to pay its dividends each year -- highlighting that Tractor Supply has ample room for increases, even if net income doesn't grow.


https://www.fool.com/investing/2023/09/07/4-top-dividend-payers-of-the-sp-500/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


However, the company has increased earnings per share (EPS) by 19% annually since 2013, so it isn't likely the company's profits will stagnate for an extended period. Led by a Neighbor's Rewards Club with over 31 million members -- a figure that grew by 19% from last year -- Tractor Supply's sales are steadier than one might think.

Even as consumer spending tightened in 2023, leading to a drop in seasonal and big-ticket purchases, the company eked out same-store sales growth of 3% thanks to its consumable, usable, and edible (CUE) sales rising by over 10%. These repeat sales help Tractor Supply generate consistent profitability, recording a return on invested capital (ROIC) of 34%. This ROIC places the company in the top decile of the S&P 500 and is an excellent sign for interested investors as stocks with higher ROICs outperform their less-profitable peers.

With a price-to-earnings (P/E) ratio of 22, Tractor Supply trades at a slight discount to its historical averages, making it an elite dividend growth stock to buy and hold forever.

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>>> The Procter & Gamble Co. (PG) has benefitted from robust pricing and a favorable mix, along with strength across segments. PG’s products play a key role in meeting the daily health, hygiene and cleaning needs of consumers around the world. PG has witnessed continued strong momentum as reflected by the underlying strength in brands and appropriate strategies, which aided its organic sales growth.


https://finance.yahoo.com/news/fed-dampens-wall-street-sentiments-121000701.html


Procter & Gamble remains focused on productivity and cost-saving plans to boost margins. PG’s continued investment in the business alongside its efforts to offset macro cost headwinds and balance top and bottom-line growth underscores its productivity efforts. PG is witnessing cost savings and efficiency improvements across all facets of the business.

Procter & Gamble has an expected earnings growth rate of 4.4% and 8.1%, respectively, for the current year (ending June 2024). The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 60 days. PG has a current dividend yield of 2.45%.

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>>> PepsiCo Inc. (PEP) reported robust second-quarter 2023 earnings. The results reflected strength and resilience in its diversified portfolio, modernized supply chain, improved digital capabilities, flexible go-to-market distribution systems and robust consumer demand trends. Resilience and strength in the global beverage and food businesses also aided results.


https://finance.yahoo.com/news/fed-dampens-wall-street-sentiments-121000701.html


PEP expects organic revenue growth of 10% for 2023 compared with the 8% rise estimated earlier. PEP expects core earnings per share of $7.47 for 2023 compared with $7.27 forecast earlier.

PepsiCo has an expected revenue and earnings growth rate of 6.7% and 10.2%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the last 60 days. PEP has a current dividend yield of 2.94%.

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Chevron - >>> Got $500? 1 Warren Buffett Stock to Buy Emphatically


Motley Fool

By Reuben Gregg Brewer

Sep 22, 2023


https://www.fool.com/investing/2023/09/22/got-500-1-warren-buffett-stocks-to-buy-emphaticall/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

Oil and natural gas are vital energy sources used the world over.

Despite a global push to increase the use of non-carbon energy sources, oil and natural gas will remain important for decades.

Financially strong Chevron will be there to provide it while paying an attractive dividend.

The world will need oil for decades, and Chevron is well positioned to provide it while rewarding investors with dividends along the way.


Warren Buffett's portfolio contains a number of energy companies, including both utilities and oil and natural gas production companies. It's an admission of the important role that energy plays in the modern world. If you are looking at Buffett's portfolio at Berkshire Hathaway (BRK.B -0.86%), one energy company that even conservative investors with as little as $500 might want to add to their portfolios is Chevron (CVX 0.66%). Here are some key reasons why.

1. Oil demand is not going away

According to the Energy Information Administration, the International Energy Agency, and OPEC, demand for carbon fuels will continue to be robust through at least 2050. The biggest shift will be a trend away from coal, the dirtiest of the major carbon fuels, and toward natural gas, the cleanest. Oil demand will be higher, too, but it will not grow as quickly as natural gas. All in, neither oil nor natural gas is going away, largely thanks to a still-growing world population.

