Sure Passive Income · Coca-Cola (KO) B $53 58 3.1% 86% 7.5% 10.6% Home Depot (HD) B $274 11 2.2%...

Sure Passive Income

Rising Passive Income From Buy & Hold Forever Securities

November 2020 Edition

By Ben Reynolds, Bob Ciura, Josh Arnold, and Eli Inkrot

Edited by Brad Beams

Published on November 15th, 2020

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Table of Contents

Opening Thoughts - What Part Does Value Play In Buy & Hold Forever Investing? - ........ 3

Sure Passive Income Top 10 - November 2020 .......................................................................... 4

Analysis of Top 10 Securities ....................................................................................................... 5

National Fuel Gas Co. (NFG) ..................................................................................................... 5

General Dynamics Corp. (GD) ................................................................................................... 8

Hormel Foods Corp. (HRL) ...................................................................................................... 11

Amgen Inc. (AMGN) ................................................................................................................ 14

The Travelers Companies Inc. (TRV) ...................................................................................... 17

The Coca-Cola Co. (KO) .......................................................................................................... 20

The Home Depot Inc. (HD) ...................................................................................................... 23

Comcast Corp. (CMCSA) ......................................................................................................... 26

The J.M. Smucker Co. (SJM) ................................................................................................... 29

American Tower Corp. (AMT) ................................................................................................. 32

Closing Thoughts - The ‘Aha’ Moment With Forever Rising Passive Income Investing - .. 35

Buying & Ranking Criteria ....................................................................................................... 36

Portfolio Building Guide ............................................................................................................ 37

Examples ................................................................................................................................... 37

Past Recommendations & Performance ................................................................................... 38

List of Securities by Dividend Risk Score ................................................................................. 39

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Opening Thoughts - What Part Does Value Play In Buy & Hold

Forever Investing? - When you buy a security to hold for the long run, does valuation matter?

The short answer is yes, valuation always matters for fundamental investors. But with that said, valuation does not matter as much for the truly long-term buy and hold investor.

The value investing strategy is based around the idea of buying a dollar bill for only three quarters; paying less than what a security is ‘intrinsically’ worth. One then sells the security as it approaches its intrinsic value. There’s no reason to hold a security that was purchased because it was cheap after it is no longer cheap.

Value investing ultimately relies on perception. Negative perceptions about a security create a discount to intrinsic value. When perceptions shift, valuation multiples rise.

Long-term buy and hold investing is less reliant on value. Returns come from dividends and growth – from the strength of the operating business itself – and not from changes in the perception of the business.

However, the entry price does matter for a buy and hold investment. Imagine a stock that pays a $2 per share dividend. We’d much rather own that stock at $50 per share than $100. That’s the difference between a 2% starting yield and a 4% starting yield.

Valuation matters to the long-term buy and hold investor who is investing for rising passive income because, in part, it determines the starting yield the investor receives. Note that this is different than attempting to arbitrage perception surrounding a security as is done in traditional value investing.

Starting with this edition of The Sure Passive Income Newsletter and going forward, we are instituting a screen that requires any recommended security to be trading at equal to or greater than its 10-year historical average dividend yield. This is in addition to the security trading at or above the S&P 500’s dividend yield.

A dividend yield screen is also in line with the feedback we received on the inaugural edition of The Sure Passive Income Newsletter regarding having more consideration towards price/value.

This screen means we will always be buying into quality dividend growth securities at ‘fair or better prices’ from a dividend yield perspective. Our recommendations in The Sure Passive Income Newsletter will still not be focused on traditional value investing metrics, but they will have an element of timeliness in them as we take care to buy into securities that are trading at or above their historical dividend yield.

At the same time, this means we won’t be recommending securities trading below their 10-year historical average dividend yield. This has the effect of preventing recommendations for securities that have seen their share price appreciate much faster than their dividend over the last several years.

The goal of The Sure Passive Income Newsletter remains the same; to practice buy and hold forever investing into high-quality dividend growth securities for rising passive income over time. Please keep reading to see this month’s Top 10 analyzed in detail.

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Sure Passive Income Top 10 - November 2020

Name & Ticker Div. Risk

Score

Stock Price

# Years Div.

Increases

Div. Yield

Payout Ratio

Exp. Growth

Exp. Growth + Div. Yield

National Fuel Gas (NFG) A $41 50 4.4% 62% 6.0% 10.4%

General Dynamics (GD) A $149 28 3.0% 40% 6.0% 9.0%

Hormel Foods (HRL) A $52 54 1.8% 56% 6.0% 7.8%

Amgen (AMGN) B $237 10 2.7% 40% 9.0% 11.7%

Travelers (TRV) B $132 15 2.6% 39% 8.0% 10.6%

Coca-Cola (KO) B $53 58 3.1% 86% 7.5% 10.6%

Home Depot (HD) B $274 11 2.2% 53% 7.0% 9.2%

Comcast (CMCSA) B $48 12 1.9% 37% 7.0% 8.9%

J.M. Smucker (SJM) B $120 23 3.0% 53% 5.0% 8.0%

American Tower (AMT) B $240 9 1.9% 54% 6.0% 7.9%

Notes: Data for the table above is from a spreadsheet during the past week of our Sure Analysis Research

Database and general data over the same week. ‘Div.’ stands for ‘Dividend.’ ‘# Years Div. Increases’

shows the consecutive years of dividend growth. ‘Payout Ratio’ is calculated using expected current

fiscal year adjusted earnings-per-share. ‘Exp. Growth’ means expected annualized growth rate over the

next five years.

Disclosures: Ben Reynolds is long AMGN, & TRV from this month’s Top 10.

We added a new screen to this month’s edition of The Sure Passive Income Newsletter that requires

securities in the Top 10 be trading for equal to or greater than their historical 10-year average dividend

yield at the time rankings were done. As a result, 9 out of this month’s Top 10 are new

recommendations. Coca-Cola (KO) is the lone exception.

An equally weighted portfolio of the Top 10 has the following future expected total return estimate

characteristics:

Dividend Yield: 2.7%

Growth Rate: 6.7%

Payout Ratio: 52%

Note: Data for this newsletter was obtained between 11/9/20 and 11/13/20.

https://www.suredividend.com/sure-analysis-research-database/


Return to Top 10 List

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Analysis of Top 10 Securities National Fuel Gas Co. (NFG)

Overview & Current Events

National Fuel Gas is a diversified energy company with upstream, midstream, and downstream

operations. The company’s upstream assets located in the Marcellus and Utica shale formations have

production capacity of 800 million cubic feet of gas per day. Upstream represents approximately 42%

of the company’s annual earnings before interest, taxes, depreciation, and amortization (EBITDA).

Meanwhile, the midstream operations include pipeline infrastructure, and represent 37% of company

EBITDA. Finally, NFG’s downstream utility segment provides utility services to over 740,000

customers and represents 21% of total EBITDA.

In November, National Fuel Gas reported financial results for the fourth fiscal quarter and full fiscal

year. Adjusted earnings-per-share of $0.40 for the quarter were a 26% year-over-year decline, due

primarily to weak commodity prices that impacted the company’s E&P segment. Partially offsetting

declining oil and gas prices was a 14% increase in production, fueled by the recent acquisition of

upstream assets. Adjusted EBITDA increased 1.5% year-over-year.

Safety

National Fuel Gas’ competitive advantage is its combination of regulated and stable businesses

(pipelines and utilities) with cyclical and potentially higher-growth sectors (exploration & production).

This allows the company to endure difficult operating environments and downturns, such as the

coronavirus pandemic, with less difficulty than its peers which focus exclusively on more cyclical areas

of energy.

Despite operating in the highly cyclical and economically sensitive energy industry, National Fuel Gas

performed very well during the Great Recession. Earnings-per-share increased 10% from 2007-2009,

with continued growth in the years after. This recession resilience has allowed the company to increase

its dividend for 50 consecutive years.

Growth Prospects

We expect 6% annual earnings-per-share growth over the next five years. Higher commodity prices

would be a meaningful boost, but even in the current environment we believe National Fuel Gas can

produce modest growth. The recent acquisition of Shell’s integrated upstream and midstream assets in

Pennsylvania for $541 million is expected to boost natural gas production by 215 million to 230

million cubic feet per day. The company also raised fiscal 2021 guidance, and now expects a more

meaningful recovery next year with adjusted earnings-per-share in a range of $3.55 to $3.85.

National Fuel Gas has increased its dividend for 50 consecutive years, which makes it a Dividend

King. Continued dividend growth is very likely, due to the company’s durable competitive advantages

and diversified business model.

Key Statistics, Ratios, & Metrics Years of Dividend Increases: 50 5-Year Growth Estimate: 6.0%

Dividend Yield: 4.4% Most Recent Dividend Increase: 2.3%

Dividend Risk Score: A Stock Price: $41


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Income Statement Metrics Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Revenue 1,779 1,627 1,830 2,113 1,761 1,452 1,580 1,593 1,693 1,546

Gross Profit 924 940 1,042 1,123 1,075 1,055 1,080 1,014 1,031 568

Gross Margin 51.9% 57.8% 57.0% 53.2% 61.0% 72.6% 68.4% 63.7% 60.9% 36.7%

Operating Profit 441 448 518 570 515 532 594 520 512 479

Operating Margin 24.8% 27.5% 28.3% 27.0% 29.3% 36.6% 37.6% 32.6% 30.2% 31.0%

Net Profit 258 220 260 299 (379) (291) 283 392 304 (124)

Net Margin 14.5% 13.5% 14.2% 14.2% -21.5% -20.0% 17.9% 24.6% 18.0% -8.0%

Free Cash Flow (160) (376) 35 (5) (165) 7 234 31 (94) (482)

Income Tax 164 151 173 190 (319) (233) 161 (7) 85 19

Balance Sheet Metrics Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Assets 5,221 5,935 6,218 6,728 6,565 5,636 6,103 6,036 6,462 6,965

Cash & Equivalents 80 74 65 37 114 130 556 230 20 21

Accounts Receivable 163 116 133 150 105 133 112 141 140 144

Inventories 82 78 94 67 65 71 74 78 80 85

Goodwill & Int. Ass. 5 5 5 5 5 5 5 5 5 5

Total Liabilities 3,329 3,975 4,024 4,317 4,539 4,109 4,400 4,099 4,323 4,993

Accounts Payable 142 88 105 137 180 108 126 160 132 134

Long-Term Debt 1,089 1,570 1,649 1,723 2,084 2,086 2,384 2,131 2,189 2,660

Shareholder’s Equity 1,892 1,960 2,195 2,411 2,025 1,527 1,704 1,937 2,139 1,972

D/E Ratio 0.58 0.80 0.75 0.71 1.03 1.37 1.40 1.10 1.02 1.35

Profitability & Per Share Metrics Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Return on Assets 5.0% 3.9% 4.3% 4.6% -5.7% -4.8% 4.8% 6.5% 4.9% -1.8%

Return on Equity 14.2% 11.4% 12.5% 13.0% -17.1% -16.4% 17.5% 21.5% 14.9% -6.0%

ROIC 8.6% 6.8% 7.1% 7.5% -9.2% -7.5% 7.4% 9.6% 7.2% -2.8%

Shares Out. 82.9 83.3 83.7 84.2 84.6 85.1 85.5 86.0 86.8 88.0

Revenue/Share 21.26 19.43 21.69 24.87 20.87 17.12 18.37 18.43 19.51 17.58

FCF/Share (1.92) (4.49) 0.42 (0.06) (1.95) 0.09 2.72 0.36 (1.09) (5.47)

Note: All figures in millions of U.S. Dollars unless per share or indicated otherwise.


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8

General Dynamics Corp. (GD)


General Dynamics is an aerospace & defense company that operates five business segments:

Aerospace (23% of sales), Combat Systems (17%), Marine Systems (23%), Information Technology

(23%), and Mission Systems (13%). The company’s Aerospace segment is focused on business jets

and services while the remainder of the company is defense. The company makes the well-known M1

Abrams tank, Stryker vehicle, Virginia-class submarine, Columbia-class submarine, and Gulfstream

business jets. General Dynamics had revenue of nearly $40 billion last year.

