Global Net Lease Inc (GNL) Q4 2018 Earnings Conference Call Transcript

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Global Net Lease Inc  (NYSE:GNL)Q4 2018 Earnings Conference CallFeb. 27, 2019, 11:00 a.m. ET

Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

Operator

Good day and welcome to the Global Net Lease, Fourth Quarter Earnings Conference Call and Webcast. All participants will be in listen-only mode. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Louisa Quarto, Executive Vice President. Please go ahead.

Louisa Hall Quarto -- Executive Vice President

Thank you, operator. Good morning everyone and thank you for joining us for GNL's fourth quarter 2018 earnings call. This call is being webcast in the Investor Relations section of GNL's website at www.globalnetlease.com. Joining me today on the call to discuss the quarter's results are, Jim Nelson GNL's Chief Executive Officer and Chris Masterson, GNL's Chief Financial Officer.

The discussion today will include certain statements and assumptions, which are not historical facts. They are forward looking in nature and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The following discussion and analysis should be read in conjunction with the accompanying financial statements.

The following information contains forward-looking statements, which are subject to risks and uncertainties. The one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the Form 10-K filed for the year ended December 31st, 2017, filed on February 28, 2018, and all other filings with the SEC after that date for more detailed discussion of the risk factors that could cause these differences.

Also during the call, we will use the term investment grade rating, which includes both actual investment grade ratings of the tenant and implied investment grade rating. Implied investment grade can include ratings of the lease guarantor or the tenant parent, regardless of whether or not the parent has guaranteed the tenant's obligation under the lease.

Implied investment grade ratings can also include ratings determined using a proprietary Moody's analytical tool, which compares the risk metrics of the non-rated company to those of a company with an actual rating. The ratings information is as of December 31st, 2018. Any forward-looking statements provided during this conference call are only made as of the date of this call. As stated in our SEC filings, GNL disclaims any intent or obligation to update or revise these forward-looking statements except as required by law.

Also during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the Company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most recent directly comparable GAAP measure is available in our earnings release.

I'll now turn the call over to our CEO, Jim Nelson.

James L. Nelson -- Chief Executive Officer and President

Thank you, Louisa and thanks again to everyone for joining us on today's call. It has been a year-and-a-half since I became GNL's CEO and I'm very proud of the tremendous progress and growth we've achieved in our global real estate portfolio. It is these achievements that distinguish us in the marketplace and we will continue to build on this positive momentum in 2019 and beyond. Our team relies on six key drivers which guide management in the operation of Global Net Lease.

First, there is a focus on owning and operating a high quality mission critical diversified portfolio. At the end of 2018, GNL's portfolio has grown to over $3.5 billion, made up of 342 properties located in the U.S. and six Western European countries. This portfolio includes the 23 properties that GNL purchased in 2018, for a combined contract purchase price of $478 million. These properties provide additional quality and diversification to GNL's overall portfolio.

Second, an important part of GNL's long-term strategy is to focus on leases with long durations that are backed by investment grade and credit-worthy tenants. The Company has demonstrated its ability to source and acquire these types of properties, which provide safe and durable rental income. At the end of 2018, GNL's weighted average lease duration was 8.3 years and it's investment grade and implied investment grade tenant base represents 78.3% of the overall portfolio.

Third, GNL pursues a differentiated strategy with both U.S. and international exposure. The Company maintains a good balance of U.S. and Western European properties with a 55.7% U.S. and 44.3% Western European mix.

Fourth, we utilized proactive asset management to drive long-term portfolio value. As an example, the Company recently agreed to opportunistically sell three European assets for a gain and will generate EUR72.5 million in proceeds available for reinvestment in the U.S. and Europe.

Fifth, an experienced and robust management team. The Company's capabilities are enhanced through professionals based in London, Luxembourg, Charlotte, Newport and New York with specialists across multiple segments including acquisitions, finance, accounting, legal and property management. The Company benefits from this Group's breadth of knowledge and talent.

And Sixth, as a global Company, we believe GNL has the ability to capitalize on differences between the U.S. and European markets to deliver superior risk adjusted returns. Over this past year, GNL acquired $478 million of acquisitions with an average cap rate of 7.70% with a focus on U.S. industrial and distribution properties. The Company also closed on several different debt financing into both U.S. and Europe including the upsizing of the credit facility by $192 million and the GBP230 million UK debt refinancing at an improved interest rate. These financing demonstrate the different sources of capital GNL has access to, in order to optimally finance the Company's global portfolio.

Now, I will begin to review of the key milestones GNL achieved during 2018. Chris will then go into more detail regarding our financial performance. We anticipate settlement of the outstanding litigation with our former European service provider. In connection with this, we recorded a $7.4 million reserve, which is a one-time non-recurring expense that affects net income and FFO, but has no impact to the Company's AFFO. We are extremely pleased with the anticipated resolution.

Turning to several of GNL's key metrics. It is clear that the Company made significant progress in 2018 from 2017. Revenue increased to $282.2 million and 8.8% increase. Net income attributable to common stockholders was $1.1 million, which includes a one-time $7.4 million anticipated settlement with our former European service provider. Adjusted funds from Operations or AFFO, increased 4.7% to $147.3 million. Real estate portfolio increased to over $3.5 billion from less than $3.2 billion. Investment grade or implied investment grade tenants increased to 78.3% from 76.3% and remaining debt maturity increased to 4.2 years from 3.7 years.

Over the course of 2018, GNL continue to execute on its disciplined long-term strategy of acquiring and managing a portfolio of high quality assets net leased on a long-term basis to predominantly investment grade and credit-worthy tenants in the U.S. and in Western Europe. During the year, GNL acquired 23 properties for a combined contract purchase price of $478 million and sold two properties for gross proceeds of $25.3 million.

GNL's acquisitions are broken down as follows: 16 industrial properties acquired for $242.5 million with a weighted average lease term of 12.1 years and six distribution facilities acquired for $181.7 million with a weighted average lease term of 10.1 years and one office property acquired for $54 million with a lease term of 12 years. In their first full year within the portfolio, these 23 assets will contribute approximately $36 million in additional annualized straight-line rental revenue, based on existing in-place leases.

The properties were acquired with a combination of cash-on-hand, equity proceeds and debt financing. Additionally, GNL already has $53 million of additional acquisitions under executed LOI or PSA plus over $200 million of LOIs currently submitted for potential acquisitions. To execute on the Company's long-term growth strategy, GNL accessed the equity capital markets with two common equity offerings and issuances through the ATM program in 2018. Raising a total of $179 million in common equity capital during 2018 at an average gross price of $20.46 per share.

The company used these funds to close on $212 million in acquisitions made during the fourth quarter. As of 12/31/2018, GNL's total liquidity was $143 million and subsequent to year-end GNL raise an additional $153 million in equity capital through its ATM program at an average price of $19.69 per share.

Proceeds from the equity issuances will continue to be used to fund new acquisitions and for general corporate purposes. As part of our asset management strategy during 2018, GNL disposed of two properties for gross proceeds of $25.3 million, which is inclusive of a $3 million lease termination fee. The Company also entered into a contract to sell three additional properties located in Germany for a contract sale price of EUR135 million, which is an EUR11 million premium to the original purchase price of these assets. We expect this disposition to result in a recognized gain of approximately $40 million. Additionally, we expect the sale to generate approximately EUR72.5 million in net proceeds after debt repayment and the Company plans to redeploy those proceeds into accretive acquisitions.

Now I will discuss GNL's fourth quarter activity. During the quarter, GNL closed on six properties for approximately $212 million. These six properties were purchased at a weighted average going in cap rate of 6.67% with a weighted average cap rate of 7.23% and a weighted average remaining lease term of 12.3 years, all six of the property served a critical function for the underlying tenants and the buildings are split evenly between industrial and distribution.

GNL funded the transactions with mortgage debt and cash-on-hand, which includes proceeds from its November public offering. The Company also entered in a new 10-year $98.5 million mortgage loan with a fixed interest rate of 4.85%, which was used to pay down the credit facility. The quality of GNL's portfolio remains strong in several metrics.

GNL's investment grade or implied investment grade tenants make up 78.3% of the portfolio, up from 76% at the end of 2017. Occupancy remained strong at 99.2% at the end of the quarter. The geographic mix based on annualized straight-line rents sits at 55.7% U.S., 44.3% Europe. While GNL's property mix was at 53% Office, 39% Industrial and Distribution, and a 8% Retail.

The Company has continued to increase its exposure to the growing and robust industrial and distribution sector as GNL increased its concentration by 7% of its total portfolio in 2018. GNL's overall portfolio consists of 342 properties and provides predictable consistent cash flow through long-term net leases that include contractual rent growth.

Heading into 2019, we will continue to execute on our long-term strategy to grow GNL's global and diversified portfolio. Our demonstrated ability to underwrite transactions with an eye toward long-term value is what continues to set GNL apart in the net lease sector.