With this backdrop, it is clear that oil and natural gas companies are going to be important providers of energy. Chevron is an integrated energy giant with a market cap of over $300 billion. It has been producing oil and natural gas for a very long time and has highly efficient operations. If there is a need for oil and/or natural gas, it is well positioned to produce the fuels.

2. Chevron is financially strong

There are a lot of energy companies in the world, however, even some very large ones that rival Chevron in scale. But one thing that separates Chevron from similar peers is its impressive financial strength. To put a number on that, Chevron's debt-to-equity ratio is roughly 0.14 times. That would be low for any company.

But Chevron's debt-to-equity ratio also happens to be the lowest in its direct peer group, as the chart above shows. This is important because oil and natural gas are commodities prone to dramatic and often swift price swings. Excessive debt reduces a company's strategic options when times get tough. Chevron, given its financial strength, has more choices during the inevitable industry downturns it will face. That's something conservative investors should greatly appreciate.

3. Chevron has a strong playbook

Just having choices isn't enough, however; a company has to show that it knows what to do. And Chevron did just that during the oil downturn spurred by the economic shutdowns used to slow the spread of the coronavirus in 2020.

As the graph above shows, when oil prices declined in 2020, crimping Chevron's earnings, it took on more debt and increased its leverage. That cash was used to keep the business going and to continue paying dividends to investors (more on this in a second). Just as important, when energy prices recovered, Chevron reduced leverage so it would be prepared for the next industry weak spot. So not only does Chevron have a strong financial foundation, but it has proven willing to use that strength when needed.

4. Chevron puts investors first

As noted, one of the things Chevron did during the last downturn was support its dividend. The company's earnings dipped into the red, so it could have easily justified a dividend cut. It did not, though, preferring instead to increase the dividend just like it has every year for over three decades. Through good energy markets and bad ones, Chevron has continued to increase its dividend annually. This is notable for a couple of reasons.

First, it shows that the company knows how to navigate a highly volatile industry. Second, and perhaps more importantly, it proves that the company places a high value on the needs and desires of its shareholders. There are other energy stocks out there, some with dividend policies that effectively rise and fall along with oil prices. However, the board of Chevron is well aware that conservative income investors buy its stock because they expect a consistent and slowly growing dividend. And that is what they have made sure shareholders get.

An all-around great energy stock for conservative income investors

There are other things to like about Chevron, like its growing production profile and the current guidance that it will continue to improve the returns on the capital it invests. It's also working to improve its own environmental footprint. Such things will ebb and flow over time.

The bigger picture is what Buffett generally looks at. And from that perspective, Chevron operated in an industry that is out of favor but will remain important for years. It has a large and financially strong business. It has proven it can use its financial strength to muddle through difficult times. And it continues to put investors first with a steadily increasing dividend. If that sounds like a good combination of traits, then you might just be channeling your inner Warren Buffett.

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>>> KLA Corporation (KLAC) designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. It operates through three segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB, Display and Component Inspection. The company offers inspection and review tools to identify, locate, characterize, review, and analyze defects on various surfaces of patterned and unpatterned wafers; metrology systems that are used to measure pattern dimensions, film thickness, film stress, layer-to-layer alignment, pattern placement, surface topography, and electro-optical properties for wafers; Wafer defect inspection, review, and metrology systems; reticle inspection and metrology systems; chemical process control equipment; wired and wireless sensor wafers and reticles; and semiconductor software solutions that provide run-time process control, defect excursion identification, process corrections, and defect classification to accelerate yield learning rates and reduce production risk. It also provides etch, plasma dicing, deposition, and other wafer processing technologies and solutions for the semiconductor and microelectronics industry. In addition, the company offers direct imaging, inspection, optical shaping, inkjet and additive printing, UV laser drilling and computer-aided manufacturing and engineering solutions for the PCB market; inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market; and inspection and metrology systems for quality control and yield improvement in advanced and traditional semiconductor packaging markets. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was incorporated in 1975 and is headquartered in Milpitas, California.

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>>> O'Reilly Automotive, Inc. (ORLY), together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States and Mexico. The company provides new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting products, and oil and wiper blades; and accessories, including floor mats, seat covers, and truck accessories. It also offers auto body paint and related materials, automotive tools, and professional service provider service equipment. In addition, the company provide enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; and professional paint shop mixing and related materials. Further, it offers do-it-yourself and professional service for domestic and imported automobiles, vans, and trucks. The company was founded in 1957 and is headquartered in Springfield, Missouri.

