In This Issue Adding a Protein-Rich Source of Dividend ...

TM

March 2019

Volume VIII Issue 3



Adding a Protein-Rich Source of Dividend

Income to the DI Portfolio

In This Issue

DI Tables

Portfolio Alerts This Month

Portfolio Holdings

Performance of DI Portfolio

Recent Earnings Announcements

Dividend Payments

Dividend Analysis

2

3

4

5

6

7

In-Depth Stock Reports

Huntington Bancshares Inc. (HBAN) 8

Regional bank is using its financial

strength to repurchase shares and

pay a dividend.

Procter & Gamble Co. (PG)

10

Snap-on Inc. (SNA)

12

Tyson Foods, Inc. (TSN)

14

World¡¯s leading consumer products

company starting to see traction

from focus on core brands.

Vehicle repair service and tool

supplier with strong dividend growth

expanding into wider range of

equipment and industries.

Domestic food producer with recent

record of strong dividend growth

trading at an attractive dividend

level relative to its historical norm.

DI Article

DI Monthly Dividend Cash Flows 16

Examining the month-to-month

variance in the dividend income of

the DI portfolio, coupled with the

impact of a stock¡¯s dividend yield on

the portfolio cash payout.

Next Publication Date:

April 5, 2019

AAII Dividend Investing is produced by AAII. ¡°The American

Association of Individual Investors is an independent nonprofit

corporation formed in 1978 for the purpose of assisting

individuals in becoming effective managers of their own assets

through programs of education, information and research.¡±

The market posted solid monthly gains in February, giving investors the best

start to a year since 1991. The Dow Jones U.S. Index ETF (IYY), gained 3.4% during February and is now up 11.4% through March 6, 2019. The Dividend Investing tracking portfolio returned 2.9% for the month of February and is up 11.7%

for the year through March 6, 2019.

The DI tracking portfolio¡¯s monthly total return of 2.9% was composed of a

2.8% price increase and 0.1% in income return. The Dow Jones U.S. Index ETF

(IYY) 3.4% return during the month was composed of a 3.4% price increase and

no distributed income return. The exchange-traded fund will distribute its next

dividend in March.

Over the life of the DI portfolio, it has provided a total return of 122.5%, with

dividend income contributing 42.8% to the total return. The Dow Jones U.S.

Index ETF has a total return of 146.6%, with income contributing 29.8% to the

total return.

AAII¡¯s Dividend Investing seeks total return that consists of both dividend

income and capital appreciation by being fully invested in a portfolio of stocks

that exhibit financial strength; have a solid record of sales, earnings and dividend

growth; maintain a consistent pattern of dividend increases; and remain attractively priced. The strategy and tactics are based on robust studies of market

factors that have contributed to strong long-term market returns.

Portfolio Alerts

There is one portfolio deletion and one portfolio addition for March. CVS

Health (CVS) is being removed from the portfolio, and Tyson Foods Inc. (TSN) is

being added.

A firm¡¯s financial quality, growth, dividend consistency and valuation are

considered when making portfolio deletion and addition decisions for the DI

portfolio.

Portfolio Deletion: CVS Health (CVS)

CVS Health is a health care company providing consumer care through its

pharmacies as well as its health services and plans. In a bold move, CVS acquired

the insurance provider Aetna Inc. late last year. The merger combines CVS¡¯ pharmacies with Aetna¡¯s insurance business with the hopes of lowering costs. CVS

also has one of largest pharmacy benefit managers through CVS Caremark.

CVS took on debt to complete the acquisition. The combined company is

generating strong operating cash flow. CVS reported operating cash flow of $8.9

billion for full-year 2018 and free cash flow of $6.8 billion. The free cash flow will

be primarily used to pay down debt and fund the cash dividend. The company is

committed to paying its dividend, but it will not increase the dividend until the

debt level is reduced.

The stock continues to offer an attractive dividend yield, but the lack of nearterm dividend growth dictates that it be removed from the DI portfolio.

