The Big-Picture Coronavirus Investing Plan

It is weird covering stocks during a one-month period when the major indices rise 30% from a low (and in the case of Nasdaq, surpass the price at the start of the year) while at the same time the unemployment figures in the United States indicate that 30 million people are now unemployed.

For this obvious reason, it is somewhat uncomfortable for me to discuss investing because it is such a subordinate concern to human capital and taking care of you and your family’s needs. That said, this is an investing blog, and doing intelligent things with your financial capital eases the primary burden of sustaining yourself through your labor (i.e. your human capital).

For that reason, I just put together a monstrously long post (almost 5,000 words) over on Patreon discussing my approach to investing during COVID-19 and beyond as well as highlighting the six stocks that have caught … Read the rest of this article!

Why Big Dividend Growth Awaits Reynolds American

Reynolds American tobacco has officially acquired Lorillard and now owns Newport, one of the strongest brands in the tobacco sector that has industry leading profits in the menthol sector and has maintained volume shipments even while the tobacco-smoking industry as a whole shrinks by 3.5% annually in the United States.

The addition of Newport has greatly increasing the per share earnings power of the company even after adjusting for dilution resulting from the acquisition. Before the transaction, Reynolds had 530 million shares outstanding and was earning $2.70 per share, or $1.4 billion in net profits.

Now that Reynolds has ownership of Newport (which accounted for 88% of Lorillard’s 2014 sales) and the remaining 12% of the Lorillard portfolio, the expected profits for Reynolds American is $4.15 per share, or $2.6 billion in net profits spread across 715 million shares.

This is what catches my attention: For most of the past … Read the rest of this article!