With that, I'll turn the call over to Chris to walk through the operating results in more detail and then I will follow up with some closing remarks. Chris?

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Thanks, Jim.

GNL saw improved financial results for both Q4 2018 annual and quarterly results in comparison to the prior year. For the 2018 year, GNL's revenue increased 8.8% to $282.2 million, with net income attributable to common stockholders of $1.1 million, which includes a one-time $7.4 million anticipated settlement with our former European service provider.

FFO decreased 0.9% to $131.4 million, FFO also includes the $7.4 million accrual. Core FFO increased 10.8% to an $149.1 million and AFFO was up 4.7% to $147.3 million. The Company paid common stock dividends to investors of $147.4 million in 2018, up from $142.7 million in 2017. Revenues increased primarily due to rental income from acquisitions and rent escalators embedded in existing leases.

As always, a reconciliation of GAAP net income to the non-GAAP measures can be found in our earnings release. In the fourth quarter, revenue increased 6.9% to $71.2 million on a year-over-year basis. FFO decreased 18% to $28.3 million, which included the one-time anticipated settlement with our European service provider and our core FFO increased 8.3% to $36.9 million.

GNL's adjusted funds from operations or AFFO, increased 5.6% to $37.1 million and during the quarter, the Company paid common stock dividends of $39.1 million. I would like to note that GNL's $212 million of acquisitions were all purchased on or after November 14th and four of the six acquisitions were purchased in the second half of December.

These acquisitions were financed in conjunction with the Company's $81 million equity raise in late November 2018. We expect a $2.5 million step up in rental income in Q1, 2019 or about $0.03 on a per share basis as the Company will benefit from the full impact of the $212 million of acquisitions acquired in Q4 2018.

On the balance sheet, GNL ended the fourth quarter with net debt, which is debt less cash and cash equivalents of $1.7 billion at a weighted average interest rate of 3.1%. GNL's weighted average maturity at the end of the fourth quarter of 2018 was 4.2 years, which is improvement from 3.7 years at the close of the 2017 fourth quarter.

The components of GNL's debt include $363.9 million on the multi-currency revolving credit facility, $282.1 million on the term loan and $1.1 billion of outstanding gross mortgage debt. This debt was approximately 79.9% fixed rate, which is inclusive of floating rate debt with in-place interest rate swaps. The Company has a robust interest coverage ratio of 3.8 times.

As of December 31st, 2018, liquidity was approximately $142.6 million, which comprises to $100.3 million of cash-on-hand and $42.2 million of availability under the credit facility. GNL's net debt to enterprise value was 53.3% with an enterprise value of $3.2 billion based on the December 31st, 2018 closing share price of $17.62 per common shares and $24.68 per Series A preferred shares.

The net debt to enterprise value would improve to 50.8% if the calculation was based on closing share prices from February 22nd of $19.67 for common shares and $25.17 for preferred shares. 2018 was an active year for our accounting and finance teams. GNL closed our new debt facilities refinanced in-place that an upsized existing facilities across three currencies an amount equal to $165 million, EUR52 million and GBP230 million.

Financing activity included, successfully closed on an eight properties CMBS loan in the amount of $33 million, closed an upsizing of its unsecured credit facility of $132 million for the multi-currency revolving credit facility portion and EUR51.8 million for the senior unsecured term loan facility portion. Also closed on a GBP230 million syndicated investment facility loan agreement, which was secured by all 43 of GNL's properties in the United Kingdom. This refinancing lowers the cost of borrowings on the UK assets from 3.4% to approximately 3.2%.

On February 6, 2019, GNL entered into a syndicated investment facility loan agreement in the amount of EUR74 million. The loan is secured by all five finished properties owned by GNL. The maturity date of the loan is February 1st, 2024, and it bears interest rate at three-month Euribor plus 1.4%. 80% of the principal amount of the loan is fixed at 1.8% by the interest rate swap agreement. This refinancing significantly lowered the borrowing costs from 2.3% to 1.7%.

As a quick update to GNL's hedging program, we have continued to use our hedging strategy as a way to offset movements in interest rates and local currencies for our European portfolio.

In regards to currency hedging, the Company employs disciplined strategy of layering hedges against the two currencies over upcoming quarters to manage some exposure to both currencies.

With that, I'll turn the call back to Jim for some closing remarks.

James L. Nelson -- Chief Executive Officer and President

Thanks Chris. GNL's portfolio is in great shape, with 273 properties in the U.S. and 69 in the UK and Western Europe representing 55.7% and 44.3% of rental revenue respectively. Overall, the portfolio was 99.2% leased and as a weighted average 8.3 years with no near-term expirations. There has been measurable improvement in 2018 across several segments and our steady execution and deliberate focus on high-quality acquisitions continues to drive strong results, including the following:

In 2017, GNL acquired 12 properties for $99 million; while in 2018, the Company acquired 23 properties for nearly $500 million at a going in CAP rate of 7.21% and an average cap rate of 7.70%. 96% of the properties acquired in 2018 include embedded, contractual with average annual rent growth of 1.6% per year based on existing in-place leases.

GNL has an attractive and stable 3.1% weighted average cost to debt at year-end 2018, along with an improved weighted-average remaining lease term of 4.2 years. Our intentional focus is on building portfolio diversification with a focus on an increased mix of industrial and distribution properties.

GNL's acquisition activity of nearly $500 million in 2018 led to an increased portfolio concentration of industrial and distribution property, as this property type now represents 39% of GNL's portfolio at the end of 2018, up from 32% at year-end, 2017. The strength of GNL's portfolio is demonstrated by its high level of leases that are leased to or guaranteed by investment grade or implied investment grade tenants.

As of December 31, 2018, that figure had increased to 78.3%, up from 72.6% at year-end 2015. The year that GNL listed on the New York Stock Exchange. GNL continues to demonstrate a proven ability to source investment opportunities by leveraging direct relationships with landlords and developers to identify off market transactions.

We believe this allows the Company to achieve better than market cap rates at more favorable terms that are generally available. This execution generates improved results for the Company and its shareholders. We will remain proactive and disciplined in our acquisition strategy to identify compelling opportunities to acquire net lease assets, with a continued near-term focus on U.S. industrial and distribution facilities. We will also remain opportunistic when it comes to selectively adding to our international footprint. My last 1.5 years have been exciting and fulfilling, and as we move forward toward the future, we will continue to drive slow and steady growth to enhance long-term value for shareholders.

With that operator, we can open the line for questions.

Questions and Answers:

Operator

(Operator Instructions) The first question today comes from Mitch Germain with JMP Securities. Please go ahead.

Mitch Germain -- JMP Securities -- Analyst

Thanks for taking question. I appreciate it. Chris, if I was to look at -- I think I saw a leverage based on 4Q annualized was 7.9 times, but does that include if I looked at the acquisitions as of day one of the quarter and if that's not, what would that leverage look like if I assume the full quarter or full-year of those acquisitions?

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Right. So, that leverage does not include the acquisitions as if they were on the books as of day one. The actual rental income that is reflected in that number is actually less than a third of what the total would be. So, it's actually $2.5 million more rental income, which would be flowing through, if they were in place as of the first day of the quarter. So, it would definitely drop the number from 7.9 too much lower in the 7s.

Mitch Germain -- JMP Securities -- Analyst

Got you. Got you. And I apologize, I missed some of your prepared comments. Where do we stand on liquidity now with regards to your ability to execute on further acquisitions?

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Sure. So, we're actually in a very strong position as of year-end, we had $100 million in cash, $42 million of availability on the credit facility. Then in January, we actually raised $153 million on our ATM. So with that, we then paid down $130 million on the revolver, which we can draw as needed. We also added some additional properties to our revolver borrowing base, which increased our capacity by about $50 million.

Mitch Germain -- JMP Securities -- Analyst

So what's -- what's the total capacity of the revolver today in terms of -- what's the total size and then what's the availability, is that a better way to say?

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Okay. So the total size is up to about roughly $917 million which could fluctuate fluctuate with the FX. In terms of where we are with capacity -- back of the envelop now -- we have over $250 million.

Mitch Germain -- JMP Securities -- Analyst

Great, that's very helpful. Jim, you guys had some real good success in the fourth quarter, but even the whole year, what changed. I mean, I think you're probably almost more than four times, so what you guys did an acquisition volumes in the year before that. What sort of directive -- what sort of change created the increased activity?

James L. Nelson -- Chief Executive Officer and President

Well, you know, we -- as a strategy for the Company, we are looking at growing the business, doing accretive acquisitions and building a stronger, better, bigger company. So, we've just started executing on all eight cylinders and the acquisition guys found a lot of great stuff. We were able to raise money, so all things considered, everything worked well and we are still moving ahead the way we did last year.

Mitch Germain -- JMP Securities -- Analyst

Great, last one for me. And again, I apologize if I missed it. The sale of the asset that was planned for 2019, I believe those in office building in Germany, is that still on target -- what created the delay there and where does that stand?