The company reported third-quarter results on October 28th. Total revenue declined 3.4% year-over-

year, while diluted earnings-per-share declined 7.6%. Declines resulted from weakness in Aerospace,

Information Technology, and Mission Systems. But, net debt is also declining and is now 3.2% lower

than last quarter at $11.9 billion. New orders have strengthened, and the total backlog now stands at

$81.5 billion, up 21% from the same quarter last year. Revenue increased 3.5% for Combat Systems

and 7.6% for Marine Systems. Information Technology revenue declined 2% while Mission Systems

was flat for the quarter.

Safety

General Dynamics is an entrenched military prime contractor. It has ground and marine platforms that

serve as the backbone for the U.S. Army, U.S. Navy and militaries around the world. This leads to a

competitive advantage as these platforms have decades-long life cycles and General Dynamics has

expertise and experience to perform sustainment and modernization.

These characteristics lead to a good degree of recession resistance. For example, from 2008-2010

during the Great Recession, General Dynamics increased its earnings-per-share by 11%. General

Dynamics also has a secure payout ratio at just 40% of expected fiscal 2020 adjusted earnings-per-

share.

Growth Prospects

We expect 6% annual earnings-per-share growth over the next five years. This earnings-per-share

growth will be achieved through a combination of rising revenue as well as share repurchases. General

Dynamics’ top and bottom lines have grown due to increasing U.S. defense spending and international

sales. The business jet market is being negatively impacted in the near-term due to COVID-19 and

travel restrictions, but defense remains a much bigger portion of General Dynamics’ revenue and

earnings. General Dynamics has established naval and ground platforms that support maintenance and

modernization contracts, as well as future prime contract wins.

General Dynamics has increased its dividend for 28 consecutive years, which makes it a Dividend

Aristocrat. Continued dividend growth is very likely due to the company’s durable competitive

advantages and market leadership. We expect 8% compound annual dividend growth through 2025.





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Revenue 32466 32677 30992 30930 30852 31781 30561 30973 36193 39350 Gross Profit 5909 5856 4980 5728 5873 6232 5665 6242 6715 7059

Gross Margin 18.2% 17.9% 16.1% 18.5% 19.0% 19.6% 18.5% 20.2% 18.6% 17.9% SG&A Exp. 1964 2030 2221 2039 1984 1937 1921 2006 2258 2411 D&A Exp. 569 592 590 525 496 481 453 441 763 829

Operating Profit 3945 3826 2759 3689 3889 4295 3744 4236 4457 4648 Op. Margin 12.2% 11.7% 8.9% 11.9% 12.6% 13.5% 12.3% 13.7% 12.3% 11.8% Net Profit 2624 2526 -332 2357 2533 3036 2572 2912 3345 3484

Net Margin 8.1% 7.7% -1.1% 7.6% 8.2% 9.6% 8.4% 9.4% 9.2% 8.9% Free Cash Flow 2616 2780 2170 2675 3307 2038 1771 3448 2458 1994

Income Tax 1162 1166 854 1125 1129 1183 977 1165 727 718


Total Assets 32545 34883 34309 35494 35337 31997 33172 35046 45408 48841 Cash & Equivalents 2613 2649 3296 5301 4388 2785 2334 2983 963 902

Acc. Receivable 3848 4429 4204 4370 4050 3446 3399 3617 3759 3544 Inventories 2158 7478 7740 7670 7812 7723 5118 5303 5977 6306

Goodwill & Int. 14641 15389 13431 12976 12643 12206 12123 12616 22179 21992 Total Liabilities 19229 21651 22919 20993 23508 21259 22871 23611 33676 35264

Accounts Payable 2736 2895 2469 2216 2057 1964 2538 3207 3179 3162 Long-Term Debt 3203 3907 3908 3909 3893 3399 3888 3982 12417 11930

Total Equity 13316 13232 11390 14501 11829 10738 10301 11435 11732 13577 D/E Ratio 0.24 0.30 0.34 0.27 0.33 0.32 0.38 0.35 1.06 0.88


Return on Assets 8.2% 7.5% -1.0% 6.8% 7.2% 9.0% 7.9% 8.5% 8.3% 7.4% Return on Equity 20.4% 19.0% -2.7% 18.2% 19.2% 26.9% 24.4% 26.8% 28.9% 27.5%

ROIC 16.0% 15.0% -2.0% 14.0% 14.8% 20.3% 18.2% 19.7% 16.9% 14.0% Shares Out. 372 356 354 353 332 311 302 297 289 290

Revenue/Share 84.28 88.91 87.71 87.50 90.39 97.29 98.46 101.67 120.98 135.3 FCF/Share 6.79 7.56 6.14 7.57 9.69 6.24 5.71 11.32 8.22 6.86



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Note: General Dynamics has paid large special dividends in the past, two of which are truncated in this image for better readability of the

normal quartlerly dividend.

11


Hormel Foods Corp. (HRL)


Hormel Foods is a leader in the packaged and processed food products industry. The company was

founded in 1891, so its operating history is long and storied. While it has acquired and divested many

different businesses since its founding, it has also kept to its core business of processed meat products,

and its robust distribution chain. Hormel sells in more than 80 countries around the world, although its

core business is still centered in the U.S., and it produces about $10 billion in annual revenue. The

stock currently trades with a market capitalization of $28 billion, very near its all-time high set earlier

this year. Hormel is also a member of the prestigious Dividend Kings, having increased its dividend

for more than 50 consecutive years.

Hormel reported third-quarter earnings on August 25th, and results were roughly in line with

expectations. Volumes were up 4% in Q3, as organic volume led the way with a solid 3% gain.

Pricing and mix were lower, however, so organic revenue was up 2%.

Grocery Products revenue was up 7% to $581 million, Refrigerated Foods revenue rose 5% to $1.36

billion, Jennie-O was down 4% to $287 million, and the International segment was up 2% to $151

million. Net retail sales in the U.S. were up 19%, but that was offset by a 19% decline in foodservice

revenue, as many restaurants remain shut.

Operating margin declined year-over-year to 10.5% of revenue, and earnings-per-share was 37 cents,

flat from the year-ago period. We continue to expect $1.65 in earnings-per-share for this year

following Q3 results.

Safety

Hormel’s competitive advantage is that it has built a portfolio of nearly 40 products that are either first

or second in terms of market share in their respective categories. This sort of widespread market

dominance is difficult to come by in any industry, and the reason for this is that Hormel is highly

entrenched among consumers.

Hormel has proven to be resistant to recessions as well, as its products offer good value and long shelf

lives to consumers. Hormel grew earnings during the Great Recession and is also weathering the storm

in 2020 quite well. Hormel’s payout ratio has grown considerably in recent years thanks to robust

dividend increases. However, we continue to see the dividend as very safe given the company’s stable

earnings, and payout ratio of just 56%.

Growth Prospects

Hormel managed to grow its earnings-per-share in 7 out of the last 9 full fiscal years. We see 6%

annual growth from 2020 levels as Hormel grows revenue and margins though organic and acquisition-

driven growth.




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Revenue 7221 7895 8231 8752 9316 9264 9523 9168 9546 9497

Gross Profit 1239 1334 1332 1413 1565 1809 2158 1997 1979 1885

Gross Margin 17.2% 16.9% 16.2% 16.1% 16.8% 19.5% 22.7% 21.8% 20.7% 19.8%

SG&A Exp. 605 619 606 627 651 744 872 759 841 728

D&A Exp. 126 124 119 125 130 133 132 131 162 165



Net Profit 396 474 500 526 603 686 890 847 1012 979

Net Margin 5.5% 6.0% 6.1% 6.0% 6.5% 7.4% 9.3% 9.2% 10.6% 10.3%

Free Cash Flow 396 394 385 531 588 848 784 813 852 629

Income Tax 225 240 253 268 316 370 427 432 169 231


Total Assets 4054 4244 4564 4916 5456 6140 6370 6976 8142 8109



Inventories 794 886 951 968 1055 993 986 921 964 1042

Goodwill & Int. Ass. 771 763 754 1313 1781 2527 2738 3147 3921 3516

Total Liabilities 1647 1585 1739 1599 1844 2138 1919 2036 2537 2183


Long-Term Debt 350 250 250 250 250 435 250 250 625 250

Shareholder’s Equity 2401 2657 2819 3311 3606 3998 4448 4936 5601 5921

D/E Ratio 0.15 0.09 0.09 0.08 0.07 0.11 0.06 0.05 0.11 0.04


Return on Assets 10.2% 11.4% 11.4% 11.1% 11.6% 11.8% 14.2% 12.7% 13.4% 12.0%

Return on Equity 17.5% 18.8% 18.3% 17.2% 17.4% 18.0% 21.1% 18.0% 19.2% 17.0%

ROIC 15.1% 16.7% 16.7% 15.8% 16.2% 16.5% 19.5% 17.1% 17.7% 15.8%

Shares Out. 534 532 528 526 527 527 528 528 529 544

Revenue/Share 13.34 14.52 15.30 16.19 17.24 17.12 17.56 17.00 17.55 17.42

FCF/Share 0.73 0.72 0.72 0.98 1.09 1.57 1.45 1.51 1.57 1.15


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14


Amgen Inc. (AMGN)


Amgen is the largest independent biotech company in the world. Amgen discovers, develops,

manufactures, and sells medicines that treat serious illnesses. The company focuses on six therapeutic

areas: cardiovascular disease, oncology, bone health, neuroscience, nephrology, and inflammation.

Amgen announced earnings results for the third quarter on 10/28/20. Revenue increased 12% to $6.4

billion, while adjusted earnings-per-share (EPS) increased 19.4% to $4.37. Revenue and EPS both beat

consensus estimates. The company had volume growth of 18%, which was partially offset by lower

net selling prices. Sales for Enbrel, which treats rheumatoid arthritis and remains Amgen’s top

grossing product, were down 3%. Enbrel lost market share in the quarter and was also impacted by

lower growth in the rheumatology sector as a whole due to COVID-19. Offsetting this decline was the

bone health drug, Prolia, which grew sales by 11%, due mostly to volume gains.

The company also revised its guidance for the year, by narrowing its revenue forecast but raising its

earnings forecast. Amgen expects revenue of $25.1 billion to $25.5 billion, from $25 billion to $25.6

billion previously. Adjusted EPS is now expected in a range of $15.80 to $16.15 for 2020, up from

$15.10 to $15.75 previously.

Safety

Amgen’s competitive advantages include its strong pharmaceutical assets as well as its robust pipeline.

Amgen spent 18.1% of its 2019 sales on research and development. As a result, it has a well-stocked

pipeline to fuel its future growth. The company has also demonstrated resilience during recessions, as

people will seek treatment for their health issues regardless of economic conditions. The company also

has a reasonably low payout ratio of 40% expected for 2020, which will allow it to continue to raise its

dividend going forward, even in a prolonged recession.

Growth Prospects

We expect 9% annual earnings-per-share growth over the next five years for Amgen. This earnings-

per-share growth will be achieved through a combination of rising revenue as well as share

repurchases. While Amgen is struggling with falling sales for legacy products such as Neulasta and

Enbrel, new products are generating growth for Amgen. For example, Repatha, which is used to

control cholesterol, grew sales by 22% in large part from a 60% increase in volume. Separately,

Otezla, which is used to treat inflammatory diseases, generated 11% year-over-year sales growth.

Lastly, share buybacks will boost earnings-per-share growth. Amgen repurchased 3 million shares at

an average share price of $251 during the third quarter (~0.5% of shares outstanding), and it still has

$4.2 billion remaining on its share repurchase authorization.