Portfolio Alerts This Month

March Portfolio Deletion:

Portfolio Deletion Alert

Date

Price*

3/8/2019

$52.36

Company (Ticker)

CVS Health (CVS)

Portfolio

Addition

Alert Date

4/7/2017

Stock Total

Return Since

Purchase*

(28.6%)

Index Total

Return Since

Purchase*

20.2%

March Portfolio Addition:

Company (Ticker)

Tyson Foods, Inc. (TSN)

*Data as of 3/7/2019.

Latest

Price*

$64.11

Dividend

Yield*

Sector: Industry

2.3%

Consumer Non-Cyclicals: Food Processing

Portfolio Addition: Tyson Foods, Inc. (TSN)

The search for candidates with a

record of dividend consistency, financial

strength, growth and attractive valuation led to Tyson Foods.

Tyson Foods is one of the world¡¯s largest meat producers, supplying one out

of five pounds of all the chicken, beef

and pork in the U.S. Tyson¡¯s portfolio

includes Tyson, Jimmy Dean, Hillshire

Farm, Ball Park, Wright Brand, Golden

Island, Aidells and State Fair.

Tyson operates through four segments: chicken, beef, pork and prepared

foods. It operates a vertically integrated

chicken production process, which

consists of breeding stock, contract

growers, feed production, processing, further-processing, marketing and

transportation of chicken and related

products, including animal and pet food

ingredients. Its products are marketed

and sold by its sales staff to grocery

retailers, grocery wholesalers, meat

distributors, warehouse club stores and

military commissaries, among others.

Revenue for Tyson has increased at

a 3.1% annual rate of growth over the

last five years but has contracted 1.1%

annually over the last three years. Yearover-year revenue growth was 1.8% for

the last four quarters.

Net income is much stronger, with a

five-year compound annual growth rate

(CAGR) of 31.2% and three-year CAGR

of 35.3%. The year-over-year decline in

net income is 30.9%.

Tyson operates in competitive and

relatively low margin industry. Its gross

profit margins have generally improved

over the last five years from 7.1% during

2014 to 12.8% during 2018. Operating

margins have improved from 3.8%

in 2014 to 7.6% in 2018. The operating margin of 7.3% over the last four

quarters is above the 4.7% margin of

the food processing industry. The net

profit margin has increased from 2.3%

to 7.6% over the last five fiscal years but

has declined to 4.9% for the trailing four

quarters.

Tyson had a minor positive earnings surprise of 1.3% in February and a

significant positive surprise of 17.0% in

November. Analysts expect earnings to

expand 7.8% to $5.90 for the current

fiscal year and 6.2% to $6.27 in 2020. It

should be noted that the consensus estimate for the current year has declined

over the last three months from $5.94

to $5.90 but increased from $6.24 to

$6.27 for fiscal 2020. Analysts expect

earnings to expand 3.3% annually over

the next three to five years.

Tyson has paid cash dividends since

1976 without interruption. In recent

Published monthly by the American

Association of Individual Investors

625 N. Michigan Ave., Chicago, IL 60611

312-280-0170, .

Annual DI subscription, $199.

AAII Dividend Investing? (DI) is not a registered investment

adviser or a broker/dealer. This report is issued solely for

informational purposes and should not be construed as an

offer to sell or the solicitation of an offer to buy securities.

The opinions and analyses included herein are based on sources believed to be reliable

and written in good faith, but no representation or warranty, expressed or implied, is

made as to their accuracy, completeness, timeliness, or correctness. Neither we nor our

information providers shall be liable for any errors or inaccuracies, regardless of cause,

2

years, Tyson has been

aggressive in increasing

its dividend, with a fiveyear compound annual

growth rate of 43.1%. It

raised its dividend 25.0%

last August. Tyson has

raised its dividend for

seven straight years but

that was after a period

of many years without

increases.