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>>> Roper Technologies, Inc. (ROP) designs and develops software, and technology enabled products and solutions. The company offers management, campus solutions, diagnostic and laboratory information management, enterprise management, information solutions, transportation management, financial and compliance management, and cloud-based financial analytics and performance management software; cloud-based software to the property and casualty insurance industry; and software, services, and technologies for foodservice operations. It also provides cloud-based data, collaboration, and estimating automation software; electronic marketplace; visual effects and 3D content software; wireless sensor network and solutions; cloud-based software for the life insurance and financial services industries; supply chain software; health care service and software; RFID card readers; data analytics and information; and pharmacy software solutions. In addition, the company offers ultrasound accessories; dispensers and metering pumps; automated surgical scrub and linen dispensing equipment; water meters; optical and electromagnetic measurement systems; and medical devices. It distributes and sells its products through direct sales, manufacturers' representatives, resellers, and distributors. The company was formerly known as Roper Industries, Inc. and changed its name to Roper Technologies, Inc. in April 2015. The company was incorporated in 1981 and is based in Sarasota, Florida.

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>>> Analog Devices, Inc. (ADI) designs, manufactures, tests, and markets integrated circuits (ICs), software, and subsystems that leverage analog, mixed-signal, and digital signal processing technologies. The company provides data converter products, which translate real-world analog signals into digital data, as well as translates digital data into analog signals; power management and reference products for power conversion, driver monitoring, sequencing, and energy management applications in the automotive, communications, industrial, and high-end consumer markets; and power ICs that include performance, integration, and software design simulation tools for accurate power supply designs. It also offers high-performance amplifiers to condition analog signals; and radio frequency and microwave ICs to support cellular infrastructure; and micro-electro-mechanical systems technology solutions, including accelerometers used to sense acceleration, gyroscopes for sense rotation, inertial measurement units to sense multiple degrees of freedom, and broadband switches for radio and instrument systems, as well as isolators. In addition, the company provides digital signal processing and system products for high-speed numeric calculations. It serves clients in the industrial, automotive, consumer, instrumentation, aerospace, and communications markets through a direct sales force, third-party distributors, and independent sales representatives in the United States, rest of North and South America, Europe, Japan, China, and rest of Asia, as well as through its Website. Analog Devices, Inc. was incorporated in 1965 and is headquartered in Wilmington, Massachusetts.

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>>> Winmark Corporation (WINA), a resale company operates as a franchisor for small business in the United States and Canada. The company's Franchising segment franchises retail stores concepts that buy, sell and trade merchandise. Its Leasing segment operates middle-market equipment leasing business. The company buys and sells used clothing and accessories geared toward the teenage and young adult market under Plato's Closet brand; and operates stores which buys and sells used and new children's clothing, toys, furniture, equipment, and accessories primarily to parents of children ages infant to 12 years under the Once Upon A Child brand. In addition, it buys, sells, trades in, and used and new sporting goods, equipment, and accessories for various athletic activities including team sports, such as baseball/softball, hockey, football, lacrosse, and soccer, as well as fitness, ski/snowboard, golf, and others under the Play It Again Sports brand; and buys and sells used women's apparel, shoes, and accessories under the Style Encore brand. Further, the company buys, sells, trades in, and used and new musical instruments, speakers, amplifiers, music-related electronics, and related accessories under the Music Go Round brand. Winmark Corporation was incorporated in 1988 and is headquartered in Minneapolis, Minnesota.

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>>> Casey's General Stores, Inc. (CASY), together with its subsidiaries, operates convenience stores under the Casey's and Casey's General Store names. Its stores offer pizza, donuts, breakfast items, and sandwiches; and tobacco and nicotine products. The company's stores provide soft drinks, energy, water, sports drinks, juices, coffee, and tea and dairy products; beer, wine, and spirits; snacks, candy, packaged bakery, and other food items; ice, ice cream, meals, and appetizers; health and beauty aids, automotive products, electronic accessories, housewares, and pet supplies; and ATM, lotto/lottery, and prepaid cards. In addition, its stores offer motor fuel for sale on a self-service basis; and gasoline and diesel fuel, as well as car wash services. Casey's General Stores, Inc. was founded in 1959 and is headquartered in Ankeny, Iowa.