James L. Nelson -- Chief Executive Officer and President

We -- the way we structured the sale was to give us time to have acquisitions in our hand to replace the capital. So, we look at closing that toward the middle of the year and that will give us time to have a number of acquisitions to put the money back to work very quickly.

Mitch Germain -- JMP Securities -- Analyst

Great. And just a follow-up on that, do you guys ever disclosed the cap rate or the IRR on that investment for you guys?

James L. Nelson -- Chief Executive Officer and President

We haven't yet.

Mitch Germain -- JMP Securities -- Analyst

Thank you.

James L. Nelson -- Chief Executive Officer and President

Thanks. Good to talk to you.

Operator

Next question comes from Bryan Maher with B. Riley FBR. Please go ahead.

Bryan Maher -- B. Riley FBR -- Analyst

Yes, good morning.

James L. Nelson -- Chief Executive Officer and President

Hi Bryan.

Bryan Maher -- B. Riley FBR -- Analyst

If you answered partially, one of my questions, in your closing remarks as to where you're seeing the best opportunities, and correct me if I'm wrong, but it continues to seem to be U.S. industrial. Is that really where the focus will be in 2019?

James L. Nelson -- Chief Executive Officer and President

That will be, where quite a bit of the focus is, yes. I mean we are still looking in Europe and we underwrite a lot of different types of properties, but that is one of our primary focus, is to grow that part of our portfolio.

Bryan Maher -- B. Riley FBR -- Analyst

And I'm sorry if I missed it, but did you give any estimate as to what the acquisition size would be for 2019 in dollar terms?

James L. Nelson -- Chief Executive Officer and President

We don't usually give guidance, but I think you can take a look back at what we did in 2018, which was a very robust year and we intend to continue in that same vein.

Bryan Maher -- B. Riley FBR -- Analyst

And then just lastly from me, and I'm really interested in hearing how you think about this. When we look at your multiple on EBITDA in kind of just under the the mid-teens. And we look at office REITs in the U.S. trading in the high teens and -- U.S. industrial REITs trading in the low to mid 20s times and European office trading in the high 20s times EBITDA. Is it frustrating to you with where your stock trades? is I guess partially my question, But then you continue to issue equity in a kind of low 20s range and so I'm trying to figure out how you, you kind of rationalize that when I think a case could be made for a mid to high 20s valuation on the stock, but you issue stock in the low '20s?

James L. Nelson -- Chief Executive Officer and President

Well, that's where we issued it now because that's where the stock was trading, but certainly by having great new analysts like you covering the stock, we intend to get the story out to more people, and the more people that are aware of the Company. I think the stock should trade better, more people hear the story. So, I want to thank you for following the Company and we do agree with you.

Bryan Maher -- B. Riley FBR -- Analyst

Flattery will get you everywhere, Jim. So, thank you.

James L. Nelson -- Chief Executive Officer and President

Okay, pal.

Operator

(Operator Instructions) The next question comes from John Massocca with Ladenburg Thalmann. Please go ahead.

John Massocca -- Ladenburg Thalmann -- Analyst

Good morning.

James L. Nelson -- Chief Executive Officer and President

Hi, John.

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Hi John.

John Massocca -- Ladenburg Thalmann -- Analyst

Just trying to kind of -- I think you touched on a little bit. But given all of the equity issuance that happened in January in 4Q and potentially also the proceeds, you're going to get from the sale of the German asset. I mean your leverage is coming down fairly significantly versus where it was even a couple of quarters ago. I mean is this kind of a statement of intent to maybe run the Company at a lower leverage or is this just really creating kind of essentially pre-funding your potential acquisition pipeline for 2019, and that leverage should creep up as maybe some of the things you've submitted LOIs on potentially successfully closed on?

James L. Nelson -- Chief Executive Officer and President

Yes, well. As you know, we're always looking to balance the capital structure. So, we raised common when we could. The market was surprisingly robust last month for the ATM. So, we took advantage of that, but we do have a very strong pipeline and we think we can put that money to work fairly quickly.

John Massocca -- Ladenburg Thalmann -- Analyst

And -- kind of with regards to that $200 million, out of $53 million we kind of know what it is, but that $200 million, I mean what maybe the industrial office mix, is it 90:10 or something closer to 70:30. I know the primary focus has been industrial, but is there some office slipping into that $200 million number?

James L. Nelson -- Chief Executive Officer and President

As you know, last year we bought an office building for $53 million. So that indicates, we still -- if we see a great deal, a great tenant, long-term lease, investment grade quality, we can execute on it, but as we stated, our main focus is on Industrial/Distribution. We continue to execute on those and I think that you'll see a lot of that going forward.

John Massocca -- Ladenburg Thalmann -- Analyst

And then within the existing portfolio, obviously lot still up in the air, but with a lot of different indicators on Brexit. I mean, any of your existing UK tenants indicated any concerns about their operations or need for the assets they leased from you, if there is maybe a hard Brexit or Brexit is more impactful, the kind of that -- as they look to the risk curve...

James L. Nelson -- Chief Executive Officer and President

It's a great question. And if you talk to 10 different people, you will get 10 different responses on Brexit. We talked to a lot other people that we work with, and I think everybody has a wait-and-see attitude. Our assets are performing well. We are happy with the assets that we have. So, I think we'll just wait and see what happens with Brexit. There may be opportunities that open up for us, if there is a hard Brexit or -- but -- I think we'll wait and see. We'll wait and see what happens.

John Massocca -- Ladenburg Thalmann -- Analyst

And then one last one. As you may be look to kind of refinance some of the other European mortgages you have, is the potential kind of benefit you are going to get on rate that you got with the Finland's refinancing. Is that something you would expect on kind of a general basis that something you would expect with additional refinancings you do in Europe?

James L. Nelson -- Chief Executive Officer and President

In looking at the various rates in the different countries, some are lower and some are about the same. I think overall, we will benefit. If you put all of the European financings together, we will see a benefit over the previous loans, as we saw in the UK.

John Massocca -- Ladenburg Thalmann -- Analyst

In Finland, I mean is Finland maybe typical or is Finland kind of an outlier or is it just too hard to tell, so vary so much base from country to country?

James L. Nelson -- Chief Executive Officer and President

Finland was a great rate, but remember we're going from individual mortgages to say, country-specific, roughly country-specific mortgages. So, we are getting better rates combining all the properties together and dealing with the bank that way.

John Massocca -- Ladenburg Thalmann -- Analyst

Okay, that's it from me. Thank you very much.

James L. Nelson -- Chief Executive Officer and President

All right, thank you.

Operator

The next question is a follow-up from Bryan Maher with B. Riley. Please go ahead.

Bryan Maher -- B. Riley FBR -- Analyst

Hey, Jim and Chris, just two quick follow-ups. When we look at your leverage, it's kind of been hanging out in the low 50s, getting a little bit better. What is the goal? Are you comfortable with it hanging out around 50% or do you want to see it get into the mid to high 40s. What is your thought process there?

James L. Nelson -- Chief Executive Officer and President

Well -- we've -- and I think we may have even talked about this before, but we look at the quality of our tenants, the long-term leases, the investment grade -- the high investment grade percentages of our tenants and we're very comfortable with roughly 50% leverage. I think that's sort of a rule of thumb when we look at -- we look at our portfolio, we are very, very comfortable with where we are and we'll see what happens in the future.

Bryan Maher -- B. Riley FBR -- Analyst

And then my other quick question is when we look at the dividend coverage on a CAD payout ratio, it's elevated relative to a number of the other REITs that we cover not alarmingly so, it's a triple net lease situation, but where would you like to see that gravitate to as a payout ratio on CAD?

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Well, I think over time, it will naturally come down as we add these new accretive properties to the income stream. So, I think you'll probably see it come down overtime.

Bryan Maher -- B. Riley FBR -- Analyst

Right, thank you.

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Thank you everybody.

Operator

This concludes our question-and-answer session. I would now like to turn the conference back over to James Nelson, for any closing remarks.

James L. Nelson -- Chief Executive Officer and President

Yeah, just want to thank you all for joining us on today's call, there was some great questions and we look forward to this next year with GNL and reporting to you in the next quarter. So thank you all for dialing in.

Operator

This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Duration: 36 minutes

Call participants:

Louisa Hall Quarto -- Executive Vice President

James L. Nelson -- Chief Executive Officer and President

Christopher Masterson -- Chief Financial Officer, Treasurer and Secretary

Mitch Germain -- JMP Securities -- Analyst

Bryan Maher -- B. Riley FBR -- Analyst

John Massocca -- Ladenburg Thalmann -- Analyst

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Up to 20 percent of people over the age of 65 have some form of cognitive impairment, and more than half of people older than 85 have Alzheimer's disease or another kind of dementia.

As a result, older investors are a prime target for exploitation. Seniors lose an estimated $2.9 billion annually from fraud or financial abuse, according to the Senate Special Committee on Aging.