Dividend Risk Score: B Stock Price: $237

15



Revenue 15,053 15,582 17,265 18,676 20,063 21,662 22,991 22,849 23,747 23,362

Gross Profit 12,833 12,874 14,066 15,330 15,641 17,435 18,829 18,780 19,646 19,006

Gross Margin 85.3% 82.6% 81.5% 82.1% 78.0% 80.5% 81.9% 82.2% 82.7% 81.4%

SG&A Exp. 3,983 4,499 4,814 5,184 4,699 4,846 5,062 4,870 5,332 5,150

D&A Exp. 1,017 1,060 1,088 1,286 2,092 2,108 2,105 1,955 1,946 2,206

Operating Profit 5,545 4,312 5,577 5,867 6,191 8,470 9,794 9,973 10,263 9,674

Op. Margin 36.8% 27.7% 32.3% 31.4% 30.9% 39.1% 42.6% 43.6% 43.2% 41.4%

Net Profit 4,627 3,683 4,345 5,081 5,158 6,939 7,722 1,979 8,394 7,842

Net Margin 30.7% 23.6% 25.2% 27.2% 25.7% 32.0% 33.6% 8.7% 35.3% 33.6%

Free Cash Flow 5,207 4,552 5,168 5,598 7,949 9,137 9,616 10,513 10,558 9,150

Income Tax 690 467 664 184 427 1,039 1,441 7,618 1,151 1,296


Total Assets 43,486 48,871 54,298 66,125 69,009 71,449 77,626 79,954 66,416 59,707

Cash & Equivalents 3,287 6,946 3,257 3,805 3,731 4,144 3,241 3,800 6,945 6,037

Acc. Receivable 2,335 2,896 2,518 2,697 2,546 2,995 3,165 3,237 3,580 4,057

Inventories 2,022 2,484 2,744 3,019 2,647 2,435 2,745 2,834 2,940 3,584

Goodwill & Int. 13,564 14,334 16,630 28,230 27,481 26,428 25,030 23,370 22,142 34,116

Total Liabilities 19,542 29,842 35,238 44,029 43,231 43,366 47,751 54,713 53,916 50,034

Accounts Payable 716 642 905 787 995 965 917 1,352 1,207 1,371

Long-Term Debt 13,362 21,428 26,529 32,128 30,715 31,429 34,596 35,342 33,929 29,903

Total Equity 23,944 19,029 19,060 22,096 25,778 28,083 29,875 25,241 12,500 9,673

D/E Ratio 0.56 1.13 1.39 1.45 1.19 1.12 1.16 1.40 2.71 3.09


Return on Assets 11.1% 8.0% 8.4% 8.4% 7.6% 9.9% 10.4% 2.5% 11.5% 12.4%

Return on Equity 19.9% 17.1% 22.8% 24.7% 21.5% 25.8% 26.6% 7.2% 44.5% 70.7%

ROIC 13.1% 9.5% 10.1% 10.2% 9.3% 12.0% 12.5% 3.2% 15.7% 18.2%

Shares Out. 932 796 756 755 760 754 738 720 640 598

Revenue/Share 15.60 17.09 21.94 24.41 26.06 28.28 30.49 31.09 35.71 38.36

FCF/Share 5.40 4.99 6.57 7.32 10.32 11.93 12.75 14.30 15.88 15.02


16


17


The Travelers Companies Inc. (TRV)


The Travelers Companies was founded in 1864 in Connecticut by two businessmen. It began with life

insurance and accident insurance but has since expanded into all different kinds of property and

casualty insurance, becoming a leader in the space. Travelers offers protection products for consumers,

auto insurance, home insurance, and various types of commercial products. Today, the company

produces nearly $30 billion in annual revenue, and the stock trades with a market capitalization of $34

billion. Travelers is also the only property and casualty insurance provider that is a constituent of the

Dow Jones Industrial Average.

Travelers released its third-quarter earnings report on October 20th, and results were slightly better than

expected on the top and bottom lines. Core earnings-per-share came to $3.12 in Q3, five cents above

expectations. Travelers saw a favorable development on its prior year reserves, higher underlying

underwriting gains, and higher net investment income. The company once again suffered from

relatively high catastrophe losses, but it wasn’t enough to offset the good news elsewhere.

Net written premiums were up from $7.57 billion to $7.77 billion year-over-year, while the combined

ratio fell from 94.1% to 91.5%; combined ratios are expenses including claims divided by premium

revenue, so the lower, the better.

Adjusted book value was $94.89 per share at the end of the period versus $90.09 in the same quarter

last year. We estimate $8.70 in earnings-per-share for 2020 following Q3 results.

Safety

Travelers’ primary competitive advantages are its scale and its brand, both of which have been built

steadily in the past century and a half. Travelers has a globally recognizable brand that stands for

stability, and its scale affords it the ability to diversify in different types of products, not only

diversifying risk away via differing revenue streams, but also allowing for cross-selling to customers,

maximizing customer value.

Travelers isn’t necessarily susceptible to economic slowdowns, as its policies are tied to specific

events, like catastrophes, rather than economic weakness. This gives Travelers a diversifying attribute

for an investor’s portfolio.

Travelers’ dividend ranks highly for safety as the payout ratio is just 39% on this year’s earnings. We

see Travelers as having the capacity to raise the payout for years to come.

Growth Prospects

We expect Travelers to grow at 8% annually in the coming years, primarily from higher underwritten

premium growth, better margins, and its well-funded buyback program. We note that unforeseen

catastrophe losses could temporarily derail our bullish expectations.




18



Revenue 25112 25446 25740 26191 27174 26815 27625 28902 30282 31581

SG&A Exp. 3406 3556 3610 3757 3964 4094 4154 4170 4297 4365

D&A Exp. 812 802 827 867 864 818 826 813 803 763

Net Profit 3216 1426 2473 3673 3692 3439 3014 2056 2523 2622

Net Margin 12.8% 5.6% 9.6% 14.0% 13.6% 12.8% 10.9% 7.1% 8.3% 8.3%

Free Cash Flow 3054 2169 3230 3816 3693 3434 4469 4148 4380 5205

Income Tax 1090 -74 693 1272 1397 1301 1039 674 438 516


Total Assets ($B) 105.66 104.58 104.94 103.81 103.08 100.18 100.25 103.48 104.23 110.1


Acc. Receivable 5497 22071 21390 20166 19920 19721 19618 20228 20661 20763

Goodwill & Int. 3867 3798 3746 3985 3915 3852 3848 4293 4282 4291



Long-Term Debt 6611 6605 6350 6346 6349 6344 6437 6571 6564 6558

Total Equity 25407 24477 25405 24796 24836 23598 23221 23731 22894 25943

D/E Ratio 0.26 0.27 0.25 0.26 0.26 0.27 0.28 0.28 0.29 0.25


Return on Assets 3.0% 1.4% 2.4% 3.5% 3.6% 3.4% 3.0% 2.0% 2.4% 2.4%

Return on Equity 12.2% 5.7% 9.9% 14.6% 14.9% 14.2% 12.9% 8.8% 10.8% 10.7%

ROIC 9.7% 4.5% 7.9% 11.7% 11.8% 11.3% 10.1% 6.9% 8.4% 8.5%

Shares Out. 435 393 377 354 322 296 280 271 264 259

Revenue/Share 52.05 60.51 66.03 69.97 79.34 85.43 94.93 103.74 112.24 120.40

FCF/Share 6.33 5.16 8.29 10.20 10.78 10.94 15.36 14.89 16.23 19.84


19


20


The Coca-Cola Co. (KO)


The Coca-Cola Company is the world’s largest beverage company, owning or licensing more than 500

different drink brands, all of which are non-alcoholic. The company was founded in 1886 with a single

product – the original Coca-Cola – but now distributes beverages in nearly every country in the world,

accounting for about two billion individual servings every day worldwide. The company produces

about $33 billion in annual revenue and trades with a market capitalization of $230 billion.

Coca-Cola reported third-quarter earnings on October 22nd, with mixed results as revenue was better

than expectations, while profit was slightly below expectations. Revenue was $8.7 billion, down 8%

year-over-year, but beating consensus of $8.4 billion. The challenge faced in the quarter continued to

be away-from-home categories; such as movie theaters, sports venues, and even restaurants to a degree.

Management noted demand elsewhere was improving, but the company remains challenged. Organic

revenue declined 6% year-over-year as volume, as well as pricing and mix, declined 3%. Operating

margin rose from 28.1% of revenue to 30.4% year-over-year, attributable to cost management, and

partially offset by currency headwinds. We see $1.90 in earnings-per-share for this year following Q3

results and remain optimistic for 2021 and beyond.

Safety

Coca-Cola’s competitive advantages include its portfolio of brands that is unmatched. In addition, its

supply chain is unparalleled in terms of distributing beverages globally at favorable costs. These

advantages have been durable for decades, and the company has only strengthened its competitive

position with recent acquisitions.

Generally, Coca-Cola’s recession resistance is strong. Indeed, it produced strong earnings growth from

2007 to 2010, during the Great Recession. While earnings are expected to dip this year, we see a swift

rebound out of the current recession.

The payout ratio has increased in recent years as growth in the dividend has outpaced earnings growth.

The current payout ratio is high at 86%, but we expect that to fall over time as earnings growth catches

up to smaller increases in the dividend.

Growth Prospects

We expect Coca-Cola to grow at 7.5% annually in the years ahead from the relatively low base of 2020

earnings. The company’s organic revenue growth should pick up in 2021 and beyond as venues are

reopened. In addition, its margin improvement efforts are bearing fruit, along with a steady stream of

share repurchases. Coca-Cola’s portfolio improvements, such as moving into coffee, and its core suite

of extremely popular brands should keep earnings growing for many years to come.




21



Revenue 35119 46542 48017 46854 45998 44294 41863 35410 31856 37,266 Gross Profit 22426 28327 28964 28433 28109 26812 25398 22154 20086 22,647

Gross Margin 63.9% 60.9% 60.3% 60.7% 61.1% 60.5% 60.7% 62.6% 63.1% 60.8% SG&A Exp. 13194 17422 17738 17310 17218 16427 15262 12496 10307 12,103 D&A Exp. 1443 1954 1982 1977 1976 1970 1787 1260 1086 1,365

Operating Profit 8413 10173 10779 10228 9708 10240 9750 9427 8700 10,086 Op. Margin 24.0% 21.9% 22.4% 21.8% 21.1% 23.1% 23.3% 26.6% 27.3% 27.1% Net Profit 11787 8584 9019 8584 7098 7351 6527 1248 6434 8,920

Net Margin 33.6% 18.4% 18.8% 18.3% 15.4% 16.6% 15.6% 3.5% 20.2% 23.9% Free Cash Flow 7317 6554 7865 7992 8209 7975 6534 5431 6280 8,417

Income Tax 2370 2812 2723 2851 2201 2239 1586 5560 1623 1,801


Total Assets 72921 79974 86174 90055 92023 89996 87270 87896 83216 86,381 Cash & Equivalents 8517 12803 8442 10414 8958 7309 8555 6006 8926 6,480

Acc. Receivable 4430 4920 4759 4873 4466 3941 3856 3667 3396 3,971 Inventories 2650 3092 3264 3277 3100 2902 2675 2655 2766 3,379

Goodwill & Int. 26909 27669 27337 27611 26372 24132 21128 16636 17270 26,766 Total Liabilities 41604 48053 53006 56615 61462 64232 64050 68919 64158 65,283

Accounts Payable 1887 2172 1969 1933 2089 2795 2682 2288 8932 11,312 Long-Term Debt 23417 28568 32610 37079 41745 44116 45709 47685 43555 42,763

Total Equity 31003 31635 32790 33173 30320 25554 23062 17072 16981 18,981 D/E Ratio 0.76 0.90 0.99 1.12 1.38 1.73 1.98 2.79 2.56 2.25


Return on Assets 19.4% 11.2% 10.9% 9.7% 7.8% 8.1% 7.4% 1.4% 7.5% 10.5% Return on Equity 42.2% 27.4% 28.0% 26.0% 22.4% 26.3% 26.9% 6.2% 37.8% 49.6%

ROIC 25.6% 14.9% 14.3% 12.6% 9.9% 10.3% 9.4% 1.8% 10.0% 14.1% Shares Out. 4,584 4,526 4,469 4,402 4,366 4,324 4,288 4,259 4,250 4,314



22



23

The Home Depot Inc. (HD)


Home Depot was founded in 1978, and since that time has grown into a leading home improvement

retailer with almost 2,300 stores in the U.S., Canada, and Mexico. In all, Home Depot generates

annual revenue of approximately $110 billion.

Home Depot reported excellent second-quarter financial results on August 18th. The company

recorded quarterly sales of $38.1 billion, a 23.4% increase year-over-year. Comparable sales increased

23.4% for the quarter, and 25% specifically in the United States. Additionally, sales per retail square

foot increased by 24%, to $629 from $510 last year. Average ticket size and number of transactions

both increased by double-digits in the second quarter. Net earnings of $4.3 billion for the quarter were

up 23% year-over-year. Meanwhile, diluted earnings-per-share (EPS) increased 26.8% to $4.02 for the

quarter. Revenue growth boosted EPS, as did share repurchases, as Home Depot reduced its diluted

share count by 2.0% in the quarter.