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>>> The Progressive Corporation (PGR), an insurance holding company, provides personal and commercial auto, personal residential and commercial property, general liability, and other specialty property-casualty insurance products and related services in the United States. It operates in three segments: Personal Lines, Commercial Lines, and Property. The Personal Lines segment writes insurance for personal autos and recreational vehicles (RV). This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, snowmobiles, and related products. The Commercial Lines segment provides auto-related liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, pick-up trucks, and dump trucks used by small businesses; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, garbage/debris removal, and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses; as well as non-fleet and airport taxis, and black-car services. The Property segment writes residential property insurance for homeowners, other property owners, and renters, as well as offers manufactured homes, personal umbrella insurance, and primary and excess flood insurance. The company offers policy issuance and claims adjusting services; and acts as an agent to homeowners, general liability, workers' compensation insurance, and other products. It also provides reinsurance services. The company sells its products through independent insurance agencies, as well as through mobile applications and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield Village, Ohio.

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>>> Kinsale Capital Group, Inc. (KNSL), a specialty insurance company, provides property and casualty insurance products in the United States. The company's commercial lines offerings include construction, small business, excess and general casualty, commercial property, allied health, life sciences, energy, environmental, health care, inland marine, public entity, and commercial insurance, as well as product, professional, and management liability insurance. It markets and sells its insurance products in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands primarily through a network of independent insurance brokers. Kinsale Capital Group, Inc. was founded in 2009 and is headquartered in Richmond, Virginia.

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>>> Badger Meter, Inc. (BMI) manufactures and markets flow measurement, quality, control, and communication solutions in the United States, Asia, Canada, Europe, Mexico, the Middle East, and internationally. It offers mechanical or static water meters, and related radio and software technologies and services to municipal water utilities. The company also provides flow instrumentation products, including meters, valves, and other sensing instruments to measure and control fluids going through a pipe or pipeline, including water, air, steam, oil, and other liquids and gases to original equipment manufacturers as the primary flow measurement device within a product or system, as well as through manufacturers' representatives. In addition, the company offers ORION (SE) for traditional fixed network applications; and ORION Cellular for utility-owned fixed network infrastructure, as well as BEACON, a secure cloud-hosted software suite that establishes alerts for specific conditions and allows consumer engagement tools that permit end water customers to view and manage their water usage activity. Its flow instrumentation products are used in water/wastewater, heating, ventilating and air conditioning, and corporate sustainability markets. The company serves water utilities, industrial, and other industries. It sells its products directly, as well as through resellers and representatives. Badger Meter, Inc. was incorporated in 1905 and is based in Milwaukee, Wisconsin.

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>>> Comfort Systems USA, Inc. (FIX) provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services for the mechanical and electrical services industry in the United States. It engages in the design, engineering, integration, installation, and start-up of mechanical, electrical, and plumbing (MEP) systems; and renovation, expansion, maintenance, monitoring, repair, and replacement of existing buildings. The company offers its services for heating, ventilation, and air conditioning (HVAC) systems, as well as plumbing, piping and controls, off-site construction, electrical, monitoring, and fire protection. It serves building owners and developers, general contractors, architects, consulting engineers, and property managers in the commercial, industrial, and institutional MEP markets. Comfort Systems USA, Inc. was incorporated in 1996 and is based in Houston, Texas.

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>>> TransDigm Group Incorporated (TDG) designs, produces, and supplies aircraft components in the United States and internationally. Its Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. The company's Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, and parachutes. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots. Its Non-aviation segment offers seat belts and safety restraints for ground transportation applications; electro-mechanical actuators for space applications; hydraulic/electromechanical actuators and fuel valves for land-based gas turbines; refueling systems for heavy equipment used in mining, construction, and other industries; and turbine controls for the energy and oil and gas markets. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment. The company was founded in 1993 and is based in Cleveland, Ohio.

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>>> CBIZ, Inc. (CBZ) provides financial, insurance, and advisory services in the United States and Canada. It operates through three segments: Financial Services, Benefits and Insurance Services, and National Practices. The Financial Services segment offers accounting and tax, financial advisory, valuation, risk and advisory, and government healthcare consulting services. The Benefits and Insurance Services provides employee benefits consulting, payroll/human capital management, property and casualty insurance, and retirement and investment services. The National Practices segment offers information technology managed networking and hardware, and health care consulting services. The company primarily serves small and medium-sized businesses, as well as individuals, governmental entities, and not-for-profit enterprises. CBIZ, Inc. was incorporated in 1987 and is headquartered in Cleveland, Ohio.