"Most advisors' clientele are in their 60s and 70s, and these types of issues are front in mind," said Chris Heye, the co-founder of Whealthcare Planning, a platform that helps people financially prepare for aging and tests their decision-making capacities.

Source: Carolyn McClanahan Carolyn McClanahan

A new spat of regulations is another reason advisors are keeping tabs on their clients' mental state.

Two new FINRA rules aimed at protecting older investors went into effect last year.

One of them requires that financial advisors ask their clients for a trusted contact in case they exhibit red flags, such as wanting to invest their lifetime savings in bitcoin. The other permits financial advisors to put a temporary hold on their clients' bank accounts if they suspect exploitation is occurring.

To be sure, some elderly clients may find their advisors have overreached. Last year, a woman sued Fidelity, after the company froze her assets when it became concerned about her mental state. As a result, the woman claimed, she was unable to pay her electric bill, visit the dentist or take her dogs to the veterinarian.

Still, Wrona said advisors often hear from their older clients with suspicious requests and are unsure of how to respond.

"A [client] will say, 'I won the lottery, but I need to pay the taxes upfront before I can claim the award,'" Wrona said. If the client demands the money even after the advisor has explained that it's a scam, he or she can then temporarily pause their assets and investigate further.

More than a dozen states have also passed laws that allow financial firms to pause disbursals when financial exploitation is suspected.

Congress passed a law last year called The Senior Safe Act, which encourages advisors to get trained in spotting fraud or abuse and report any such instances to law enforcement.

"Getting that training is going to stop a lot of financial exploitation," said Cristina Martin Firvida, vice president for financial security and consumer affairs at AARP.

Source: Chris Heye Chris Heye

Beyond looking out for obvious scams and threats, more advisors are proactively planning for the issues their clients could face as they climb up into their later decades.

Gary Vawter, a financial advisor for more than 30 years and the owner of Vawter Financial in Columbus, Ohio, said he quizzes nearly all of his clients over 60 on their decision making abilities. (He uses the Whealthcare Planning platform to do so).

One question on it asks, "What month is it?" There are also other math and financial literacy problems.

"It's pretty neat when the client brags that their financial advisor is having them do these tests to find out how vulnerable they are," Vawter said. "Their friends are amazed that their doctor isn't doing it."

Another reason Vawter does this: A new law in his state requires advisors to report instances of financial exploitation to the authorities.

Source: Gary Vawter Gary Vawter

After McClanahan and the Cooneys discussed their issues, they talked about how to protect themselves. Now, the couple review their bank accounts more frequently and pay their bills together.

If both of them find their financial decision-making capacity declining, McClanahan has asked their children to pitch in.

"The kids were just so relieved that we were looking out and that we had a plan in action," she said.

Many of the financial plans for older people involve their family members. Yet often it's these relatives who are the problem.

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Even in these sensitive matters, advisors can be their client's advocate, Vawter said.

He has one client whom he suspected was being taken advantage of by his daughter. The older man began to pay her thousands of dollars a month, grinding down his lifetime savings. "[It] was bankrupting the client," Vawter said.

The daughter's family, he noticed, was not exactly in need of the money. "They were buying second homes and taking trips — they were just loving the gravy train," Vawter said. "We had to step in and say, 'You can't do this. Your dad needs this money.'"

Vawter thought the conversation went well, but the daughter continued to ask her father for money. That's when Vawter cut off the payments.

"We're not adding rate of return," he said. "But we're watching out for their money."

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Univar Inc (UNVR) Files 10-K for the Fiscal Year Ended on December 31, 2018

Univar Inc (NYSE:UNVR) files its latest 10-K with SEC for the fiscal year ended on December 31, 2018. Univar Inc is a distributor of commodity and specialty chemicals. The company's chemicals portfolio includes acids and bases, surfactants, glycols, inorganic compounds, alcohols, as well as general and other specialty chemicals. Univar Inc has a market cap of $3.38 billion; its shares were traded at around $23.87 with a P/E ratio of 19.55 and P/S ratio of 0.40. Univar Inc had annual average EBITDA growth of 2.00% over the past five years.

For the last quarter Univar Inc reported a revenue of $2 billion, compared with the revenue of $2 billion during the same period a year ago. For the latest fiscal year the company reported a revenue of $8.6 billion, an increase of 4.6% from last year. For the last five years Univar Inc had an average revenue decline of 4.7% a year.

The reported diluted earnings per share was $1.21 for the year. The Univar Inc had an operating margin of 5.01%, compared with the operating margin of 4.35% a year before. The 10-year historical median operating margin of Univar Inc is 3.61%. The profitability rank of the company is 5 (out of 10).

At the end of the fiscal year, Univar Inc has the cash and cash equivalents of $121.6 million, compared with $467.0 million in the previous year. The long term debt was $2.4 billion, compared with $2.8 billion in the previous year. The interest coverage to the debt is 3.2. Univar Inc has a financial strength rank of 5 (out of 10).

At the current stock price of $23.87, Univar Inc is traded at 11.7% discount to its historical median P/S valuation band of $27.03. The P/S ratio of the stock is 0.40, while the historical median P/S ratio is 0.45. The stock lost 13.13% during the past 12 months.

For the complete 20-year historical financial data of UNVR, click here.

What Pepsi Wants Investors to Know

Pepsi (NASDAQ:PEP) recently closed the books on a surprisingly strong fiscal 2018 that had investors feeling more optimistic about the business. The beverage and snack giant achieved faster growth in its core soda portfolio while continuing to squeeze value from the Frito-Lay segment.

Following his first full quarter as CEO, Ramon Laguarta told investors in a conference call why the management team believes they can accelerate sales growth even more in future years. Pepsi's new leader also had some comments about his broader capital allocation plans that should produce significant cash returns for shareholders. Below are a few highlights from the presentation by Laguarta and his team.

Image source: Getty Images.

Beverage gains

Organic revenue grew 3.7%, which was a meaningful sequential acceleration from 2017. And within the year, we saw the rate of growth accelerate from 2.5% in the first half to 4.7% in the second half.-- Laguarta

Pepsi modestly outpaced executives' growth rebound expectations for the second half of 2018 thanks to a 5% spike in organic sales in the third and fourth quarters. Nearly all of its product and geographic segments contributed to that strong result, but the most encouraging rebound came in the U.S. beverage unit. Demand for Pepsi Zero Sugar is helping stabilize the wider soda portfolio, according to management.

Organic sales sped up to a 2% rate in the final six months of 2018 compared to about 5% for rival Coca-Cola (NYSE:KO). "While there is more work to do," Laguarta said, "we're very encouraged by the steady sequential improvement we've seen in this business."

Snack updates

The core of [the Frito-Lay] business remains very strong and growing.-- Laguarta

The Frito-Lay snack segment is Pepsi's biggest profit contributor, and it showed off its pricing power in the most recent quarter, with higher prices leading to an 8% earnings increase despite a 1% downtick in sales volumes.

Executives said there's room for improvement on both the top and bottom lines. On the manufacturing side, they help to boost capacity to fix bottlenecks that have cropped up recently. As for market share gains, Laguarta and his team think they can broaden the snacking portfolio to more tastes and more eating occasions so that the segment improves upon the 3% organic sales boost it achieved in 2018.

Spending that cash

We do not currently see the need to shed or acquire businesses in any significant way. Those businesses are not squarely on strategy, are relatively small and generate very healthy cash flows. And there is no apparent value-creating path to divest them because of tax consequences and/or transaction complexity.-- Laguarta

Pepsi's 2019 outlook had a few numbers that stood out as encouraging for investors. On the operations side, executives predicted sales gains would hold steady at a 4% pace overall, which compares favorably to the modest deceleration that Coke predicted.

Laguarta also outlined a capital investment strategy that targets incremental sales growth, mainly through investing in the existing snack and beverage businesses. Management didn't rule out major acquisitions on the level of last year's $4 billion purchase of SodaStream, but Pepsi seems content to focus on supporting the 22 franchises it already owns that each generates over $1 billion in annual sales.

The 2019 spending plan envisions earnings dropping about 1% as the company invests in growth initiatives. The good news for investors is that executives see this approach driving a quick return to high single-digit profit gains in 2020. It should also leave lots of cash from Pepsi's annual $5 billion of free cash flow open for direct returns to shareholders. Pepsi plans to scale up stock repurchase spending to around $3 billion in 2019, in fact, while Coke is predicting almost zero spending on buybacks.

Brokerages Set Royal Mail PLC (RMG) Target Price at $340.85

Shares of Royal Mail PLC (LON:RMG) have been assigned a consensus rating of “Hold” from the fourteen ratings firms that are currently covering the company, MarketBeat.com reports. Eight research analysts have rated the stock with a sell recommendation, four have given a hold recommendation and two have given a buy recommendation to the company. The average 12 month price target among analysts that have updated their coverage on the stock in the last year is GBX 340.85 ($4.45).