Safety

Home Depot’s most compelling competitive advantage is its leadership position in the home

improvement industry. Not only is demand for home improvement products growing at a high rate in

the U.S., but the industry is highly concentrated with just two major operators (Home Depot and

Lowe’s) taking the vast majority of market share. Home Depot has also proven to be extremely

resilient to recessions, including the coronavirus pandemic, which has arguably helped Home Depot as

consumers spend much more time at home. Home Depot has a projected 2020 dividend payout ratio

just above 53%, which indicates a safe dividend.

Growth Prospects

Home Depot’s earnings growth has been strong in the past decade as it has successfully capitalized on

the housing and construction boom that ensued following the Great Recession of 2008-2010.

E-commerce is another growth catalyst for Home Depot, as the company has invested heavily to

expand its digital footprint. Home Depot stated that sales leveraging its digital platforms increased

approximately 100% last quarter. We see five-year annual earnings growth of 7.0%, consisting of

comparable sales in the mid-single-digits, a low single-digit tailwind from buybacks, and a steady,

boost from operating margin expansion.

Home Depot has paid 134 consecutive quarterly dividends. The company’s streak of meaningful

dividend growth should continue, as we see the payout rising at the rate of EPS growth in the next five

years. The company has room to continue raising the dividend in the years to come. Further, as Home

Depot matures it may allow for a higher payout ratio for the dividend, which would further boost its

dividend growth prospects.




24



Revenue ($B) 68.00 70.40 74.75 78.81 83.18 88.52 94.60 100.90 108.20 110.2

Gross Profit 23304 24262 25842 26915 28389 30265 32313 34356 37160 37572

Gross Margin 34.3% 34.5% 34.6% 34.2% 34.1% 34.2% 34.2% 34.0% 34.3% 34.1%

SG&A Exp. 15849 16028 16508 16122 16280 16801 17132 17864 19513 19740

D&A Exp. 1718 1682 1684 1757 1786 1863 1973 2062 2152 2296


Op. Margin 8.6% 9.5% 10.4% 11.6% 12.6% 13.3% 14.2% 14.5% 14.6% 14.4%

Net Profit 3338 3883 4535 5385 6345 7009 7957 8630 11121 11242

Net Margin 4.9% 5.5% 6.1% 6.8% 7.6% 7.9% 8.4% 8.6% 10.3% 10.2%

Free Cash Flow 3489 5430 5663 6239 6800 7870 8162 10134 10596 11045

Income Tax 1935 2185 2686 3082 3631 4012 4534 5068 3435 3473


Total Assets 40125 40518 41084 40518 39946 41973 42966 44529 44003 51236


Acc. Receivable 1245 1395 1398 1484 1890 1570 1604 1936 1738

Inventories 10625 10325 10710 11057 11079 11809 12549 12748 13925 14531

Goodwill & Int. 1187 1120 1170 1289 1353 2102 2093 2275 2252 2254



Long-Term Debt 9749 10788 10796 14724 17197 21216 23601 27028 29202 31483

Total Equity 18889 17898 17777 12522 9322 6316 4333 1454 N/A -3116

D/E Ratio 0.52 0.60 0.61 1.18 1.84 3.36 5.45 18.59 N/A -10.10


Return on Assets 8.2% 9.6% 11.1% 13.2% 15.8% 17.1% 18.7% 19.7% 25.1% N/A

Return on Equity 17.4% 21.1% 25.4% 35.5% 58.1% 89.6% 149% 298% N/A 23.6%

ROIC 11.6% 13.5% 15.8% 19.3% 23.6% 25.9% 28.7% 30.6% N/A N/A

Shares Out. 1,623 1,537 1,484 1,380 1,307 1,252 1,203 1,158 1,121 1,088

Revenue/Share 41.01 44.84 49.47 54.96 61.79 68.99 76.66 85.22 94.67 100.5

FCF/Share 2.10 3.46 3.75 4.35 5.05 6.13 6.61 8.56 9.27 10.07


25


26


Comcast Corp. (CMCSA)


Comcast Corporation is a media, communications, and entertainment conglomerate. Its operating

segments include Cable Communications, NBCUniversal, Theme Parks, Broadcast TV, and Sky.

Collectively, through these segments, Comcast offers high-speed Internet, video, voice, wireless, cable

networks, filmed TV, and other services. Comcast was founded in 1963, has $109 billion in annual

revenue, and trades for a market capitalization of $218 billion.

Comcast reported its third-quarter earnings results on 10/29/20. For the quarter, the company’s

revenues declined 4.8% to $25.5 billion, adjusted EBITDA declined 11.3% to $7.6 billion, and

adjusted earnings-per-share (EPS) declined 17.7%. However, free cash flow rose 10.5% to nearly $2.3

billion. Comcast experienced record net additions of 556,000 Cable Communications customers in the

quarter, and also added 633,000 High-Speed Internet customers and 187,000 wireless lines.

NBCUniversal revenue was down 19%.

Safety

Comcast is one of the largest companies in the telecommunications and entertainment industry. The

whole cable industry is impacted by the cord-cutting trend, as some customers are ditching traditional

pay-TV entirely in favor of streaming services. Fortunately, consumers still need Internet service for

streaming, and Comcast has so far been able to withstand this trend through growth from its other

businesses. We expect COVID-19 to be a temporary drag on Comcast. Another factor improving

Comcast’s safety is its balance sheet, as the company focused on deleveraging following the Sky

takeover. Comcast’s consolidated net-debt-to-adjusted-EBITDA ratio fell from 2.9x to 2.8x from the

2019 third quarter.

Growth Prospects

We expect 7% annual earnings-per-share growth over the next five years. The company has a long

history of growth. From 2010 to 2019, its EPS grew every year, by an average of 19% per year. We

expect a recovery as soon as the COVID-19 pandemic ends. Over the next five years, as the economy

normalizes, we see several drivers for the company’s earnings growth. Revenue growth will be driven

primarily by Cable Communications through a higher customer count and rate increases. Although

video revenue is struggling with cord-cutting, higher revenues in the high-speed internet business have

more than offset this headwind.

Comcast has had 12 consecutive dividend increases. The per share dividend has grown from $0.19 in

2010 to $0.84 in 2019. That fast dividend growth was possible through solid earnings growth and a

rising dividend payout ratio. The current payout ratio using expected fiscal 2020 adjusted earnings is

just 37%. The company’s dividend is well-covered by both earnings and cash flows and has room to

grow faster than earnings-per-share through payout ratio increases moving forward.




27



Revenue 37937 55842 62570 64657 68775 74510 80736 85029 94507 108942 Gross Profit 29,400 39,246 42,641 44,987 47,863 51,960 56,388 59,674 64,815 74,502

Gross Margin 77.5% 70.3% 68.1% 69.6% 69.6% 69.7% 69.8% 70.2% 68.6% 68.4% SG&A Exp. 14,804 20,889 22,664 23,553 24,940 27,282 30,131 31,968 5,130 40,424 D&A Exp. 6,803 14,423 7,798 7,871 8,019 8,680 9,426 9,688 10,676 12,953

Operating Profit 7,980 10,721 12,179 13,563 14,904 15,998 16,831 18,018 19,009 21,125 Operating Margin 21.0% 19.2% 19.5% 21.0% 21.7% 21.5% 20.8% 21.2% 20.1% 19.4%

Net Profit 3,635 4,160 6,203 6,816 8,380 8,163 8,678 22,735 11,731 13,057 Net Margin 9.6% 7.4% 9.9% 10.5% 12.2% 11.0% 10.7% 26.7% 12.4% 12.0%

Free Cash Flow 5,682 8,084 8,217 6,555 8,403 9,616 9,004 10,106 12,588 13,269 Income Tax 2,436 3,050 3,744 3,980 3,873 4,959 5,298 -7,569 3,380 3,673


Total Assets (B) 119 158 165 159 159 167 119 158 165 159 Cash & Equivalents 5,984 1,620 10,951 1,718 3,910 2,295 5,984 1,620 10,951 1,718

Accounts Receivable 1,855 4,652 5,521 6,376 6,321 6,896 1,855 4,652 5,521 6,376 Good. & Int. Ass. (B) 78 110 109 109 109 115 78 110 109 109 Total Liabilities (B) 74 110 115 108 106 113 74 110 115 108 Accounts Payable --- 5,705 6,206 5,528 5,638 6,215 --- 5,705 6,206 5,528 Long-Term Debt 31415 39309 40,458 47,847 48,081 52,621 31,415 39,309 40,458 47,847

Shareholder’s Equity 44354 47274 49356 50694 52711 52269 44354 47274 49356 50694 D/E Ratio 0.71 0.83 0.82 0.94 0.91 1.01 0.71 0.83 0.82 0.94


Return on Assets 3.1% 3.0% 3.8% 4.2% 5.3% 5.0% 3.1% 3.0% 3.8% 4.2% Return on Equity 8.3% 9.1% 12.8% 13.6% 16.2% 15.6% 8.3% 9.1% 12.8% 13.6%

ROIC 4.9% 5.1% 7.0% 7.2% 8.4% 7.9% 4.9% 5.1% 7.0% 7.2% Shares Out. 5.55 5.41 5.26 5.19 5.06 4.88 4.75 4.64 4.60 4.62



28


29


The J.M. Smucker Co. (SJM)


In 1897 Jerome Monroe Smucker founded a small cider mill in Orrville, Ohio. He used surplus apples,

said to be cultivated by Johnny Appleseed, to make cider and apple butter. Since then the J.M.

Smucker company has grown into an international powerhouse of packaged food and beverage

products including iconic names like Smucker’s, Jif, Crisco, and Folgers, along with pet food brands

like Milk Bone, Meow Mix, Kibbles ‘n Bits and 9Lives. The company has a market capitalization of

about $14 billion and generated nearly $8 billion in sales last year.

On August 25th, 2020, Smucker’s reported Q1 fiscal year 2021 results for the period ending July 31st,

2020. For the quarter, sales increased 10.8% to $1.97 billion, driven by increased consumer demand

resulting from the COVID-19 pandemic. The U.S. Retail Pet Foods, U.S. Retail Coffee and U.S. Retail

Consumer Foods segments saw sales increases of 3%, 23% and 22% respectively, offset slightly by a

9% decline in the International and Away From Home segment. Adjusted operating income equaled

$404.5 million compared to $290.7 million in the year ago quarter, while adjusted earnings-per-share

equaled $2.37 versus $1.58 previously.

On October 26th, 2020, Smucker’s announced that it was selling its Crisco oils and shortening business

to B&G Foods for approximately $550 million. This continues the company’s intent to exit the U.S.

baking category and focus on its core growth platforms of pet food, coffee, and snacking.

Safety

Smucker’s iconic brands continue to enjoy recognition, but this moat is eroding somewhat as

consumers look for fresher and healthier alternatives. During the last recession Smucker’s held up

exceptionally well, growing both earnings and dividends during the time. Our apprehension is not with

the next recession, but instead at what pace the company can grow.

As a result of acquisitions over the years, the company has levered up the balance sheet to some extent.

Smucker’s held ~$900 million in long-term debt back in 2009 against ~$320 million in net profit

(2.8x). As of the most recent quarter, this was closer to $5.1 billion in debt against an underlying

earnings machine of ~$775 million per year (6.6x) with interest payments near $200 million annually.

Additionally, $12.7 billion of the company’s $16.9 billion in total assets were held as goodwill and

other intangible assets. The leverage continues to be serviceable; the payout ratio is reasonable, and

profits are recession resistant. With that said, leverage should be reduced rather than increased ahead.

Growth Prospects

Since 2008, Smucker’s has increased earnings-per-share by over 5% annually. The company has a

collection of iconic brands, but many of them are center-aisle staples that have been losing popularity.

Increased advertising spending and moving toward consumer preferences will require significant

capital outlays in the years to come. On the positive side, coffee is a strong, sticky segment for the

business and Smucker’s is working to expand the current iconic lines (think Jif) to more on-trend

products like granola bars and on-the-go snacks. Moreover, the divestiture of Crisco and focus on

growth brands ought to focus the company. We are forecasting 5% intermediate term growth.