Financial Strength

The ratio of total liabilities to assets

has declined over the last five years

from 62.9% to 59.4% but remains above

the industry median of 53.5%.

The company¡¯s ability to pay interest

is strong as measured through the times

interest earned ratio of 8.3, more than

double the industry median of 3.0.

Tyson has a current earnings payout

ratio of 23.9%, above its five-year average of 14.4%, but overall is low. The

company currently has a free-cash-flow

payout ratio of 31.3%, which is also

above its five-year average of 17.3%.

The company generated strong operating cash flows of $2.705 billion over the

last four quarters, while capital expenditures were $1.222 billion. Free cash flow

per share is strong but has contracted

slightly since 2016.

Tyson¡¯s dividend yield of 2.3% is above

its five-year average yield of 1.1%. Tyson

is trading with a reasonable trailing

price-earnings ratio of 12.7, which is

below its five-year average of 14.5 and

well below the food processing industry

median of 20.6. The forward price-earnings ratio is 10.8 times expected 2019

earnings and 10.2 times consensus 2020

earnings.

Tyson is a large producer of chicken,

or the lack of timeliness of, or any delay or interruptions in, the transmission thereof

to the users. All information contained in this report should be independently verified

with the companies mentioned.

? American Association of Individual Investors, 2019. AAII Dividend Investing is a

trademark and service mark of the American Association of Individual Investors¡ªAll

rights reserved. This publication may not be reproduced in whole or in part by any

means without prior written consent.

¡°The American Association of Individual Investors is an independent nonprofit corporation

formed in 1978 for the purpose of assisting individuals in becoming effective managers

of their own assets through programs of education, information and research.¡±

Printed in the U.S.A.

March 2019

AAII Dividend Investing

Portfolio Holdings

Ticker

AMGN

BLK

CMA

CBRL

CMI

EMN

ETN

HD

HBAN

IBM

IP

IVZ

MDT

OXY

PEP

PII

PFG

PG

SNA

TXN

TSN

UNP

WEC

WSM

Company

Amgen, Inc.

BlackRock, Inc.

Comerica Inc.

Cracker Barrel

Cummins Inc.

Eastman Chemical Co.

Eaton Corporation

Home Depot Inc.

Huntington Bancshares

IBM Corp.

International Paper Co.

Invesco Ltd.

Medtronic PLC

Occidental Petroleum

PepsiCo, Inc.

Polaris Industries Inc.

Principal Financial

Procter & Gamble Co.

Snap-on Incorporated

Texas Instruments

Tyson Foods, Inc.

Union Pacific Corp.

WEC Energy Group

Williams-Sonoma, Inc.

Data as of 3/5/2019.

Portfolio Alert

Date

Price

10/27/17 $175.28

10/5/18 $470.86

12/7/18 $74.03

2/3/17 $158.50

10/3/14 $135.10

2/6/15 $73.20

12/31/11 $43.53

9/1/17 $150.78

1/12/18 $15.85

10/2/15 $144.58

4/4/14 $45.81

6/6/14 $38.18

1/6/17 $72.87

1/9/15 $77.54

12/31/11 $66.35

12/9/16 $85.84

12/9/16 $60.30

12/7/12 $70.29

9/7/18 $180.60

4/5/13 $34.20

3/8/19

na

7/2/15 $96.66

12/31/11 $34.96

6/3/16 $53.25

Three stocks in the DI portfolio announced dividend increases during

February¡ªEaton Corp. (ETN), Home

Depot Inc. (HD) and Union Pacific Corp.

(UNP). Seven of the 24 stocks in the

portfolio have announced dividend increases this year, and the increases have

averaged 10.7%.

Eaton declared a quarterly dividend of

$0.71 per share, an increase of 8% over

its last dividend. Eaton¡¯s dividend yield

of 3.5% is above its five-year average of

3.4%. The dividend is payable March 22

to shareholders of record at the close of

business on March 9. The ex-dividend

date was Thursday, March 7.