RMG has been the topic of several research analyst reports. UBS Group reissued a “neutral” rating and set a GBX 282 ($3.68) target price (down from GBX 354 ($4.63)) on shares of Royal Mail in a research note on Monday, February 11th. Barclays restated an “overweight” rating on shares of Royal Mail in a research note on Thursday, November 22nd. HSBC upgraded Royal Mail to a “buy” rating and dropped their target price for the stock from GBX 347 ($4.53) to GBX 300 ($3.92) in a research note on Monday, February 4th. JPMorgan Chase & Co. downgraded Royal Mail to an “underweight” rating in a research note on Thursday, January 24th. Finally, Liberum Capital restated a “sell” rating and set a GBX 240 ($3.14) target price (down from GBX 250 ($3.27)) on shares of Royal Mail in a research note on Tuesday, January 29th.

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Shares of RMG traded down GBX 5.50 ($0.07) during mid-day trading on Friday, hitting GBX 271.70 ($3.55). 4,392,362 shares of the company’s stock traded hands, compared to its average volume of 5,850,000. Royal Mail has a 1 year low of GBX 367.80 ($4.81) and a 1 year high of GBX 575 ($7.51).

In related news, insider Rico Back purchased 150,000 shares of the company’s stock in a transaction dated Tuesday, January 29th. The stock was acquired at an average cost of GBX 261 ($3.41) per share, for a total transaction of £391,500 ($511,564.09). In the last quarter, insiders have acquired 300,035 shares of company stock worth $82,659,765.

About Royal Mail

Royal Mail plc, together with its subsidiaries, operates as an universal postal service provider in the United Kingdom, the United States, and other European countries. It offers parcels and letter delivery services under the Royal Mail and Parcelforce Worldwide brands. The company also provides services for the collection, sorting, and delivery of parcels and letters; and designs and produces stamps and philatelic items, as well as offers media and marketing mail services.

Further Reading: Strike Price

Analysts Anticipate HubSpot Inc (HUBS) to Announce $0.25 Earnings Per Share

Wall Street brokerages expect HubSpot Inc (NYSE:HUBS) to post earnings per share of $0.25 for the current quarter, Zacks Investment Research reports. Nine analysts have issued estimates for HubSpot’s earnings, with the highest EPS estimate coming in at $0.27 and the lowest estimate coming in at $0.21. HubSpot reported earnings of $0.15 per share in the same quarter last year, which would indicate a positive year over year growth rate of 66.7%. The firm is expected to report its next quarterly earnings report on Thursday, May 9th.

According to Zacks, analysts expect that HubSpot will report full year earnings of $1.16 per share for the current financial year, with EPS estimates ranging from $1.12 to $1.27. For the next financial year, analysts anticipate that the company will post earnings of $1.67 per share, with EPS estimates ranging from $1.41 to $1.92. Zacks Investment Research’s earnings per share calculations are an average based on a survey of research analysts that that provide coverage for HubSpot.

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HubSpot (NYSE:HUBS) last announced its quarterly earnings data on Tuesday, February 12th. The software maker reported $0.37 earnings per share for the quarter, beating the Zacks’ consensus estimate of ($0.17) by $0.54. HubSpot had a negative net margin of 12.44% and a negative return on equity of 17.08%. The business had revenue of $144.02 million for the quarter, compared to analyst estimates of $137.48 million. During the same period last year, the business earned $0.12 EPS. The company’s revenue was up 35.2% on a year-over-year basis.

A number of equities research analysts have recently weighed in on the stock. Raymond James raised their price objective on shares of HubSpot from $155.00 to $181.00 and gave the company an “outperform” rating in a report on Wednesday, February 13th. Zacks Investment Research upgraded shares of HubSpot from a “hold” rating to a “buy” rating and set a $170.00 price objective on the stock in a report on Monday, January 28th. Deutsche Bank raised their price objective on shares of HubSpot from $150.00 to $168.00 and gave the company a “hold” rating in a report on Wednesday, February 13th. Canaccord Genuity raised their price objective on shares of HubSpot from $160.00 to $190.00 and gave the company a “buy” rating in a report on Wednesday, February 13th. Finally, Needham & Company LLC restated a “buy” rating and issued a $198.00 price objective (up from $145.00) on shares of HubSpot in a report on Wednesday, February 13th. Nine analysts have rated the stock with a hold rating, ten have given a buy rating and one has assigned a strong buy rating to the stock. The stock has an average rating of “Buy” and an average target price of $170.29.

In related news, General Counsel John P. Kelleher sold 972 shares of HubSpot stock in a transaction on Thursday, January 3rd. The shares were sold at an average price of $122.60, for a total transaction of $119,167.20. Following the sale, the general counsel now directly owns 39,659 shares in the company, valued at approximately $4,862,193.40. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, CEO Brian Halligan sold 15,277 shares of HubSpot stock in a transaction on Thursday, December 20th. The stock was sold at an average price of $123.18, for a total transaction of $1,881,820.86. Following the sale, the chief executive officer now owns 680,046 shares in the company, valued at $83,768,066.28. The disclosure for this sale can be found here. Insiders have sold a total of 46,763 shares of company stock worth $6,156,940 over the last quarter. 9.60% of the stock is owned by company insiders.

A number of large investors have recently made changes to their positions in HUBS. Capital Research Global Investors raised its stake in HubSpot by 164.5% during the 3rd quarter. Capital Research Global Investors now owns 1,900,059 shares of the software maker’s stock worth $286,814,000 after acquiring an additional 1,181,611 shares in the last quarter. 1832 Asset Management L.P. grew its position in HubSpot by 2,435.9% during the 4th quarter. 1832 Asset Management L.P. now owns 388,000 shares of the software maker’s stock worth $47,549,000 after purchasing an additional 372,700 shares during the last quarter. TIAA CREF Investment Management LLC grew its position in HubSpot by 358.0% during the 3rd quarter. TIAA CREF Investment Management LLC now owns 362,839 shares of the software maker’s stock worth $54,771,000 after purchasing an additional 283,609 shares during the last quarter. North Peak Capital Management LLC purchased a new position in HubSpot during the 4th quarter worth $15,397,000. Finally, Polar Capital LLP grew its position in HubSpot by 51.4% during the 4th quarter. Polar Capital LLP now owns 309,191 shares of the software maker’s stock worth $38,875,000 after purchasing an additional 104,956 shares during the last quarter. Hedge funds and other institutional investors own 93.19% of the company’s stock.

Shares of HUBS traded down $0.08 during midday trading on Monday, reaching $166.09. The stock had a trading volume of 838,913 shares, compared to its average volume of 716,332. HubSpot has a 1-year low of $101.45 and a 1-year high of $180.00. The firm has a market capitalization of $6.58 billion, a price-to-earnings ratio of -162.83 and a beta of 1.92. The company has a current ratio of 3.01, a quick ratio of 3.15 and a debt-to-equity ratio of 1.30.

HubSpot Company Profile

HubSpot, Inc provides a cloud-based marketing and sales software platform for businesses in the Americas, Europe, and the Asia Pacific. Its software platform includes integrated applications, such as social media, search engine optimization, blogging, Website content management, marketing automation, email, sales productivity, CRM, analytics, and reporting.

Read More: What is the balance sheet?

Get a free copy of the Zacks research report on HubSpot (HUBS)

For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top Small Cap Stocks To Watch Right Now

tags:ZROZ,SHOS,HR,

Small cap Internet radio stock Pandora Media Inc (NYSE: P) reported Q2 2017 earnings after the Monday market close with revenue better than expected, but the Company trimmed its revenue forecast which sent shares down in after hours trading. Total consolidated revenue grew 10% to $376.8 million as advertising revenue grew 5% to $278.2 million (advertising growth was enabled by improvements in effective CPMs coupled with higher ad-loads relative to the year-ago period); total paid subscribers increased 24% from 3.93 million in Q2 2016 to 4.86 million in Q2 2017; subscription and other revenue grew 25% to $68.9 million; and ticketing service revenue grew 31% to $29.7 million. The GAAP net loss was $275.1 million versus a net loss of $76.3 million plus the Company ended with $227.6 million in cash and investments versus $203.0 million at the end of the prior quarter. The Company now expects its full-year revenue to range between $1.45 billion and $1.50 billion versus a previous forecast of $1.50 billion to $1.65 billion.

Top Small Cap Stocks To Watch Right Now: PIMCO 25+ Year Zero Coupon US Trs ETF (ZROZ)

Advisors' Opinion:

• [By ]

  My preferred fund here is Vanguard Extended Duration Treasury ETF (NYSE: EDV), which owns a basket of long-term, zero-coupon bonds. It's better-known, larger, and, most important, cheaper than its competitor PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (NYSE: ZROZ). Both are poised to rally if deflation hits and the stock market falls. But EDV is cheaper, at only 0.07% expense ratio, compared with ZROZ's 0.15%, and so it's the one that makes the cut.