30



Revenue 4826 5526 5898 5611 5693 7811 7392 7357 7838 7801

Gross Profit 1799 1845 2028 2031 1969 2968 2835 2836 2916 3002

Gross Margin 37.3% 33.4% 34.4% 36.2% 34.6% 38.0% 38.4% 38.5% 37.2% 38.5%

SG&A Exp. 863 893 974 989 1031 1510 1380 1363 1509 1474

D&A Exp. 186 209 251 256 267 430 419 413 446 447


Operating Margin 18% 16% 16% 17% 15% 16% 17% 17% 15% 16.6%

Net Profit 480 460 544 565 345 689 592 1339 514 780

Net Margin 9.9% 8.3% 9.2% 10.1% 6.1% 8.8% 8.0% 18.2% 6.6% 10.0%

Free Cash Flow 212 457 649 577 491 1260 867 896 781 986

Income Tax 238 242 273 285 178 289 286 -478 187 247


Total Assets 8325 9115 9032 9060 16806 15984 15640 15301 16711 16970



Inventories 864 962 946 931 1164 899 906 854 910 895

Goodwill & Int. Ass. 5753 6242 6142 6123 12962 12586 12227 11859 13030 12734



Long-Term Debt 1304 2071 2018 2216 6171 5430 5399 4832 5911 5621


D/E Ratio 0.25 0.40 0.39 0.44 0.87 0.77 0.79 0.61 0.74 0.69


Return on Assets 5.9% 5.3% 6.0% 6.2% 2.7% 4.2% 3.7% 8.7% 3.2% 4.6%

Return on Equity 9.0% 8.8% 10.6% 11.1% 5.7% 9.8% 8.5% 18.2% 6.5% 9.6%

ROIC 7.5% 6.6% 7.6% 7.8% 3.4% 5.4% 4.8% 10.7% 3.9% 5.6%

Shares Out. 114 110 106 102 120 116 113 114 114 113

Revenue/Share 41.20 49.22 54.18 54.20 55.25 65.64 63.95 65.11 69.30 68.79

FCF/Share 1.81 4.07 5.97 5.57 4.77 10.58 7.50 7.93 6.91 8.69


31


Note: The J.M. Smucker Co. has paid two large special dividends which are truncated in this image for better readability of the normal

quartlerly dividend.

32


American Tower Corp. (AMT)


American Tower, founded in 1995, is one of the world’s largest global Real Estate Investment Trusts

(REITs). The company specializes in owning, operating and developing multitenant communications

real estate, with a portfolio of approximately 181,000 communications sites in the United States and

Internationally. Last year the $107 billion company generated $3.5 billion in Adjusted Funds from

Operations (AFFO) attributable to stockholders.

On October 29th, 2020, American Tower reported Q3 2020 results for the period ending September

30th, 2020. For the quarter total revenue increased 3.0% to $2.013 billion, while property revenue

increased 3.4% to $1.988 billion. Net income declined 8.4% to $463 million. Consolidated AFFO

increased 14.7% to $1.022 billion or $2.29 per share, as results continue to prove resilient amid the

pandemic.

On November 5th, 2020, American Tower announced an agreement to acquire InSite Wireless Group,

which manages approximately 3,000 communication sites (including more than 1,400 towers in the

U.S.) for $3.5 billion. This deal is expected to contribute $115 million of gross profit in its first year.

Safety

American Tower enjoys a competitive advantage in its leadership in the U.S market. Not only is the

company entrenched in the space but switching costs for the company’s customers (once equipment is

installed) are quite high. Meanwhile, American Tower enjoys economies of scale as it grows larger,

with the cost to add additional tenants to a tower being effectively negligible. Further, unlike its U.S.

counterparts, American Tower is geographically diversified around the globe. This can increase risk

somewhat – for instance with currency translation and working in different operating environments –

but it insulates the firm from relying on a single country in lesser times.

As of the most recent report, American Tower had long-term obligations of $24 billion, with net-debt-

to-adjusted-EBITDA of 4.5x. This leverage is moderately elevated but is offset by the company’s

long-term leases. The dividend also warrants special mention. Despite the yield not being particularly

impressive, especially for a REIT, American Tower has raised its payout (often substantially) every

quarter dating back to 2012.

Growth Prospects

American Tower has put together an exceptional record in the last decade, growing AFFO by nearly

16% per year dating back to 2011. Moreover, many of the growth drivers of the past remain today.

The company is rooted as a leader in the U.S. market and also has been significantly expanding into

International markets. The continued increase in data usage, especially as it relates to international

countries “catching up,” will be a trend for some time. Moreover, with long-term leases in place,

American Tower has good visibility into the future.

There are a variety of risks that could formulate in the years to come including carrier consolidation,

5G disrupting the company’s macro tower business, and growing off such a large base. Weighing the

positives and negatives, we are somewhat cautious with our assumption of 6% annual growth.




33



Revenue 1985 2444 2876 3361 4100 4772 5786 6664 7440 7580

Gross Profit 1511 1823 2153 2502 3006 3463 3995 4607 5262 5364

Gross Margin 76.1% 74.6% 74.9% 74.4% 73.3% 72.6% 69.1% 69.1% 70.7% 70.8%

SG&A Exp. 230 289 327 416 447 498 543 637 733 730

D&A Exp. 461 556 644 800 1004 1285 1526 1716 2111 1778



Net Profit 373 396 637 551 825 685 956 1239 1236 1888

Net Margin 18.8% 16.2% 22.2% 16.4% 20.1% 14.4% 16.5% 18.6% 16.6% 24.9%

Free Cash Flow 674 643 846 875 1160 1438 2019 2122 2835 2761.3

Income Tax 182 125 107 60 63 158 156 31 -110 -0.2


Total Assets 10368 12242 14089 20284 21264 26904 30879 33214 33010 42802



Goodwill & Int. Ass. 4476 5171 6049 10425 10856 13930 16345 17422 16676 18497



Long-Term Debt 5587 7236 8753 14478 14540 17119 18534 20205 21160 24055


D/E Ratio 1.60 2.20 2.45 4.10 3.68 2.57 2.74 3.24 3.97 4.76


Return on Assets 3.9% 3.5% 4.8% 3.2% 4.0% 2.8% 3.3% 3.9% 3.7% 5.0%

Return on Equity 10.9% 11.7% 18.6% 15.5% 22.0% 12.9% 14.3% 19.1% 21.4% 36.3%

ROIC 4.5% 4.0% 5.5% 3.6% 4.5% 3.2% 3.9% 4.7% 4.6% 6.7%

Shares Out. 399 394 395 395 397 424 427 429 441 446

Revenue/Share 4.91 6.11 7.20 8.42 10.25 11.28 13.48 15.44 16.80 17.01

FCF/Share 1.67 1.61 2.12 2.19 2.90 3.40 4.70 4.92 6.40 6.20


34


35

Disclaimer

Nothing presented herein is, or is intended to constitute, specific investment advice. Nothing in this newsletter should be construed as a recommendation to follow any investment strategy or allocation. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements

or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While Sure Dividend has used reasonable efforts

to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein. No guarantee of investment performance is being provided and no inference to the contrary should be made. There is a risk of loss from an investment in

securities. Past performance is not a guarantee of future performance.

Closing Thoughts - The ‘Aha’ Moment With Forever Rising Passive

Income Investing - The idea of buy and hold forever investing for rising passive income is powerful and appealing (at least to myself) when it ‘clicks.’

The ‘buy and hold forever’ portion of this investing style is important to understand. You cannot have true passive income when you are doing significant work to generate that income. As should be plainly obvious two decades into the 21st century, knowledge work – including researching investments – is a form of work. It’s interesting work (again, at least to myself), but it’s work, nonetheless.

That’s where the ‘buy and hold forever’ portion of this investing style comes in. Once purchased, a high-quality dividend growth security with a strong and durable competitive advantage may pay rising dividends far into the future with no additional work from the investor. A quality portfolio of dividend growth securities needs only minimal upkeep; it minimizes the ‘work’ aspect of investing.

The ‘rising passive income’ portion of this investing style is equally important to understand. Rather than focusing on changes in perception resulting in valuation multiple expansion (value investing) or short to medium turn business growth resulting in capital gains (growth investing), rising passive income investors are looking to generate actual income and income growth over time. This significantly reduces the need to sell because you aren’t looking to ‘play’ valuation multiples or guess when or how long a company will be in its ‘hypergrowth’ phase.

In short, this investing style is about buying into great businesses that have proven they have both the desire and ability to pay investors rising dividends over long periods of time, and then holding these securities so they can pay you increasing income.

The purpose of the investment is rising passive income. This fills a clear need for busy investors, retirement investors, and investors with a very long-term outlook seeking to make investments that carry on to future generations.

Ultimately, buy and hold investing puts an investor’s focus on what a business owner would focus on. Namely, the long-term prospects of the company and its ability to generate cash flows and return them to owners. It is perhaps the investment style that is least reliant on what the stock market does and most reliant on the long-term prospects of the investments chosen, while also filling a vital need (rising income generation) for investors.

Thanks,

Ben Reynolds

The next Sure Passive Income Newsletter publishes on Sunday, December 20th, 2020

36

Buying & Ranking Criteria The method we use to come up with the Top 10 list for The Sure Passive Income Newsletter is as follows: Note: Ranking data is from the preceding Wednesday’s Sure Analysis data update.

1. Filter our Sure Analysis Research Database universe of securities for: - Dividend yield greater than or equal to the S&P 500’s - A & B Dividend Risk Scores - Dividend yield greater than or equal to the security’s 10-year historical dividend yield - U.S. securities only (no international securities)

2. Rank securities by 5-year forward dividend growth rate and 5-year historical price standard deviation

3. Sort securities by their average ranking between standard deviation and expected growth rate

4. No more than three companies per sector

5. Veto any securities from the Top 10 as necessary after qualitative analysis

6. The Top 10 is the 10 highest ranked securities from steps 1 through 5

7. “A” Dividend Risk Score securities rank ahead of “B” Dividend Risk Score securities within the Top 10. Within each Dividend Risk Score category, the Top 10 order will be sorted by dividend yield + expected 5-year growth rate (the higher the better).

To receive an “A” Dividend Risk Score, a security must be in the top 20% for dividend safety. To receive a “B” Dividend Risk Score, a security must be in the top 40% for dividend safety. The formula for the Dividend Risk Score is below: Dividend Risk Score (Raw) = Payout Ratio x 100 – # Years of Rising Dividends + 50 if deemed risky during a recession We view securities with “A” and “B” Dividend Risk Scores as generally having secure dividends that are very unlikely to be reduced in the near future. Note that the Dividend Risk Score factors in dividend history also. The combination of quality (low price standard deviation and our Dividend Risk Score) with ‘fair or better price’ dividend yield (yield greater than the S&P 500 and the security’s 10-year historical average) and growth (5-year expected growth rate) creates a compelling system to find buy and hold forever securities for rising passive income.

https://www.suredividend.com/sure-analysis-subscribe/

37

Portfolio Building Guide

The process of building a buy and hold rising passive income portfolio is outlined on this page.

Each month invest in the top-ranked security in which you own the smallest dollar amount out of

the Top 10. If you already have 25% or more of your equity portfolio in a specific sector, avoid

purchasing additional securities from that sector until a purchase would not push your allocation in the

sector above 25%.

Over time, you will build a diversified portfolio of high-quality securities likely to pay you rising

income over time.

Alternatively, the Top 10 list is also useful as an idea generation tool for those with a different portfolio

allocation plan.

Examples Portfolio 1 Portfolio 2

Ticker Name Amount Ticker Name Amount

NFG National Fuel Gas $ 1,002 NFG National Fuel Gas $ 4,374

GD General Dynamics $ - GD General Dynamics $ 4,878

HRL Hormel Foods $ - HRL Hormel Foods $ 4,353

AMGN Amgen $ - AMGN Amgen $ 7,428

TRV Travelers $ - TRV Travelers $ 3,309

KO Coca-Cola $ - KO Coca-Cola $ 8,099

HD Home Depot $ - HD Home Depot $ 5,629

CMCSA Comcast $ - CMCSA Comcast $ 2,176

SJM J.M. Smucker $ - SJM J.M. Smucker $ 1,079

AMT American Tower $ - AMT American Tower $ 4,864

- If you had portfolio 1, you would buy GD, the top-ranked security you own least.

- If you had portfolio 2, you would buy SJM, the top-ranked security you own least.

If you have an existing portfolio or a large lump sum to invest, you may wish to switch over to the Sure

Passive Income strategy over a 30-month period. Each month take 1/30 of your initial portfolio value

and buy the top-ranked security you own the least out of the Top 10, subject to the 25% sector

allocation rule discussed earlier. A portfolio with 30 securities purchased with equal dollar amounts

will have a high level of firm-specific diversification.