Home Depot declared a quarterly dividend of $1.36 per share, a 32% increase

March 2019

Latest

Price

(3/5/19)

$188.82

$432.52

$86.38

$158.01

$154.49

$82.53

$80.80

$184.00

$14.27

$137.88

$46.03

$19.47

$92.72

$67.53

$116.03

$89.16

$51.58

$99.09

$160.57

$106.57

$63.97

$166.78

$76.25

$58.33

Feb

Gain/

(Loss)

1.6%

6.8%

10.6%

(3.2%)

4.7%

2.6%

4.6%

0.9%

8.8%

2.8%

(3.4%)

6.2%

2.4%

(0.9%)

2.6%

1.6%

5.1%

2.2%

(3.6%)

5.1%

(0.4%)

5.4%

4.5%

6.9%

Market

Total Return

Div

Cap

Since Purchase

Stock

Index

Yield

(Mil) Industry

12.7%

14.2%

3.1% $118,283 Pharmaceuticals

(5.9%)

(2.1%) 3.1% $70,259 Investment Mgmt & Fund Operators

19.1%

5.4%

3.1% $13,851 Banks

8.2%

27.2%

3.2%

$3,895 Restaurants & Bars

29.4%

53.0%

3.0% $24,244 Auto, Truck & Motorcycle Parts

22.1%

45.6%

3.0% $11,580 Chemicals - Commodity

123.4% 134.2%

3.5% $34,572 Electrical Components & Equipment

23.7%

16.4%

3.0% $209,121 Retailers - Home Improve Prods & Servs

(6.8%)

2.6%

3.9% $15,043 Banks

6.1%

47.8%

4.6% $123,278 IT Services & Consulting

20.9%

63.2%

4.3% $18,339 Paper Packaging

(38.5%)

54.3%

6.2%

$7,683 Investment Mgmt & Fund Operators

29.9%

27.2%

2.2% $121,324 Medical Equip, Supplies & Distribution

5.6%

47.3%

4.6% $49,583 Oil & Gas - Exploration and Production

115.3% 134.2%

3.2% $162,438 Non-Alcoholic Beverages

8.9%

27.2%

2.7%

$5,196 Recreational Products

(6.5%)

27.2%

4.2% $14,650 Insurance - Life & Health

70.8% 117.5%

2.9% $247,331 Personal Products

(11.4%)

(2.7%) 2.4%

$8,881 Industrial Machinery & Equipment

259.1%

96.9% 2.9% $99,273 Semiconductors

na

na

2.3% $22,742 Food Processing

87.1%

42.6%

2.1% $121,227 Freight & Logistics - Ground

210.7% 134.2%

3.1% $24,063 Utilities - Electric

17.5%

38.9%

2.9%

$4,662 Retailers - Home Furnishings

Sources: AAII Stock Investor Pro, Thomson Reuters, I/B/E/S and company releases.

pork and beef, which provides it economies of scale, but these are largely

commodity items, which limits pricing

power. Tyson¡¯s results are impacted by

overall agricultural commodity trends

such as feed costs, market demand and

fuel costs. Tyson has strengthened its

packaged foods business, which now

accounts for around 30% of profits.

Protein products produced by Tyson are

currently in demand, providing opportunity for growth.

Dividend News

DI Purchase

Price

$174.93

$463.47

$73.13

$158.80

$136.18

$74.67

$45.52

$152.88

$15.86

$149.54

$45.69

$37.82

$75.05

$75.96

$66.66

$86.34

$59.55

$70.89

$183.36

$34.80

na

$97.23

$34.68

$54.00

from the previous dividend of $1.06 per

share. Home Depot¡¯s dividend yield of

3.0% is above its five-year average of

1.8%. The dividend is payable March 28

to shareholders of record as of March

14. The stock will trade ex-dividend on

Wednesday, March 13.