Top Small Cap Stocks To Watch Right Now: Sears Hometown and Outlet Stores, Inc.(SHOS)

Advisors' Opinion:

• [By Lisa Levin]

  Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) was down, falling around 29 percent to $2.30. Sears Hometown and Outlet Stores reported a Q4 loss of $1.46 per share on revenue of $395.77 million.

• [By Lisa Levin]

  Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) was down, falling around 29 percent to $2.30. Sears Hometown and Outlet Stores reported a Q4 loss of $1.46 per share on revenue of $395.77 million.

• [By Lisa Levin]

  Sears Hometown and Outlet Stores, Inc. (NASDAQ: SHOS) was down, falling around 29 percent to $2.30. Sears Hometown and Outlet Stores reported a Q4 loss of $1.46 per share on revenue of $395.77 million.

Top Small Cap Stocks To Watch Right Now: Healthcare Realty Trust Incorporated(HR)

Advisors' Opinion:

• [By Logan Wallace]

  Fiduciary Financial Services of The Southwest Inc. TX reduced its holdings in Healthcare Realty Trust Inc (NYSE:HR) by 6.9% during the 3rd quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The fund owned 27,551 shares of the real estate investment trust’s stock after selling 2,045 shares during the period. Fiduciary Financial Services of The Southwest Inc. TX’s holdings in Healthcare Realty Trust were worth $806,000 at the end of the most recent quarter.

• [By Logan Wallace]

  Get a free copy of the Zacks research report on Healthcare Realty Trust (HR)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Shane Hupp]

  Get a free copy of the Zacks research report on Healthcare Realty Trust (HR)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Shane Hupp]

  New Mexico Educational Retirement Board lessened its holdings in Healthcare Realty Trust Inc (NYSE:HR) by 14.8% during the 2nd quarter, according to its most recent Form 13F filing with the SEC. The fund owned 29,300 shares of the real estate investment trust’s stock after selling 5,100 shares during the period. New Mexico Educational Retirement Board’s holdings in Healthcare Realty Trust were worth $852,000 at the end of the most recent quarter.

Viper Energy Partners (VNOM) Upgraded to Buy by BidaskClub

BidaskClub upgraded shares of Viper Energy Partners (NASDAQ:VNOM) from a hold rating to a buy rating in a report released on Thursday morning.

A number of other equities analysts have also commented on the stock. Oppenheimer reissued a buy rating on shares of Viper Energy Partners in a report on Monday, October 29th. Credit Suisse Group lifted their price target on shares of Viper Energy Partners from $39.00 to $42.00 and gave the stock an outperform rating in a research note on Tuesday, October 30th. ValuEngine lowered shares of Viper Energy Partners from a buy rating to a hold rating in a research note on Thursday, December 6th. Ifs Securities initiated coverage on shares of Viper Energy Partners in a research note on Monday, October 29th. They issued a strong-buy rating for the company. Finally, Piper Jaffray Companies reissued a buy rating and issued a $44.00 price objective on shares of Viper Energy Partners in a report on Monday, November 19th. One analyst has rated the stock with a sell rating, eleven have assigned a buy rating and two have given a strong buy rating to the company’s stock. The stock presently has an average rating of Buy and an average price target of $43.91.

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NASDAQ VNOM traded up $0.27 during mid-day trading on Thursday, reaching $35.25. 4,613 shares of the stock were exchanged, compared to its average volume of 567,007. Viper Energy Partners has a one year low of $21.51 and a one year high of $44.00. The company has a market capitalization of $4.36 billion, a PE ratio of 32.70 and a beta of 1.31. The company has a quick ratio of 13.32, a current ratio of 13.32 and a debt-to-equity ratio of 0.23.

Viper Energy Partners (NASDAQ:VNOM) last announced its earnings results on Tuesday, February 5th. The oil and gas producer reported ($0.01) earnings per share for the quarter, missing analysts’ consensus estimates of $0.16 by ($0.17). The firm had revenue of $73.67 million for the quarter, compared to the consensus estimate of $81.53 million. Viper Energy Partners had a return on equity of 7.06% and a net margin of 49.62%. During the same period in the prior year, the business earned $0.37 EPS. As a group, equities analysts expect that Viper Energy Partners will post 0.2 earnings per share for the current fiscal year.

The firm also recently disclosed a quarterly dividend, which will be paid on Monday, February 25th. Investors of record on Tuesday, February 19th will be issued a $0.51 dividend. This represents a $2.04 dividend on an annualized basis and a dividend yield of 5.79%. The ex-dividend date is Friday, February 15th. Viper Energy Partners’s payout ratio is 214.81%.

In other Viper Energy Partners news, President Hof Matthew Kaes Van’t sold 5,000 shares of the stock in a transaction dated Thursday, December 20th. The shares were sold at an average price of $25.76, for a total transaction of $128,800.00. Following the completion of the sale, the president now directly owns 52,673 shares of the company’s stock, valued at $1,356,856.48. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Company insiders own 0.30% of the company’s stock.

Hedge funds have recently added to or reduced their stakes in the business. Capital World Investors bought a new position in Viper Energy Partners during the 3rd quarter worth approximately $166,610,000. HITE Hedge Asset Management LLC boosted its position in Viper Energy Partners by 221.4% during the 4th quarter. HITE Hedge Asset Management LLC now owns 1,735,295 shares of the oil and gas producer’s stock valued at $45,187,000 after buying an additional 1,195,378 shares during the period. Eagle Asset Management Inc. purchased a new stake in Viper Energy Partners during the 3rd quarter valued at $49,279,000. Wells Fargo & Company MN boosted its position in Viper Energy Partners by 571.0% during the 3rd quarter. Wells Fargo & Company MN now owns 1,226,697 shares of the oil and gas producer’s stock valued at $51,644,000 after buying an additional 1,043,868 shares during the period. Finally, Carillon Tower Advisers Inc. purchased a new stake in Viper Energy Partners during the 3rd quarter valued at $34,749,000. 29.83% of the stock is owned by institutional investors and hedge funds.

About Viper Energy Partners

Viper Energy Partners LP owns, acquires, and exploits oil and natural gas properties in North America. The company holds mineral interests covering an area of approximately 43,843 net acres in the Permian Basin, West Texas. As of December 31, 2017, its estimated proved oil and natural gas reserves consisted of 38,246 thousand barrels of crude oil equivalent.

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Why Deere Fell Short in Q1

Deere & Co. (NYSE: DE) released its fiscal first-quarter financial results before the markets opened on Friday. The firm posted $1.54 in earnings per share (EPS) and $6.94 billion in revenue, which compared with consensus estimates of $1.76 in EPS on revenue of $6.82 billion. The same period of last year reportedly had EPS of $1.35 and $5.97 billion in revenue.

In terms of its segments, Deere reported that Agriculture & Turf sales increased 10% year over year to $4.68 billion, while Construction & Forestry sales increased 31% to $2.26 billion.

Overall, Agriculture & Turf sales for the quarter increased due to higher shipment volumes and price realization, partially offset by the unfavorable effects of currency translation and higher warranty-related expenses. But Construction & Forestry sales were up for the quarter primarily due to the inclusion of Wirtgen for the full period versus one month in the first quarter of 2018.

Looking ahead to the 2019 fiscal full year, net sales and revenues are projected to increase by about 7%. Consensus estimates are calling for $11.47 in EPS and $35.8 billion in revenue for the year.

Samuel R. Allen, board chair and chief executive, commented:

Although Deere has continued to make solid progress on a number of fronts and reported higher earnings for the quarter, our results were hurt by higher costs for raw materials and logistics as well by customer concerns over tariffs and trade policies. These latter issues have weighed on market sentiment and caused farmers to become more cautious about making major purchases. At the same time, sales of John Deere construction and forestry machinery have continued at a strong pace. We believe cost pressures should abate as the year progresses and are hopeful we will soon have more clarity around trade issues. As a result, we remain cautiously optimistic about our prospects for the year ahead.

Shares of Deere closed Thursday at $162.42, in a 52-week range of $128.32 to $175.26. The consensus price target is $176.71. Following the announcement, the stock was down about 4% at $155.76 in early trading indications Friday.

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Warren Buffett’s Top Stocks for 2019

Top 10 Insurance Stocks To Watch Right Now

tags:PRU,PFG,AIG,WRB,AON,TOP,

Voya to Exit Most of Its Annuity Business

5 Big Questions About Life Insurance for 2018

5 Big Questions About Annuities for 2018

Members of the Senate confirmed Preston Rutledge as the head of the Employee Benefits Security Administration Thursday, by a voice vote. 

Rutledge, who will be an assistant secretary of Labor, succeeds Phyllis Borzi.

Rutledge has been the senior tax and benefits counsel for Sen. Orrin Hatch, R-Utah, the chairman of the Senate Finance Committee.

(Related: Trump Names New EBSA Chief to Replace Borzi)

Before going to work for Hatch, Rutledge was a tax law specialist at the Internal Revenue Service. He has also worked as a benefits lawyer in private practice.

He has a bachelor's degree from the University of Idaho, a law degree from George Washington University, and an L.L.M. in taxation from Georgetown University.