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>>> CACI International Inc (CACI), together with its subsidiaries, provides expertise and technology to enterprise and mission customers in support of national security missions and government modernization/transformation in the intelligence, defense, and federal civilian sectors. It operates through two segments: Domestic Operations and International Operations. The Domestic Operations segment offers information solutions and services to the U.S. federal government agencies and commercial enterprises in the areas, such as digital solutions, C4ISR, cyber and space, engineering services, enterprise IT, and mission support. The International Operations segment provides a range of IT services, proprietary data, and software products to the commercial and government customers in the United Kingdom, continental Europe, and internationally. The company designs, implements, protects, and manages secure enterprise IT solutions. It also offers software-defined, full-spectrum cyber, electronic warfare, and counter-unmanned aircraft system solutions; and platform integration and modernization and sustainment, as well as system engineering, naval architecture, training and simulation, and logistics engineering. In addition, the company provides enterprise cloud solutions for classified and unclassified networks; and intelligence support that ensures continuous advances in collection, analysis, and dissemination to optimize decision-making. CACI International Inc was founded in 1962 and is headquartered in Reston, Virginia.

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>>> Republic Services, Inc. (RSG), together with its subsidiaries, offers environmental services in the United States. It is involved in the collection and processing of recyclable, solid waste, and industrial waste materials; transportation and disposal of non-hazardous and hazardous waste streams; and other environmental solutions. Its residential collection services include curbside collection of material for transport to transfer stations, landfills, recycling centers, and organics processing facilities; supply of recycling and waste containers; and renting of compactors. The company also engages in the processing and sale of old corrugated containers, old newsprint, aluminum, glass, and other materials; and provision of landfill services. It serves small-container, large-container, and residential customers. As of December 31, 2022, the company operated through 353 collection operations, 233 transfer stations, 206 active landfills, 71 recycling centers, 6 saltwater disposal wells, and 7 deep injection wells, as well as 3 treatment, recovery, and disposal facilities in 41 states; and 20 treatment, storage, and disposal facilities. It also operates 73 landfill gas-to-energy and renewable energy projects, and 12 closed landfills. The company was incorporated in 1996 and is based in Phoenix, Arizona.

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>>> Gartner, Inc. (IT) operates as a research and advisory company in the United States, Canada, Europe, the Middle East, Africa, and internationally. It operates through three segments: Research, Conferences, and Consulting. The Research segment delivers its research primarily through a subscription service that include on-demand access to published research content, data and benchmarks, and direct access to a network of research experts. The Conferences segment offers business professionals in an organization the opportunity to learn, share, and network. The Consulting segment offers market research, custom analysis, and on-the-ground support services. This segment also offers actionable solutions for IT-related priorities, including IT cost optimization, digital transformation, and IT sourcing optimization. Gartner, Inc. was founded in 1979 and is headquartered in Stamford, Connecticut.

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>>> Arthur J. Gallagher & Co. (AJG), together with its subsidiaries, provides insurance and reinsurance brokerage, consulting, and third-party property/casualty claims settlement and administration services to businesses and organizations worldwide. It operates in Brokerage and Risk Management segments. The Brokerage segment offers retail and wholesale insurance and reinsurance brokerage services; assists retail brokers and other non-affiliated brokers in the placement of specialized and hard-to-place insurance; and acts as a brokerage wholesaler, managing general agent, and managing general underwriter for distributing specialized insurance coverages to underwriting enterprises. This segment also performs activities, including marketing, underwriting, issuing policies, collecting premiums, appointing and supervising other agents, paying claims, and negotiating reinsurance; and offers services in the areas of insurance and reinsurance placement, risk of loss management, and management of employer sponsored benefit programs. The Risk Management segment provides contract claim settlement and administration services; and claims management, loss control consulting, and insurance property appraisal services. The company offers its services through a network of correspondent brokers and consultants. It serves commercial, industrial, public, religious, and not-for-profit entities, as well as underwriting enterprises. The company was founded in 1927 and is headquartered in Rolling Meadows, Illinois.

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