Union Pacific announced a 10% increase to its dividend, boosting its quarterly payment to $0.88 per share. The

dividend is payable March 29 to shareholders of record as of February 28. This

marks Union Pacific¡¯s fourth dividend

increase in the past six quarters. Union

Pacific¡¯s dividend yield of 2.1% matches

its five-year average of 2.1%.

Amgen Inc. (AMGN), Cracker Barrel

(CBRL), Medtronic PLC (MDT) and

Williams-Sonoma Inc. (WSM) should

declare dividends this month if past

patterns hold true. Williams-Sonoma is

expected to increase its dividend payouts to preserve its record of consistent

dividend increases.

Portfolio News

Strongest Stocks During

February

Comerica Inc. (CMA) was the topperforming holding of February, gaining

10.6% for the month, marking a 26.8%

gain during the first two months of the

year. Financial stocks have rebounded

strongly since the Federal Reserve

signaled a more dovish wait-and-see approach to future interest rate increases.

The company released fourth-quarter

earnings and forward guidance and

increased its dividend during January,

which has helped to propel the stock

price.

For fiscal-year 2019, Comerica expects

average loans to grow between 2% and

4% and average deposits to decline 1%

to 2%. It expects net interest income to

grow between 4% and 5% and noninterest income to grow between 2% and

3%. Noninterest expenses are expected

to decline by 3%, and the tax rate is approximated to be 23%. The company is

expecting to meet and exceed its capital

targets for the fiscal year within a margin of 9.5% to 10.0%.

In late January, the company increased its quarterly dividend by 11.7%

to $0.67 per share for the third time

in less than 12 months. CEO Ralph W.

Babb Jr. cited the company¡¯s ¡°solid

capital position and strong earnings performance as well as our future growth

potential¡± as factors attributing to the

dividend increase. The company also

3

Performance of DI Portfolio

$250,000

Growth of $100,000

$240,000

$230,000

$220,000

$210,000

$200,000

$190,000

$180,000

$170,000

$160,000

$150,000

$140,000

$130,000

AAII Dividend Investing Portfolio

$120,000

$110,000

$100,000

2012

2013

2014

2015

2016

2017

2018

2019

$90,000

Performance

Dividend Yield

Dividend Investing Portfolio

3.2%

Dividend Investing Portfolio*

Total

Income

Capital

Return

Gain/(Loss)

Return

February

2.9%

0.1%

2.8%

2019 YTD

11.7%

0.4%

11.3%

2018

(11.5%)

2.6%

(14.1%)

2017

22.3%

3.4%

18.9%

2016

18.2%

3.9%

14.3%

2015

(7.7%)

2.9%

(10.6%)

2014

12.2%

3.0%

9.2%

2013

36.5%

3.6%

32.9%

2012*

10.2%

3.5%

6.7%

From Inception

122.5%

42.8%

79.7%

Performance as of 3/6/2019.

Dow Jones U.S. Index (IYY)

1.8%

Dow Jones U.S. Index (IYY)

Total

Income

Capital

Return

Gain/(Loss)

Return

3.4%

0.0%

3.4%

11.4%

0.0%

11.4%

(5.2%)

1.7%

(6.9%)

21.3%

2.0%

19.3%

12.0%

2.1%

9.9%

0.4%

1.9%

(1.5%)

12.9%

2.0%

10.9%

32.6%

2.3%

30.3%

14.4%

2.3%

12.1%

146.6%

29.8%

116.8%

*The AAII Dividend Investing portfolio started on January 3, 2012. The portfolio is run as if

managed by a subscriber and includes delays in reaction time to portfolio alerts, actual

commissions and bid-ask spreads.

increased its share buyback authorization, allowing for 15.0 million shares to

be repurchased in addition to the 4.7

million shares remaining at the end of

2018.

Comerica¡¯s dividend yield is 3.1%, well

above the five-year average of 1.8%.