As the head of EBSA, Rutledge will oversee a low-profile division of the U.S. Department of Labor that shapes and administers group benefits regulation.

Top 10 Insurance Stocks To Watch Right Now: Prudential Financial Inc.(PRU)

Advisors' Opinion:

• [By ]

  Along with index ETFs, consider redeploying the capital into solid dividend producing names like Prudential Financial (NYSE: PRU), AT&T (NYSE: T) and Omega Health Care (NYSE: OHI) for their expected future stability and consistent dividend payouts.

• [By Max Byerly]

  Covenant Asset Management LLC lowered its position in shares of Prudential Financial Inc (NYSE:PRU) by 60.0% during the third quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm owned 2,500 shares of the financial services provider’s stock after selling 3,743 shares during the period. Covenant Asset Management LLC’s holdings in Prudential Financial were worth $253,000 as of its most recent filing with the Securities and Exchange Commission.

• [By Max Byerly]

  Wesbanco Bank Inc. raised its stake in Prudential Financial Inc (NYSE:PRU) by 5.9% during the second quarter, HoldingsChannel reports. The institutional investor owned 65,335 shares of the financial services provider’s stock after acquiring an additional 3,655 shares during the period. Wesbanco Bank Inc.’s holdings in Prudential Financial were worth $6,110,000 as of its most recent SEC filing.

• [By Stephan Byrd]

  Sentinel Trust Co. LBA lifted its stake in shares of Prudential Financial Inc (NYSE:PRU) by 18.0% during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 65,450 shares of the financial services provider’s stock after buying an additional 9,980 shares during the quarter. Prudential Financial comprises 1.4% of Sentinel Trust Co. LBA’s portfolio, making the stock its 15th largest position. Sentinel Trust Co. LBA’s holdings in Prudential Financial were worth $6,120,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Top 10 Insurance Stocks To Watch Right Now: Principal Financial Group Inc(PFG)

Advisors' Opinion:

• [By Max Byerly]

  Shore Capital reissued their hold rating on shares of Provident Financial (LON:PFG) in a report issued on Thursday.

  PFG has been the subject of several other reports. Liberum Capital reissued a sell rating and set a GBX 483 ($6.48) price objective on shares of Provident Financial in a research note on Monday, February 26th. Peel Hunt reissued a hold rating and set a GBX 870 ($11.67) price objective on shares of Provident Financial in a research note on Tuesday, February 27th. JPMorgan Chase & Co. reduced their price objective on Provident Financial from GBX 1,100 ($14.76) to GBX 750 ($10.06) and set a neutral rating for the company in a research note on Thursday, May 10th. Barclays reissued an underweight rating and set a GBX 584 ($7.84) price objective on shares of Provident Financial in a research note on Wednesday, January 31st. Finally, Societe Generale lowered Provident Financial to a hold rating and set a GBX 1,050 ($14.09) price objective for the company. in a research note on Wednesday, February 28th. Two investment analysts have rated the stock with a sell rating, eleven have assigned a hold rating and two have assigned a buy rating to the company’s stock. Provident Financial presently has a consensus rating of Hold and a consensus price target of GBX 1,190.14 ($15.97).

• [By Shane Hupp]

  These are some of the news articles that may have impacted Accern’s scoring:

  Get Principal Financial Group alerts: Principal Financial Group (PFG) Approves New $300M Buyback (streetinsider.com) Principal Financial Group (PFG) Announces Share Repurchase Plan (americanbankingnews.com) Is Principal Large Cap Growth I Institutional (PLGIX) a Strong Mutual Fund Pick Right Now? (finance.yahoo.com) Principal Financial Group is Oversold (nasdaq.com) Principal Names New Chief Human Resources Officer (finance.yahoo.com)

  Several equities analysts have recently commented on PFG shares. Morgan Stanley decreased their target price on Principal Financial Group from $79.00 to $77.00 and set an “equal weight” rating on the stock in a research report on Thursday, April 5th. Wells Fargo reaffirmed a “market perform” rating and issued a $76.00 target price on shares of Principal Financial Group in a research report on Monday, January 8th. Credit Suisse Group started coverage on Principal Financial Group in a research report on Wednesday, April 25th. They issued a “neutral” rating and a $62.00 target price on the stock. Bank of America started coverage on Principal Financial Group in a research report on Monday, March 26th. They issued a “neutral” rating and a $65.00 target price on the stock. Finally, UBS started coverage on Principal Financial Group in a research report on Friday, March 2nd. They issued a “neutral” rating and a $69.00 target price on the stock. Two research analysts have rated the stock with a sell rating, seven have given a hold rating and three have issued a buy rating to the company. Principal Financial Group currently has an average rating of “Hold” and an average price target of $71.18.

• [By Joseph Griffin]

  Sawtooth Solutions LLC bought a new position in Principal Financial Group Inc (NYSE:PFG) during the second quarter, according to its most recent Form 13F filing with the SEC. The firm bought 17,428 shares of the financial services provider’s stock, valued at approximately $922,000.

Top 10 Insurance Stocks To Watch Right Now: American International Group Inc.(AIG)

Advisors' Opinion:

• [By Max Byerly]

  These are some of the media stories that may have effected Accern’s rankings:

  Get American International Group alerts: AIG’s loss for European business worsens in 2017 (businessinsurance.com) $1.26 EPS Expected for American International Group (AIG) This Quarter (americanbankingnews.com) UBS: Buy AIG After Earnings Estimates ‘Bottom Out’ (finance.yahoo.com) American International Group (AIG) Stock Rating Upgraded by UBS (americanbankingnews.com) American International Group (AIG) Receives Average Recommendation of “Hold” from Analysts (americanbankingnews.com)

  American International Group traded up $0.36, hitting $55.15, during mid-day trading on Friday, MarketBeat.com reports. The stock had a trading volume of 9,821,608 shares, compared to its average volume of 6,828,715. The company has a debt-to-equity ratio of 0.53, a current ratio of 0.27 and a quick ratio of 0.27. American International Group has a 1-year low of $49.57 and a 1-year high of $67.30. The firm has a market cap of $49.51 billion, a P/E ratio of 22.98, a PEG ratio of 1.01 and a beta of 1.24.

• [By Max Byerly]

  Get a free copy of the Zacks research report on American International Group (AIG)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Lee Jackson]

  American International Group Inc. (NYSE: AIG) was only a DJIA member for four years when it was removed on September 22, 2008. In an ironical twist, AIG was replaced with Kraft Foods, which only lasted about four years on the index. AIG was removed during the credit and mortgage crisis and was ejected after the government propped up the insurer with stimulus funds. The shares closed most recently at $55.43.

• [By Stephan Byrd]

  American International Group (NYSE:AIG)‘s stock had its “buy” rating reiterated by stock analysts at Wells Fargo & Co in a research note issued to investors on Wednesday. They presently have a $54.00 target price on the insurance provider’s stock. Wells Fargo & Co‘s price target indicates a potential upside of 33.12% from the stock’s current price.

Top 10 Insurance Stocks To Watch Right Now: W.R. Berkley Corporation(WRB)

Advisors' Opinion:

• [By Joseph Griffin]

  Get a free copy of the Zacks research report on W. R. Berkley (WRB)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Logan Wallace]

  Standard Life Aberdeen plc increased its stake in shares of W. R. Berkley Corp (NYSE:WRB) by 56.6% in the 2nd quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The fund owned 15,374 shares of the insurance provider’s stock after purchasing an additional 5,555 shares during the period. Standard Life Aberdeen plc’s holdings in W. R. Berkley were worth $1,113,000 as of its most recent filing with the Securities & Exchange Commission.

• [By Shane Hupp]

  Gifford Fong Associates bought a new position in shares of W. R. Berkley Corp (NYSE:WRB) during the 2nd quarter, according to its most recent disclosure with the SEC. The institutional investor bought 3,000 shares of the insurance provider’s stock, valued at approximately $217,000.

• [By Stephan Byrd]

  Get a free copy of the Zacks research report on W. R. Berkley (WRB)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Logan Wallace]

  Get a free copy of the Zacks research report on W. R. Berkley (WRB)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 10 Insurance Stocks To Watch Right Now: Aon Corporation(AON)

Advisors' Opinion:

• [By Max Byerly]

  State of Wisconsin Investment Board decreased its holdings in shares of Aon (NYSE:AON) by 9.2% in the 1st quarter, Holdings Channel reports. The fund owned 384,127 shares of the financial services provider’s stock after selling 38,942 shares during the quarter. State of Wisconsin Investment Board’s holdings in AON were worth $53,905,000 at the end of the most recent quarter.

• [By Ethan Ryder]

  North Star Investment Management Corp. decreased its position in Aon PLC (NYSE:AON) by 17.9% during the 3rd quarter, Holdings Channel reports. The firm owned 2,515 shares of the financial services provider’s stock after selling 550 shares during the period. North Star Investment Management Corp.’s holdings in AON were worth $387,000 as of its most recent filing with the Securities and Exchange Commission.

