Qualcomm (QCOM)
Qualcomm (QCOM) was founded in 1985 and is a leader in the development and commercialization of digital communication technologies called CDMA (Code Division Multiple Access) and OFDMA (Orthogonal Frequency Division Multiple Access), including LTE (Long Term Evolution). The company owns significant intellectual property applicable to products that implement any version of CDMA and OFDMA, including patents, patent applications, and trade secrets. In fact, Qualcomm has over 46,000 granted patents, with about another 107,000 pending. Any company in the mobile communications industry trying to develop, manufacture, and/or sell products using CDMA and/or LTE standards usually requires a patent license from Qualcomm. The company also develops other technologies used in handsets and tablets, including certain audio and video technologies, [...]
Consolidated Edison (ED)
Consolidated Edison (ED) was founded in 1884 and serves as a regulated electric and gas utility to the New York metro areas and Westchester County, NY. Con Ed's principal business segments are: Con Edison of New York (93% of earnings when combined w/Orange & Rockland): provides electric service to approximately 3.3 million customers and gas service to approximately 1.1 million customers in New York City and Westchester County. The company also provides steam service in parts of Manhattan for heating purposes. Orange & Rockland (93% of earnings when combined w/Con Edison of New York): provides electric service to more than 300,000 customers in southeastern New York and adjacent areas of northern New Jersey and eastern Pennsylvania and gas service to [...]
Public Storage (PSA)
Public Storage (PSA) was founded in 1972 and is America’s largest self-storage REIT, owning over 2,500 storage rental properties in 38 states and seven European countries. The company also owns a 42% stake in PS Business Parks (PSB), which leases out commercial space to small and mid-size businesses. U.S. self-storage operations account for approximately 86% of company-wide net operating income, followed by commercial properties (6%), ancillary businesses (6% - reinsurance policies, locks and cardboard boxes), and European self-storage (3%). In total, Public Storage serves over one million customers. The company's business model provides great short-term visibility because customers typically sign month-to-month leases. This gives the REIT some protection against inflation because it can continually adjust rents to account [...]
Magellan Midstream Partners, L.P. (MMP)
Magellan Midstream Partners is one of America’s larger MLPs and specializes in refined petroleum products. Magellan’s pipeline systems primarily transport products such as gasoline and diesel fuel from refineries, helping them eventually reach gasoline stations, truck stops, airports, and other end users. The partnership’s 13,000 miles of pipelines and over 50 storage terminals (100 million barrels of capacity) supply it with extremely steady distributable cash flow, or DCF, courtesy of the long-term contracts it has that are generally insensitive to commodity prices. Source: Magellan Midstream Partners Investor Presentation In fact, only 10% of Magellan’s operating margin has any commodity exposure at all, and management uses hedging to reduce that risk even further. Source: Magellan Midstream [...]
Verizon (VZ)
Verizon is the largest wireless service provider in the United States. The company’s 4G LTE network is available to more than 98% of the country’s population. Wireless operations, which include voice and data services and equipment sales, generate approximately 73% of Verizon’s revenue and account for over 86% of the company’s EBITDA (earnings before interest, depreciation, and amortization). Wireline operations account for about 27% of the company’s revenue but only generate 14% of Verizon’s EBITDA. This segment includes traditional voice offerings, as well as broadband video and internet services. The company has sold off many of its wireline assets in recent years to reduce its exposure to slower-growing, capital intensive areas of the sector. Overall, Verizon maintains [...]
Duke Energy (DUK)
Duke Energy’s history dates back to the early 1900s, and the company is largest electric utility in the country today, serving approximately 7.5 million electric customers and 1.6 million gas customers across the Southeast and Midwest regions of the U.S. A blend of residential (33%), commercial (30%), industrial (20%), and wholesale (17%) customers make up the company's mix. Regulated electric utilities account for 89% of Duke Energy’s earnings, but the company also has a fast-growing gas infrastructure and utilities business (8%) and a commercial portfolio of renewables (3%). Management sold Duke Energy’s international energy business (which was 5% of earnings) in 2016 to reduce the firm's earnings volatility and focus the company completely on its core domestic [...]
Pfizer (PFE)
Founded in 1849, Pfizer is one of the world's largest drug makers, with over 95,000 global employees, more than 60 manufacturing facilities, and medications sold in over 125 countries. The company's annual sales exceed $50 billion and are grouped into two business segments: Innovative Health (60% of sales and 62% profits): produces patented medicines to treat various therapeutic areas, including internal medicine, vaccines, oncology, inflammation and immunology, and rare diseases. This unit drives Pfizer's overall growth because it produces all of the company's largest sellers, including a number of medications with more than $1 billion in annual sales. Compared to other pharma and biotech companies, Pfizer's portfolio is nicely diversified by treatment area and drug type, reducing [...]
Procter & Gamble (PG)
In business since 1837, Procter & Gamble has grown into one of the world’s largest consumer goods manufacturers, advertisers, and distributors. It currently sells 65 products in more than 180 countries. Some of its leading brands are Luvs, Pampers, Tampax, Charmin, Downy, Tide, Cascade, Dawn, Febreze, Head & Shoulders, Old Spice, Pantene, Gillette, Braun, Crest, and Oral-B. Here’s a look at Procter & Gamble’s segments. Over 70% of its earnings are accounted for by Fabric & Home Care (27%); Baby, Feminine & Family Care (25%), and Beauty (19%). Source: Procter & Gamble, Simply Safe Dividends Procter & Gamble's business is very diversified geographically. North America accounted for 45% of sales in fiscal 2017, followed by Europe (23%), Asia Pacific [...]
General Mills (GIS)
General Mills went into business in 1866, owning just a single flour mill at the time. Since then, the company expanded into a number of different industries, including restaurants, toys, and even apparel. However, the business refocused completely on consumer foods in 1995. Today, General Mills sells a diversified mix of packaged meals, cereal, snacks, baking products, yogurt, and more. The company’s largest brands are Cheerios, Betty Crocker, Yoplait, Pillsbury, Nature Valley, Old El Paso, and Haagen-Dazs. Each of these brands generates over $1 billion in annual sales. While natural and organic food only accounted for 7% of the company's total revenue in fiscal 2017, General Mills is one of the largest organic food manufacturers in the U.S. and [...]
Johnson & Johnson (JNJ): A Dividend King That’s Built to Last
Founded in 1885, Johnson & Johnson is the world’s largest medical conglomerate. With more than 250 subsidiaries operating in over 60 countries, Johnson & Johnson’s three major business units provide it with a very diversified mix of revenue, earnings, and cash flow. Here are the company’s operating segments: Pharmaceuticals (47% of 2016 sales; 62% of pretax profit): dozens of patented drugs and vaccines to treat oncology, cardiovascular, immunological, neurological, infectious diseases, and diabetes. Remicade, a treatment for a number of immune-mediated inflammatory diseases, is Johnson & Johnson’s largest drug and accounted for 9.7% of company-wide revenue in 2016. Medical Devices (35% of 2016 sales; 26% of pretax profit): surgical, orthopedic, endomechanical (i.e. hip replacements), and sterilization equipment. [...]