There’s no upper limit to the number of securities that can be held in a buy and hold portfolio because

securities need not be monitored as closely after purchasing. As a result, investors still in the

accumulation phase can further diversify by adding a greater number of securities over time.

If you are not ready to use the dividend income from your portfolio, set your securities to reinvest

dividends so that your portfolio automatically reinvests its dividend proceeds. This will have the effect

of compounding your portfolio’s dividend income stream faster, as you benefit from having more

shares in the companies and will likely be getting rising dividends from each share as well.

This simple investing process will build a diversified portfolio very likely to generate rising passive

income over time.

38

Past Recommendations & Performance

Every past recommendation in The Sure Passive Income Newsletter is shown below, along with the

date it would’ve been first purchased1, and total returns since the initial recommendation.

Name Ticker First Purchase Date Total Return

Honeywell HON 10/19/2020 17.5%

Republic Services RSG 10/19/2020 10.3%

Colgate-Palmolive CL 10/19/2020 7.8%

Coca-Cola KO 10/19/2020 6.8%

Atmos Energy ATO 10/19/2020 6.7%

Johnson & Johnson JNJ 10/19/2020 3.2%

NextEra Energy NEE 10/19/2020 2.8%

Medtronic MDT 10/19/2020 2.6%

Mondelez MDLZ 10/19/2020 0.5%

Lockheed Martin LMT 10/19/2020 -3.3%

Amgen AMGN 11/16/2020 N/A

American Tower AMT 11/16/2020 N/A

Comcast CMCSA 11/16/2020 N/A

General Dynamics GD 11/16/2020 N/A

Home Depot HD 11/16/2020 N/A

Hormel Foods HRL 11/16/2020 N/A

National Fuel Gas NFG 11/16/2020 N/A

J.M. Smucker SJM 11/16/2020 N/A

Travelers TRV 11/16/2020 N/A

Note: Performance data is through the morning of November 13th, 2020.

1 This is the closing price from the first trading day after The Sure Passive Income Newsletter publishes.

39

List of Securities by Dividend Risk Score

Each of the securities in the Sure Analysis Research Database are grouped according to Dividend

Risk Score and sorted (from highest to lowest) by expected 5-year growth rate. Dividend or

distribution yield is included next to each security’s ticker symbol. The Dividend Risk Score uses

payout ratio, dividend history, and recession resiliency to measure a company’s dividend safety.

You can learn more about how the score is calculated in the Sure Analysis Glossary. See our

‘Buying and Ranking Criteria’ for more information.

A-Rated Dividend Risk Securities 1. TCEHY (Tencent Holdings Ltd.): 0.2%

2. ECL (Ecolab, Inc.): 0.9%

3. SYK (Stryker Corp.): 1%

4. GD (General Dynamics Corp.): 2.9%

5. FUL (H.B. Fuller Co.): 1.2%

6. CSX (CSX Corp.): 1.1%

7. V (Visa, Inc.): 0.6%

8. NOC (Northrop Grumman Corp.): 1.8%

9. LOW (Lowe's Cos., Inc.): 1.4%

10. LHX (L3Harris Technologies, Inc.): 1.6%

11. BDX (Becton, Dickinson & Co.): 1.3%

12. DCI (Donaldson Co., Inc.): 1.6%

13. DG (Dollar General Corp.): 0.6%

14. COST (Costco Wholesale Corp.): 0.7%

15. PH (Parker-Hannifin Corp.): 1.3%

16. NKE (NIKE, Inc.): 0.8%

17. JKHY (Jack Henry & Associates, Inc.): 1.1%

18. GWW (W.W. Grainger, Inc.): 1.4%

19. SPGI (S&P Global, Inc.): 0.8%

20. FELE (Franklin Electric Co., Inc.): 0.9%

21. AAPL (Apple, Inc.): 0.7%

22. ALB (Albemarle Corp.): 1.3%

23. WST (West Pharmaceutical Services, Inc.): 0.2%

24. ROP (Roper Technologies, Inc.): 0.5%

25. ORCL (Oracle Corp.): 1.7%

26. TNC (Tennant Co.): 1.3%

27. AMP (Ameriprise Financial, Inc.): 2.2%

28. SEIC (SEI Investments Co.): 1.3%

29. MCO (Moody's Corp.): 0.8%

30. DOV (Dover Corp.): 1.6%

31. BRO (Brown & Brown, Inc.): 0.7%

32. SWK (Stanley Black & Decker, Inc.): 1.5%

33. CP (Canadian Pacific Railway Ltd.): 0.8%

34. PPG (PPG Industries, Inc.): 1.4%

35. MSFT (Microsoft Corp.): 1%

36. MKC (McCormick & Co., Inc.): 1.3%

37. CSVI (Computer Services, Inc.): 1.4%

38. CTAS (Cintas Corp.): 0.7%

39. NDSN (Nordson Corp.): 0.8%

40. SJW (SJW Group): 1.9%

41. TSCO (Tractor Supply Co.): 1.1%

42. EBTC (Enterprise Bancorp, Inc.): 2.7%

43. SLGN (Silgan Holdings, Inc.): 1.3%

44. CSL (Carlisle Cos., Inc.): 1.4%

45. ATO (Atmos Energy Corp.): 2.2%

46. CHD (Church & Dwight Co., Inc.): 1.1%

47. MDT (Medtronic Plc): 1.9%

48. SHW (The Sherwin-Williams Co.): 0.7%

49. CNI (Canadian National Railway Co.): 1.5%

50. ABT (Abbott Laboratories): 1.3%

51. MSA (MSA Safety, Inc.): 1.2%

52. OTIS (Otis Worldwide Corp.): 0.6%

53. BF.B (Brown-Forman Corp.): 0.9%

54. PNR (Pentair Plc): 1.4%

55. NFG (National Fuel Gas Co.): 4.3%

56. PII (Polaris Inc.): 2.7%

57. AIZ (Assurant, Inc.): 1.9%

58. ADM (Archer-Daniels-Midland Co.): 2.9%

59. MCK (McKesson Corp.): 0.9%

60. FMS (Fresenius Medical Care AG & Co. KGaA): 1.6%

61. JNJ (Johnson & Johnson): 2.6%

62. AAP (Advance Auto Parts, Inc.): 0.5%

63. TGT (Target Corp.): 1.7%

64. CL (Colgate-Palmolive Co.): 2.1%

65. HRL (Hormel Foods Corp.): 1.8%

66. TXT (Textron, Inc.): 0.2%

67. EV (Eaton Vance Corp.): 2.3%

68. CARR (Carrier Global Corp.): 0.4%

69. EFSI (Eagle Financial Services, Inc.): 3.9%

70. WMT (Walmart, Inc.): 1.5%

71. PNGAY (Ping An Insurance (Group) Co. of China Ltd.): 1.8%

72. WBA (Walgreens Boots Alliance, Inc.): 4.3%

73. PRGO (Perrigo Co. Plc): 1.8%

74. FMCB (Farmers & Merchants Bancorp (California)): 2%

75. BRC (Brady Corp.): 2%

76. MMM (3M Co.): 3.5%

77. SON (Sonoco Products Co.): 3%

78. ABM (ABM Industries, Inc.): 1.8%

79. ABC (AmerisourceBergen Corp.): 1.5%

80. TROW (T. Rowe Price Group, Inc.): 2.5%

81. CB (Chubb Ltd.): 2%

82. EMR (Emerson Electric Co.): 2.6%

83. SCL (Stepan Co.): 0.9%

84. EXPD (Expeditors International of Washington, Inc.): 1.2%

85. RPM (RPM International, Inc.): 1.6%

86. CLX (The Clorox Co.): 2.2%

87. BEN (Franklin Resources, Inc.): 5.2%

88. PSBQ (PSB Holdings, Inc. (Wisconsin)): 2.2%

89. CTBI (Community Trust Bancorp, Inc. (Kentucky)): 4.3%

90. BKH (Black Hills Corp.): 3.4%


https://www.suredividend.com/procedures-glossary-definitions/

40

91. KMB (Kimberly-Clark Corp.): 3.1%

92. GRC (The Gorman-Rupp Co.): 1.6%

93. LANC (Lancaster Colony Corp.): 1.6%

94. MGEE (MGE Energy, Inc.): 2%

95. CWT (California Water Service Group): 1.6%

96. ABBV (AbbVie, Inc.): 4.8%

97. KR (The Kroger Co.): 2.1%

98. AFL (Aflac, Inc.): 2.7%

99. CAH (Cardinal Health, Inc.): 3.4%

100. MGRC (McGrath RentCorp): 2.5%

101. GPC (Genuine Parts Co.): 3.1%

102. BANF (BancFirst Corp. (Oklahoma)): 2.4%

103. TR (Tootsie Roll Industries, Inc.): 1.1%

104. PG (Procter & Gamble Co.): 2.2%

105. AWR (American States Water Co.): 1.6%

106. RLI (RLI Corp.): 0.9%

107. UNM (Unum Group): 5.3%

108. AROW (Arrow Financial Corp.): 3.3%

109. CPKF (Chesapeake Financial Shares, Inc. (Maryland)): 2.4%

110. TDS (Telephone & Data Systems, Inc.): 3.6%

111. MSEX (Middlesex Water Co.): 1.4%

112. CINF (Cincinnati Financial Corp.): 2.7%

113. THFF (First Financial Corp. (Indiana)): 2.7%

114. TMP (Tompkins Financial Corp.): 3.2%

B-Rated Dividend Risk Securities 1. HII (Huntington Ingalls Industries, Inc.): 2.6%