• [By Logan Wallace]

  CorVel (NASDAQ: CRVL) and AON (NYSE:AON) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.

• [By Motley Fool Transcribing]

  Aon (NYSE:AON) Q4 2018 Earnings Conference CallFeb. 1, 2019 8:30 a.m. ET

  Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

  Operator

Top 10 Insurance Stocks To Watch Right Now: Topdanmark A/S (TOP)

Advisors' Opinion:

• [By Max Byerly]

  TopCoin (CURRENCY:TOP) traded flat against the U.S. dollar during the one day period ending at 7:00 AM E.T. on September 8th. In the last seven days, TopCoin has traded flat against the U.S. dollar. TopCoin has a total market capitalization of $0.00 and $0.00 worth of TopCoin was traded on exchanges in the last day. One TopCoin coin can now be bought for about $0.0008 or 0.00000010 BTC on major cryptocurrency exchanges.

• [By Logan Wallace]

  TopCoin (CURRENCY:TOP) traded down 15.4% against the dollar during the 1-day period ending at 7:00 AM E.T. on June 21st. During the last seven days, TopCoin has traded up 4% against the dollar. TopCoin has a market cap of $0.00 and approximately $123.00 worth of TopCoin was traded on exchanges in the last day. One TopCoin coin can currently be bought for about $0.0010 or 0.00000015 BTC on popular exchanges.

Why Shares of Unisys Popped Today

What happened

Shares of technology services and solutions provider Unisys (NYSE:UIS) jumped on Wednesday after the company reported fourth-quarter revenue and earnings that beat analyst estimates. The stock was up about 17.5% at 12:45 p.m. EST.

So what

Unisys reported fourth-quarter revenue of $760.9 million, up 2.2% year over year and $8.9 million higher than the average analyst estimate. Currency hurt the company's results, with revenue up 4.8% year over year in constant currency. Non-GAAP adjusted revenue was up 1.3% to $754.6 million.

Image source: Getty Images.

Services accounted for $625.5 million of revenue, growing by 5.6% year over year. The rest came from technology, which slumped 11% year over year to $135.4 million. The company blamed the renewal schedule for its ClearPath Forward products for the decline.

Non-GAAP earnings per share came in at $0.97, down from $1.75 in the prior-year period but $0.31 better than analysts were expecting. Earnings in the fourth quarter of 2017 were boosted by tax benefits worth $0.41 per share related to the Tax Cut and Jobs Act.

Now what

Total revenue grew by 3% in 2018, the first year of revenue growth for Unisys since 2003. "Our results were driven by our strategy of a focused industry go-to-market approach and using security to differentiate our offerings. Our expertise in cloud migration and infrastructure modernization and managed digital workplace services which contributed to our growth in 2018, is aligned with ongoing market demand for these services," said Unisys President and CEO Peter Altabef.

Canopy Growth Looks Toward a Marijuana Revenue Explosion

Marijuana stocks have hit the ground running in 2019, and Canopy Growth (NYSE:CGC) has been one of the best performers so far this year in the cannabis industry. With a powerful combination of a high-growth business and the support of partner and major shareholder Constellation Brands (NYSE:STZ), Canopy is an early leader in the budding marijuana business.

Canopy Growth expects to release its fiscal third-quarter financial report on Thursday, Feb. 14, and investors are looking forward to getting their first reading on how the company has fared following the opening of the lucrative Canadian market to recreational cannabis sales. In particular, most expect Canopy's revenue to soar -- but the big question will be whether it can also make moves toward eventual consistent profitability as it grows.

Stats on Canopy Growth

Metric

Current Figure (Loss)

EPS estimate	(CA$0.06)
Last quarter's EPS	(CA$1.52)
Revenue estimate	CA$84.8 million
Change from last quarter's revenue	276%

Source: S&P Global Market Intelligence.

Delayed gratification for Canopy Growth investors

Many of those who follow Canopy Growth expected that they'd see a big jump in revenue during the fiscal second quarter that ended last September. Even though that quarter ended before the Canadian recreational cannabis market opened, many still believed that advance shipments of cannabis products would show up in those quarterly results. Yet the actual results showed only marginal gains of about 33% in its top line, and huge losses stemming from a combination of rising expenses, stock-based compensation, and adjustments to the value of convertible debt that the company has outstanding.

Fundamentally, though, Canopy's results showed its readiness for the big leagues. Even though sales volumes of cannabis were restrained, production soared, as Canopy harvested more than 15,000 kilos of cannabis during the period, up from just over 4,000 kilos in the same period a year earlier. Canopy also succeeded in sustaining its pricing power, demonstrating the value of the brands that it's put into place at a key time for the industry.

Image source: Canopy Growth.

As a result, many investors will look closely at how well the Canadian rollout went for Canopy. Signs of strong sales will be rewarded, but any hint of weakness could disappoint shareholders who've already waited three months longer than they wanted to see the signs of success in the Great White North.

Looking forward

Yet the bigger question for many investors in Canopy Growth is exactly how quickly it can capitalize on what most see as a much larger long-term opportunity. In January, following the legalization of hemp production in the U.S. Farm Bill, Canopy said that it would build a production facility for hemp in upstate New York. The huge project involves a $150 million investment, but the most important part of the move is that it establishes an entry point for Canopy to get involved in what could become a major part of the U.S. market for cannabis-related products. Details on the timing and extent of the project will be crucial in helping to establish expectations, but investors will inevitably have high hopes that Canopy will be a first-mover in this part of the industry as well.

At the same time, shareholders should also focus on the continuing relationship between Canopy and Constellation Brands. Already, Constellation has made it clear that it sees huge growth potential in marijuana, and the beer and spirits company is counting on its investment in Canopy to produce strong returns that justify its faith in the cannabis industry.

Constellation has the power to help Canopy Growth immensely, both by using its existing distribution networks and marketing expertise and by providing capital as necessary to fund expansion. Canopy CEO Bruce Linton speaks assertively about his company's ability to grow on its own, but it's in both Canopy's and Constellation's interest to work together toward the common goal of attaining domination of the budding marijuana industry.

Expect more growth

Canopy Growth will see several of its peers report their results, and comparisons are inevitable. With the advantages that it has, though, Canopy should be able to remain near the top of the industry with a vision that should take full advantage of the prospects for greater availability of legal cannabis in the months and years to come.

Here's Why International Paper Rose 17.5% in January

What happened

Shares of International Paper (NYSE:IP) rose more than 17% last month, according to data from S&P Global Market Intelligence. There wasn't any company-specific news to drive the stock higher throughout the month, but shares rose with the broader market following the sell-off at the end of 2018. That's not to say the move higher wasn't deserved, however.

The $18.5 billion pulp and paper company reported fourth-quarter and full-year 2018 earnings results at the end of January. International Paper beat Wall Street's earnings estimate in every quarterly period last year, showing that analysts were unnecessarily worried about trade-war risks that never materialized. 

Image source: Getty Images.

So what

For the full year 2018, International Paper delivered strong growth in operating income for each of its core segments. The year-over-year comparisons are always muddied a little bit by special items and one-time expenses for the globe-spanning operations of the company. For instance, the industrial packaging segment took a $354 million charge in 2017 related to a legal settlement, and it took a $122 million charge last year to write off certain assets in Brazil. Nonetheless, the comparison provides a solid glimpse into the health of the business. 

Operating Profit

2018

2017

Year-Over-Year Difference

Industrial packaging (cardboard)	$2.09 billion	$1.55 billion	35%
Global cellulose fibers (pulp)	$251 million	$65 million	286%
Printing papers	$533 million	$457 million	17%
Total segment operating profit	$2.88 billion	$2.07 billion	39%

Data source: press release.

The results indicate that International Paper is doing well navigating the headwinds facing the global pulp and paper industry. Wall Street worried that the ongoing trade war between China and the United States would sap the business last year, especially if tariffs cut off cardboard sales to China. The country has been one of the driving forces of rising global cardboard demand in recent years, alongside the rise of online shopping, which requires a lot of cardboard boxes. Apparently, China is still purchasing plenty of finished paper products, which isn't surprising, considering the state of its domestic industry.

The business also reported full-year 2018 equity earnings of $290 million from its stake in Ilim, a pulp joint venture in Russia. That's an increase from just $183 million in 2017. International Paper also reported full-year 2018 equity earnings of $46 million for its stake in a printing paper company. It didn't report any earnings from the investment in 2017. The strong performance of the equity investments provides confidence that management is taking advantage of opportunities in the pulp and paper industry.

Now what

International Paper delivered operating income growth for each of its business segments in 2018, led by an impressive increase in its core industrial packaging unit. If that's not enough to prove that Wall Street was wrong about the threat of tariffs on the business, then perhaps no data will be sufficient.

The steady progress of the business last year didn't keep shares from sliding 30% in 2018. Then again, that could just create a great entry point for investors with a long-term mindset.