Huntington Bancshares Inc. (HBAN)

was the second-top-performing stock,

gaining 8.8%. The company announced

4

earnings toward the end of January,

which propelled the stock into February.

Although Huntington¡¯s reported

earnings of $0.29 per share missed the

I/B/E/S consensus estimate of $0.325

per share by 10.8%, it was a year-overyear increase of roughly 11%. Total

revenue increased 4% year over year

to $1.17 billion, beating the average

estimate by 18 analysts of $1.16 billion.

Net interest income, a focal point within

the loan business, rose 8% year over

year and net interest margin improved

11 basis points to 3.41%.

Based on macroeconomic trends and

guidance from the Fed, Huntington is

in a position to benefit from the lack

of interest rate increases in 2019 and

expects total revenue to be in the range

of 4% to 7%.

On a dividend perspective, the company¡¯s current dividend yield of 3.9%

is higher than its five-year average of

2.5%.

Williams-Sonoma Inc. (WSM) was up

6.9% in February, making it the thirdbest-performing stock in the DI portfolio. There was no company-specific

news related to the performance.

Williams-Sonoma had yet to report its

fourth-quarter results for 2018. Analysts

are expecting a year-over-year increase

in adjusted earnings per share of 17%

to $1.968 (an average of 22 estimates)

from adjusted earnings per share of

$1.68.

The company has so far weathered

interruptions in the consumer home

goods market due to its established,

well-known brands, including the namesake Williams Sonoma and Pottery Barn.

Its e-commerce assets account for most

of the total revenue, which has helped

boost the company¡¯s operating margin

of 7.9% above the industry median of

5.2%. Analysts are expecting WilliamsSonoma¡¯s earnings per share to grow

3% from 2019 to 2020, and 4% from

2020 to 2021.

If the company follows recent patterns, the next dividend declaration

should be an increase announced in

March. In March 2018, the company

raised its dividend 10.3%, higher than

the previous year¡¯s increase of 5.4%.

BlackRock Inc. (BLK) was the fourthbest-performing holding within the DI

portfolio, gaining 6.8% for the month of

February.

At the beginning of February, the

company said it would sell a portfolio of

four operating solar projects in Ontario,

Canada, to Ullico Inc. and, separately,

five operating wind farms and one operating solar project in the U.K. to Equitix

March 2019

AAII Dividend Investing

Investment Management. Financial

terms for these transactions were not

disclosed.

BlackRock said it would increase

its stake in Re/Max Holdings (RMAX)

by 5.2%, valued at more than $113.5

million.

Separately, the company announced

toward the end of February that it has

come to an agreement with KKR Inc.

(KKR) regarding a $4 billion infrastructure deal with Abu Dhabi National Oil

Company (ADNOC), where the consortium between the companies would

take a 40% stake in the new entity with

ADNOC owning the remainder.

BlackRock¡¯s current dividend yield is

3.1%, slightly above the five-year

average of 2.5%.

Weakest Stocks During

February

Snap-on Incorporated (SNA) was

the DI portfolio¡¯s worst performer in

February, down 3.6% for the month.

In early February, Snap-on reported

weaker-than-expected revenue for the

fourth quarter of 2018.

Total revenue of $952.5 million was

down 2.3% year over year, reflecting a

0.6% organic sales decline and $17.1

million in unfavorable foreign currency

translation. By segment, Snap-on saw

organic sales decline most in its repair

systems and information group¡ªa

decrease of 3.5%¡ªdue to lower sales

to original equipment manufacturer

(OEM) dealerships and reduced sales of

undercar equipment. The sales from the

repair systems and information group of

$339.9 million was about 36% of total

revenue for the quarter. Snap-on¡¯s other

two segments saw the negative impact

of foreign currency translation offset

year-over-year organic sales growth.

Chairman and CEO Nicholas T. Pinchuk

said the company faced ¡°near-term

challenges in a variety of environments,¡± but continued to see progress

in its commercial and industrial group,

extending its penetration of critical

industries; the building of activity in

emerging markets, such as India; and

the continuing recovery in Snap-on¡¯s

U.S. van channel.