2. ICE (Intercontinental Exchange, Inc.): 1.2%

3. INTU (Intuit, Inc.): 0.6%

4. RMD (ResMed, Inc.): 0.7%

5. FRT (Federal Realty Investment Trust): 4.5%

6. TTC (The Toro Co.): 1.1%

7. LMT (Lockheed Martin Corp.): 2.6%

8. UNH (UnitedHealth Group, Inc.): 1.3%

9. KDP (Keurig Dr Pepper, Inc.): 2.1%

10. SWKS (Skyworks Solutions, Inc.): 1.3%

11. CMCSA (Comcast Corp.): 1.9%

12. AMGN (Amgen, Inc.): 2.6%

13. BLK (BlackRock, Inc.): 2.1%

14. DPZ (Domino's Pizza, Inc.): 0.8%

15. XYL (Xylem, Inc.): 1.1%

16. HON (Honeywell International, Inc.): 1.8%

17. SAP (SAP SE): 1.5%

18. AMAT (Applied Materials, Inc.): 1.2%

19. TRV (The Travelers Cos., Inc.): 2.4%

20. CMI (Cummins, Inc.): 2.2%

21. CTSH (Cognizant Technology Solutions Corp.): 1.1%

22. BAH (Booz Allen Hamilton Holding Corp.): 1.4%

23. ADP (Automatic Data Processing, Inc.): 2.1%

24. DE (Deere & Co.): 1.2%

25. KO (The Coca-Cola Co.): 3%

26. MDLZ (Mondelez International, Inc.): 2%

27. SLF (Sun Life Financial, Inc.): 3.6%

28. AXP (American Express Co.): 1.5%

29. RTX (Raytheon Technologies Corp.): 3.6%

30. HD (The Home Depot, Inc.): 2.1%

31. UPS (United Parcel Service, Inc.): 2.4%

32. QCOM (QUALCOMM, Inc.): 1.8%

33. UNP (Union Pacific Corp.): 1.9%

34. ITW (Illinois Tool Works, Inc.): 2%

35. WTRG (Essential Utilities, Inc.): 2.1%

36. NEE (NextEra Energy, Inc.): 1.8%

37. NSC (Norfolk Southern Corp.): 1.6%

38. ROK (Rockwell Automation, Inc.): 1.6%

39. EIX (Edison International): 4.1%

40. CSCO (Cisco Systems, Inc.): 3.7%

41. HBI (Hanesbrands, Inc.): 4.6%

42. SRE (Sempra Energy): 3%

43. FDX (FedEx Corp.): 1%

44. TSN (Tyson Foods, Inc.): 2.8%

45. AMT (American Tower Corp.): 1.9%

46. RSG (Republic Services, Inc.): 1.6%

47. HSY (The Hershey Co.): 2.1%

48. AOS (A. O. Smith Corp.): 1.8%

49. AJG (Arthur J. Gallagher & Co.): 1.6%

50. BBY (Best Buy Co., Inc.): 1.9%

51. MCD (McDonald's Corp.): 2.3%

52. INFY (Infosys Ltd.): 1.6%

53. LIN (Linde Plc): 1.4%

54. CBSH (Commerce Bancshares, Inc. (Missouri)): 1.5%

55. APD (Air Products & Chemicals, Inc.): 1.6%

56. MORN (Morningstar, Inc.): 0.6%

57. MTB (M&T Bank Corp.): 3.6%

58. PEP (PepsiCo, Inc.): 2.8%

59. ERIE (Erie Indemnity Co.): 1.6%

60. SYY (Sysco Corp.): 2.5%

61. INTC (Intel Corp.): 2.9%

62. GILD (Gilead Sciences, Inc.): 4.4%

63. CVS (CVS Health Corp.): 2.8%

64. FLO (Flowers Foods, Inc.): 3.5%

65. MRK (Merck & Co., Inc.): 3%

66. RDEIY (Red Eléctrica Corp. SA): 6.1%

67. SJM (The J. M. Smucker Co.): 3%

68. FTS (Fortis, Inc.): 3.4%

69. EMN (Eastman Chemical Co.): 2.8%

70. RE (Everest Re Group Ltd.): 2.6%

71. WSM (Williams-Sonoma, Inc.): 2.1%

72. CHRW (C.H. Robinson Worldwide, Inc.): 2.2%

73. WM (Waste Management, Inc.): 1.7%

74. JW.A (John Wiley & Sons, Inc.): 3.9%

75. BMY (Bristol Myers Squibb Co.): 2.8%

76. PB (Prosperity Bancshares, Inc.): 2.9%

77. IBM (International Business Machines Corp.): 5.5%

78. NVS (Novartis AG): 3.7%

79. VZ (Verizon Communications, Inc.): 4%

80. MET (MetLife, Inc.): 3.9%

81. IFF (International Flavors & Fragrances, Inc.): 2.7%

82. NEP (NextEra Energy Partners LP): 3.3%

83. CFR (Cullen/Frost Bankers, Inc.): 3.4%

84. LLY (Eli Lilly & Co.): 2%

85. XEL (Xcel Energy, Inc.): 2.3%

86. CBU (Community Bank System, Inc.): 2.5%

87. ATR (AptarGroup, Inc.): 1.1%

88. EBAY (eBay, Inc.): 1.3%

89. EPD (Enterprise Products Partners LP): 9.8%

90. BAYRY (Bayer AG): 5.4%

41

91. ED (Consolidated Edison, Inc.): 3.7%

92. ETR (Entergy Corp.): 3.4%

93. BMI (Badger Meter, Inc.): 0.9%

94. UGI (UGI Corp.): 3.5%

95. T (AT&T, Inc.): 7.2%

96. MO (Altria Group, Inc.): 8.5%

97. PBCT (People's United Financial, Inc.): 5.5%

98. OZK (Bank OZK): 3.7%

99. WHR (Whirlpool Corp.): 2.6%

100. NTIOF (National Bank of Canada): 4%

101. K (Kellogg Co.): 3.6%

102. BAM (Brookfield Asset Management, Inc.): 1.2%

103. NWN (Northwest Natural Holding Co.): 3.7%

104. ARTNA (Artesian Resources Corp.): 2.5%

105. HRB (H&R Block, Inc.): 5.8%

106. MDU (MDU Resources Group, Inc.): 3.2%

107. UBSI (United Bankshares, Inc. (West Virginia)): 4.7%

108. WABC (Westamerica Bancorporation): 2.8%

109. SUN (Sunoco LP): 12.6%

110. NUE (Nucor Corp.): 3.1%

111. FOXA (Fox Corp.): 1.7%

112. WU (The Western Union Co.): 4%

113. SNA (Snap-On, Inc.): 2.5%

C-Rated Dividend Risk Securities 1. MRVL (Marvell Technology Group Ltd.): 0.6%

2. LRCX (Lam Research Corp.): 1.2%

3. MA (Mastercard, Inc.): 0.5%

4. NVDA (NVIDIA Corp.): 0.1%

5. AMX (America Móvil SAB de CV): 2.5%

6. ASML (ASML Holding NV): 0.6%

7. YUM (Yum! Brands, Inc.): 1.8%

8. CONE (CyrusOne, Inc.): 2.9%

9. AON (Aon Plc): 0.7%

10. CLCT (Collectors Universe, Inc.): 1.1%

11. ERIC (Telefonaktiebolaget LM Ericsson): 1.4%

12. SBUX (Starbucks Corp.): 1.7%

13. TT (Trane Technologies Plc): 1.5%

14. LAZ (Lazard Ltd.): 5.1%

15. KLAC (KLA Corp.): 1.5%

16. BIP (Brookfield Infrastructure Partners LP): 3.9%

17. JACK (Jack in the Box, Inc.): 1.4%

18. CAT (Caterpillar, Inc.): 2.4%

19. DEO (Diageo Plc): 2.3%

20. TXN (Texas Instruments Incorporated): 2.4%

21. KSU (Kansas City Southern): 0.9%

22. DRI (Darden Restaurants, Inc.): 1.6%

23. PCAR (PACCAR, Inc.): 1.4%

24. ET (Energy Transfer LP): 22.4%

25. LOGI (Logitech International SA): 1%

26. RCI (Rogers Communications, Inc.): 3.3%

27. DLR (Digital Realty Trust, Inc.): 3.3%

28. TYCB (Calvin B. Taylor Bankshares, Inc.): 3.4%

29. DTE (DTE Energy Co.): 3.1%

30. RELX (RELX Plc): 2.4%

31. NVO (Novo Nordisk A/S): 1.4%

32. CCI (Crown Castle International Corp.): 3%

33. WRK (WestRock Co.): 3.2%

34. UMBF (UMB Financial Corp.): 1.8%

35. PAYX (Paychex, Inc.): 2.7%

36. FAST (Fastenal Co.): 2.1%

37. BEP (Brookfield Renewable Partners LP): 3.5%

38. MSM (MSC Industrial Direct Co., Inc.): 3.7%

39. LNT (Alliant Energy Corp.): 2.6%

40. HNI (HNI Corp.): 3.2%

41. WEC (WEC Energy Group, Inc.): 2.4%

42. ENB (Enbridge, Inc.): 7.7%

43. HPQ (HP, Inc.): 3.5%

44. CPB (Campbell Soup Co.): 3%

45. AEG (AEGON NV): 1.8%

46. LEG (Leggett & Platt, Inc.): 3.7%

47. STZ (Constellation Brands, Inc.): 1.5%

48. UL (Unilever Plc): 2.9%

49. NSRGY (Nestlé SA): 2.4%

50. SKM (SK Telecom Co., Ltd.): 4%

51. TPR (Tapestry, Inc.): 2.6%

52. MAR (Marriott International, Inc.): 0.8%

53. TRI (Thomson Reuters Corp.): 1.8%

54. SAXPY (Sampo Oyj): 9.2%

55. OTTR (Otter Tail Corp.): 3.4%

56. ERF (Enerplus Corp.): 4%

57. SIEGY (Siemens AG): 2.8%

58. MMP (Magellan Midstream Partners LP): 10.7%

59. ORI (Old Republic International Corp.): 4.4%

60. GWLIF (Great-West Lifeco, Inc.): 5.7%

61. BK (The Bank of New York Mellon Corp.): 3.2%

62. SNY (Sanofi): 3.4%

63. GS (The Goldman Sachs Group, Inc.): 2.3%

64. O (Realty Income Corp.): 4.3%

65. OSK (Oshkosh Corp.): 1.6%

66. SO (The Southern Co.): 3.9%

67. DUK (Duke Energy Corp.): 3.9%

68. PDCO (Patterson Cos., Inc.): 3.6%

69. AEP (American Electric Power Co., Inc.): 3.1%

70. NNN (National Retail Properties, Inc.): 5%

71. OMC (Omnicom Group, Inc.): 4.6%

72. WPC (W.P. Carey, Inc.): 6.1%

73. ALL (The Allstate Corp.): 2.2%

74. TRSWF (TransAlta Renewables, Inc.): 5.3%

75. OKE (ONEOK, Inc.): 11.4%

76. BTI (British American Tobacco plc): 7.4%

77. IPPLF (Inter Pipeline Ltd.): 10.3%

78. VIAC (ViacomCBS, Inc.): 3.2%

79. VALE (Vale SA): 3.7%

80. TRGP (Targa Resources Corp.): 6%

81. NLSN (Nielsen Holdings Plc): 1.6%

82. UHT (Universal Health Realty Income Trust): 4.5%

83. GIS (General Mills, Inc.): 3.3%

84. PSA (Public Storage): 3.4%

85. OMI (Owens & Minor, Inc.): 0%

86. BUD (Anheuser-Busch InBev SA/NV): 2.2%

87. GEF (Greif, Inc.): 3.7%

88. PEG (Public Service Enterprise Group, Inc.): 3.2%

89. ABEV (Ambev SA): 4.2%

90. HMC (Honda Motor Co., Ltd.): 2.9%

91. AVB (AvalonBay Communities, Inc.): 3.7%

42

92. RY (Royal Bank of Canada): 4.2%

93. MPLX (MPLX LP): 14.1%

94. BNS (The Bank of Nova Scotia): 5.7%

95. FRFHF (Fairfax Financial Holdings Ltd.): 0%

96. SVC (Service Properties Trust): 5.2%

97. PPL (PPL Corp.): 5.6%

98. SRCE (1st Source Corp.): 3%

99. DDAIF (Daimler AG): 1.4%

100. AUY (Yamana Gold, Inc.): 1%

101. SNE (Sony Corp.): 0.3%

102. MCY (Mercury General Corp.): 5.8%

103. UVV (Universal Corp.): 6.8%

104. TD (The Toronto-Dominion Bank): 4.6%

105. BMO (Bank of Montreal): 4.7%

106. CM (Canadian Imperial Bank of Commerce): 5.3%

107. NC (NACCO Industries, Inc.): 3.4%

108. WEYS (Weyco Group, Inc.): 5.3%

109. GOLD (Barrick Gold Corp.): 1.2%

110. GPS (Gap, Inc.): 1%

111. DHC (Diversified Healthcare Trust): 7.9%

112. NAVI (Navient Corp.): 6.3%

113. MAC (Macerich Co.): 23.8%

114. WY (Weyerhaeuser Co.): 2.4%

D-Rated Dividend Risk Securities 1. HAL (Halliburton Co.): 3.1%

2. BRX (Brixmor Property Group, Inc.): 3.9%

3. PHG (Koninklijke Philips NV): 1.8%

4. KIM (Kimco Realty Corp.): 4.7%

5. PLD (Prologis, Inc.): 2.3%

6. HASI (Hannon Armstrong Sustainable Infrastructure Capital,

Inc.): 2.8%

7. IP (International Paper Co.): 4.2%

8. VFC (VF Corp.): 2.5%

9. TSM (Taiwan Semiconductor Manufacturing Co., Ltd.): 1.9%

10. OGZPY (Gazprom PJSC): 9.2%

11. HAS (Hasbro, Inc.): 3.2%

12. APO (Apollo Global Management, Inc.): 5.2%

13. GRMN (Garmin Ltd.): 2.1%

14. ABB (ABB Ltd.): 3%

15. DNKN (Dunkin' Brands Group, Inc.): 1.1%

16. AVGO (Broadcom, Inc.): 3.4%

17. ACN (Accenture Plc): 1.3%

18. RACE (Ferrari NV): 0.6%

19. TFC (Truist Financial Corp.): 3.7%

20. DD (DuPont de Nemours, Inc.): 1.9%

21. DFS (Discover Financial Services): 2.3%

22. JCI (Johnson Controls International Plc): 2.3%

23. TU (TELUS Corp.): 4.6%

24. WEN (The Wendy's Co.): 1.5%

25. LAMR (Lamar Advertising Co.): 3.9%

26. COR (CoreSite Realty Corp.): 4%

27. PBT (Permian Basin Royalty Trust): 12.4%

28. PFE (Pfizer Inc.): 3.9%

29. NTAP (NetApp, Inc.): 3.8%

30. C (Citigroup, Inc.): 4.3%

31. DTEGY (Deutsche Telekom AG): 7.6%

32. JPM (JPMorgan Chase & Co.): 3.1%

33. ARE (Alexandria Real Estate Equities, Inc.): 2.6%

34. GLW (Corning, Inc.): 2.4%

35. TIF (Tiffany & Co.): 1.8%

36. PFG (Principal Financial Group, Inc.): 4.7%

37. CVA (Covanta Holding Corp.): 5.7%

38. WMB (The Williams Cos., Inc.): 7.9%

39. ALLY (Ally Financial, Inc.): 2.5%

40. IPG (Interpublic Group of Cos., Inc.): 4.7%

41. CDUAF (Canadian Utilities Ltd.): 5.3%

42. SYF (Synchrony Financial): 3%

43. BAC (Bank of America Corp.): 2.6%

44. STAG (STAG Industrial, Inc.): 4.5%

45. CPT (Camden Property Trust): 3.2%

46. AMCR (Amcor Plc): 3.9%

47. USB (U.S. Bancorp): 3.8%

48. NEM (Newmont Corp.): 1.2%

49. ESS (Essex Property Trust, Inc.): 3.2%

50. CNP (CenterPoint Energy, Inc.): 3.6%

51. MPW (Medical Properties Trust, Inc.): 5.5%

52. CME (CME Group, Inc.): 2%

53. FE (FirstEnergy Corp.): 5.3%

54. TRP (TC Energy Corp.): 5.5%

55. PRU (Prudential Financial, Inc.): 5.7%

56. KEY (KeyCorp): 4.8%

57. PM (Philip Morris International, Inc.): 6.3%

58. CNA (CNA Financial Corp.): 4.1%

59. CRT (Cross Timbers Royalty Trust): 10.3%

60. CAG (Conagra Brands, Inc.): 2.4%

61. STX (Seagate Technology Plc): 4.8%

62. AZN (AstraZeneca Plc): 2.4%

63. ETN (Eaton Corp. Plc): 2.5%

64. HOG (Harley-Davidson, Inc.): 2.2%

65. DIS (The Walt Disney Co.): 1.2%

66. STOR (STORE Capital Corp.): 4.4%

67. MGA (Magna International, Inc.): 2.6%

68. DEA (Easterly Government Properties, Inc.): 4.8%

69. DRETF (Dream Office Real Estate Investment Trust): 4.8%

70. GEL (Genesis Energy LP): 18.2%

71. SLG (SL Green Realty Corp.): 5.2%

72. IMBBY (Imperial Brands Plc): 13.2%

73. TCP (TC Pipelines LP): 8.8%

74. GSK (GlaxoSmithKline Plc): 5.1%

75. KHC (The Kraft Heinz Co.): 5.2%

76. HTA (Healthcare Trust of America, Inc.): 4.5%

77. HPE (Hewlett-Packard Enterprise Co.): 4.8%

78. BHP (BHP Group Ltd.): 4.5%

79. WPP (WPP Plc): 1.3%

80. CC (The Chemours Co.): 4.5%

81. GM (General Motors Co.): 1.9%

82. CHL (China Mobile Ltd.): 5.7%

83. BXP (Boston Properties, Inc.): 4.2%

84. SBRA (Sabra Health Care REIT, Inc.): 9.1%

85. EQR (Equity Residential): 3.9%

86. HEP (Holly Energy Partners LP): 17.3%

87. KMI (Kinder Morgan, Inc.): 8%

88. TEF (Telefónica SA): 10.8%

89. NRZ (New Residential Investment Corp.): 9.5%

90. SPH (Suburban Propane Partners LP): 10.5%

91. OHI (Omega Healthcare Investors, Inc.): 7.7%

43

92. IVZ (Invesco Ltd.): 6.4%

93. EXC (Exelon Corp.): 3.5%

94. VTR (Ventas, Inc.): 5.1%

95. KLIC (Kulicke & Soffa Industries, Inc.): 1.7%

96. SPG (Simon Property Group, Inc.): 8.6%

97. DOC (Physicians Realty Trust): 5%

98. OPI (Office Properties Income Trust): 5%

99. RIO (Rio Tinto Plc): 6.2%

100. UBS (UBS Group AG): 4%

101. PRT (PermRock Royalty Trust): 21.9%

102. WSR (Whitestone REIT): 7.7%

103. SUUIF (Superior Plus Corp.): 5.6%

104. UBA (Urstadt Biddle Properties, Inc.): 7.9%

105. CF (CF Industries Holdings, Inc.): 4%

106. PACW (PacWest Bancorp): 7%

107. VER (VEREIT, Inc.): 5.7%

108. FL (Foot Locker, Inc.): 3%

109. GLPI (Gaming & Leisure Properties, Inc.): 6.3%

110. GEO (The GEO Group, Inc.): 22%

111. AGNC (AGNC Investment Corp.): 11.3%

112. WPM (Wheaton Precious Metals Corp.): 0.9%

F-Rated Dividend Risk Securities 1. BMWYY (Bayerische Motoren Werke AG): 3.3%

2. IIPR (Innovative Industrial Properties, Inc.): 2.8%

3. CEO (CNOOC Ltd.): 6.8%

4. SPKE (Spark Energy, Inc.): 7.9%

5. APA (Apache Corp.): 3.3%

6. CLDT (Chatham Lodging Trust): 5.7%

7. HP (Helmerich & Payne, Inc.): 13.7%

8. QSR (Restaurant Brands International, Inc.): 3.5%

9. CVX (Chevron Corp.): 6.1%

10. CAKE (Cheesecake Factory, Inc.): 1%

11. RDS.B (Royal Dutch Shell Plc): 6.3%

12. BKR (Baker Hughes Co.): 4.1%

13. CNQ (Canadian Natural Resources Ltd.): 5.9%

14. BX (The Blackstone Group, Inc.): 3.3%

15. GE (General Electric Co.): 0.4%

16. SU (Suncor Energy, Inc.): 6.7%

17. XOM (Exxon Mobil Corp.): 9.4%

18. IDEXY (Industria de Diseño Textil SA): 1.3%

19. D (Dominion Energy, Inc.): 4.4%

20. PTR (PetroChina Co., Ltd.): 5.5%

21. COP (ConocoPhillips): 4.7%

22. AQN (Algonquin Power & Utilities Corp.): 3.6%

23. SFL (SFL Corp. Ltd.): 16.6%

24. TOT (Total SE): 7.7%

25. E (Eni SpA): 4.9%

26. LYB (LyondellBasell Industries NV): 5.2%

27. ABR (Arbor Realty Trust, Inc.): 8.6%

28. DREUF (Dream Industrial Real Estate Investment Trust):

5.4%

29. NYCB (New York Community Bancorp, Inc.): 7.7%

30. SLB (Schlumberger NV): 6.8%

31. AXS (AXIS Capital Holdings Ltd.): 3.3%

32. SBR (Sabine Royalty Trust): 9.2%

33. SJR (Shaw Communications, Inc.): 7.2%

34. LAND (Gladstone Land Corp.): 4.6%

35. SSREY (Swiss Re AG): 6.9%

36. FUN (Cedar Fair LP): 5.2%

37. PBA (Pembina Pipeline Corp.): 7.8%

38. SCHL (Scholastic Corp.): 2.6%

39. VET (Vermilion Energy, Inc.): 30.3%

40. NTR (Nutrien Ltd.): 4.3%

41. DOW (Dow, Inc.): 5.2%

42. R (Ryder System, Inc.): 4.1%

43. MGM (MGM Resorts International): 1.2%

44. INN (Summit Hotel Properties, Inc.): 4.5%

45. NWL (Newell Brands, Inc.): 4.8%

46. BP (BP Plc): 9.8%

47. HBAN (Huntington Bancshares, Inc.): 4.9%

48. SRC (Spirit Realty Capital, Inc.): 6.9%

49. CODI (Compass Diversified Holdings): 7.6%

50. BPY (Brookfield Property Partners LP): 8.8%

51. WYNN (Wynn Resorts Ltd.): 2.1%

52. APLE (Apple Hospitality REIT, Inc.): 3.2%

53. ARCC (Ares Capital Corp.): 10.2%

54. CBRL (Cracker Barrel Old Country Store, Inc.): 3.9%

55. SNP (China Petroleum & Chemical Corp.): 7.2%

56. PSX (Phillips 66): 6.2%

57. VLO (Valero Energy Corp.): 7.7%

58. LTC (LTC Properties, Inc.): 6.2%

59. IMO (Imperial Oil Ltd.): 3.9%

60. CMA (Comerica, Inc.): 5.1%

61. GAIN (Gladstone Investment Corp.): 8.9%

62. BGS (B&G Foods, Inc.): 7.1%

63. BCE (BCE, Inc.): 5.7%

64. BRMK (Broadmark Realty Capital, Inc.): 7%

65. WFC (Wells Fargo & Co.): 6.7%

66. APAM (Artisan Partners Asset Management, Inc.): 5.6%

67. PEAK (Healthpeak Properties, Inc.): 5%

68. VGR (Vector Group Ltd.): 8.9%

69. DDS (Dillard's, Inc.): 1.2%

70. IRM (Iron Mountain, Inc.): 9.1%

71. LMRK (Landmark Infrastructure Partners LP): 10.7%

72. PPRQF (Choice Properties Real Estate Investment Trust):

5.3%

73. CWCO (Consolidated Water Co. Ltd.): 3.2%

74. HFC (HollyFrontier Corp.): 6.5%

75. OXY (Occidental Petroleum Corp.): 19.2%

76. MGP (MGM Growth Properties LLC): 6.5%

77. ALARF (Alaris Equity Partners Income Trust): 11.6%

78. MAIN (Main Street Capital Corp.): 7.9%

79. LADR (Ladder Capital Corp.): 12.2%

80. PSO (Pearson Plc): 3.1%

81. EQNR (Equinor ASA): 5.9%

82. VOD (Vodafone Group Plc): 6.4%

83. CAJ (Canon, Inc.): 5.6%

84. OLN (Olin Corp.): 3.7%

85. WELL (Welltower, Inc.): 4.4%

86. HSBC (HSBC Holdings Plc): 4.3%

87. CORR (CorEnergy Infrastructure Trust, Inc.): 32%

88. GNL (Global Net Lease, Inc.): 10.5%

89. STWD (Starwood Property Trust, Inc.): 11.3%

90. LUMN (Lumen Technologies, Inc. (Louisiana)): 10.2%

91. USAC (USA Compression Partners LP): 19.6%

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92. NYMT (New York Mortgage Trust, Inc.): 10.9%

93. MPC (Marathon Petroleum Corp.): 6%

94. NLY (Annaly Capital Management, Inc.): 12.4%

95. BXMT (Blackstone Mortgage Trust, Inc.): 9.5%

96. TWO (Two Harbors Investment Corp.): 12%

97. CIM (Chimera Investment Corp.): 16%

98. PSEC (Prospect Capital Corp.): 13.9%

99. HRZN (Horizon Technology Finance Corp.): 9.9%

100. GLAD (Gladstone Capital Corp.): 10.5%

101. SCM (Stellus Capital Investment Corp.): 11.3%

102. HTGC (Hercules Capital, Inc.): 10.7%

103. GOOD (Gladstone Commercial Corp.): 8.2%

104. DX (Dynex Capital, Inc.): 9.7%

105. XRX (Xerox Holdings Corp.): 4.6%

106. AB (AllianceBernstein Holding LP): 8.6%

107. WDR (Waddell & Reed Financial, Inc.): 5.9%

108. NMFC (New Mountain Finance Corp.): 11.7%

109. ORC (Orchid Island Capital, Inc.): 15.3%

110. ARI (Apollo Commercial Real Estate Finance, Inc.): 14.1%

111. AM (Antero Midstream Corp.): 19.4%

112. OXSQ (Oxford Square Capital Corp.): 25.7%

113. PTEN (Patterson-UTI Energy, Inc.): 3.4%

113. ARR (ARMOUR Residential REIT, Inc.): 13.6

Sure Passive Income · Coca-Cola (KO) B $53 58 3.1% 86% 7.5% 10.6% Home Depot (HD) B $274 11 2.2%...

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Transcript of Sure Passive Income · Coca-Cola (KO) B $53 58 3.1% 86% 7.5% 10.6% Home Depot (HD) B $274 11 2.2%...