March 2019

Recent Earnings Announcements

Ticker

CBRL

CMI

HD

MDT

OXY

PEP

SNA

TSN

WEC

Company

Cracker Barrel

Cummins Inc.

Home Depot Inc.

Medtronic PLC

Occidental Petroleum

PepsiCo, Inc.

Snap-on Incorporated

Tyson Foods, Inc.

WEC Energy Group

Date

Reported Expected

Reported Earnings Earnings

Feb 26

$2.520

$2.496

Feb 6

$3.480

$3.807

Feb 26

$2.250

$2.162

Feb 19

$1.290

$1.237

Feb 12

$1.220

$1.142

Feb 15

$1.490

$1.490

Feb 7

$3.030

$3.018

Feb 7

$1.580

$1.560

Feb 12

$0.650

$0.633

Data as of 3/5/2019.

Despite disappointing revenue, Snapon reported that its profit increased

38% year over year from $2.24 per

share to $3.09 per share. Adjusted earnings per share of $3.03 beat the I/B/E/S

analyst consensus estimate of $3.02 per

share.

Snap-on also declared a dividend of

$0.95 per share during February, in line

with the previous declaration. Snap-on

has a dividend yield of 2.4%, above its

five-year average of 1.7%.

For more on Snap-on, see pages 12

and 13.

International Paper Co. (IP) was

the second-worst-performing stock in

February, down 3.4%. There was no

company-specific news beyond global

market volatility from lingering trade

disputes that drove the company¡¯s performance during the month.

International Paper reported strong

fourth-quarter earnings on January

31. Adjusted operating income for the

quarter was $670 million, or $1.65 per

diluted share, up 26% and 30%, respectively, from $530 million, or $1.27 per

diluted share, in the fourth quarter of

2017. The company beat the I/B/E/S

analyst consensus estimate of $1.591 by

3.7%.

Net sales were $6.0 billion in the

fourth quarter of 2018 compared with

$5.9 billion in the third quarter of 2018

and $5.7 billion in the fourth quarter of

2017.

The company¡¯s North American business performed well, delivering $641

million in earnings. Box demand was

strong, driven by e-commerce and

produce, and International Paper said

it continues to see strong box demand

Surprise

%

1.0%

(8.6%)

4.1%

4.3%

6.8%

0.0%

0.4%

1.3%

2.7%

Sources: I/B/E/S and company releases.

as the company enters 2019, with

shipments in January estimated to be

between 1.5% and 2.0%.

Export containerboard came under

pressure in the fourth quarter with

demand slowing in China and in some

regions in Europe, the Middle East

and Africa (EMEA). International Paper

said that it is also seeing the impact of

higher tariffs in Turkey, which is a major

importer of U.S. containerboard. The

company expects volume and price

pressure to continue in the first quarter

as inventory destocking plays out.

International Paper has a dividend

yield of 4.3%, above its five-year average of 3.5%.

Cracker Barrel (CBRL) was down 3.2%

during February, making it the thirdworst-performing stock. Cracker Barrel

reported earnings per share of $2.52

that beat the I/B/E/S analyst consensus estimate of $2.50 per share but

decreased 7.7% year over year due to

increased labor and food commodity

costs.

Revenue for Cracker Barrel¡¯s second

quarter was $811.7 million, up 3% year

over year, driven by a 4.6% increase in

restaurant retail. However, the company

saw retail revenue decrease 2.2% to

$180.5 million. Regarding the drop in

retail revenue, CEO Sandra B. Cochran

said that the company started the

quarter with lower-than-planned inventory levels, which led it to supplement

its offerings with items that ¡°did not

resonate as strongly with [their] guests.¡±

Cracker Barrel¡¯s comparable-store sales

were also affected by unfavorable

weather, though they grew 3.8% year

over year.

5

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